Jobs going to Mexico?

Spook

Well-known Member
What I don't understand about the previous post is why 3 pages of posters ragged about regulation, taxes, politics, but never once brought up the real reason:

MONEY!!! Labor in Mexico is cheap. Very cheap. Ford Motor Company is currently paying LESS than $4 per hour for labor in Mexico. And Carrier probably isn't going to pay that.

The cost of the plant machinery is going to be the same, they likely don't make it in Mexico. It will be imported from the US, Europe, or Asia.

The cost of raw matierals won't change much. Again, likely imported from somewhere else.

The only thing cheaper is labor. 4 bucks an hour, including bennies, cannot be beat. To the multinational bean counters,
this is like fine food, great liquor, and sexx all rolled into one.

I really don't get it. I've seen this before on this forum, nobody wants to acknowledge what seems to be obvious: These corporations are moving labor intensive jobs to places where labor is cheaper. Nothing more. Not politics, not regulations, not even unions. All of Fords employees in Mexico are union. A weak, government controlled union, but a union.

Nothing beats cheap labor!

Rant off.
 
That's NOT the real reason Spook. I deal with building new plants in this country on a regular basis. EPA, taxes, and bureaucracy is the main reasons that plants are moving elsewhere. That and a workforce that doesn't want to work. Several reasons, but pay is far from the top. Bob
 
Yup,and what ticks me off about it is that the only ones who benefit are stock holders,not consumers. When the refrigerator plant closed and 2700 jobs went south of the border,the price of a new refrigerator didn't come down one thin dime.
Refrigerators are what's known as a durable good,meaning they last a long time. How often does the average consumer have to buy one?
The total number of jobs that went with those 2700 will probably never be known,but it's estimated to be at least 10,000. If everybody had to pay another $200 for an American made refrigerator every 20 years or so,wouldn't we all still be better off having those people employed,paying taxes,circulationg that money through the economy creating more jobs?
Now spread that out over the whole country,across a wide array of durable goods. Wouldn't the whole country be better off?
We're past the golden age in this country. Back when union manufacturing jobs were the rule,not the exception.

I know you and I agree on this Spook. We've had this conversation face to face. Let everybody else start the slings and arrows against us now.
 
Well, yes.

But why can a Mexican in Mexico work for $4 an hour?

Because he doesn't need all the regulation, the expense, and so forth that our govt puts upon the workers, same as it does upon the
companies.

So its all the same circle. Its still the govt regulations that drive up the cost of living or the cost of production.

Does Mexico force its citizens to have certain toilets, light bulbs, smoke detectors in their bedrooms, so and so much insulation, and on and
on? Mind you these individual issues might be good or bad; but in either case they ratchet up the cost of living. How about education, I
USA has the govt loans they saddle on most high school graduates, free money for education until you graduate, then we hand a 1/4 million
dollar debt around your neck because its all good free money for the universities. But it raises the cost of living, while subsidizing the
universities. Does Mexico do that?

And if my cost of living goes up, then I need a higher paying job.

Taxes on my farm are approaching $50 an acre, where we have good weather or bad, high or low crop prices. Does Mexico have that sort of
cost on its land owners?

Tomato, tamatoe.

Govt regulation and largesse upon corporations and or citizens is the same, it raises the costs above sustainability within our country.

We have to buy goods made in other countries, we can't afford the bills for all that govt regulation and extras.

No point in arguing if it falls on workers or falls on large corporations, it is the same dang deal and it kills our economy the same.

Paul
 
That doesn't explain why they close existing plants Bob. State and local government laid it all on the table and offered to build Frigidaire a new factory,not just tax breaks,the union agreed to some concessions,but they still wouldn't stay. All they could see was higher profits from lower wages.
 
I tend to agree with you but saving labor costs by moving outside the US is not the only method. As happened in my company years
back and a friend's company (both very huge corporations) they announce that they are closing up a facility and that jobs will
only be available at "such and such" facility several states away but you will have to 're-apply'. Long time staff, who are too
well entrenched in their home state (i.e. can't afford to sell or move without a crippling financial loss) quit or take a small
buyout. After the staff is reduced, mostly by those who earn "too much" for their position (because all the years they got 'cost
of living' raises that compound off their base) the company calls off the move (for some contrived reason) and hires new people
at a lower pay scale. Better yet (as happened to a good friend) they hire back the same person for the same job at half the
original pay. Then the cycle, maybe 10 or 20 years, starts all over.
 
real people working 40hrs on time everyday ect we have lost big time there and it does start at home just when is the general public going to wake up
 
(quoted from post at 09:07:21 02/11/16) That's NOT the real reason Spook. I deal with building new plants in this country on a regular basis. EPA, taxes, and bureaucracy is the main reasons that plants are moving elsewhere. That and a workforce that doesn't want to work. Several reasons, but pay is far from the top. Bob

With all due respect, I think you are wrong. The jobs are moving due to wages. Period. These days, the things like EPA are pretty much worldwide. Taxes? the margin they make in Mexico will more than cover taxes. You think running a plant in Mexico and importing the products here will result in less bureaucracy? I reject the idea that Americans won't work.

Labor, in the automotive industry is less than 10% of cost. But this is a business that makes a profit of less than 5%. If they can reduce labor cost, it all falls to the bottom line.

It all comes down to the trade treaties. As long as they can outsource to Mexico, they will do it. As long as it makes money for them. When they cannot ( unlikely ), make a profit doing so, they will build more plants here.
 
Talk to someone that runs a business in America--large or small, and see what they say about taxes--rules--and regulations.
 
I agree with Spook generally. I suspect that if you asked the chief financial officer of most large US based
corporations...goverment regulations are way down on the list of important considerations in moving to a lower cost production
facility. Labor costs would certainly top the list (by far) They are a consideration for sure and don't want to minimize it..but
the rant on government regulations is a not so subtle jab at the US government.
 
Agreed. Watch any of the promo vids that circulate in plant engineering field covering the savings available in Mexico. Getting a fully q/a'd plant capable of the same quality of a
Canada/US plant running is very expensive in Mexico too but the savings pour in once its running. You can fire employees at will, you don't have the same responsibility if they
get hurt etc. The humans in the plant become very cheap.
 
This is a bit ironic, as we complain on our Japanese computers with rare earth components from China assembled in Mexico
serviced by on line techies in India.

Be careful what you wish for. Read Leonard Read's "I Pencil." He talks about how no single person knows how nor can make a
pencil. Graphite from Maylasia, tin from china or Europe, chainsaws from Sweden, ships to haul everything from China or India.
You start throwing up trade restrictions and suddenly you have unintended consequences and more impediments.

In a truly free society, should you not be able to purchase what you want from where you want? Should you not be able to run a
business over seas and give the best price to your customer?

Where is the logical conclusion in trade restrictions. OUtside the inter commerce clauses of the constitution, you could
restrict people to buy within your state or county; think of the jobs! Yet we all know it is better to grow wheat in Kansas or
Washington than Florida. Likewise, other places have advantages and seek to exploit those advantages. Rockefeller created
unfair advantages, most of which were temporary until competitors adopted them, to give us cheaper fuel, more disposable income,
greater free time and quality of life.

Sure, Mexico has lower labor rates but does anyone here employ the higher labor of one contractor over another? I read all the
time on this site of people complaining about the cost of professional services, mechanics, machine shop, pump and drill,
electricians, horseshoers, etc. seeking lower cost elsewhere. We do, on small scale, precisely what these companies in question
do on a large scale; we seek the lower cost, nearly every time, and enjoy the savings.
 
There are probably some environmental/safety regulations that must be addressed in Canada
and the US that aren't as extensive in Mexico or anywhere offshore for that matter. I do
agree, however, that labour costs would be the biggest factor in offshore relocation.

Ben
 
I worked for 32 years in a large aluminum production plant as a machinist. Plant was organized.
My hourly salary was less then my rural mail carrier and he now draws more retirement then I do.
Lots of people I knew that worked non union and made more money and had better benefits then I.
 
Lower Mexican labor costs is, indeed, a factor but it is certainly not the the only factor.

The fact is that the enormous burden of mostly federal (but also state and local) taxes and regulations adds greatly to the cost of doing business in the US vis a vis many other countries.

Like it or not, no business can remain economically viable if it does not remain cost competitive.

Dean
 
There is some truth in what you say but stockholders are consumers too. Have you heard the rant lately from Bernie Sanders and Clinton about Wall Street? What they don't tell us is that Wall Street only handles the money we all own. All of our 401k's and IRA's are invested in the market to some extent or another. Wall Street just handles the investment for us. We can't hurt them without hurting all of us. As far as EPA type regs are concerned no country is regulated nearly to the degree the USA is and Clinton and Sanders want even more of it. EPA is now even regulating ground or surface water such as puddles that appear in low spots on our land after a rain that usually evaporates or disappears within a couple of days. I can't blame the companies for they fight to survive and all of us middle class folks have a lot invested in their stocks and bonds and want them to do well. 15.00 per hour minimum wage puts even more pressure on businesses. I am a retired person with a fixed income-SS and a small fixed pension but free trade is the only way for ours or any economy to survive. I buy a lot of USA products even if cost more for usually they are better and the better they become the more in demand they will be.
 
Up state New York like 15 years ago Carrier closed the plant in Sarquess NY. Nestles closed a plant in Fulton, NY. If you don't think that didn't raise holly heck on the economy up there. Cost is cost and that means a lot. When the government gets involved with all of the crap they can think of it drives everything over seas. Purposley destroying the economy and turning this country into a third world country. Can you remember back to when you were a kid? Your mom stayed home and was a Mother not a fellow bread winner to help the family survive. "Latch key kids" The idiots who follow what liberals said about fill your potential etc. It destroyed most of the American family. The government again needed more power so they set up wellfair so if you had a illagit kid the father couldn't live with you in section 8 housing. You couldn't make enough money to survive and pull yourself up so you sit on your a$$ and let the checks roll in. Then you pop out a few more kids to make more gov money and have fun. The nnalert party has created its own voter base over the past 50 years and just look at the crap that has been in office. Almost every city that is in the toilet has a nnalert for a mayor. Just do a little research. But there is something that has not come up. There are people in charge of the world that are one or two percent of the population and control more than 90% of the worlds money. Governments are just puppet heads to these people. We need a very powerful head of our government who might be able to straighten out just some of this crap. Let us see what happens over the next 9 months. My rant but all to true.
 
I saw this exact same thing happen at the last big corporation I worked for. They had small maintenance bases at some outstations. They would run them a few years then "close" them, shuffle employees around and then "re-open" them a few years later.

This is also the same tactic they use to keep pilot costs down at the regional airlines. They moved to contract flying and the contracts last a few years and then are re-bid. When one company loses they downsize and furlough or lay off pilots. But guess who is expanding and hiring? The low bidder! Pilot pay is based on seniority and all the newly hired guys start at the bottom of the pay scale, gain seniority for a few years and then their company is underbid and it starts all over. A little bit simplified explanation but that's how things have evolved. It defeats the union seniority system.
 
That is not entirely true, cheap energy beats cheap labor in the long run because most cheap labor
is not very efficient. Unfortunately, now that cheap energy is back the federal government is doing
everything in its power (plus much illegal action) to prevent the use of that cheap energy to
attempt to validate the ridiculous lie which is ''global warming'', deliberately crippling the
national economy so as to tighten the dependency noose on the American public and ensure that the
two parties and their sycophants remain in power. The glory years of Americas post war industrial
expansion which created the middle class and made America the richest nation on earth was
supercharged by 30 years of $2.00 per barrel oil, as soon as the Arab oil embargo hit in 73
industry started for the door in earnest.
 
Spook, you cannot possibly believe that ''things like the EPA are worldwide''. I have worked in
roughly a dozen third world countries in my life and I can assure you that regulation is largely
unknown or, if it exists at all, it is simply a means for two bit government functionaries to
extract bribes and for the nations rulers to extort western corporations doing business. Most
places the people would not stand for anything that stood in the way of their chance at a job. Do
you think that Saudi Arabia can produce oil for under $10.00 per barrel in 2016 because they are so
efficient? The idea is to ludicrous to even be laughable, they can do it because there are
absolutely zero regulations, zero tax and they can pay people what they want to pay them, or not,
do you think slavery is dead in 2016? Think again.
 

Quite simply there is no EPA or OSHA in Mexico, and the government of Mexico, as corrupt as it is, is not nearly as corrupt as the nnalert government of the US.

We need to completely burn down the US government and start over with a constitutional government, but liberals like it corrupt and weak and they have indoctrinated millions of school kids to see it the same way so there is no salvation for the US..
 
A couple of points:

Regulations similar to EPA are solidly in place in
Europe, Japan, Australia and other countries.

Mexicans may only make $4 per hour, but they
have universal health care.
 
There has to be some balance. I don't want to bring this in to the discussion,but I have to,to make a point. Talk radio is owned by somebody or somebodies with money and power. More money and more power is the goal of the people who own those shows. Politics only come in to it as a means of making it easier for those people to acquire more money and more power. The paid hosts go on the air every day,drumming the same message over and over until it becomes ingrained in listeners to become part of an army of foot soldiers to carry out whatever it takes to achieve the goal of doing what's best for those show owners.
I listened to those promises for 15 years,that if those with money and power were better off,I'd be better off. The only ones who were ever better off were the hosts and the owners,not me. In the seven years since I went cold turkey and stopped listening,things still haven't gotten any better for the average working person. The whole message they preach is bunk for the average guy.

Now anybody who's read that,if your head hasn't exploded yet and your eyes aren't bleeding,it's just as bad on the other side. I listen to NPR on weekends. Those people are not fans of the US Constitution to put it as mildly and gently as I can possibly put it.
As for the unions,I've seen perfectly nice,normal people go to work in a union shop and start getting that union newsletter. It's so full of propaganda that it makes them incapable of having a conversation. You could say "Nice weather" to those people and they'd go off on a political rant until you walked away.

The results of the NH primary should scare the life out of every citizen in this country. Just looking at the field of candidates should. Sanders isn't the answer,nnalert isn't the answer,nnalert,Cruz,they're all just plain dangerous. This whole election is just a sporting event where somebody's "side" wins. There won't be any winners among the general populace when this disastrous election is over in November.
 
Labor costs are a factor, but as others say, not always the only factor. I know the plant I used to work for was part of another manufacturing company that was purchased. The plant I worked for built the
same basic product as a few other facilities they already had, so the handwriting was on the wall, and one very large plant that built that same product was in Mexico. It took about 3 years to roll that plant
into existing plants across the US and Mexico, and the term is "synergies". As much as it hurts the US worker, and US economy, it makes no sense to make a product in more than one location and duplicate
efforts, therefore they identify the least cost method or location, and move the existing process or product to that location. Ironically part of the close of that facility moved jobs to another US plant, and
in fact I can think of one such process that has moved twice - two times for plant closings. Each time they closed a plant where that machine or process was. Since this machine does not produce high volume
it is very likely it will remain in the US in one of their plants. It is well known that low volume or processes that require high set up times (requiring more machine set up), do not lend well to Mexican
plants.
 
The first article I found.

Low Wages, Trade Deals Luring Auto Plants And Jobs To Mexico (Google that and you'll get the below)

Low labor costs and fewer tariffs are the swing factors. A worker in Mexico costs car companies an average of $8 an hour, including wages and benefits. That compares with $58 in the U.S. for General Motors and $38 at Volkswagen's factory in Tennessee, the lowest hourly cost in the U.S., according to the Center for Automotive Research, an industry think tank in Ann Arbor, Michigan. German auto workers cost about $52 an hour.

Mexico also trumps the U.S. on free trade. It has agreements with 45 countries, meaning low tariffs for exporting globally. That, along with low labor costs, convinced Audi to build an SUV factory in the state of Puebla. The German automaker will save $6,000 per vehicle in tariffs when it ships a Q5 to Europe, compared with building the same vehicle in the U.S., says Sean McAlinden, chief economist at CAR...
 
(quoted from post at 11:35:04 02/11/16) The first article I found.

Low Wages, Trade Deals Luring Auto Plants And Jobs To Mexico (Google that and you'll get the below)

Low labor costs and fewer tariffs are the swing factors. A worker in Mexico costs car companies an average of $8 an hour, including wages and benefits. That compares with $58 in the U.S. for General Motors and $38 at Volkswagen's factory in Tennessee, the lowest hourly cost in the U.S., according to the Center for Automotive Research, an industry think tank in Ann Arbor, Michigan. German auto workers cost about $52 an hour.

Mexico also trumps the U.S. on free trade. It has agreements with 45 countries, meaning low tariffs for exporting globally. That, along with low labor costs, convinced Audi to build an SUV factory in the state of Puebla. The German automaker will save $6,000 per vehicle in tariffs when it ships a Q5 to Europe, compared with building the same vehicle in the U.S., says Sean McAlinden, chief economist at CAR...

The Mexican wage thing will vary somewhat between companies, and location in Mexico. I've heard that the farther south in Mexico, the lower the wages. I just read a article from Forbes magazine that states that Ford's cost is under $4 per hour, including bennies.

I've got several friends that are in Mexico right now, working for one company or another. They go down there for a week to 3 weeks per month. The plants are modern, and have to meet the same or even stricter environmental standards. These companies, if for no other reason, cannot be seen as polluters anywhere, even in the 3rd world. In many cases, the Mexican plants have newer, more sophisticated equipment than the US plants.

Another issue: These plants just aren't built in the middle of nowhere. They are in industrial parks, along with a lot of supplier plants. These developments also can include subsidized housing and schools. Medical care there is government run. In other words, socialized. The worker's are unionized.

The reality is, those jobs are gone, they are never coming back, no matter who is elected.
 

Under the free trade rules, the "market" will determine where jobs go. So until the 3rd world living standards rise quite a bit, and ours go down, no, they are not coming back.

Bruce Springsteen had it right 30+ years ago: "these jobs are going boys, and they ain't coming back".
 
I agree with you and Centex that over time many industries feel the need to shake out the dead wood and start afresh.

This cleansing and divestment of all unnecessary personnel and functions is exactly what is needed in government. It has become so bloated, so diverse in its functions, so loaded with bureaucrats who in order to justify their jobs must constantly be stirring the regulatory pot and changing the rules they enforce, no company or individual is safe from their meddling. Unfortunately, only a revolution can produce the kind of change that could restore common sense order.
 
Maybe we can count on good old fashioned Mexican corruption to help us out. It will not be so cheap if the companies have to pay protection money to get their goods out of Mexico. That issue already exists in South America and in particular with getting grain to the ports.
 
Hi Randy. I don't mean this to be mean, and that very well may be the reason with Frigidaire for sure, but was that the real reason or is that just what got out to the general public. Sometimes press is a terrible thing. Again, certainly not casting doubt, but in a large company board rooms there is a lot more discussed than is general knowledge.

In Frigidaire's case, lower wages may certainly be the main reason.

However, I deal mostly with new plants that deal more so with the Plastics Industry. Most already have existing Plants in the States. I hate to tell you the number of Green Grass Plants we have designed and helped quote that get shelved because it just costs too much to get Permitted and through the local and federal government bureaucracy. Not only that, but everything has to be made so Stupid Proof that these companies look at the cost vs reward and either shelf the Project or send it elsewhere.

When I say Stupid Proof, I don't mean handrail around a deep pit, I'm talking money spent to make sure, that they are sure, that they are sure, that they are sure, that no one can possibly get hurt. In which case, someone will invariably remove the hundreds of protections, and get hurt.

Probably the main excuse I hear from Corporate Heads is the lack of, and poor workforce. Getting people to show up day after day. If you (actually anyone reading this) have never had to keep a 10 to 100 person or more workforce operating on a daily basis, you would not be able to imagine the extremely poor American workforce that is available this day and age. It changes from Geographical locations for sure, but it will make you want to pull your hair out for sure.

This is why Companies are moving abroad. Bob
 
When I was still flying we went to Mexico a lot. Nissan built a huge state of the art plant in Aguascalientes near the airport. We drove right by it on the way to and from the hotel. They also had either Honda or Toyota there, I forget which. Many times the flights between there and DFW would be half Japanese passengers going to and from these plants.

Mexico is not fancy but from what I've seen is far from a third world. Most people underestimate what they are capable of.

It was amazing to see the difference in how the station personel worked vs. outstations in the U.S., a real eye opener. Everyone at every little job in Mexico took their work seriously and everything would ready to go when we arrived or came out in the morning to leave. In the US a lot of the station workers acted like the aircraft activities were an annoying interruption to their long breaks.
 
>bureaucrats who in order to justify their jobs must constantly be stirring the regulatory pot and changing the rules they enforce, no company or individual is safe from their meddling.<
You hit that one right on the head. After a dozen years at my company I couldn't help notice the trend of how engineering paper work requirements would get steadily more complex until there would be a "new" program to simplify it. This would go in a 4 year cycle then start all over again. One of my coworkers transferred to 'internal training' and had to visit the 'Documentation' section in another state. Understand; his hobby was dating strippers and he would take them out, get them stinking drunk then take advantage of them. He would "fake" excessive drinking. When he went out with the "documentation" folks his habit was tough to change so he stayed sober enough while they got loaded. In a stupor, one of them confessed, when asked, that they constantly changed documents only to justify their jobs to management. Gov't works the same I'm sure.
 
(quoted from post at 12:10:22 02/11/16) Hi Randy. I don't mean this to be mean, and that very well may be the reason with Frigidaire for sure, but was that the real reason or is that just what got out to the general public. Sometimes press is a terrible thing. Again, certainly not casting doubt, but in a large company board rooms there is a lot more discussed than is general knowledge.

In Frigidaire's case, lower wages may certainly be the main reason.

However, I deal mostly with new plants that deal more so with the Plastics Industry. Most already have existing Plants in the States. I hate to tell you the number of Green Grass Plants we have designed and helped quote that get shelved because it just costs too much to get Permitted and through the local and federal government bureaucracy. Not only that, but everything has to be made so Stupid Proof that these companies look at the cost vs reward and either shelf the Project or send it elsewhere.

When I say Stupid Proof, I don't mean handrail around a deep pit, I'm talking money spent to make sure, that they are sure, that they are sure, that they are sure, that no one can possibly get hurt. In which case, someone will invariably remove the hundreds of protections, and get hurt.

Probably the main excuse I hear from Corporate Heads is the lack of, and poor workforce. Getting people to show up day after day. If you (actually anyone reading this) have never had to keep a 10 to 100 person or more workforce operating on a daily basis, you would not be able to imagine the extremely poor American workforce that is available this day and age. It changes from Geographical locations for sure, but it will make you want to pull your hair out for sure.

This is why Companies are moving abroad. Bob

There are several plastic companies in our town. They all pay little more than minimum wage. A neighbor of mine is a manager at one. He says it's M or M. Minimum wage or Mexico. Most of the companies have plants down there also. The HR folks in these places make sure that everybody is signed up for their bridge cards and so forth. They have a bus service that picks up folks also. Basically, they are employing folks that can't get a better job.

Do you think these companies can afford to have substandard plants in Mexico?
 
(quoted from post at 09:47:02 02/11/16) Lower Mexican labor costs is, indeed, a factor but it is certainly not the the only factor.

The fact is that the enormous burden of mostly federal (but also state and local) taxes and regulations adds greatly to the cost of doing business in the US vis a vis many other countries.

Like it or not, no business can remain economically viable if it does not remain cost competitive.

Dean

Vote nnalert!! Talking about it, and voting in losers will never do any good.
 
Yes, voting in Donald nnalert will solve it all. sarcasm concluded.
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How are US people that have no jobs or poor paying jobs going to buy stuff made in Mexico with $4.00 labor??
 
We can't find local labor for our farm that is even 1/2 as good as H2A workers from Mexico. The local help is lazy, undependable and scarce and want twice as much for half the work.
 
(quoted from post at 12:24:33 02/11/16)
(quoted from post at 09:47:02 02/11/16) Lower Mexican labor costs is, indeed, a factor but it is certainly not the the only factor.

The fact is that the enormous burden of mostly federal (but also state and local) taxes and regulations adds greatly to the cost of doing business in the US vis a vis many other countries.

Like it or not, no business can remain economically viable if it does not remain cost competitive.

Dean

Vote nnalert!! Talking about it, and voting in losers will never do any good.

Really? You mean they guy who bankrupted 4 companies and has run many more so far in the ground that even though he still owns stock in them he's barred from having anything to do with management of them? That looser? That nnalert? He gets the nomination either nnalert or Bernie are going to be living in the white house!

Besides even if he gets in what's he going to do except keep running his mouth? Tax laws and such have to go through the house and senate. He's can't do that with an executive order. He can order the fence be built but the house and senate has to vote to fund it. So just what is he going to do?

Rick
 
(quoted from post at 13:08:33 02/11/16) How are US people that have no jobs or poor paying jobs going to buy stuff made in Mexico with $4.00 labor??

Because they are on welfare.

Rick
 
1206SWMO ,that was my thoughts exactly. Folks the rich are getting richer and the poor poorer and the middle class is becoming poor. My thought is most of these company's would still make a hefty profit staying here but corporate greed will not allow that , not if they can make more by outsourcing. This "global economy" malarkie seems to work for most but terrible for us. When Clinton opened free trade really hurt us ,some real low down liars right with the obummers. But I digress there is no good candidate unless there is the option to clean from top to bottom.
 
(quoted from post at 13:47:56 02/11/16) Yes, voting in Donald nnalert will solve it all. sarcasm concluded.

Even if he only does 1/10 the stuff that he says he will do he's STILL 'way out in front of the rest of them. 8)
 
Sure, money is the reason a company starts up and continues and it is the reason we get up and go to work everyday. But without the desire
to make money where would we all be? We can look around and see those who never hit a lick at a snake but live pretty good. To get ahead
financially is a good motive. It is why I left the factory and worked myself through college. It paid off but I was always content to work
for someone else. Too afraid I guess to try anything on my own. But I did get the rewards of my efforts but they were limited because of
my temperament to play it safe.
 
Wow Tanker! You mean you got to look at Trumps books and saw yourself he bankrupted 4 companies. Or is that
what the media tells you? Good ole CNN telling you what you want to hear. You don't get to be rich without
taking chances and risks. Not all pay off.

I can tell you this much, he isn't bought and paid for. I believe he will make things happen and I'm
willing to take the chance. No way will he be worse than the career politicians. The fact that 4 companies
went broke out of hundreds doesn't worry me one bit. We are already BROKE!
 
You are right about the workforce, and I do not mean all are lazy, but so many are unable to keep up with the challenges of modern factory life. I doubt the Mexican workforce is any better, but where I worked for 22 years it was difficult to get and keep competent employees.
 
Some thoughts. In 2004, when I was
doing some projects with some GM
engineers, they told me that an
Olds Alero or Pontiac Grand Am
total cost was around $2000. Those
cars were selling new at that time
for $18,000 - $24,000. Some profit
to be had there. I have a buddy
that has a relative that is a
current GM engineer, and he claims
that a 1500 4WD crew cab pickup
with the median options package
costs around $8000 for them to
build. That is a $35,000-$40,000
in most places. If you can make
MORE money than your already cozy
profits, why wouldn't they?

Ross
 
I don't know how your buddy's relative is calculating the cost of a new 1500 pick-up, maybe raw materials and the specific amount of labor to put one together, but, he/she is surely not amortizing the physical plant costs, insurance, interest, taxes, pensions of employees and all of the other costs associated with running a manufacturing operation.
 
Ron, your experience sounds like one of mine. In the late 80's and through the 90's I was working in a plastics molding plant. Loved it. Really fun work and made good money. We did it all, build tooling, run the tools, apply paint and shielding, assemble and ship the customer a completed sub-assembly ready for their line.
Then it happen, a new "Flagship" plant was built in Portland and another was built in Guadalajara Mexico. Our plant in Denver was in the top of the corporation in sales and profit and in order to support the new plant on Portland and the one in Mexico we were "consolidated". Mostly to Mexico. The high volume mostly automated processes we had in Denver meant it fit Mexico well. Turn it on and go.
So my job changed from project management to putting myself out of a job and moving it to Mexico. I spent months installing brand new state of the art equipment in the Guad plant and teaching the locals how to run it.
The coating line they put in was all brand new and all coatings were applied by robots. My job then was to set it up, debug it and program the robots, then teach the process of startup and shutdown and some trouble shooting. They had hired a local that was to be their programmer that supposedly had programming experience on the Fanuc robots. After I got the first one up and running he finally admitted he couldn't even start one up let alone do any programming. He stayed on, for what reason I do not know. He never came out to the floor to learn anything. Just sat in the production office all day. Anyway, after a period of flying home every few weeks and basically managing the production in Mexico I grew tired of all the travel and resigned. I was mostly living in Mexico in their economy and making the American dollar. Lived like a king. All my paychecks went right into my bank account back home and I could live there on my travel allowance easily.
Talking with higher-up's in the corporation the coast savings for them were not that great. They had to keep a good sized crew of american engineering and management staff on hand to make it work and they got big paychecks plus travel back home every three weeks as promised. One guy from the U.S I was there with is still there. He loves it and is making huge money.

Greg
 
Yes you are right labor is cheap in Mexico however if it wasn't for government interference a lot of companies could stay open and make a profit. I once had a business with a half dozen employees and was forced out of business by the government mainly thanks to the environmental crackpot movement.
 
Most middle class folks pay 15% or less in taxes after deductions are applied whether or not they own stocks. We are the average person. The poor pay no income taxes and the rich have their money come to them in the form of capital gains and that rate is lower than the rate for ordinary income. The top 5% pay 90% of federal income taxes. A lot of the time we forget that what we pay during the year may come back to us with a tax refund. If the total value of goods and services was fixed we might have a complaint but money creates money so the "pie" grows. What the rich make has no influence on what I have at my disposal.
 
What this nation needs is another major world war that decimates the production capacity of every other
country but this one. Good ole days would be back again.
 
There are many Diesel cars available all over the world including all of Europe that will not pass US epa pollution laws. I see them every time
I go to Germany and travel into neighboring countries. To think pollution laws, in the rest of the modernized world are the same is bogus, and
meeting those requirements is very costly.It IS a big factor for US manufacturing. The VW diesels cheating issue would not be an issue anywhere
else. German has built and is building more coal burning power plants while coal burning is being forced out in many power plants in the US. If
Ob...a were to be elected another term (ie nnalert) the plans are to shutter ALL coal before we reach 2030.
 
I agree. There are U.S. companies now that are deciding to do away with drug testing of new employees. They have found that if they don't they can't find enough drug free ones to keep the business open. That and the fact so many of our high school graduates can't read, write, cipher or talk sensibly. And this is not a recent phenomenon. In 1994 I worked in CA. dealing with the Northridge earthquake where a lot of business who suffered damage had to get their stores cleaned out and needed to hire workers to do that. I saw lines of Hispanics waiting to be hired and almost no Whites or African Americans.
 
(quoted from post at 12:55:44 02/11/16) What I don't understand about the previous post is why 3 pages of posters ragged about regulation, taxes, politics, but never once brought up the real reason:

MONEY!!! Labor in Mexico is cheap. Very cheap. Ford Motor Company is currently paying LESS than $4 per hour for labor in Mexico. And Carrier probably isn't going to pay that.

The cost of the plant machinery is going to be the same, they likely don't make it in Mexico. It will be imported from the US, Europe, or Asia.

The cost of raw matierals won't change much. Again, likely imported from somewhere else.

The only thing cheaper is labor. 4 bucks an hour, including bennies, cannot be beat. To the multinational bean counters,
this is like fine food, great liquor, and sexx all rolled into one.

I really don't get it. I've seen this before on this forum, nobody wants to acknowledge what seems to be obvious: These corporations are moving labor intensive jobs to places where labor is cheaper. Nothing more. Not politics, not regulations, not even unions. All of Fords employees in Mexico are union. A weak, government controlled union, but a union.

Nothing beats cheap labor!

Rant off.

It's more than just labor costs.
 
(quoted from post at 18:45:48 02/11/16) Wow Tanker! You mean you got to look at Trumps books and saw yourself he bankrupted 4 companies. Or is that
what the media tells you? Good ole CNN telling you what you want to hear. You don't get to be rich without
taking chances and risks. Not all pay off.

I can tell you this much, he isn't bought and paid for. I believe he will make things happen and I'm
willing to take the chance. No way will he be worse than the career politicians. The fact that 4 companies
went broke out of hundreds doesn't worry me one bit. We are already BROKE!

Nope, he was at the helm so to speak when 4 different companies he was running at the time went belly up.

Without congressional backing he won't get a thing done. He can't build the fence built without funding that has to be approved, no executive order there. Can't do a thing about taxes without congress. Again outside what an executive order can cover. What country is going to renegotiate a trade deal that is in effect and to their benefit? None! The man is just saying what people want to hear to get elected. He can't force companies to move work back to the US. About the only thing he can do is order INS to deport illegals. He can't even repeal external_link Care. Both houses have to vote to repeal it then he can sign it into law. So just what is he going to do? I've heard his claims but he fails to mention any plans on just how he's going to get it done. To be honest if it comes down to nnalert or Bernie VS nnalert I may just stay home. Be a first for me. I can't vote for any of the 3 with a clear conscious. One is an admitted socialist who sounds like he's quoting the communist manifesto, one IMO is a closet communist who's proven to be a huge security risk and one is a loud mouthed egotist who only wants to be president because of his ego. May as well stay home. Personally if the nnalert nominate nnalert I think our next president will be a nnalert. I honestly don't think nnalert is electable.

Rick
 
Yeah, the only reason Aloca is still in NY is because the goobermint bribes them to stay. Otherwise they would have been gone years ago. The proposed $15 minimum wage will turn upstate NY into a desert, business-wise. Heinz/Kraft just consolidated with a net loss of around 1200 jobs statewide, Some upstate businesses are making noises of moving to Canada. Wages ain't the only reason businesses leave. Wouldn't make any difference if wages were $1 per hour, no business managed by anyone with half a brain would even consider NY for a business location. Unless like Alcoa, they can wring a bunch of money out of the state (taxpayers) to locate here. And then they just take the money, operate a few years and seriously reduce their workforce or leave anyway. The abundant states in particular, and the US in general has become extremely business unfriendly over the last 30 years, with predictable results.
 
(quoted from post at 19:44:58 02/11/16) Some thoughts. In 2004, when I was
doing some projects with some GM
engineers, they told me that an
Olds Alero or Pontiac Grand Am
total cost was around $2000. Those
cars were selling new at that time
for $18,000 - $24,000. Some profit
to be had there. I have a buddy
that has a relative that is a
current GM engineer, and he claims
that a 1500 4WD crew cab pickup
with the median options package
costs around $8000 for them to
build. That is a $35,000-$40,000
in most places. If you can make
MORE money than your already cozy
profits, why wouldn't they?

Ross

That is the first time I've heard that. If that's true then why did Chrysler fail? Why did GM need a bail out? OH wait! It's because that isn't true at all. The figures your friend gave you is the dollar amount of the materials needed to build those vehicles. Now look it up. But labor, bennies and retirees are the ones eating up most of the cost of a new car or truck. Something to the tune of 67%. Current employees get about 36-37% of that. What's killing them is the retirees. When the big 3 gave the retirement packages to the UAW the average retiree last less than 10 years. Now they are lasting 15, 20 and some even more. No one way back then ever saw those darn pesty retirees living that long! No, I'm not saying we should kill off the retirees. But that has been a huge problem for the big 3.

Rick
 
(quoted from post at 17:55:53 02/12/16)
(quoted from post at 19:44:58 02/11/16) Some thoughts. In 2004, when I was
doing some projects with some GM
engineers, they told me that an
Olds Alero or Pontiac Grand Am
total cost was around $2000. Those
cars were selling new at that time
for $18,000 - $24,000. Some profit
to be had there. I have a buddy
that has a relative that is a
current GM engineer, and he claims
that a 1500 4WD crew cab pickup
with the median options package
costs around $8000 for them to
build. That is a $35,000-$40,000
in most places. If you can make
MORE money than your already cozy
profits, why wouldn't they?

Ross

That is the first time I've heard that. If that's true then why did Chrysler fail? Why did GM need a bail out? OH wait! It's because that isn't true at all. The figures your friend gave you is the dollar amount of the materials needed to build those vehicles. Now look it up. But labor, bennies and retirees are the ones eating up most of the cost of a new car or truck. Something to the tune of 67%. Current employees get about 36-37% of that. What's killing them is the retirees. When the big 3 gave the retirement packages to the UAW the average retiree last less than 10 years. Now they are lasting 15, 20 and some even more. No one way back then ever saw those darn pesty retirees living that long! No, I'm not saying we should kill off the retirees. But that has been a huge problem for the big 3.

Rick

Exactly. I think it was the head of GM that said, "I thought I was running a car company. Now I find out I'm running a retirement plan." or something along those lines. People seem to forget that every single penny of cost, plus the profit needed to stay in business, gets tacked on to each product they buy. If it costs $10.00 to build an item and there are another $40.00 in costs like labor, insurance, regulatory fees, taxes and taxes and taxes, healthcare, unemployment, lawyers fees to protect the company, etc, etc, etc, it all gets tacked on to the cost. Does anyone really think a pickup costs $50K to build? Every single penny gets tacked onto every item you pay for. Raise the min wage and that gets passed onto you and me. Raise taxes, same thing.

People seem to think that a company can stay in business on a negative profit. Only gov't can do that.
 
(quoted from post at 06:55:11 02/13/16)
(quoted from post at 17:55:53 02/12/16)
(quoted from post at 19:44:58 02/11/16) Some thoughts. In 2004, when I was
doing some projects with some GM
engineers, they told me that an
Olds Alero or Pontiac Grand Am
total cost was around $2000. Those
cars were selling new at that time
for $18,000 - $24,000. Some profit
to be had there. I have a buddy
that has a relative that is a
current GM engineer, and he claims
that a 1500 4WD crew cab pickup
with the median options package
costs around $8000 for them to
build. That is a $35,000-$40,000
in most places. If you can make
MORE money than your already cozy
profits, why wouldn't they?

Ross

That is the first time I've heard that. If that's true then why did Chrysler fail? Why did GM need a bail out? OH wait! It's because that isn't true at all. The figures your friend gave you is the dollar amount of the materials needed to build those vehicles. Now look it up. But labor, bennies and retirees are the ones eating up most of the cost of a new car or truck. Something to the tune of 67%. Current employees get about 36-37% of that. What's killing them is the retirees. When the big 3 gave the retirement packages to the UAW the average retiree last less than 10 years. Now they are lasting 15, 20 and some even more. No one way back then ever saw those darn pesty retirees living that long! No, I'm not saying we should kill off the retirees. But that has been a huge problem for the big 3.

Rick

Exactly. I think it was the head of GM that said, "I thought I was running a car company. Now I find out I'm running a retirement plan." or something along those lines. People seem to forget that every single penny of cost, plus the profit needed to stay in business, gets tacked on to each product they buy. If it costs $10.00 to build an item and there are another $40.00 in costs like labor, insurance, regulatory fees, taxes and taxes and taxes, healthcare, unemployment, lawyers fees to protect the company, etc, etc, etc, it all gets tacked on to the cost. Does anyone really think a pickup costs $50K to build? Every single penny gets tacked onto every item you pay for. Raise the min wage and that gets passed onto you and me. Raise taxes, same thing.

People seem to think that a company can stay in business on a negative profit. Only gov't can do that.

Last numbers I've read of, direct labor was about $1500. The bennies were about the same. I really think some od these numbers posted are either wrong, or very old. These companies have folks checking everything, and every cost gets put into some category. Some of the things are capital - like equipment. I remember when they had to replace a huge air compressor - it was something north of 2 million. A lot of their cost here are subsidized by the government. In some cases, the State of Michigan actually, thru corporate shields, owns the plant. A lot of "mid level" manufacturing plants did this, just to keep jobs here. They also assumed the responsibility for a lot of environmental stuff. The deindustrialization of Michigan ( America ) started long ago. It's become pretty well accepted that it has been going on here. There is a lot of interconnection between government and business, how that works is pretty political, so I won't discuss it.
 
(quoted from post at 13:55:53 02/12/16)
(quoted from post at 19:44:58 02/11/16) Some thoughts. In 2004, when I was
doing some projects with some GM
engineers, they told me that an
Olds Alero or Pontiac Grand Am
total cost was around $2000. Those
cars were selling new at that time
for $18,000 - $24,000. Some profit
to be had there. I have a buddy
that has a relative that is a
current GM engineer, and he claims
that a 1500 4WD crew cab pickup
with the median options package
costs around $8000 for them to
build. That is a $35,000-$40,000
in most places. If you can make
MORE money than your already cozy
profits, why wouldn't they?

Ross

That is the first time I've heard that. If that's true then why did Chrysler fail? Why did GM need a bail out? OH wait! It's because that isn't true at all. The figures your friend gave you is the dollar amount of the materials needed to build those vehicles. Now look it up. But labor, bennies and retirees are the ones eating up most of the cost of a new car or truck. Something to the tune of 67%. Current employees get about 36-37% of that. What's killing them is the retirees. When the big 3 gave the retirement packages to the UAW the average retiree last less than 10 years. Now they are lasting 15, 20 and some even more. No one way back then ever saw those darn pesty retirees living that long! No, I'm not saying we should kill off the retirees. But that has been a huge problem for the big 3.

Rick

Yup, Retiree health care was a huge problem for all the big 3. Just prior to the crash, GM off loaded the retirees, present and future, to a trust, for all our retiree health care. My deductibles have gone up, copays up, so that is how that works.

My dad has been retired almost 30 years. And he might have another 20 in him.

One thing about downsizing, it leaves fewer folks to pay into these systems, back in the 50's, GM had over 1 million employees, like wallmart does now. GM now has less than 50K in the US. So they now have 5% of the contributors into a system, originally designed for much larger populations. On the other hand, the union has always been pretty diligent about making sure the company funded the pension. So our funding is not that bad. And we never got as big as pension as the teamster's got either. My FIL gets a larger pension than I do, even though he made a lot less than I did, and retired 20 years ago. He is gonna see that cut quite a bit in the near future.

I think at the end of the day, pension costs were predictable and sustainable. Health care costs weren't.

I look back, I worked in 4 shops in Detroit. The first was pretty small, maybe 50 guys building tooling for the big 3. Then a Chrysler plant with 6K workers, a GM plant with 15K workers, and a GM stamping plant with 1400 workers. All were old plants, 2 dating back to 1903 - 1908. They were all surrounded by commercial and residential buildings. When they needed to expand, and get more efficient buildings, they had to leave Detroit - no room. In the years after ww2, there were over 30 Big 3 plants built in SE Michigan, all outside of Detroit. So when the need to be more efficient got going, the least efficient plants were the oldest, in Detroit. 2 plants I worked in had 5 stories, one had 8! No clear spans, either, there was a 3 ft pillar every 20 feet in the lower levels, forcing machinery to wind around the pillars. In the summers, it would get as hot as 130F, and in the winter, you could see your breath in some areas. When we went to a new plant in the burbs, we thought it was like heaven.

When those old plants closed, whole neighborhoods went downhill. No jobs, no money in the community, everything went south at once.

I don't know anybody here who thinks that any political party is gonna bring those jobs back. It's over. Done.

Have a good one!
 

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