Redundancies

[Metal Head]

Hi,

As most people will know here is that when our currency gets strong against foreign currencies, then it is good for those going overseas on holidays generally. However, one of the negatives is that our goods being sold overseas become more expensive to buy. This is now being seen by the large number of redundancies here in Melbourne in recent times and the pain will continue. 600 today were told at the South Pacific Tyre plant that jobs are going offshore because they are too expensive to make here. 600 are going at the Holden engine plant. 500 going at Hawker de Havilland & more to be announced in the coming month. I am starting a new job at an iconic company in a fortnight. The reason I got the job was because they couldn't find a toolmaker to work for $22 ph after a 6 month search so they got a recruitment company to find one for them. I was told the reason they couldn't pay more (as well as most of there other workers) is that they couldn't compete against the opposition from overseas i.e. China. Thus the work (& jobs) would have to go overseas. You don't think so well listen here.

I was speaking to a former work colleague yesterday who told me that he had closed his car building business (fibre glass) because the Americans couldn't afford to buy them anymore. The extra fuel (transpost) costs as well as the rising Aussie dollar had seen to that. I also dropped in on a former boss the other day who had the contract to supply die & punches sets to Hare & Forbes but lost it 5 months ago as they decided to get them from China - maybe more profit in it for them? However, some of their customers have returned to H&F to complain about the lack of quality with the new sets. When asked by some of them where they used to get them from they were told the business had gone to the wall - which was a total lie. However, word has got around via word & mouth /and the internet about the lack of truth and work is slowly picking up for him which I am happy about. It is ashame to see people like him trying to make some money (and keeping their head above the water line) but aren't being helped by their fellow Aussies.

This brings me back to the reason why tradespeople will in future have to accept lower pay (unless they are in the money gold mines of WA, NT & QLD) or you presently run the risk of sending the business you work for to close down & move overseas. Better to have a bit than nothing at all.

Anyway I will get off my soap box now.

Cheers
MH

[Greg Q]

The entire western world seems to be going out of the manufacturing business...not just here, but Europe and Canada as well. The USA may actually see a slight reversal of that trend as their currency falls. (Their pay rates are quite a bit lower than here)

One offsetting factor may be the increase in fuel prices, and the Chinese currency edging away from dollar parity. Container costs are going up, and Chinese wages are too. The era of cheap Asian crap may be slowly ending.

As far as H & F choosing a cheaper supplier...it is far more important to protect the wealth of a couple of execs than preserve local jobs. It's the way of the world, sad to say.

Your mate should get an eBay presence, which is pretty cheap, and corner the market in his product. Advertise heavily on quality and "Australian made". I'll bet he outsells H & F and makes more profit to boot.

Good luck in the new job.

(My brother in law is a tool maker in Canada. He is one of fifty guys left there, down from 650 three years ago. The auctions there would make you weep. Lots of Chinese buyers chasing the late model VMC's and other CNC tools...gets on a boat and disappears forever. It's not just here mate.

[damian]

I understand why your upset, but your only getting about 10% of the picture.

We benifit tremendously from living in a market economy. Unfortunately like most things it's not all good. I'm a motor mechanic by trade, the second lowest paid trade there is. But I used it as a stepping stone, did engineering at night while I served my apprenticship and now make embarrassing amounts of money. I essentially retired at 35.

You have options. You can move into a more in demand line of work, or you can move up here to god's country and work in a mine.

There are many things which have happened in our country and continue to happen that infuriate me. I watched as Hawke and Keeting sent hundreds of thousands of australia's most vulnerable workers onto dole queues in the early 80's, as Howard opened the door to imported slave labour in the 90's, as our middle class shrank and the rich and poor swelled and our precious egalitarian society was wiped away all the serve abstract economic theory and the interests of a few money worshipping ^&*(.

But all these governments were elected by the people of this country, so I guess you get what you pay for.

I used to work in the automotive industry and it's been a joke for decades. I read recently, don't know if it's true, that the government provides $330,000 per worker directly employed in the auto manufacturing industry in aus. I know there are indirect benifits, but very little of that $330k is going into the pockets of those workers. I for one would have my (considerable) taxes spent differently.

Chinese labour is already getting more expensive, they will move through the same arc Japan did.

I understand your anger, but apart from ranting about it to make ourselves feel better I'm not sure what we can do.

[Ron Dunn]

I'm a life-long Liberal, but I'm wondering if we made a mistake embracing free-trade so completely.

I believe that Australia needs a strong manufacturing industry, but in a global market place we have a population that is too small to support that industry when global prices are taken into account. I cringe when I say it, but perhaps tariff protection isn't such a bad thing.

Buying everything globally is fine when the world is a peaceful, happy place. Throw in a little conflict, or some economic turmoil, however, and our neat little market gets turned upside-down. I'm afraid there will come a day when we need something manufactured, and there will be no materials on-shore, and no-one with the skills to turn those materials into a finished product.

[Sebastiaan56]

I'm a life-long Liberal, but I'm wondering if we made a mistake embracing free-trade so completely.

As a business owner employing people Im sure we have. In 20 years time Australia will remain a mine for the world will little to offer except for cultural and environmental tourist experiences. I am really worried for future generations.

There is one ray of hope. Oil will get to a price where it is uneconomic to ship containers around the planet and then we will see what we have lost.

[jerryc]

We are on the fringe of a very complex argument here as to why our jobs are going off shore. At present the argument is Laissez Faire or Monetarism . That is that governments should not interfere with market forces. The idea from Milton Friedman is, put simply, that capitalism will iron things out driven by self interest. Regan, Thatcher and Howard were disciples of that doctrine.
Monetarism replaced Keynesian economics that said the government should keep control. Roosevelt applied this idea in America during the Great Depression. The banks wouldn't lend because they had frightened themselves by previous overlending (sound familiar?) and so in an attempt to stimulate the economy FDR put into operation public works so people would have an income.
Anyone who has studied the business world knows capitalism isn't as reasonable as Friedman would have us believe. The market is driven by fear and greed --not reason.
Companies argue that to maintain profit ( and executive high salaries) they have to go where labour is cheapest.
Laissez Faire does not take into account the needs of workers. If you want education you should pay for it yourselves. If you want health care you should pay for it yourselves. So the rich get richer and the poor get poorer in such a system.
It might sound like I'm a real lefty, I'm not. But I came from a very poor working class area of London. There we were practical realists and knew what people really thought. . The words to "The Red Flag' were not those of the Communist Party. We sang "The working class may kiss my a**e, I've got the foreman's job at last" My parents had no education and my father, especially saw only the need for me to get a job.
I won State scholarships and finally got a university education which my father would never have paid for.
Striking the balance between State control and the free market is always difficult. Too many freebies and State featherbedding can create a lazy society. The Germans found this out when they allowed East Germans to join them. On the opposite side, take a look at the way Walmart works. It is a shocking eye opener to the worst of free market, economics.
We have had several years of selling our holes in the ground and calling it good economic management. State health and State education were allowed to be run down. You want it? Pay for it The opposition made good mileage out of the pain of solar panel manufacturers but forgot to mention one piece of good economic management. In China is a young man who made solar panels here. He wanted money for research and development and Howard said no. He went to China and is now a very happy billionaire just supplying China with panels.
As I said above. The arguments as to why our jobs are going off shore are complex but Geoff Dixon will be able to explain why he gets millions a year but baulks at paying flight engineers more than 3% increase which is below the CPI.

My wife is a very practical lady. She peered over my shoulder while I was writing this and said "Jobs going overseas has one huge drawback. When all the jobs have gone to others who is going to be able to buy anything here?

Jerry


War does not decide who is right. War only decides who is left