Show me ANYWHERE I EVER SAID PROFIT WAS BAD. IVE NEVER EVER SAID THAT ANYWHERE - EVER.
Profit is good. But so are good paying jobs.
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This quote seems to imply some anger at the profit motive, Mike. Thatâs the effect caps have. If thatâs not the right read, sorry for my confusion.
Not anger⊠Just rebutting what was said about government policy is to blame companies are moving jobs overseas. Itâs an argument thatâs been brought up before and has been proven wrong many many times.
I guess if govât policies have no effect on car manufacturers plans to move work out of the USA, or keep work in the USA, then the answer to your question must be: No, Ford will remain in business, functioning the same way as now, no matter whoâs elected.
Whitey, I was only replying to Docnickâs statements regarding inefficiencies in production. Perhaps that wasnât clear because I didnât quote the post and those reply icons are not very noticeable.
Itâs been written about before as well. Unions refusing to allow efficiencies that eliminate human actions at certain positions in the assembly operations. The umbrella of protecting their membership base that ultimately loses even more jobs as market pressures from stiff competitive pricing continue to throttle business and instead of preserving a few jobs, even more jobs are lost. Win the battle but lose the warâŠ
No doubt there is plenty of blame to go around. Just addressing this one aspect.
For example, when you state:
All unions do is give the workers a voice in governance. The day-to-day operational decisions and long term strategic decisions are still made by management.
Whatâs the distinction between governance and day to day operational decisions? What if the âmanagementâ determines that they could buy a robot to do a job currently done by a union employee? Do you think the union will try to block this move? BTW- If forced to retain that employee and employ them elsewhere at the same pay grade, it really doesnât end up saving anything. So they have a fairly significant voice in determining certain aspects of how the business is run.
I do agree that the tide is turning. I think more from actions like GM did to their stockholders/employees- which I deplore enough to boycott their products BTW.
None of the responsibilities or accountability? Are you serious? I just entered Ford + lawsuits into the Google search engine and it returned 13,800,000 results!
Long before NAFTA, I bought a new Ford Tempo in 1985. The engine was made in Mexico and the car was assembled in Canada. I now have a 2011 Toyota Sienna. The Sienna was assembled in Princeton, Indiana and 93% of the Sienna parts are made in the U.S.
OK, Mike, that I gotta disagree with. Government policies absolutely affect jobs staying or going overseas. There are many great examples but tax policy is a pretty clear one. When a company does an inversion to move their headquarters overseas it is primarily to avoid high corporate tax rates. There really isnât any other reason do do so. Tax policy is a government policy, not a union issue, not a wage issue.
When my former company the auto parts manufacturer spun off from GM, Delphi, entered bankruptcy as a US corporation, it came out of bankruptcy as a UK company. The CEO stayed in Troy, Michigan as did the rest of the executive staff but the business was incorporated in the UK. No union contracts were affected, no relocation costs for employees, just taxes.
http://www.jeffersonpolicyjournal.com/u-s-tax-system-forces-corporations-to-look-overseas/
So youâre telling me that without any policies that companies wouldnât be sending jobs overseas???
What govt policy sent the textile industry overseas? What govt policy sent high tech jobs overseas? What govt policy sent accounting jobs overseas? What govt olive sent biotech jobs overseas? What govt policy sent medical research jobs overseas?
I canna me many more if you want.
The commonality in all those markets is the jobs went overseas for a cheaper wages. In most cases much cheaper wages.
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Yup!
In recent years, the latest moveâvia cyberspaceâis to have US legal documents prepared in The Philippines.
Because you can have actual attorneysâwho are fluent in Englishâprepare US legal documents in a time zone that is approximately 12 hours distant from the US East Coast, NYC law firms are now hiring far fewer paralegals, and are having full-fledged attorneys in The Philippines do their legal writing while we are sleeping. The completed documents are sitting in the e-mail in-boxes of the NY law firms when they open for business in the morning.
By being able to pay full-fledged attorneys in The Philippines less than they would have to pay a paralegal in The US, these law firms are saving a ton of money, which is good news for the law firms, and very bad news for the US labor market.
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Perhaps then the question isnât âwhat current govât policies are contributing to sending jobs overseas?â so much, but instead âwhat revisions to govât policies would reduce the number of jobs sent overseas?â.
For example, in the case of high tech, if the advantage of sending high tech jobs overseas is to save money on labor costs, the govât could â in theory at least â enact policies that would make it more expensive to sell the products developed overseas, if they want to sell those products inside the USA. Itâs true thereâs no way to prevent the jobs from going to wherever the folks willing to pay the salaries send them, but it seems like there could be a way to make it expensive enough to do so that the CEOâs would think twice.
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And foreign countries would put tariffs on US goods, and trade would plummet. The US exports a HUGE amount of stuff.
The question posed that I was addressing is whether govât policies can affect the number of jobs created inside the USA, not whether one particular policy would be better at creating jobs inside the USA than another one.
For example, if it is true that the policy I mentioned above would actually rduce jobs inside the USA due to the reason you state, then it must be the case that govât polices could affect the number of jobs created inside the USA. Youâre saying it would decrease them though. Iâm not disagreeing with that point, Iâm make no claims to being job expert, you could well be right. It just seems sort of unbelievable to claim that govât policies have no effect on job growth inside the USA vs. outsourced to outside the USA.
I donât disagree the the âcheap wagesâ argument. At all. That is why all those industries left. I donât mean to suggest they wouldnât all have been outsourced. We nearly all compete globally for jobs whether we like it or not.There are reasons buried inside the hourly wages.
Off shoring for lower wages is not just the wages paid to the individual. They include all the hidden costs directly related to more government policy. Social security, 6.4% match from the employer. Same for matching Medicare. All the labor laws we legislate add more cost. Family leave act, the ADA requirements, the list goes on and on. Plus our litigious environment that adds the risk of lawsuit from every employee. All the direct result of government policies, for both good and bad, for the employees benefit and those to just push paper.
Lower wages is the reason but within those wages is a long list of government policies adding to that wage.
I guess I would say ââŠadding to the cost of labor.â
I believe every legislated benefit to workers costs someone their job.
Winners and losersâŠ
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But does the data support that belief? For example Norway and Germany have a lower unemployment rate than the USA, but have more labor regulations like 5 weeks paid vacation.
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Is it possible that their low unemployment rate is due to the strong work ethic of the German and Norwegian people? I believe you will also find a low unemployment rate in ethnically German and Norwegian communities in the U.S.
Those are miniscule in the overall wages of an individual. Plus these have been in place for DECADES and were in place when we had our largest growth years. So Iâd say they had zero effect.
As for family leave and ADA requirementsâŠjobs were disappearing for lower wages long long long before they were ever enacted.
And most of those benefits really effected the lower wag retail worker. Iâve been working for companies that had many of those policies (family leave) for decades.
Again been around long before the big labor drain.
Iâve worked for companies where our profit is very good (over 20% for 10 years and growing)âŠthen we get some new capital money in to fund a new product to take the company to the next level. The first things the investors do is tell us to start making plans to ship engineering to India and China. Our projected profit increases based on using US workers was well over 30%âŠcloser to 40%âŠwith projected EBITDA extremely high. Why then move overseas? HIGHER PROFITâŠPure and simple.
Companies have been dealing with Govt regulations for years. Nothing new. Its the short sighted company that canât see past the next quarter who then jumps at the fastest and easiest way to increase profits (lower wages by outsourcing). Other companies havenât outsourced and are doing very well. Even though our company is kinda small (less then 400) peopleâŠwe compete extremely well with other companies in our field who has shipped jobs overseas. Our executives donât get outrageous bonuses each quarter. We are privately held and arenât subject to the whim of the stock-market.
If a company WANTS to keep jobs here in the US and still make moneyâŠit can easily be done. They just have to find ways to do it.
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Morning - I see the progression the discussion is taking, and I can see how it got where it is, but could you please keep the automotive link in mind now and then? Again, not looking to shut it down altogether. Thanks very much.
Agree! LOW wages are a red herring. The automotive industry has long shifted production and jobs around the world. Britain is the only country I know of that has lost jobs to a HIGHER wage country. Both Ford and GM have basically stopped building cars in Britain and shifted most production to GERMANY, which has higher wages and benefits, but much higher productivity per worker. This shift can clearly be blamed on the British unions and incompetent British management. The British government is not at fault here.
The number of foreign car plants in the US keeps increasing so they must be doing something right! Even VW, which has a very large plant in Mexico, is now building cars in the USA.