well at least they are making some money
http://finance.yahoo.com/news/caterpillar-profit-surges-past-expectations-130852109.html
http://finance.yahoo.com/news/caterpillar-profit-surges-past-expectations-130852109.html
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CAT getting nasty with workers in Canada
- Thread starter cutting edge
- Start date
stuvecorp
Senior Member
Guess it pays to screw over your work force. 
d9gdon
Senior Member
Yes sir, I see and feel it every time I buy parts. Even when I avoid their parts, like the latest absolutely positively ridiculous price of $900 for an oil cooler end cap. I'm talking about the end cap, they called it a bonnet, about 5" round and 3/8" thick with 5 bolt holes in it. I could build 250 of them in a day in my shop with a drill press and a welder. Sure glad to see they made some money for their stockholders though.
dblaneyfan
Well-Known Member
Just wanted to point out a few facts of the case that have been overlooked.
1. Cat purchased EMD in Aug 2010. Cat did not negotiate the current wage rates at London, EMD did under GM and Berkshire, prior to being acquired by Cat. Wage negotiations between Caterpillar and the CAW employee's began not long after the purchase.
2 The decision to slash labor costs comes from the fact that the Canadian dollar has reached parity with the U.S. dollar, meaning now wage rates between the U.S. and Canada are closer to apples to apples than apples to oranges.
3. Labor costs at the London plant are roughly double what the U.S. workers make in LaGrange, IL.
4. Caterpillar as a global company has made record profits. There is no breakdown to tell what the profitability of the London, Ont plant is. Assumptions are made that because Caterpillar is booming globally that the London plant is booming as well. This is not necessarily true.
5. Caterpillar is using the current public perception that unions are overpaid compared to average employees as a leverage tool. The recent calls of the Ontario Federation of Labor for legislation to ban the use of replacement workers during strikes and lockouts are further enhancing that perception, and cannot be good for the Ontario manufacturing sector in the future if adopted or even seriously considered.
6. EMD has been losing market share over the last few years, and orders were declining. EMD laid off 600 employees in 2009 (out of 900) before recalling some back. There are around 450 employees currently on strike at the location, which leads me to believe that orders are still not streaming in.
Businesses have a basic goal to make money; no more, no less. As has been stated before, money is the only god of a business.
The CAW and the employees at London have a major dilemma, either bow to Cat's demands or remain on strike and possibly see those jobs leave. Cat is a huge company that got that way by being headstrong and determined. And don't doubt for a second that the U.S. gov't as well as local and state gov'ts aren't trying hard to entice Cat to expand production on U.S. soil.
Below is a copy of the proposed contract by Cat to the CAW workers at the London, Ont plant.
http://www.emcupdate.ca/wp-content/uploads/Employee-Letter-and-Summary-Dec-27-2011.pdf
1. Cat purchased EMD in Aug 2010. Cat did not negotiate the current wage rates at London, EMD did under GM and Berkshire, prior to being acquired by Cat. Wage negotiations between Caterpillar and the CAW employee's began not long after the purchase.
2 The decision to slash labor costs comes from the fact that the Canadian dollar has reached parity with the U.S. dollar, meaning now wage rates between the U.S. and Canada are closer to apples to apples than apples to oranges.
3. Labor costs at the London plant are roughly double what the U.S. workers make in LaGrange, IL.
4. Caterpillar as a global company has made record profits. There is no breakdown to tell what the profitability of the London, Ont plant is. Assumptions are made that because Caterpillar is booming globally that the London plant is booming as well. This is not necessarily true.
5. Caterpillar is using the current public perception that unions are overpaid compared to average employees as a leverage tool. The recent calls of the Ontario Federation of Labor for legislation to ban the use of replacement workers during strikes and lockouts are further enhancing that perception, and cannot be good for the Ontario manufacturing sector in the future if adopted or even seriously considered.
6. EMD has been losing market share over the last few years, and orders were declining. EMD laid off 600 employees in 2009 (out of 900) before recalling some back. There are around 450 employees currently on strike at the location, which leads me to believe that orders are still not streaming in.
Businesses have a basic goal to make money; no more, no less. As has been stated before, money is the only god of a business.
The CAW and the employees at London have a major dilemma, either bow to Cat's demands or remain on strike and possibly see those jobs leave. Cat is a huge company that got that way by being headstrong and determined. And don't doubt for a second that the U.S. gov't as well as local and state gov'ts aren't trying hard to entice Cat to expand production on U.S. soil.
Below is a copy of the proposed contract by Cat to the CAW workers at the London, Ont plant.
http://www.emcupdate.ca/wp-content/uploads/Employee-Letter-and-Summary-Dec-27-2011.pdf
I think the main point being overlooked in all of this, is that those jobs are already gone. Cat has offered what they have in order to force a labour dispute, allowing them to save money while closing the plant.
dblaneyfan
Well-Known Member
The short answer is the advent of the sub-prime loan.
The long answer is cheap and easy credit. Credit became much more accessible for every class of citizen, business and government, and caused many to become overextended and to start missing payments. This increasing debt led to escalating losses to lenders, which led to financial institutions facing insolvency/bankruptcy. At this point Lehman Bros. came into play. The dam was showing cracks and pouring water, but when Lehman Bros failed everyone saw how dangerous the situation really was and the dam exploded.
This led to rapidly increased loan standards which resulted in a sudden credit tightening event (read that as: no more loans or lines of credit) that really lowered the boom on those who were already overextended, and pushed others into being overextended without the access to credit that they were accustomed to. This is why TARP was put into effect, to pump money back into the credit markets to get lending and credit lines going again.
The crisis began with the housing markets. Housing prices and investment began rapidly increasing which led to the construction industry to rapidly expand which required equipment manufacturers to rapidly expand production. When the housing bubble began to pop in 2007 the construction industry experienced a dramatic downturn that caught many businesses and investors by surprise, which led to many business failures that left equipment manufacturers with a sudden glut of used equipment returned to them, no market to sell them in for decent prices, and no demand for new equipment.
Hope this helps some.
dblaneyfan
Well-Known Member
Not necessarily. If the London plant provides a strong return on investment then Cat would more than likely leave the plant operational. The CAW is promoting the "Cat wants to move the plant" idea. This idea may become a self-fulfilling prophecy in the long run, according to the actions of the workers. I'm not blaming the union workers for the current stalemate, I would be ticked off as well. Unfortunately it is now in the hands of the workers as to the future of Cat in London.
If the unions bow then Cat can't leave without much more severe financial and public relations consequences. Just my take.
That's why Cat has offered such a dramatic series of cuts. There's no way it can work out when Cat refuses to budge with their demands. Had they moved even a little bit towards the workers demands, then I would believe that there was hope that they actually would be willing to keep the plant open.
Reality dictates that the new plant in Muncie was bought and set up to take over from a higher cost operation, namely London. They are hiding behind the guise that they need the Muncie operation to comply with the requirements for US made locos. In fact, they could have easily done that with existing facilities.
Cat is closing London, and the labour dispute they have orchestrated is helping them to do that cheaper. I have no issue with the plant closing, but I do feel they should do the honourable thing, and close the plant properly. They knew about the labour agreements when they bought EMD, so it's not like it was a surprise sprung on them after the deal was closed.
bdlaneyfan, thanks for putting numbers for wages being offered, nobody up until you has done that, now for some questions, how does the wages offered compare to what other cat plants are paid, the same, higher, lower and by how many dollars per hour, also what were the wages of the workers at the canada plant, if what they are being offered is such a dramatic cut in pay? Also what was the benefits and how much less is whats being offered and how do those benefits compare to the rest of cats other plants currently in operation elsewhere? And lastly has anyone come up with what laws are being broken by cat, if the laws are different in canada verses the lower 48?
You might want to re read from the beginning Randy, the 4th post covered that.
Kind of hard to rationalize this due to the fact that wages are different all over the world. How do US Cat workers wages compare to those of Cat workers in China or India? Not really a fair comparison, is it?
The reduction in benefits was along the lines of 55% to 57%, but to get an exact figure would involve far more information than either side is willing to disclose. Wages were a 53% drop, and total compensation was a 55% drop, so to average it out, benefits should equal about a 57% reduction.
I don't believe anyone said Cat is breaking any laws. In fact, I think the opposite has been said. Cat is using loopholes in existing law to do what they are doing, instead of doing the fair and honest thing. By using a labour dispute, they can eventually get away from having to deal with the money they have been granted by the government, tax breaks they have received, and having to pay severance to the workers among other things.
Bumpus
Well-Known Member
.
They will get what they want or move all of there manufacturing to cheaper countries.
Many American companies have been doing this for years and it is going to get worse.
Wages are going down and they are not going to stop.
Ross Pero warned us all years ago, and most Americans
just laughed at him and said he was crazy.
" HEAR THAT SUCKING SOUND AS JOBS GO OVERSEAS "
.
They will get what they want or move all of there manufacturing to cheaper countries.
Many American companies have been doing this for years and it is going to get worse.
Wages are going down and they are not going to stop.
Ross Pero warned us all years ago, and most Americans
just laughed at him and said he was crazy.
" HEAR THAT SUCKING SOUND AS JOBS GO OVERSEAS "
.
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Alco, thanks for putting a full pension and the reduction into percentages of decrease for me, I never saw any dollars figured into this thread on benefits in order to convert those into percentages of decrease, so again, thanks. I too pay 100% of all health costs, along with deductibles and all the rest of the benefits cat wants to cut or is willing to pay, I pay 100% as well, so I really didn't know what dollars were taken away, my figures for myself were completely different.
As for comparing the US cat workers to China and India, yea thats exactly what I was looking for also put in percentages and wages and benefits paid, now for this being unfair, as stated in post #4 that nobody seemed to argue about was stated the housing costs, gas price, milk costs in order to justify the paid wages, no arguments at all on my end, then why is it unfair to compare to somewhere else? This is HEF and its members are worldwide, the last I checked and was wanting input from other areas and countries as to their costs and also wages, I don't see why thats unfair at all.
I hear a lot in the papers and news in my area how companies are taking jobs away from good people and giving them to third world countries that are termed cheap labor and a host of other things most not mentionable here but there is never a dollar amount put to the cheap labor, so from all aspects there must be some people working for about 25 cents an hour living in bark huts somewhere. I'd like to hear from them as well as to costs, I don't doubt there are differences in areas and costs of those areas, nobody really would, but at the same time, I'd like to know if cat is exploiting workers worldwide only paying them pennies per hour, like the media would like everyone to think, maybe your area is different for whats reported on the news, I can't speak for any other area than my own. If the statement has been made for your area, then why is it unfair for other areas to report their costs and wages? dblaneyfan has already stated the wages for us workers are about half of what canadian wages are and nobody seemed to argue that statement at all, so why not add some more data to the subject, since it was presented to HEF as cat treating workers nasty and opening up the dialog to the world, yes I'd like to know how US workers compare to china, india and the rest of the countries cat has plants.
Cats not the only company dealing worldwide, most everything I buy comes directly or indirectly from somewhere around the world if I like it or not, its just how its done today, so yes it does affect me either directly or indirectly and I for one would like to know how things are in other countries, if we're discussing wages and compensation in this thread, lets keep the information coming, sorry if this offends anyone else or hurts someone's feelings, we've got some information already stated, anyone want to add some more?
As for comparing the US cat workers to China and India, yea thats exactly what I was looking for also put in percentages and wages and benefits paid, now for this being unfair, as stated in post #4 that nobody seemed to argue about was stated the housing costs, gas price, milk costs in order to justify the paid wages, no arguments at all on my end, then why is it unfair to compare to somewhere else? This is HEF and its members are worldwide, the last I checked and was wanting input from other areas and countries as to their costs and also wages, I don't see why thats unfair at all.
I hear a lot in the papers and news in my area how companies are taking jobs away from good people and giving them to third world countries that are termed cheap labor and a host of other things most not mentionable here but there is never a dollar amount put to the cheap labor, so from all aspects there must be some people working for about 25 cents an hour living in bark huts somewhere. I'd like to hear from them as well as to costs, I don't doubt there are differences in areas and costs of those areas, nobody really would, but at the same time, I'd like to know if cat is exploiting workers worldwide only paying them pennies per hour, like the media would like everyone to think, maybe your area is different for whats reported on the news, I can't speak for any other area than my own. If the statement has been made for your area, then why is it unfair for other areas to report their costs and wages? dblaneyfan has already stated the wages for us workers are about half of what canadian wages are and nobody seemed to argue that statement at all, so why not add some more data to the subject, since it was presented to HEF as cat treating workers nasty and opening up the dialog to the world, yes I'd like to know how US workers compare to china, india and the rest of the countries cat has plants.
Cats not the only company dealing worldwide, most everything I buy comes directly or indirectly from somewhere around the world if I like it or not, its just how its done today, so yes it does affect me either directly or indirectly and I for one would like to know how things are in other countries, if we're discussing wages and compensation in this thread, lets keep the information coming, sorry if this offends anyone else or hurts someone's feelings, we've got some information already stated, anyone want to add some more?
Sorry Randy, to me it looked like you were heading down the road to "Cat only pays half that in the US plants, so it's good enough for them as well." like a few have said already. I read into what I thought you were going to say before you said it, and that was wrong. I was trying to get across that comparing different countries to each other and assuming they are all the same just isn't fair. However, it looks like you weren't trying to do that.
So, I apologize for assuming incorrectly, and I would also be interested to see how it all stacks up around the world.
Like I've said before, I know the plant is dead for all intents and purposes. Would I have liked to see it stay? Of course I would, but business dictates that they move it to save money. In truth, I have no real problem with that. My issue lies with the way they are going about it.
So, I apologize for assuming incorrectly, and I would also be interested to see how it all stacks up around the world.
Like I've said before, I know the plant is dead for all intents and purposes. Would I have liked to see it stay? Of course I would, but business dictates that they move it to save money. In truth, I have no real problem with that. My issue lies with the way they are going about it.
Hendrik
Senior Member
The way I see it Cat is saying to the Canadian workers "you're overpaid and unless you are willing to work for the same amount as we pay in another country, we will shut this plant and move it". So the workers are stuck between a rock and hard place. Work for a pittance, have no work, hope to find another well paying job or move to the place where Cat has put the factory and hope that the cost of living is a lot less?
Financially what Cat is doing is a good move but morally it is awful, of course it has been said that a business is about making a profit. However does it also have moral obligations like a person has?
I suppose I could argue that robbing a bank is immoral but makes sense from a financial view point, potentially netting large amounts of money for little effort or outlay.
Does society tolerate bank robbers? Bank robbers could argue that they are just doing their job, trying to feed their families.
Should we tolerate a big business, legally robbing the bank? The bank in this case being the loco factory and the associated things that go with it. They could argue that they are feeding their shareholders by creating a bigger profit.
Personally I think Cat are doing wrong, far as I know the plant is making a good profit, so why shoot the goose that lays the golden egg, the goose being well paid workers who have the ability to spend, thus creating the need to manufacture and manufacturing needs raw material that are mined by equipment produced by Caterpillar. Or in this case the manufactured products are moved by trains powered by Locomotives made by Cat.
I saw a good video the other day which illustrated the flow on effect of a car factory worker versus other workers, such as IT or nursing. Basically it was trying to show why the auto industry(and similar) needed to survive. I can't find it right now but it suggested that for every worker in a car plant, there are about 17 jobs that support that worker (jobs such as the haul truck driver in a mine, the persons driving the locomotive), whereas 5 jobs are created for every IT worker (these figures may be wrong because I am working from memory). The way I see it, if they agree to a reduced wage then the number of support jobs created by the worker in the Loco factory will go down because they don't have the spending power they once had. Will they be able to eat out twice a week or buy a new car every two years or even be able repay their home loan?
In this thread the 'global economy' has been mentioned a few times but can the global economy work if it is staffed by poorly paid workers who can't spend except for the very basics?
Will a Nike factory worker in Vietnam be able to buy Nike shoes? Will a Sony TV assembler in China be able to buy a Sony TV? Will a Microsoft programmer in India be able to buy an X box?
They could if they are paid at least a relatively fair wage. Do they get paid a relatively fair wage? Don't know but why should Nike, Microsoft or Sony pay them any more than the minimum, the whole point of having factories in low wage countries is the low wage. Business are not setting up factories in those countries, so that they can pay them what we would consider to be a fair wage. Imagine if Nike paid Vietnamese workers $16/h, Nike would still be making a good profit (considering what we pay for Nikes over here) and the Vietnamese workers would be able to buy shoes and TV's and game consoles and homes to put all their goodies into. End result being that companies make just as much profit because, even though their margins per product are less, they make that up in extra volume. Lets say Sony makes a profit of $100 per TV by paying the assembly worker $2/h but only $95 per TV if it pays $12 (based on the assembler making 2 TVs every hour), now if they sold 10 TVs @ $100 profit they would make 1000 bucks for their shareholders, however if they sold 11 TV's (because the worker can afford a TV) @ $95 per TV they would make a $1045 profit for their shareholders.
Basically what is happening is all the money in the world is being concentrated at the very top and the result will be that very few people have the ability to spend and thus product volumes will be affected, closing more factories. Sure the rich spend their money too but the do not buy 100 GM cars to put in their garage, they buy a couple of Rollers, perhaps 20 TV's for their mansion, whose gardens are maintained by a person being paid the minimum wage and this person can't afford a TV.
Financially what Cat is doing is a good move but morally it is awful, of course it has been said that a business is about making a profit. However does it also have moral obligations like a person has?
I suppose I could argue that robbing a bank is immoral but makes sense from a financial view point, potentially netting large amounts of money for little effort or outlay.
Does society tolerate bank robbers? Bank robbers could argue that they are just doing their job, trying to feed their families.
Should we tolerate a big business, legally robbing the bank? The bank in this case being the loco factory and the associated things that go with it. They could argue that they are feeding their shareholders by creating a bigger profit.
Personally I think Cat are doing wrong, far as I know the plant is making a good profit, so why shoot the goose that lays the golden egg, the goose being well paid workers who have the ability to spend, thus creating the need to manufacture and manufacturing needs raw material that are mined by equipment produced by Caterpillar. Or in this case the manufactured products are moved by trains powered by Locomotives made by Cat.
I saw a good video the other day which illustrated the flow on effect of a car factory worker versus other workers, such as IT or nursing. Basically it was trying to show why the auto industry(and similar) needed to survive. I can't find it right now but it suggested that for every worker in a car plant, there are about 17 jobs that support that worker (jobs such as the haul truck driver in a mine, the persons driving the locomotive), whereas 5 jobs are created for every IT worker (these figures may be wrong because I am working from memory). The way I see it, if they agree to a reduced wage then the number of support jobs created by the worker in the Loco factory will go down because they don't have the spending power they once had. Will they be able to eat out twice a week or buy a new car every two years or even be able repay their home loan?
In this thread the 'global economy' has been mentioned a few times but can the global economy work if it is staffed by poorly paid workers who can't spend except for the very basics?
Will a Nike factory worker in Vietnam be able to buy Nike shoes? Will a Sony TV assembler in China be able to buy a Sony TV? Will a Microsoft programmer in India be able to buy an X box?
They could if they are paid at least a relatively fair wage. Do they get paid a relatively fair wage? Don't know but why should Nike, Microsoft or Sony pay them any more than the minimum, the whole point of having factories in low wage countries is the low wage. Business are not setting up factories in those countries, so that they can pay them what we would consider to be a fair wage. Imagine if Nike paid Vietnamese workers $16/h, Nike would still be making a good profit (considering what we pay for Nikes over here) and the Vietnamese workers would be able to buy shoes and TV's and game consoles and homes to put all their goodies into. End result being that companies make just as much profit because, even though their margins per product are less, they make that up in extra volume. Lets say Sony makes a profit of $100 per TV by paying the assembly worker $2/h but only $95 per TV if it pays $12 (based on the assembler making 2 TVs every hour), now if they sold 10 TVs @ $100 profit they would make 1000 bucks for their shareholders, however if they sold 11 TV's (because the worker can afford a TV) @ $95 per TV they would make a $1045 profit for their shareholders.
Basically what is happening is all the money in the world is being concentrated at the very top and the result will be that very few people have the ability to spend and thus product volumes will be affected, closing more factories. Sure the rich spend their money too but the do not buy 100 GM cars to put in their garage, they buy a couple of Rollers, perhaps 20 TV's for their mansion, whose gardens are maintained by a person being paid the minimum wage and this person can't afford a TV.
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blademan150
Well-Known Member
Henrick, Well said!!!!!!
Hendrik, I've heard this discussion so many times I've lost count, you maybe right, but before you go thinking that, I've got some questions for you first, in your nike example, do you work for nike and live where you described? How about friends and relatives do they? Where did you gleam the information that nike doesn't pay a fair wage? What wage do they pay, is it nothing or is it actually the 16 per hour, more, less, and if so how much more or less? Your profits might be spot on, but where did the information come from, just assumptions or your costs where you live and translated them into those areas? My kids are growing up and getting jobs, looking around not only the US but abroad as well, and the wages look good, but I keep telling them, it means nothing unless you know the costs "there" not here and how that translates into those economies, not ours here. One was offered a wage to blow your socks off from california, we have friends there that told us, forget it, between rent and other costs, they'd work for less than minimum wage and take less here with lower costs and be money ahead.
Your mention of a global economy, I think it was me that stated that and I do believe it is true, some disagree with me, thats fine. To claim they are paid poorly and can't afford anything but the basics, is based off of what, if you don't have the actual costs there to compare, your basically using imaginary claims to state a case for hysteria and then can rationalize anything, which maybe true, but I've heard this stated thousands of times before and I'm not sure it is true at all let alone plausible.
I fully understand "here" refers to wherever "you" live, you referring to anyone, I've heard this discussion plenty, it ends the same every time, bashing workers and countries everywhere but "here" and companies for doing what they did "here" to go "there", I for one would like to actually hear from "there" just once, you know where the factories got relocated to and how it affected them. I'll use the media as a means to get information, so if I'm wrong which maybe true, its what I was told via them, bear this in mind, I don't live or work "there". I've heard for decades now how china puts out poor products, along with taiwan and a host of other countries, their workers work for starvation wages, live in bark huts if they are lucky, most live in the streets, have no skills, no intelligence, are not capable of learning even the smiliest task, the list is truly endless as to how bad they are, worse for the companies that locate there, the products are so bad nobody will buy them, the workers are exploited beyond words to describe, without law and order, some have to be held hostage and have guns held to their heads to get them do anything, horrible unsafe working conditions, etc, etc, etc..................... but their products are in our everyday lives everywhere, components in our vehicles, computers, appliances, you name it, they are making it and we're buying it, either as components or entire products, I'll bet even the computer you type on was made "there". Then the media talks about the booming economies in these third world countries with expansion everywhere, and by the looks of it, they're not riding bicycles on dirt streets, they have cities to rival ours, even better from what I've seen, they are consumers of their own products and things look good and your telling us they can't afford the basics? I'd like to know their costs and pay, also figuring in inflation what the same products costs there verses what we pay. I'm not thinking they're working for starvation wages at all, everything costs money everywhere.
I'm also under the impression "isolationism thinking" is an obsolete way of operating and thinking, and since everyone else is thinking global and I'm dealing global every day of my life weather I like it or not, from products I buy and use daily that have components in them made around the world, maybe I need to look at and see what is actually going on elsewhere, not just "here" anymore. So to me the examples you just gave are not making sense to what is actually happening around the world today, not to say your wrong, but maybe someone can explain how "those" backwards, underdeveloped countries with poorly paid labor and exploited people and "used" by companies to make mega profits are doing what they are doing with no money in their pockets to do it with?
Here on HEF we are global, members from around the world, not just "here" and it is nice to know whats happening around the "neighborhood" so to speak, its why I'm a member, if I wanted to remain "isolated" I'd go to the local coffee shop and listen to the bashing of the neighboring community, but with HEF I can talk to people around the world, hear whats going on in an industry I'm involved in and know about, see how things change and are done elsewhere, now I'd like to hear and know about wages and benefits around the world, since cats getting bashed here somewhat, lets discuss somewhere other than just "here" and the other side of the story so to speak, no I don't feel it unfair to do so or off topic in this thread at all.
Your mention of a global economy, I think it was me that stated that and I do believe it is true, some disagree with me, thats fine. To claim they are paid poorly and can't afford anything but the basics, is based off of what, if you don't have the actual costs there to compare, your basically using imaginary claims to state a case for hysteria and then can rationalize anything, which maybe true, but I've heard this stated thousands of times before and I'm not sure it is true at all let alone plausible.
I fully understand "here" refers to wherever "you" live, you referring to anyone, I've heard this discussion plenty, it ends the same every time, bashing workers and countries everywhere but "here" and companies for doing what they did "here" to go "there", I for one would like to actually hear from "there" just once, you know where the factories got relocated to and how it affected them. I'll use the media as a means to get information, so if I'm wrong which maybe true, its what I was told via them, bear this in mind, I don't live or work "there". I've heard for decades now how china puts out poor products, along with taiwan and a host of other countries, their workers work for starvation wages, live in bark huts if they are lucky, most live in the streets, have no skills, no intelligence, are not capable of learning even the smiliest task, the list is truly endless as to how bad they are, worse for the companies that locate there, the products are so bad nobody will buy them, the workers are exploited beyond words to describe, without law and order, some have to be held hostage and have guns held to their heads to get them do anything, horrible unsafe working conditions, etc, etc, etc..................... but their products are in our everyday lives everywhere, components in our vehicles, computers, appliances, you name it, they are making it and we're buying it, either as components or entire products, I'll bet even the computer you type on was made "there". Then the media talks about the booming economies in these third world countries with expansion everywhere, and by the looks of it, they're not riding bicycles on dirt streets, they have cities to rival ours, even better from what I've seen, they are consumers of their own products and things look good and your telling us they can't afford the basics? I'd like to know their costs and pay, also figuring in inflation what the same products costs there verses what we pay. I'm not thinking they're working for starvation wages at all, everything costs money everywhere.
I'm also under the impression "isolationism thinking" is an obsolete way of operating and thinking, and since everyone else is thinking global and I'm dealing global every day of my life weather I like it or not, from products I buy and use daily that have components in them made around the world, maybe I need to look at and see what is actually going on elsewhere, not just "here" anymore. So to me the examples you just gave are not making sense to what is actually happening around the world today, not to say your wrong, but maybe someone can explain how "those" backwards, underdeveloped countries with poorly paid labor and exploited people and "used" by companies to make mega profits are doing what they are doing with no money in their pockets to do it with?
Here on HEF we are global, members from around the world, not just "here" and it is nice to know whats happening around the "neighborhood" so to speak, its why I'm a member, if I wanted to remain "isolated" I'd go to the local coffee shop and listen to the bashing of the neighboring community, but with HEF I can talk to people around the world, hear whats going on in an industry I'm involved in and know about, see how things change and are done elsewhere, now I'd like to hear and know about wages and benefits around the world, since cats getting bashed here somewhat, lets discuss somewhere other than just "here" and the other side of the story so to speak, no I don't feel it unfair to do so or off topic in this thread at all.
CM1995
Administrator
- Joined
- Jan 21, 2007
- Messages
- 13,382
- Location
- Alabama
- Occupation
- Running what I brung and taking what I win
Randy good point that people really need to let sink in and understand - wages vs the cost of living.
This morning I am watching one of those "fix your house" shows on DIY TV and the house the people bought was $305,000, was built in the 70's and looked like it has never been remodeled. I laughed my ass off that the piece of junk they bought cost that much. Around "here" $300K will buy a nice NEW house, in a good location - 2500SF, 2 car garage, etc.
Last night me and the wife went out on a "date" to our local Italian restaurant. Calamari for an appetizer, bottle of Chianti, two entrees and a huge piece of chocolate cake. All the food is homemade including the pasta. Total bill with 9% sales tax was $78.00, a splurge for us during slow times but I though it was worth it.
The cost of living in Alabama is cheap compared to other parts of the US and especially Canada. I have several Canadian friends from Ontario, Nova Scotia and Alberta that I met in Costa Rica. The cost of living in CR is comparable to Alabama for food, gas, utilities and housing (North American style housing in a gated community). My Canadian friends were always amazed at how cheap it is to live in CR, which always opened up the conversation of cost of living differences. Opened my eyes and mind up, which is always a good thing.
Changing the subject somewhat, around "here" I see a positive side of globalization. Alabama is home to the first Mercedes Benz manufacturing plant in North America, a Hyundai plant that produced several 100K cars last year and a Honda plant that makes the Odessy Van as well. There is also a Toyota and Navistar engine plant as well.
http://www.edpa.org/pdfs/Automotive Industry Profile.pdf (this information is old but gives a good glimpse)
Thyssen Krup invested $5 billion in a new carbon steel plant in Mobile.
http://www.thyssenkruppsteelusa.com/
So let's take a look at wages and cost of living in Alabama-
For example- (From al.com)
Average Alabama salary - $34,600
Average auto worker salary - $54,400
Someone could say that $54,400 per year to assemble Honda's is peanuts and how dare they offer such a low wage. Hold the phone - $54K a year is a very good job here in Alabama where the cost of living is low. Average home price in Alabama is $165,052 which is roughly 3 years salary for an auto worker and 5 years of salary for the average worker. The ratio of yearly salary to the cost of housing is a number used to determine cost of living. This ratio shows an affordable cost of living in Alabama.
The Alabama worker that assembles Alantra's and Odessy's can afford to buy one. I doubt the average Mercedes worker could afford to buy an M Class but that's a luxury vehicle and if they are going to spend that much money on a vehicle they would probably buy a Superduty or a lift kit and 35's for their Blazer - it is Alabama after all.
Navistar is the only US company that located here. Of course these are "assembly" plants and some will argue that since the blocks aren't cast here it's not really manufacturing. Well those jobs these plants created are real jobs that put real roofs over their heads and food on their tables. Those folks are proud and thankful to have these jobs.
The State gave massive tax breaks in order to lure these factories here. Some will argue that it's not right to give these companies such large tax breaks as they should be paying their "fair share". (I really dislike the word "fair" as it's meaning is so subjective) What people don't realize is without these tax breaks, the auto plants would have located elsewhere and the jobs they created would not be here. You haven't lost anything you weren't going to get in the first place.:cool2
The spin-off industries of suppliers and support for these auto factories have also made a significant impact on the State economy. From the initial construction to the everyday distribution network, there are a lot of people that earn their living from these factories.
Just another view on globalization, yes there are a tremendous amount of jobs being shipped overseas but some are being create here in North America. The States must compete in this global market and use all the tools in the toolbox. Yes, Alabama is a Right to Work state and this has had a lot to do with our auto industry. I am not starting an argument just stating a fact.
There's just a little pride when I see an M Class in a foreign country and I say to myself, yep made in Alabama.
This morning I am watching one of those "fix your house" shows on DIY TV and the house the people bought was $305,000, was built in the 70's and looked like it has never been remodeled. I laughed my ass off that the piece of junk they bought cost that much. Around "here" $300K will buy a nice NEW house, in a good location - 2500SF, 2 car garage, etc.
Last night me and the wife went out on a "date" to our local Italian restaurant. Calamari for an appetizer, bottle of Chianti, two entrees and a huge piece of chocolate cake. All the food is homemade including the pasta. Total bill with 9% sales tax was $78.00, a splurge for us during slow times but I though it was worth it.
The cost of living in Alabama is cheap compared to other parts of the US and especially Canada. I have several Canadian friends from Ontario, Nova Scotia and Alberta that I met in Costa Rica. The cost of living in CR is comparable to Alabama for food, gas, utilities and housing (North American style housing in a gated community). My Canadian friends were always amazed at how cheap it is to live in CR, which always opened up the conversation of cost of living differences. Opened my eyes and mind up, which is always a good thing.
Changing the subject somewhat, around "here" I see a positive side of globalization. Alabama is home to the first Mercedes Benz manufacturing plant in North America, a Hyundai plant that produced several 100K cars last year and a Honda plant that makes the Odessy Van as well. There is also a Toyota and Navistar engine plant as well.
http://www.edpa.org/pdfs/Automotive Industry Profile.pdf (this information is old but gives a good glimpse)
Thyssen Krup invested $5 billion in a new carbon steel plant in Mobile.
http://www.thyssenkruppsteelusa.com/
So let's take a look at wages and cost of living in Alabama-
For example- (From al.com)
Average Alabama salary - $34,600
Average auto worker salary - $54,400
Someone could say that $54,400 per year to assemble Honda's is peanuts and how dare they offer such a low wage. Hold the phone - $54K a year is a very good job here in Alabama where the cost of living is low. Average home price in Alabama is $165,052 which is roughly 3 years salary for an auto worker and 5 years of salary for the average worker. The ratio of yearly salary to the cost of housing is a number used to determine cost of living. This ratio shows an affordable cost of living in Alabama.
The Alabama worker that assembles Alantra's and Odessy's can afford to buy one. I doubt the average Mercedes worker could afford to buy an M Class but that's a luxury vehicle and if they are going to spend that much money on a vehicle they would probably buy a Superduty or a lift kit and 35's for their Blazer - it is Alabama after all.
Navistar is the only US company that located here. Of course these are "assembly" plants and some will argue that since the blocks aren't cast here it's not really manufacturing. Well those jobs these plants created are real jobs that put real roofs over their heads and food on their tables. Those folks are proud and thankful to have these jobs.
The State gave massive tax breaks in order to lure these factories here. Some will argue that it's not right to give these companies such large tax breaks as they should be paying their "fair share". (I really dislike the word "fair" as it's meaning is so subjective) What people don't realize is without these tax breaks, the auto plants would have located elsewhere and the jobs they created would not be here. You haven't lost anything you weren't going to get in the first place.:cool2
The spin-off industries of suppliers and support for these auto factories have also made a significant impact on the State economy. From the initial construction to the everyday distribution network, there are a lot of people that earn their living from these factories.
Just another view on globalization, yes there are a tremendous amount of jobs being shipped overseas but some are being create here in North America. The States must compete in this global market and use all the tools in the toolbox. Yes, Alabama is a Right to Work state and this has had a lot to do with our auto industry. I am not starting an argument just stating a fact.
There's just a little pride when I see an M Class in a foreign country and I say to myself, yep made in Alabama.
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willie59
Administrator
Pretty much the same here in Tennessee as is in Alabama CM, affordable cost of living, no state income tax, 9% (+/- depending on location) sales tax. Volkswagen built a mfg plant near Chattanooga, Komatsu has an excavator plant near there as well and main US parts distribution center in Ripley TN, Denso has some fair size parts mfg plants in Athens and Maryville, probably all these jobs were moved here because of tax break negotiations between mfg company and local town they were looking at locating. Which brings up the "is that fair" issue you spoke of, which drives me bonkers as well, it ain't about fair, any form of fair can only result in stifling free people with some form of socialism. Plain and simple, it's competition folks. And moving it to a global scale, the whole world is in competition for jobs as a whole. I'm going to start a widget mfg company tomorrow, I pick up a loudspeaker that can be heard the world over that I'm going to do so, I can guarantee you that the hands will start raising the world over, some offering me this, some offering me that, to locate my plant at their location in the world. And since I intend to go into business with the illusion to make some form of profit, not because I feel I have a moral obligation to feed the world around me, I'm going to be inclined to accept an offer that I feel best suits my interests. I understand this is an oversimplified view, but it's reality, it's business, plain and simple. It's not an ethical or moral issue, it's business responding to global competition. We can complain and b-i-itch about company A doing this or that, but until we realize that all our jobs, in some form or fashion, are subjected to global competition for jobs, we can either sit on our front porch and whine about it, or we can get off our arse and figure out a way to adapt to our new reality that other folks around the world, not in our neighborhood, are competing for my job.
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Thanks CM also excellent post, see I'm learning things already, I personally never knew that was in Alabama, so taking pride in ones area has merit's, it informs the rest of us what life's like in your area. I'm not wanting to start any arguments either, I'm just wanting information about other areas, this always seems to put everyone on defense that I'm putting them down or trying to cookie cutter them into admitting they are getting something someone else isn't, thats not the case and I hope it doesn't go there either, but I've presented this same question hundreds of times and each time I'm shot out of the saddle by hostility and never get answers. We're all people making a living somehow, either by working for employers or being self employed and getting paid off others who we work for, I tell my banker this every year, I'm just a pawn piece in a larger equation is all, Henrik is basically right, all money flows into an economy, your right too CM, deals are complex and areas do cut deals to draw business's to locate there, its how things have always been done everywhere to a certain extent, thats why multimillion dollar or multibillion dollar deals are so complex and time consuming to achieve.
The joke in my area is about farmers, put a dollar in their pocket and they'll spend 5 they don't have besides the one they do, it keeps money in circulation, I also farm and can laugh at myself on that one too, its basically true, money spent circulates and thats why the philosophy of workers starving wages can't be true, money circulates and promotes progress in many areas, if starvation wages are paid, there is no progress to the mass's, only a select few, and these other countries are becoming a large bargaining force worldwide and its not done by a few with riches, some might think that but it can't be true, I maybe wrong and if so someone explain it to me.
When a plant sets up shop, there is a natural spur to the economy, workers need to build the plant, equip it, level the land for the plant, parking lots, shipping needs to be in place, workers need to be hired, taxes are generated people need to eat and housing to live in, the list is endless, and money drives it all, so the notion of inept people and starvation wages just doesn't add up, now this is true no matter where it happens, in my backyard, yours or someone else's. No company today would spend millions to set up a plant and plan on hiring total morons to work for them, so dense they can't handle the simplest task, I'm finding that hard to believe, last I looked these products are pretty high tech, the days of hiring 10 year old kids without shoes or factories with dirt floors isn't plausible any more for the components they turn out and ship out everyday. The idea of someone working in a tv manufacturing plant and not able to afford the tv's they make, or afford shoes to wear, seems a stretch to me.
The whole idea of low wage countries and exploiting them and the workers, might be somewhat short sided way to look at things, they might be cheaper, but its not just wages, like the cost of living, all products cost less, from the buildings to the labor, taxes, real-estate to buy, housing, food, gas, automobiles, the whole lot, thats why companies want to locate there, they get more for their dollar than here, they don't get this for free, its just lower cost. To put this in simpler terms, do companies move into gated communities where houses cost 10 million dollars a pop to build a plant and hire those that live in those houses to work for them? No, they hunt areas more adequate to their needs, easier access to shipping, raw materials, labor to build the infrastructure they need for not only their plant but its support personnel and the community itself, not in gated communities where movie stars live and have their luxury houses and pools. So I'm being told these workers are not even making enough to live on, but the ones who build these buildings, run shipping, truck drivers, secretaries, shop foreman, the hamburger shops downtown to feed the workers, the real-estate personnel that sells the land to them and the housing crews that put up housing, the contractors that pour the cement for roads and parking lots, the hundreds of jobs created everywhere due to the expansion, but everyone makes something but they hire the workers who are paid starvation wages and can't buy the simples things? and this makes sense and is plausible or is it a whole country conspiracy going on?
As for taiwan and china products being no good or inferior quality, how can this be, the components are put in everything we use on a daily basis, its not just cat and the rest of the big name manufactures who do it, but all manufacturing does it, but its still junk and low grade quality? put together by cheap labor, so cheap they can't buy shoes? The last time I looked, the parts that are in my vehicle and allow it to run are made there, same for the bearings and computers to laptops and everything else known to man kind basically, maybe its time to figure out how to compete with them instead of blaming them for taking what we had or wished we kept instead, sounds like Alabama has a head start on some of the rest of us on this issue to me.
For those in Canada, I'll agree maybe labor is higher there, along with the cost of living, but you've also got things that are cheaper, you've overlooked those things because your not seeing what companies see, this is also why I went down this road, everyone has advantages to their area, no matter how little it might seem, we all need to figure out why the companies left and pull our heads out of the sand and ask ourselves honest hard questions, why did we lose out and what can we do to prevent it from happening again, what is desirable to others in our area and how to promote it, without asking questions and getting answers we've not even in the game let alone armed with any knowledge. I've always said, if I lose the game I can live with that, but at least tell me we're playing a game and where its at so I can at least show up to get my *ss kicked. No company coming into your area will tell you, good god man, your transportation costs are far below average and that would save me 10 million dollars in the next ten years alone, but if you did your homework, you'd figure this out on your own to help you promote your area, apparently Alabama has done its homework well.
I'm still thinking we're dealing global and if we don't know what everyone else is doing, how can we compete, it might not be a happy idea but to me its the reality of the situation we're in today, so adjust and move on, will it help those in canada today keep their jobs, probably not, but it can help them on round two with the next company they deal with provided they learn on this one and discuss it and figure out what went wrong, I'm also thinking the loophole idea might not benefit anyone in the long run but if it exits, close it for the next time so it is illegal and can't be done again. As for moral obligations, that to me is getting pretty close to religious discussion and I'd rather not go there, thats a lot of bickering with no gain.
The joke in my area is about farmers, put a dollar in their pocket and they'll spend 5 they don't have besides the one they do, it keeps money in circulation, I also farm and can laugh at myself on that one too, its basically true, money spent circulates and thats why the philosophy of workers starving wages can't be true, money circulates and promotes progress in many areas, if starvation wages are paid, there is no progress to the mass's, only a select few, and these other countries are becoming a large bargaining force worldwide and its not done by a few with riches, some might think that but it can't be true, I maybe wrong and if so someone explain it to me.
When a plant sets up shop, there is a natural spur to the economy, workers need to build the plant, equip it, level the land for the plant, parking lots, shipping needs to be in place, workers need to be hired, taxes are generated people need to eat and housing to live in, the list is endless, and money drives it all, so the notion of inept people and starvation wages just doesn't add up, now this is true no matter where it happens, in my backyard, yours or someone else's. No company today would spend millions to set up a plant and plan on hiring total morons to work for them, so dense they can't handle the simplest task, I'm finding that hard to believe, last I looked these products are pretty high tech, the days of hiring 10 year old kids without shoes or factories with dirt floors isn't plausible any more for the components they turn out and ship out everyday. The idea of someone working in a tv manufacturing plant and not able to afford the tv's they make, or afford shoes to wear, seems a stretch to me.
The whole idea of low wage countries and exploiting them and the workers, might be somewhat short sided way to look at things, they might be cheaper, but its not just wages, like the cost of living, all products cost less, from the buildings to the labor, taxes, real-estate to buy, housing, food, gas, automobiles, the whole lot, thats why companies want to locate there, they get more for their dollar than here, they don't get this for free, its just lower cost. To put this in simpler terms, do companies move into gated communities where houses cost 10 million dollars a pop to build a plant and hire those that live in those houses to work for them? No, they hunt areas more adequate to their needs, easier access to shipping, raw materials, labor to build the infrastructure they need for not only their plant but its support personnel and the community itself, not in gated communities where movie stars live and have their luxury houses and pools. So I'm being told these workers are not even making enough to live on, but the ones who build these buildings, run shipping, truck drivers, secretaries, shop foreman, the hamburger shops downtown to feed the workers, the real-estate personnel that sells the land to them and the housing crews that put up housing, the contractors that pour the cement for roads and parking lots, the hundreds of jobs created everywhere due to the expansion, but everyone makes something but they hire the workers who are paid starvation wages and can't buy the simples things? and this makes sense and is plausible or is it a whole country conspiracy going on?
As for taiwan and china products being no good or inferior quality, how can this be, the components are put in everything we use on a daily basis, its not just cat and the rest of the big name manufactures who do it, but all manufacturing does it, but its still junk and low grade quality? put together by cheap labor, so cheap they can't buy shoes? The last time I looked, the parts that are in my vehicle and allow it to run are made there, same for the bearings and computers to laptops and everything else known to man kind basically, maybe its time to figure out how to compete with them instead of blaming them for taking what we had or wished we kept instead, sounds like Alabama has a head start on some of the rest of us on this issue to me.
For those in Canada, I'll agree maybe labor is higher there, along with the cost of living, but you've also got things that are cheaper, you've overlooked those things because your not seeing what companies see, this is also why I went down this road, everyone has advantages to their area, no matter how little it might seem, we all need to figure out why the companies left and pull our heads out of the sand and ask ourselves honest hard questions, why did we lose out and what can we do to prevent it from happening again, what is desirable to others in our area and how to promote it, without asking questions and getting answers we've not even in the game let alone armed with any knowledge. I've always said, if I lose the game I can live with that, but at least tell me we're playing a game and where its at so I can at least show up to get my *ss kicked. No company coming into your area will tell you, good god man, your transportation costs are far below average and that would save me 10 million dollars in the next ten years alone, but if you did your homework, you'd figure this out on your own to help you promote your area, apparently Alabama has done its homework well.
I'm still thinking we're dealing global and if we don't know what everyone else is doing, how can we compete, it might not be a happy idea but to me its the reality of the situation we're in today, so adjust and move on, will it help those in canada today keep their jobs, probably not, but it can help them on round two with the next company they deal with provided they learn on this one and discuss it and figure out what went wrong, I'm also thinking the loophole idea might not benefit anyone in the long run but if it exits, close it for the next time so it is illegal and can't be done again. As for moral obligations, that to me is getting pretty close to religious discussion and I'd rather not go there, thats a lot of bickering with no gain.
catken
Well-Known Member
Hendrick, did you know that NIKEs distribution system was developed by Caterpillar along with Harley Davidson? That big warehouse in Indiania of Harley's is kinda like managed by Cat! It's unbelievable how many things their into. I also can't believe they keep that much mfg in this country just because of labor and all the sales that are abroad now. Just putting that out there.