TRANSCRIPT OF THE PRIME MINISTER, THE HON P. J. KEATING MP
OPENING OF MANUFACTURING PLANT OF MERCK SHARPE AND
DOHIVE PTY LTD, SOUTH GRANVILLE, SYDNEY, 23 NOVEMBER 1994
E& OE PROOF COPY
Thank you very much Paul Bell, Managing Director of MSD, Jim Beattie, Lee
Ausbumr, Lesley Russell, Jim Gazilas, other distinguished members of the
management and ladies and gentlemen the employees of Merck, Sharpe and
Dohmo Australia.
It Is a great pleasure for me to be Involved with this. Not simply because it is so
proximate to my awn constituency here in Sydney and part of the general area
of Sydney where I am from and which I have represented now in the House of
Representatives for over a quarter of a century, but more particularly what has
happened here and is happening here is the very essence of what I have been
seeking to do and trying to bring about In the House of Representatives, In the
Government over the last 12 years.
I think It is entirely true, as Paul Bell said, there was a time when the investment
in this business had ceased and It was to be, as he put It, ' mothballed' or run
down and where it would soon be merchandising or wholesaling, distributing
products made by other arms of the company abroad. And, to see such a
change from that to one where we are seeing a very large Investment, a world
class production facility and packaging facility and distribution and a very strong
change and commitment on the part of the employees to the business is the
kind ol model that Australia needs and the model which will, of course, change
our industriaJ culture and Improve our levels of wealth, our capacity to employ
people. their rates of pay and, of course, our relationship with the rest of the
world. I was partIcularly pleased In the briefing I had a few moments ago to see
that exports had risen to about $ 125 million a year now, rising towards a
forecaint $ 250 million a year In a few years from now from virtually nothing not
that long ago. And, it Is part of that sea change in Australia looking out rather
than looking in.
Now, what has obviously happened here is that there was a real conversation
betwee3n this industry the pharmaceutical Industry and the Government in
the 1 SSOs and, I think, Governments have got to make key decisions about
whether they want particular industries or whether they don't, what they can do
to try mnd make the environment more conducive to them staying and investing.
And, In a major policy change in the 1980s across a range of areas, we
improved the atmospherics for the pharmaceutical industry in Australia. I
suppose the most well understood part of that by those people In the Industry
and probably members of the public is the factor Tf scheme which was one of
the things which underpinned the future of the industry.
Now, governments can do those things, but if companies don't take them up
well, riot much Is likely to happen. But, I think, that at Merck, Sharpe and
Dohme they have seen a willingness on the part of the Government to say ' yes,
we want this Industry and it can make a contribution to our national product and
to our exports' and the company said ' in that case, we will see what we can do,
get a strategic plan together, a corporate plan and make some Investments and
try to make it all happen.' As a consequence we have seen this very large
investment here $ 75 million the most modem developments in the
production of pharmaceutical products and what I can see around the plant,
tremendous camaraderie and esprit de corp between all of you who work for the
business and those who manage it.
I suppose, this Is part of the sea change in Australia too. It is no accident that
we have an Inflation rate of just under 2 per cent. That Is there because of cooperation
from the workplace and because of some wisdom on the part of
employers not seeking to charge what the market will bear. These things have
changed the culture of industrial relations in Australia and there Is a commitment
and I hear Paul Bell say about a number of unions committing themselves to the
business here. I think there were 13 originally, there are now five and there has
been that commitment and, I think, when one looks at a lot of other societies
which have succeeded in production and in exports and probably Japan
obviouIsly comeS to mind, the management of great companies in that country
always seem to get this conducive relationship with the workforce. I suppose
this Is one of the points of difference we have with the Coalition in this country.
We say let's get people committed in a group way, to group objectives and let's
all travel In the same direction together rather than singling people off for
Individual wage contracts. If they pipe up they lose their job, If they don't sign
up for particular things they lose their jobs. That is not the environment, I think,
which produces the kind of outcome that you really need In a group sense to
make a business work, that is, a commitment right across the business and not
simply people taking employment contracts out of fear or out of pressure or out
of something else. The way to get the change and to improve the productivity
and the culture of the business Is to get that commitment from the employees
and the management to work together.
I was delighted when I was taken around and just shown parts of the plant to
hear a number of the people demonstrating it to me say ' Well, some of our Ideas
are In there'. In other words good Ideas are appreciated rather than good ideas
being, In a sense, rejected because they haven't come from the top down. I
mean, there has been a sea change in Australian management. There was a
time when the boss saw the workers for a cup of tea and a scone on Christmas
Eve and that was that end of It or a beer maybe, then they charged off and all
came back to their being their grumpy self for the new year. Now, that has
changed and, I think, where ever you see managers enlighten people, who want
a goodJ relationship with their employees, people of good will can get It and, I
think, ' this business proves that too.
I'll just say one thing about the factor P scheme, I have been urged by Paul Bell
to continue to support it and part of the value of coming to a plant like this is to
see it in action. I think, we are providing something like $ 1 billion worth of
assistance and in return 17 companies have committed themselves to
undertake nearly $ 8 billion in additional exports. Now, when one looks at the
nature of the products here, there Is not just the added value and this is the sort
of added value that Australia can use, but there are also products that actually
make you feel good about producing, you are producing something that Is going
to help somebody and you are doing something socially useful as well as
something as productive and economically sensible.
So, this is, In a sense, part of the model that we see for Australia, being driven
by thei thing that Is our great comparative advantage-that is our education
systern. Because if you ask many Australians what Is Australia's comparative
advantage? they will say Well, it Is our minerals or it is our wool', but I would
say It is our education. As you know, 10 years ago only three kids in
completed secondary school, this year it is eight In 10, and we are streaming
per cant of those through universities and we are now building vocational
education to sit beside the universities so that we can have a very high
participation rate in school and a competent tertiary and vocational education
system which will feed businesses of this kind. Then, with our Incentives for
research and development I am delighted that we are actually seeing primary
research in pharmaceuticals undertaken here in Australa and here particularly
by Merck, Sharpe and Dohme.
So, congratulations to the Company. I mean, it Is always a tough task master
being the local subsidiary of an International parent company, singing for your
supper, trying to get a commitment by the international board to capital. It is
one thing committing it yourself, but when you have got to get someone else to
commit it, it is pretty hard and you have got to have a good story to tell and I
4
hope that the story that Paul Bell and his colleagues have been able to tell
Merck In the United States is a story of Australia. The story of a modem,
sophisticated country with a strong base in education, that Is Interested in doing
productive things and doing them well and shipping to the part of the world
where we know we can be very competitive.
So, when you hear the term added value, this is what we mean and you see It In
these modem surroundings. And to see that commitment and, obviously, the
very good will that exists between all of you Is a real pleasure for me Indeed. It
Is with even greater pleasure that I now declare these facilities open and to
draw the curtain on the plaque. Thank you Indeed.
ends