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Published 08 July 2013 10:30, Updated 11 July 2013 00:45
The advantage of local manufacturing is that ‘you are on the spot, and you can turn things around quicker,’ says Len Ainsworth. Photo: Sasha Woolley
Pokies king Len Ainsworth says that Australian manufacturing should bounce back when the dollar falls, especially if companies design their products the right way.
“Australia is a high-cost country, our dollar is far too high,” says Ainsworth, who turns 90 this week.
“I’m sure [the dollar] will go down, and then I think that manufacturers will come back, unless they’ve been put out of business and given things up,” Ainsworth told Nine’s Financial Review Sunday .
Ainsworth made his fortune through gaming group Aristocrat, which he founded in 1953 and sold in 1994, following a cancer scare.
His current company, Ainsworth, was founded in 1995 and also makes poker machines. Ainsworth ranks No.22 on the BRW Rich 200 with a fortune of $1.62 billion.
While some specialised components are imported, Ainsworth mostly manufactures its gaming machines in Australia. Efficiency is the key, its chief says.
Ainsworth says he is now able to do with 400 people what he did with 2000 people when he was running Aristocrat. While technology has changed, “the secret is very simple”.
“Namely, if you design things the right way, then you reduce the labour content,” he says.
“Then if you get your labour down low enough – and it’s only about 3 or 4 hours in the final assembly of our machines – then the differential between the cost of labour in China and here is of no significance.”
Indeed, local manufacturing has its advantages, he says. “If you are doing things here, you are on the spot, and you can turn things around quicker.”
Ainsworth says he has also been able to get local component suppliers to cut prices to more competitive levels.
“We found that with things like getting die castings done, when we put pressure on local suppliers that were looking for work and said you have to meet such and such a price, then they came to the party.”
As well as efficiency, Ainsworth says having an experienced, high-quality management team has been one of the keys to his company’s success.
“Our top six people have got nearly 300 years’ experience between them,” he told Financial Review Sunday.