Keeping the Bubble Inflated?

itsnever2lateisit?

dopester wrote: »

Let it go bust and put the business up for liquidation or auction - giving new owners opportunity to turn it around.

That is how markets should operate.

BusinessCycles, Part 4 of 4 - The Austrian Bust, Prof. Krassimir Petrov
Google Video

But it wont go bust as such, the factory will close, and production will shift to Russia. Yet again skills will be lost from these shores, forever.

It was Michael Hesseltine, I think, who said it didnt matter who owned british industry, that foreignn ownership was fine blah blah. That now seems rather untrue. First the British motor industry died, and now the motor industry in Britain is going the same way

A._Badger

itsnever2lateisit? wrote: »

But it wont go bust as such, the factory will close, and production will shift to Russia. Yet again skills will be lost from these shores, forever.

As I suggested earlier - what skills?

Bolting together a Japanese or German-designed car isn't engineering - it's Meccano assembly. The real skills, like the real profits, lie overseas.

The UK has brilliant designers and manufacturing engineers who get no help at all. In fact they have had the exact opposite of help - and there is simply no point Labour apologists claiming this was all the fault of "Thatcher". Labour has had 11 years to help manufacturing industry. It has done nothing but make its life harder

There may be a case for helping some manufacturing industries but it's hard to see why the car industry should be at the head of the queue.

Well, unless you were looking for votes in industrial communities, of course...

piggeh

Generally I see that when production is outsourced overseas the British QA staff, Engineers etc, have to fly over to give technical advice anyway!

All production, once set up, is generally a shopfloor job, but the UK still has the expertise to set it up correctly in the first place.

itsnever2lateisit?

I agree Badger, the LDV Maxus is one of the few remaining vehicles designed, engineered and built here, which is why I believe it would be money well spent. It shows just how far this country has declined when an assembly track including robots is shifted from here to China,(a low wage economy) and then the parts are made in China and shipped back here for finally assembly with screwdrivers ( a high wage economy) I refer to the MG TF in this case

lostinrates

itsnever2lateisit? wrote: »

It shows just how far this country has declined ...

..no...it also shows how much scope for improvement there is on 'manufacture' miles.

UK produced green cars....they could take those skills, find a scientist (do we still produce any British scientists?) and properly produce the sort of vehicle that we would otherwise be importing in the future...surely?

A._Badger

There is some deeply interesting background to the collapse of LDV to be found here http://eureferendum.blogspot.com/2009/02/british-jobs-for-austrian-workers.html

matbe

itsnever2lateisit? wrote: »

I agree Badger, the LDV Maxus is one of the few remaining vehicles designed, engineered and built here, which is why I believe it would be money well spent. It shows just how far this country has declined when an assembly track including robots is shifted from here to China,(a low wage economy) and then the parts are made in China and shipped back here for finally assembly with screwdrivers ( a high wage economy) I refer to the MG TF in this case

The LDV Maxus is a pile of sh!te anyone who has driven one will tell you this.

Its still got Austin Allegro knobs and dials.

It isn't a patch on Ford VW or Merc vans.

This is why no one buys them and they are going under.

dopester

Pretty much how I see the problem and the market solution in the Independent.

Jeremy Warner: We don’t need this many car-makers. Get used to it
Saturday, 21 February 2009

The market may be a brutal and uncaring arbiter of survival, yet it also has an unfailing ability to deliver outcomes that everybody knows to be right, even if socially and politically distasteful. The European and American car industries are a case in point. Both are characterised by extreme overcapacity and massive sunk capital in technologies and models which are becoming increasingly obsolete.

Manufacturers and politicians are still largely in a state of denial about this uncomfortable truth and are therefore incapable of reconciling themselves to the necessary cull. Most see the present downturn as a temporary demand shock and look forward to the time when everything returns to the way it was.

Whatever the answer, markets left to their own devices stand a better chance of delivering an equitable outcome than the politicians. Businesses with viable, long-term futures tend to survive, however bad the downturn, albeit sometimes under different ownership and capital structures.

http://www.independent.co.uk/news/business/comment/jeremy-warner/jeremy-warner-we-don8217t-need-this-many-carmakers-get-used-to-it-1628273.html

I'll have to just watch to see if car-manufacturers really can get away with keeping their prices at current levels, when steel prices have plummeted, advertising costs on on their way down, cargo shipping costs some reports say fallen 90%, people are losing jobs, house prices are crashing, stock market wealth is down £trillions..

..or whether winner companies will adapt or new challengers will come in, to buy operations at a fraction of peak prices, or startup afresh, and restructure and innovate to meet new market conditions.