A call by Labour’s associate food safety and regional development spokesman, Shane Jones, for Fonterra to be made to shift its head office from Auckland to the country’s dairying capital has been supported by several regional leaders.
The MP said a forced shift should be one outcome of Government inquiries into Fonterra’s contamination scare.
Sir William Gallagher, chairman and chief executive of another global company, Hamilton’s Gallagher Group, said that if Fonterra was his business, it would be «closer to the action».
«My view is that, in our organisation, we have production facilities and we have offices among that production. I see some companies put up a glorious office in downtown, miles away from their customers and people concerned with the business.»
He said he ensured top management was close to the production so they knew what was going on.
«You get the vibes. If I’m on site I get a feel for production, the people, and the people orchestrating it. Being among them is very important, instead of getting everything filtered through sales staff.»
Gallagher, who hosts hundreds of overseas senior business executives a year in the Waikato, said, as a loyal Hamiltonian, he would like to see Fonterra move from Auckland.
«It’s only one and a half hours off the [Auckland Airport] road.»
Auckland-based Employers and Manufacturers Association chief executive Kim Campbell said that although some head-office elements of a multinational company needed to be in a major centre, for proximity to an international airport and banking, «quite a sprawling bureaucracy» had developed in Fonterra and a chunk could be sited close to farmers in Hamilton.
«It may be time to reflect where individual senior people are deployed to. It comes down to a management philosophy.»
Waikato University professor of economics Frank Scrimgeour said Fonterra could have a strong case for its headquarters to be in Auckland, but the elements in a head office were «quite small» and there were lower-cost places to do many of the functions currently carried out in Auckland.
«The only reason you wouldn’t want to function in a lower-cost place … is if you believe you wouldn’t attract the quality of staff you need. And my experience and interpretation is that Hamilton and the Waikato is, by world standards, an attractive place to live.
«There is a compelling case for serious consideration for much stronger back-office capability here in the Waikato.»
Waikato Regional Council chairman and Fonterra dairy farmer Peter Buckley said he wanted to see Fonterra’s head office in the heartland of dairying, the Waikato. He believed Fonterra farmers had lost their relationship with the company’s «top brass».
The challenges of moving Fonterra’s head office from Auckland would be difficult, communications director Kerry Underhill said.
«While Auckland is where our head office is based, we have offices, sites and employees across New Zealand. Auckland is a central business hub and an easy location for the people travelling who we do business with, whether they are based in New Zealand or overseas.
«We also have close to 1700 office-based employees in and around central Auckland.»
Source: Stuff