New Year New Massive Job Cuts

julieq

None of the big manufacturing industries you appear to think we need would exist without banks and credit. Most business to business transactions are on 90 day terms, but employees aren't. That doesn't make businesses "debt junkies", they generate net cash or go out of business. But they need lending to help with cashflow.

A full scale banking crash would have taken out a lot more industry than has been lost so far, which is why action was taken. It's not something to get abusive about.

As for the question of the part of manufacturing in the economy, the idea that it's the only activity that generates wealth is a complete fallacy.

If you trace the value chain from raw material to finished product in the marketplace, a great deal of it is added late on. I gave an example of a car a few days ago. The lowest value is in the transformation of (say) steel to components. There is very little value that can be added. On the other hand electronics design, marketing, sales, and service are very valuable lifetime activities. The money paid to the people adding value to components then comes back into the general economy; some will buy manufactured goods, a great deal will buy services of one sort or another.

The fashion has been to outsource lower value components into the supply chain. In my experience there is a degree of disillusionment with that idea now.

One of the most surprising parts of this recession is the relatively low impact on employment. That's because (I suspect) most organisations have very little slack, and because we have a well diversified economy.

nearlynew

If you say so julie.

julieq

Nice sidestep, Nearlynew. It's the Mewbie trick isn't it, you can always avoid having to show that you can't sustain an argument with a bit of sly sarcasm, then get yourself thanked by one of your mates. Presumably the next step is to stop posting and pretend you've been invisibly PRRd so you can indulge your martyr complex.

nearlynew

You got it in one julie.

And you didn't even use any management wankspeak.



well done

julieq

macaque wrote: »

There is so much wrong with this I don't know where to start.

1. The UK service industry is a very bad employer. The quality of life for many office cleaners and restaurant workers in London is as bad or worse than for low paid workers in the third world.

2. A team of 10 people on a pharmaceutical plant can manufacture $1b worth of APIs a year. People who work on these plants and the businesses that support them do not pay minimum wages (by a long chalk). Plants like this are quietly closing every few months in the UK.

3. Manufacturing jobs generally provide better pay and better working conditions than most service industries.

4. When manufacturing goes, R&D follows within a few years. When R&D goes, the knowledge economy shrinks. The UK's real knowledge economy (and I am not talking about the Micky Mouse MBA's doing hot air reports for Gordon Brown and local government offices) is getting greyer every year.

5. Many of the manufacturing jobs disappearing from the UK are not going to low cost economies. They are moving to places like Germany and Switzerland.

6. The idea that we can have an economy where 50% of the population are BTL landlords whilst the rest work like slaves trying to compete with the rest of the world is just not going to work.

1) Very narrow definition of the service sector. But in any economy there will be a proportion of the workforce on minimum wage, it doesn't really make a lot of difference whether these people are cleaning floors or working in factories, they add very little value to the economy.

2) Pharmaceutical processes are highly automated. They don't require many line operators. R&D in highly developed industries tends to cluster round expertise, which is why for example there is a great deal of hi tech around Cambridge.

3) Source please. I don't believe that is true, someone doing essentially the same job I do for a bank will be better paid than me (in manufacturing industry). Plumbers seem to me better off than factory workers and they are in the service sector. I think you have a narrow definition of the service sector and an unrealistic view of the manufacturing sector.

4) Bold assertion, source please. I don't see any evidence of this happening in practice.

5) I doubt it, source please. Germany and France (to an extent) tends to retain manufacturing for essentially philosophical reasons, in Germany there are a lot of smallish family owned companies who like to mark their products "made in Germany". I went round one recently whose owners had paid for state of the art injection moulding machines so they could make housings rather than buy them at a fraction of the price from China.

6) There aren't 50% BTL landlords or anything like it. But it's no more ridiculous to expect wealth generation from property speculation than it is to expect safe 5% returns on cash in a savings account. At least BTL landlords are taking a risk and providing a service rather than just expecting someone else to do it for them.

HAMISH_MCTAVISH

julieq wrote: »

6) There aren't 50% BTL landlords or anything like it. But it's no more ridiculous to expect wealth generation from property speculation than it is to expect safe 5% returns on cash in a savings account. At least BTL landlords are taking a risk and providing a service rather than just expecting someone else to do it for them.

In actual fact, only around 10% of UK housing stock is in privae rental.

And half of that was in private rental before the credit availability of the last decade encouraged BTL.

Without BTL, there would be only half the rental property that is available today. And rents would be exponentially higher as a result.

julieq

Why would it be exponentially higher?

kabayiri

I don't see the point in debating the relative merits of brand awareness.

The factory closure referred to by the OP presents a stark proposition.

We are going to have regions which will lose their core employment.

What are the 'normal' employees of tomorrow going to be doing in these regions? I'm not talking games designers or geneticists. Nor do I mean biscuit packers really. I mean the skilled fitters of yesteryear; people who can be independent and self motivated and skilled, but may lack that last few percent to carry them into academic excellence.

To even find a solution, we need a value shift in society. One small example. When bad snowy weather hits Finland the country does not shut down and take a 'sickie'. The airport doesn't shut; the key roads stay open; the railways run. Money is spent on quality infrastructure product and personnel to keep things running. Finland tax payers understand the true value of this, and are willing to pay for it.

Contrast with the UK. Our fragmented railways are a joke. Our roads run at capacity; bottlenecks are commonplace. Even relatively small events disrupt the whole flow, and many man hours are lost as a result. But we don't seem to be willing to pay for a quality transport infrastructure?

Somehow, more money needs to circulate in the local economy, providing more resources for local employment.

julieq

Ridiculous argument. We have a few days of snow a year and we can limp through those, Finland has very many. Spending OUR money on infrastructure we don't need is a waste. Our roads are full because we have higher population density than our neighbours.

And core employment changes over time. To be competitive and to make a living it's not enough to do the same as you did 50 years ago and be a "skilled fitter". You need to make the effort to learn new skills which are more valuable.

The world owes no-one a living. You have to adapt to changing circumstances to survive. It's a hell of a lot worse in the developing world, yet they're outstripping us, and that's the issue, not the relative number of snow ploughs in London and Helsinki.

kabayiri

Snow is an example Julie. I was hoping you'd see it as such.

Same with the fitter too. But, you know the type of person I make reference to I hope.

Infrastructure spend is not ridiculous. But we shall have to disagree.

I'm well aware of the developing world issue though. I can agree with you there. Like yourself, I have spent time out in China and Mombai, and I have to say I was impressed with the people.

By the way, my point isn't an argument. It's a suggestion. I'm always interested in others..