Competition and the ‘Chinese challenge’

By Jennifer Perry

Up until recently Bradken had been one of the biggest manufacturers of rail wagons in Australia, but the company announced recently that it is closing down its rail division, Bradken Rail, at Ipswich and transferring its wagon manufacturing to its Xuzhou, China, factory.

“This is an absolute tragedy, not least because they’ve been producing rolling stock in Australia for about 70 years,” Dettmer, the AMWU’s state secretary, told Rail Express.

Dettmer said Bradken’s decision did not mean it would not produce wagons in the future in Australia, but right now “they’re saying it’s not economic to produce rolling stock here”.

“And in their view, the fundamental reason for this is because of increasing and unfair competition from Chinese companies,” he said.

“At one level, you can’t blame Bradken as they want to keep their market share, on the other hand, why not keep manufacturing here.

“In their defence, Bradken have laboured to produce rail wagons at a competitive price in Australia but the capacity for the Australian rolling stock industry to compete with rolling stock made in China is so difficult when Chinese companies are dumping in Australia.

“Bradken, which has been the subject of dumping activity, have decided to pull out of the market altogether which is an indication of how long it takes for anti-dumping legislation to come into play and take effect. The difficulty arises that you end up with those companies going out of business before anti-dumping duties are imposed."

Bradken general manager Brian Hodges reportedly said China was threatening to “squeeze the life” out of Australia’s heavy manufacturing industry.

“They are winning all the contracts so the manufacture of rail wagons is under sever attack. It’s not a Bradken problem, it’s a manufacturing problem,” Hodges reportedly said.