The executive director’s blog
VINZ members were correct to demutualise
That this heading may not be a popular statement among cooperators I realise, however...
Set up as an investor-owned firm in 1995 by vehicle importers to inspect used vehicles coming in from overseas, Vehicle Inspection New Zealand converted to a cooperative in 1998.
The cooperative structure was eminently suitable for the group of motor vehicle traders who used the services of VINZ as and when the boat came in, who bought the co-op’s services and received an end-of-year rebate according to how well the co-op had performed and how many vehicles they had each had inspected.
While waiting for the boats to come in, the inspection centres needed to be kept busy with other work, so they started to offer COF and WOF tests on passing vehicles, which were in the main owned by non-members.
Over the years, casual testing at the VINZ network of testing stations grew, contributing significantly to the co-op’s turnover, to its profit, and to member rebates.
As stricter regulations were introduced, the market for used imports started to dry up, which meant many members were importing less.
They could see their co-op starting to move away from them, with the likelihood of having their member shares returned to them if they were dry.
And if they weren’t putting vehicles through the co-op, then they weren’t getting a share of the surplus being created by the other work.
Demutualisation was not just on the cards but inevitable. It was the right thing to do.
VINZ members now have investor shares, and while it will still be inspecting the trickle of used vehicle imports, it will be better positioned to take on some of the other players in the market for other work.
The lesson? Cooperatives work brilliantly when the activity they conduct is a cooperative activity.
The VINZ board could see that to survive the co-op needed to diversify, did so, and the members thanked them for it.
With the demise of the original cooperative activity, members saw the need to change the structure of their business and did so. Quite rightly.
I wish them success in the future, and wonder what other co-ops might arise within the motor vehicle industry – emission testing perhaps?
– from the August/September 2009 Cooperatives News
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