The shape of things to come

74 comments on “The shape of things to come ”

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1. Jay 1

   17 April 2008 at 5:58 pm

   China is old news.

   Jobs are leaving China for Vietnam.

   Did the OP get lost? This isn’t indymedia.
2. burt 2

   17 April 2008 at 6:37 pm

   So it’s not just tax payers jumping on planes and heading west, it’s companies too.

   The great domestic decline, brought to you by the Labour led govt.
3. lonelyavenger 3

   17 April 2008 at 6:38 pm

   So we “lost” a few jobs. We also created 23,000 jobs in the last quarter and have record unemployment.

   If you think the government should have a response to this, it should be to assist those who lost their jobs into industries in which we have a competitive advantage rather than demanding we artificially prolong inefficient sectors.

   As for this:

   “refusing to buy goods made with slave labour and making sure that companies know we will not support them in their attacks on us and workers around the world.”

   I suppose you’d prefer it if developing countries’ economies regressed to where they were 30 years ago? You know, with the crippling absolute poverty rates and human rights abuses that far exceeded the current rates.
4. higherstandard 4

   17 April 2008 at 6:42 pm

   “refusing to buy goods made with slave labour and making sure that companies know we will not support them in their attacks on us and workers around the world.”

   Unfortunately the vast majority if not all manufacturers of these kind of goods (whiteware etc) are or will manufacture in low cost countries, which also have the advantage of being closer to major markets, while not wanting to debate whether that is right or wrong, NZers not buying their goods won’t make a bit of difference to them and the alternative would be purchasing a product from another company who’s probably doing exactly the same thing.
5. burt 5

   17 April 2008 at 6:44 pm

   lonelyavenger

   People said the country was doomed when GM, Ford, Toyota & Mitsi’s stopped assembling cars in NZ. But what happened? The price of cars came down and the quality improved immensely.

   I don’t think whiteware quality will improve anywhere near the magnitude that car quality did because we already produce internationally competitive whiteware, however it’s likely the price will come down which like the price drop on cars is good for consumers.
6. higherstandard 6

   17 April 2008 at 6:47 pm

   Burt

   While I find it odd to be defending the government – the reality is manufacturing of these goods in NZ is going to decline and fade to zero under National or Labour and is common place around the world.

   Pretty much the same is true for call centre support staff vast amounts of this are now ex Bangalore, Karachi, Mumbia etc.
7. Jay 7

   17 April 2008 at 6:57 pm

   Look on the bright side. When was the last time you saw bangaladeshi cheese or indian lamb chops in the supermaket.
8. burt 8

   17 April 2008 at 7:00 pm

   hs

   You are correct, but this lot has happened on Labour’s watch. As long as Labour continue to claim credit for the last 8 years of local economic trends and deny any responsibility (sledging it to international factors) for the current economic trends then it’s important to provide balance and remind people what is going on around us now is happening on Labour’s watch.

   This sort of news was, as you say, to be expected. Labour have delayed signing the FTA till the time was right and that time was widely picked as being 2008 since about 2006. Just as tax cuts were planned for 2008 and so was the full implementation of a significant social spending programme. Labour’s policies were nicely timed to win a forth term, or so they thought.

   CAPTCHA: willing miss – no argument with that!
9. Robinsod 9

   17 April 2008 at 7:03 pm

   Burt – don’t think the price will come down. The profits will go up. My F&P shares increased 15% today. I’ll be selling them tomorrow because I don’t want to be making money out of the exploitation of Mexican workers.

   HS – I’ve managed to avoid buying non-sweat products for years. If anything it’s getting easier as the market for ethical goods grows.
10. Robinsod 10

    17 April 2008 at 7:06 pm

    When was the last time you saw bangaladeshi cheese or indian lamb chops in the supermaket.

    How about Canadian bacon (about 40% from memory) and Chinese vegetables (pretty much all frozen vege except peas)?
11. burt 11

    17 April 2008 at 7:16 pm

    One thing that was said when the car assembly plants were closing down was: Why should the jobs of a thousand people hold a country of 3m (now 4.2m) consumers to ransom by requiring tariffs to make the plants profitable.

    Why should 4.2m people pay more for their cars so that 1,000 can have a job?

    The profit from F&P sounds big at $62m. But what is the company worth? What return on investment is $62m?

    A proactive govt (which I would never accuse Labour of being) might offer F&P a tax free status for say 8 years to expand their operation for economies of scale in NZ. It’s a no brainer for the govt. F&P closing the NZ plant down stops all plant tax revenue from being received in NZ, stops all wage/salary tax revenue being received in NZ and will kill a large number of supplier industries. What do the govt want, the big carnage or cut the key player in a big circle some slack in the form of significant tax incentive and only loose the plant tax revenue from the whole shooting match?
12. lonelyavenger 12

    17 April 2008 at 7:23 pm

    “I’ll be selling them tomorrow because I don’t want to be making money out of the exploitation of Mexican workers.”

    I don’t think you understand how economies develop. The choice for Mexican workers is not “high pay or low pay” it is “low pay or no pay”. Over time Mexico will develop into a higher wage economy. Unless of course too many people like you refuse to support that development and condemn them to eternal poverty.
13. Tane 13

    17 April 2008 at 7:28 pm

    Interestingly that part of Mexico has recently been victim of factories moving to China for even lower wages. That’s nature of the game; as soon as a country like Mexico’s wages start going up the factories leave for somewhere even cheaper. The right’s only answer is to cut our own conditions to compete. It’s called the race to the bottom for a reason.
14. mawgxxxxiv 14

    17 April 2008 at 7:48 pm

    Ummmm, 4.25 million New Zealanders standing against the tide of globalization that is two billion Chinese & Indians ? Yeah right.
15. Jay 15

    17 April 2008 at 7:52 pm

    “How about Canadian bacon (about 40% from memory) and Chinese vegetables (pretty much all frozen vege except peas)?”

    So do you have to pay extra for the added pesticides and toxins in chinese vegetables or is that free? Maybe you should brush with that cheap chinese toothpaste and see where it gets you.

    My point was that there are some things that NZ can produce cheaply and efficiently like diary products because we have a comparative advantage and the Chinese aren’t about to start a dairy industry are they?
16. Tane 16

    17 April 2008 at 7:59 pm

    These countries don’t have a comparative advantage at manufacturing – they just have poor workers who they shoot when they try to organise for a better deal. If your theory calls that ‘comparative advantage’ then I’d argue it’s bankrupt.
17. burt 17

    17 April 2008 at 8:18 pm

    Tane

    So why aren’t the workers rights based govt doing more? Why not give F&P some of the same massive tax incentives as offered to globally portable business like movie companies? A 10% flat tax rate for all employees perhaps? After all the workers would get a massive pay rise, the govt is still up on tax revenue and the company can post bigger profits and invest more capital in developing the business. Win win always beats a loose loose.

    F&P are a significant exporter and innovator, a good example of a NZ brand which the govt could easily reduce the tax burden on to provide incentive for it to stay here.
18. Tane 18

    17 April 2008 at 8:31 pm

    Rather than subsidise them Burt – after all, where does it end? – I’d rather see the government do more to promote investment in skills and machinery and review our absurd monetary policy that punishes our exporters with high exchange rates due to its singular focus on inflation.

    Labour’s making a start with the former, but I think you’ll need a major paradigm shift to see any action on the latter.
19. burt 19

    17 April 2008 at 8:47 pm

    Tane

    Tax incentives are a contract between the govt and the company, tariffs are a contract between the consumers and the govt. The significant difference is the govt negotiates with strategic companies to achieve shared gaols rather than make the consumers pay more for a sheltered workshop. Do we want any manufacturing business or do we not?
20. Jay 20

    17 April 2008 at 8:48 pm

    Tane, the advantage that China has is real whether or not you recognise it. It’s no use putting your head in the sand and calling it bankrupt. Is that seriously going to help FPA sell it’s washing machines in the US when a competing model in 50% cheaper due to cheap chinese labour?

    And as for your claim that the right’s only answer is to cut NZer’s condition that is wrong. Key has repeatedly said that productivity is the solution to raising NZ standard of living which is something that Labour had three terms to address and we’re still sliding down the OECD.
21. Robinsod 21

    17 April 2008 at 9:28 pm

    Jay – you were doing real well until you got to productivity. Productivity is a ratio. That means if you produces 3000 units of output with 2000 units of input and then switch to a model that outputs only 300 units but does so with only 100 units of input your productivity increases. Hardly a decent measure.

    We had that kind of productivity in the 90’s with wage cuts and layoffs. F&P will increase their productivity by paying poverty rates in Mexico. It is unsustainable. Sustainable productivity requires investment in skills and in plant and machinery. Key’s idea of productivity involves making us work harder for less. But we can’t.

    Currently we are seeing poor productivity because business “investment” has been in buildings and fleet rather than in production capital.

    To be honest I don’t think the answer lies with NZ businesses. They’re just too short-sighted and stupid to look after themselves. That’s why the govt has had to step in with the R and D fund – the useless free-market pricks were never going to invest in their futures – even as they drifted closer to their beloved market’s maw.

    In my honest opinion I think we should let them hang themselves rather than provide them with corporate welfare. Like Roger Kerr says “the greatest freedom of the free market is the freedom to fail.” The only problem is they’ll drag us down with them…
22. burt 22

    17 April 2008 at 9:52 pm

    Robinsod

    The country has ridden on them as a business and tax payer and an employer and a flagship product for decades. Their roots are deeply established in protected markets and the changes began by the Labour govt in the 80’s has delivered this outcome. Now you denigrate them for protecting the best interests of the business and the shareholders. The give (tariffs) has gone (are almost completely gone) the tax take continues and they are expected to tough it out against cheaper competition?

    If the company fails financially through staying in NZ and delivering large tax dividends to the govt and declining dividends to the shareholders the jobs are also gone.

    We wanted movie business in NZ so we gave them significant tax incentives, do we not want manufacturing?
23. Robinsod 23

    17 April 2008 at 10:28 pm

    Burt – the tariffs on whiteware were actually extened by the FTA. The company has just had a direct tax cut of 3% and all sorts of R and D tax breaks. The Dunedin plant got a rates holiday and public money to help it invest in plant expansion, many of its workers have been provided with tax credits in the form of working for families.

    What has changed over the last few years is the ownership of F & P. Far more of it is owned by overseas financial institutions whose primary interests are large short-term profits.

    You just don’t get it so you? New Zealand is the second best country for ease of doing business – that’s according to the great neo-liberal institution that is the world-bank. This is international late-capitalism at work and it will finish us. A decent left government (and I don’t think Labour is quite that) may allow us to weather the storm a little better. National would scupper the ship and sell it as scrap.
24. burt 24

    17 April 2008 at 10:45 pm

    Robinsod

    Incase you didn’t notice the operation is leaving while Labour are in power and after 8-9 years of Labour govt. Trying to focus on what National might do is locking the stable door after horse has bolted. Get a grip man – the company is paying lots of tax in the form on PAYE. I know that’s actually paid by the workers but it will stop being paid by the workers once F&P stops paying them.

    I hope they all find jobs, then only the manufacturing business and associated smaller businesses supplying the plant will be the only tax revenue lost through having a head in the sand approach about 30% taxation.
25. Jay 25

    17 April 2008 at 10:52 pm

    Robinsod I’m so glad you can write off NZ business with such gross generalisations.

    It’s a pity that you toss around words like productivity and sustainability with what appears to be little understanding of how they fit together. Productivity is making more with less and making the right kinds goods that people demand. Your version sounds rather incoherent and biased toward cutting costs which I never advocated.

    You seem to only focus on one part of the equation, what businesses pay their workers while ignoring that they are constrained by how much they can sell their products for. Look at the comparison between FP Appliance and FP Healthcare. Appliances is operating in an innovative but competitive market where their profit margins are dropping in their major market but Healthcare is fine because there is a lot less competition and the margins are great – there are no mass redundencies there (Which is why I brought shares in Healthcare instead of Appliances)

    I found your idea that businesses are investing too much in building to be a little ignorant of reality. In wellington the market is driven by Labour expansion of the public sector. We’re seeing total returns (capital plus income) of over 20% for the past 3-4 years here for class A office space here. If Labour wasn’t so fanatically dedicated to raising the numbers of policy analysts (very productive aren’t they) then that investment would have flowed into productive capital.

    If the govnt, both national and labour, were concerned about the long term growth then they would seriously start to fund basic research in universities better as well as govnt research institution. I don’t see that happening anytime soon irrespective of whoever wins the next election.
26. Ted 26

    17 April 2008 at 11:45 pm

    Irrigate, if you’re so keen to stop jobs going overseas, do you agree that the Government should do more to ensure local businesses are able to compete globally?

    Businesses, particularly exporters, are being held back by Labour’s economic mismanagement. Economic inefficiency and rampant government expenditure have driven up inflation and interest rates for the last nine years, having the knock on effect of artificially inflating the strength of the Kiwi dollar.

    Some of the more inflexible provisions of the ERA have held back labour productivity, driving up costs. Low after tax incomes – partly due to the Government’s record of high taxation – have driven many of our skilled workers to Australia or elsewhere, making it harder for businesses to employ the right people. The RMA has made it difficult for businesses to expand their manufacturing plants. Even Labour’s record of lumping more responsibilities on Local Government have contributed to the problem by driving up business rates and adding more costs on to producers. I think if you are serious about keeping jobs in New Zealand, you should start by supporting measures that will ease the pressure on companies like F & P.
27. Fred 27

    18 April 2008 at 7:23 am

    Lonleyavenger – how many of the 23,000 jobs were created in the public service. F&P is a flagship NZ company, innovative, long term focussed, world class products. Whether things would have been different if interest rates were more realistic and the exchange rate wasn’t propped up to artificially high levels is now moot but swift action is now needed to foster a business environment that supports productive investment in order to create alternative jobs for these people.
28. Robinsod 28

    18 April 2008 at 7:36 am

    Jay – it’s not hard to write off large chunks of business when you see how poor New Zealand’s management is. Your attempt to blame lack of productive capital investment on “bloated bureaucracy” is amusing though I must say! A classic example of the Kiwi business mind’s refusal to take personal responsibility.

    Oh and Jay? Cullen’s moves to change universities from bums-on-seats businesses includes a greater focus on funding for research (though I would agree that it is not enough). It was National that instituted a funding model that incentivised high student numbers over research work.

    Ted – you are wrong on so many basic facts I don’t know where to start.
29. MikeE 29

    18 April 2008 at 7:54 am

    a) Noone has a “right” to a job.
    b) These job losses are a direct result of Labours policies. WFF, Interest Free Loans, extra regulations, Kyoto etc. All of these have pushed the cost of compliance up, and forced organisations to relocated overseas where they can do what they are actually supposed to, deliver a profit for their shareholders.

    If businesses can’t make decent profits, then they can’t employ people. Its that simple.

    You guys go on about the need for higher wages, we can’t have higher wages unless companies are making a higher return on investment. Kill that return, and you destroy all chance of a higher wage benifiting the employees.
30. Robinsod 30

    18 April 2008 at 8:06 am

    MikeE – you seem a little slow so I’ll repeat myself – New Zealand is the second best country in the world for ease of doing business.

    If anything Interest free loans and WFF have made it easier for NZ business by providing inducements for skilled and educated Kiwis to stay in NZ (rather than go overseas for higher wages) and have eased wage demands, respectively. “Extra regulations” means nothing and I suspect you’ve used the term because you can’t actually name one (hint: that’s because there aren’t any). Thailand has provided massive subsidies for F and P and I’ll guarantee Mexico has as well. They also offer a huge saving in terms of wages. Are you suggesting we should start doing the same? ‘Cos bro, if you want to work for $2 an hour then I suggest you head to Mexico and start doing so immediately.

    Oh and you’re right. Nobody has a “right” to a job but they do have a right to a job that offers a proper wage and safe working conditions. Mexico doesn’t and that’s the only real reason F and P are heading over there (just ask their Californian workers).
31. higherstandard 31

    18 April 2008 at 9:11 am

    Sod

    Not wanting to rain on the parade of your fatuous argument with Mike but just because NZ has a rating from some agency as having an easy environment is as irrelevant to F&P’s decision to move this part of their manufacturing offshore as it would be to a foreign manufacturer considering manufacturing in NZ.

    The decision F&P made was based simply on economics.
32. Robinsod 32

    18 April 2008 at 9:26 am

    HS – Um bro, I know that. Mike was arguing it was over-regulation. I was simply pointing out that was false and that the World Bank (hardly just “some agency”) survey confirms that.

    If you want to talk “fatuous” I suggest you consider reading comments properly before wasting your time making irrelevant comments…
33. higherstandard 33

    18 April 2008 at 9:46 am

    Sod

    Damn your eyes.

    You were clearly implying that because of the ‘ease of doing business’ in NZ and your previous comments that F&P and their like should be remaining in NZ to manufacture and one should only buy “ethical” products (another rating agency perhaps).

    Such bombast is non-sensical.
34. Robinsod 34

    18 April 2008 at 9:55 am

    Oh. I thought my last par pretty much covered the fact that it was an economic decision.

    And bro, “such bombast” is a pretty bombastic phrase in itself – you seem to be getting all self-referential on me you pomo mofo you.
35. Joker 35

    18 April 2008 at 10:17 am

    Some of you will remember hearing the old manufacturing mantra that “a kiwi worker was worth 8 from a developing country”.

    This is patently no longer true (if it ever was). I would be interested in others thoughts on the suggestion that the average worker in New Zealand has got lazier.

    I know from first hand experience through spending time doing work with manufacturing centres throughout Asia that the guys on the floor are pretty amazing. The inventiveness, iniative and straight out hard work that they display is in stark contrast to their NZ counterparts.

    Calling them “slave” labour as some have here is a bit disingenuous. They may be paid less but putting things in perspective they are alot better off than their parents were and are pretty happy about that on the whole.
36. Jay 36

    18 April 2008 at 10:25 am

    “New Zealand’s management is. Your attempt to blame lack of productive capital investment on “bloated bureaucracy’ is amusing though I must say! A classic example of the Kiwi business mind’s refusal to take personal responsibility.”

    Really! I remember reading an interview with the CEO of Capital Properties, which owns a substantial portfolio of class A wellington office space, who said that everyone in the office was a Labour supporter. Why would that be I wonder? Maybe because the the value of the (non-productive assets) buildings they hold increase through govnt expanding the number of public sector workers.

    Robinsod, you can hide behind slogans like refusal to take responsibility (which sounds like something Thatcher would say to the poor) but it simply indicate in inability to analyse the situation rationally.
37. Robinsod 37

    18 April 2008 at 10:35 am

    Really! I remember reading an interview with the CEO of Capital Properties, which owns a substantial portfolio of class A wellington office space, who said that everyone in the office was a Labour supporter.

    So what if they are Labour supporters? You seem to be arguing that it then naturally follows that Labour is to blame for the fact business has not been investing in productive capital. In rhetoric that’s called a non-sequitur – literally “it does not follow” and Jay? Your points certainly do not follow.

    If you seriously believe that business X in Hamilton, Invercargill, Auckland or even Petone has decided to return big short-term dividends to shareholders rather than upgrade their plant and equipment because of Wellington office space growing then I hope to god you never get near any company I have shares in.
38. Jay 38

    18 April 2008 at 11:23 am

    Robinsod,
    I’m not sure you really understand the investment process and the imperatives the businesses face to compete. My statement was simply an example of how non-productive govnt spending can drive investment in non-productive capital which to anyone with any commercial experience is perfectly understandable and is the basis for making a lot of money. For you to extend it to factories in Petone demonstrates that you lack the ability to prove your assertions beyond simplistic unprovable generalisations. I don’t deal in trite rhetoric for arguments sakes because that can lose me a lot of money.

    BTW your statement can be easily proven false

    “If you seriously believe that business X in Hamilton, Invercargill, Auckland or even Petone has decided to return big short-term dividends to shareholders rather than upgrade their plant and equipment because of Wellington office space growing…”

    Waren Buffet made billion’s re-allocating capital and not reinvesting in plant and machinary from a low growth business (textiles, yarn) into business with a superior return on investment and high barriers to entry. Businesses do this kind of thing every day. Only an idiot would invest in japanese govt bonds yielding 1% when they can put it in a term deposit yielding 9% in NZ. Is that something you can’t seriously believe in?

    Joker, I agree with you. Took a trip though China and it amazed me to see how hardworking they are labouring on construction sites at all hours of the night.
39. Robinsod 39

    18 April 2008 at 11:49 am

    Jay – yawn. But you do indulge in trite rhetoric and by claiming some superior understanding of investment without providing proof beyond anecdotal evidence you are continuing to do so.

    I know of at least one construction firm in Wellington that is took early advantage of the office boom to reinvest in better plant and equipment. They did so early and are now capitalising on increased productivity due to their investment and doing much better than they otherwise would have.

    See how the anecdote game works? You put up a story showing how the Wellington office boom is unproductive and I put one up pointing out how it has stimulated productive investment. The only difference is you don’t offer any cogent framework of debate for your story.

    Waren Buffet made billion’s re-allocating capital and not reinvesting in plant and machinary from a low growth business (textiles, yarn) into business with a superior return on investment and high barriers to entry. Businesses do this kind of thing every day.

    And I mentioned textiles and yarn where? Really bro, you need to start arguing the points I make not the ones you wish I had made.

    Just as a footnote to your comment about China. I assume you are aware of the massive investments they are making in high-tech manufacturing equipment? I’m also interested to know if “labouring on construction sites at all hours of the night.” is your idea of how productivity should be increased…
40. higherstandard 40

    18 April 2008 at 12:16 pm

    sod

    I’m sure you’re aware that many of those massive investments in high tech manufacturing equipment are being driven and financed by multinationals whom China has wooed for a number of reasons.

    As the original post was railing against F&P for closing in NZ and moving to invest in plant (and labour) overseas it is really self evident that they’re just applying sound business principles – did that make their decision to lay off staff any easier I doubt it.

    As an aside where do you get your whiteware that’s a “non-sweat” “ethical good” .
41. Robinsod 41

    18 April 2008 at 12:24 pm

    I believe you can still buy German-made whiteware. Large German companies are required by law to provide fifty percent of their board to workers elected from the factory floor. Turns out they do quite well in terms of productivity and long-term planning. Who’da thunk it?
42. Robinsod 42

    18 April 2008 at 12:25 pm

    That should be “board positions” – the (non-worker) chair has two votes however.
43. higherstandard 43

    18 April 2008 at 12:36 pm

    Sod

    you might find this an interesting read at a later date

    http://www.prol-position.net/nl/2005/04/washing
44. Jay 44

    18 April 2008 at 12:41 pm

    Really Robinsod
    I thought I indulged in assertions backed up by empirical evidence. The problem with your arguments is that you can’t back them up with evidence. I can point exactly to where you can find evidence of how business reallocate capital from low return to high return assets.

    http://www.berkshirehathaway.com/
    http://www.scoop.co.nz/stories/BU0803/S00303.htm

    Once again you clearly demonstrate a lack of understanding of the argument. he point I was making was the the govnt is responsible in wellington for businesses investing in ‘unproductive’ buildings because it provides an incentive through increasing the headcount of the public sector and thus the demand for office space. It’s really not rocket science. Anyone with half a brain can see the connection between the historically low vacancy rates and the increase in govnt spending and the lowering of yields of commercial property assets.

    Anyway I’m going to stop here for both our sakes because this is getting boring since you’re clearly out of you depth because you haven’t logically refuted anything I’ve said and you lack the required knowledge to argue the point in the first place.
45. Robinsod 45

    18 April 2008 at 12:52 pm

    Anyway I’m going to stop here for both our sakes because this is getting boring since you’re clearly out of you depth because you haven’t logically refuted anything I’ve said and you lack the required knowledge to argue the point in the first place.

    Here’s a tip Jay – if you want to argue a point it helps to have a point other than “I’ve got some stories and I know better than you because I do”. Goodbye.
46. Jay 46

    18 April 2008 at 1:01 pm

    I suppose that the difference between us. I can demonstrate my knowledge in a logical manner backed up with theory and empirical evidence to deliver a conclusion.

    We should both, however, agree that something radical has to be done regarding the hollowing out the NZ manufacturing base. I think that this should be beyond politics.
47. Bill 47

    18 April 2008 at 1:21 pm

    As Adam Smith pointed out, net profit is wages not paid. So divide the $63 million net profit by the number of employees at F&P and you get the sum of money that was stolen from each and every worker at F&P last year.

    Then the thieves fire all the workers because they realise they can steal even more if the workers are based in Italy, Mexico etc.

    And if they can find other places that allow them to nick even more from workers then that is where they will go next.

    If workers want work in NZ, then workers will have to control their workplaces and stick the profit motive. Every worker at F&P could have had the same take home pay last year and had $63 million left over to reinvest over and above what was reinvested, or simply given themselves a $63 million pat on the back.

    Capitalism is underpants. Smelly shitty ones. Time for a change peeps, no?
48. Robinsod 48

    18 April 2008 at 1:51 pm

    No Jay – the difference between us is that I didn’t come to the conversation with the inalienable belief I was right and didn’t need to prove it. On the subject of manufacturing all I can say is there is no way we can keep it here unless we “innovate” but that innovation isn’t going to happen with remote production and certainly not as China goes high-tech.

    I like Bill’s way of doing things but that ain’t going to happen without serious crisis. In short while we continue to accept the parameter of international capitalism in which multinationals like F&P make country compete against country in the lowest-wages game the we can only follow the advice Candide gives to to the “great thinker” Pangloss at the end of Voltaire’s masterpiece – “Excellently observed, but let us cultivate our garden.”
49. higherstandard 49

    18 April 2008 at 2:24 pm

    RS

    “I like Bill’s way of doing things ….”

    If you mean in relation to his comment.

    “So divide the $63 million net profit by the number of employees at F&P and you get the sum of money that was stolen from each and every worker at F&P last year.”

    What asinine garbage.
50. Jay 50

    18 April 2008 at 2:26 pm

    So what are you accusing me of, upholding principle that I believe in?

    It’s a pity that the the govnt wasn’t a little more serious about the knowledge wave they were trumpeting about 4 years back in regards to innovation.

    The only way that NZ is going to be able to go against the parameters of international capitalism is if we build a substantial amount of capital ourselves like japan did in the 1850 and 1950s to build homegrown companies which are loyal to NZ but given our dismal savings rate and propensity to consume with other peoples capital it’s probably not going to happen without a radical change in mindset.
51. Robinsod 51

    18 April 2008 at 2:44 pm

    Jay – at last we can agree on something. But it is a lot harder to protect and guide accrued capital now than it was in 1950’s Japan.
52. Jay 52

    18 April 2008 at 3:20 pm

    I would have to say that the Japanese have a lower standard of living in certain respects to NZ despite being a wealthier country through having overpriced consumer goods to discourage consumption and creating real estate bubbles to build up their capital base – shifting wealth from the people to govnt and corporations. Politically I’m not sure if it’s wise or even feasible to force this upon NZ.

    The japanese govnt forced companies to back a certain standard of high definition TV which was a competition they ultimately lost and burned through about a billion dollar (USD I think) in R&D. Guidence of capital has it’s limits and the opportunity cost of spending that on healthcare may too great for NZ to bear. It an interesting question though but I have yet to be convinced that NZ economic renaissance can be guided from the terrace. Maybe it’s only possible on a small scale.
53. Linda Axford 53

    18 April 2008 at 7:31 pm

    My view is simplistic: Friends, in-laws, ourselves and people I hardly know have each spent thousands in the last 20 years supporting Fisher and Paykel; I thought they had a secure market. Does the firm want more profit or something?
    And how’s this: The people who have shares in F and P make money, yet the employees (who have only their labour to sell) are losing out, yet again.

    aladin
54. Jay 54

    18 April 2008 at 8:55 pm

    “The people who have shares in F and P make money, yet the employees (who have only their labour to sell) are losing out, yet again.”

    Not entirely.

    http://stuff.co.nz/4486486a13.html

    Long term prospects don’t look good. By the sounds of it the management tried to keep the jobs onshore but in the end had to move them.

    A cursory look at the historical share price graph shows that the price has fallen from about $4.90 to $2.20 is the past 18 months. If you were relying upon FPA to help fund your retirement then you’re basically screwed.
55. burt 55

    18 April 2008 at 11:05 pm

    irigate & Tane

    How far do you recommend we take protecting jobs by selfless acts of paying more for the things we value? For instance, should I cancel the insurance on my house and start a major fire in it resulting in a fire service call out if the local fire station is under threat of losing a member because of increased smoke alarm usage reducing call outs? Will I sacrifice my house to save the local fireman, will others join me so that he need not loose his job? This amount of money to Owen Glenn is probably relatively less than my mother paying an extra $100 in tariffs on the only fridge she can afford – the cheapest imported one.

    You claim you will boycott slave labour/sweetshop producers? Just out of interest, will you be breeding your own horses or buying some from local ‘fair trade’ breeders? You will need them to get around but you will need to stay off the roads while you move about. Minimum wage workers have been worked hard to build them roads.
56. burt 56

    18 April 2008 at 11:19 pm

    irrigate & Tane

    I came up with the horse because I couldn’t think of any modern form of transport that hasn’t got major components of sweetshop labour involved in their making. A homebuilt vehicle is possibly an option, as is setting up an ethical vehicle manufacturing plant.

    Choice of components that are not custom built in ethical engineering workshops would need to be carefully considered and researched. It’s quite possible that the only option would be to build all components and also re-open the Dunlop tire production plants that have closed.

    It’s a big job to build a motor vehicle so it might be a good idea to test the feasibility with building an ethical bicycle. Have a think about that, think about how hard it would be to even source or build all of the components that would be required to build even a bicycle, and then think about how far and genuine your boycott of ‘slave’ labour will be.
57. burt 57

    19 April 2008 at 1:10 am

    Kona produce The Africa Bike.

    I haven’t the time to research where it’s actually built etc but the company seems to have a good focus calling the bike “The most important bike we’ve ever designed.”
58. jh 58

    19 April 2008 at 10:37 am

    Jay
    Apr 17th, 2008 at 5:58 pm

    China is old news.

    Jobs are leaving China for Vietnam.
    ……………..

    What China has reached full employment? What’s going on here?

    This implies that there will soon be balance in the labour market in a globalised world. The catch cry is that “globalisation enriches everybody” . I tend to think that Joe Bloggs kiwi will average out somewhat low down there when we reach an equilibrium with the rest of the world. The globalised property market is also a worry.

    I’m picking over population isn’t (allowed to be) a problem, along with climate change or resource depletion (oil etc).
    [ New Zealand is the new Eden, its clean and green image the beneficiary of a public-relations windfall direct from Middle-earth. Americans are not just visiting the country in numbers unimaginable only five years ago—they’re immigrating, drawn by an arcadian ideal (never underestimate the pacifying effect of several billion sheep), breathtakingly cheap waterfront real estate, see-through fish-tank architecture, and an investment climate that, as one Las Vegas resort ownercumSouth Island winemaker puts it, makes New Zealand “the Switzerland of the South Seas.”

    One of the most powerful forces in the shilling of the nation is Helen Clark, familiar to all Kiwis as Madame Prime Minister.

    Clark aggressively packaged and promoted New Zealand as a place where Californians in particular, because of their relative proximity and the kinship in lifestyles, might consider putting down roots. “Active recruitment,” she called it, and some of the state’s richest residents signed up. Vive le marketing.

    http://www.travelandleisure.com/articles/kiwi-country ]
59. burt 59

    20 April 2008 at 10:23 am

    irrigate & Tane

    Have you nothing to say about what changes will be required for you to avoid all ‘slave’ labour ?

    Can we assume from this point forward that when you publish strong opinions on this blog that you are just blustering and we shouldn’t take anything you say seriously?
60. burt 60

    20 April 2008 at 10:37 am

    [lprent: deleted as requested]
61. burt 61

    20 April 2008 at 10:39 am

    lprent

    I did the “muppet” post my comment in the wrong tab again. Can you please tidy up after me once more and delete my comment directly above this one.

    Thanks.

    [lprent: no sweat]
62. jh 62

    21 April 2008 at 9:50 am

    Notice that in relation to jobs leaving the Pearl Delta (as workers demand better conditions) the margins are described as “really tight”. That suggests that there is an over supply of labor so wages don’t rise up to say a NZ workers rate then move but go up a little bit and then the factory moves to a poorer area.

    The thing about globalisation is knowing where to stop. We have to be clear about our comparative advantage (fishing, forestry, agriculture, tourism, niche industries) and revisit the assumptions about economic growth and mass migration (stop selling the family silver to balance a trade deficit).

    Notice that 50 to 60% of the job growth in the last 5 years were due to the housing boom which was due to a liquidity bubble…..
63. burt 63

    21 April 2008 at 10:41 pm

    The shape of things to come – 2,000 junior Dr’s planning to walk off the job tomorrow.

    Looks like the senior Dr’s are set to make a real living, better hope they don’t get to like the $200 /hour they can charge in the next few days or weeks – they may leave NZ so they can continue to earn that sort of money.

    But I can see where the problem is, how can the govt give them big pay rises when they are already rich pricks. I mean tax cuts (increases in net income) can only be given as long as they don’t only benefit the rich so percentage increases for rich pricks have the same problem. The laws of supply and demand are things we can’t talk about so all we have left is ‘how much do they already earn’. Sad sad socialists making a pudding of public health.
64. r0b 64

    22 April 2008 at 12:35 am

    Sad sad socialists making a pudding of public health.

    Guess you’re right Burt. Gee, I wish we had a good capitalist health system like America…

    http://en.wikipedia.org/wiki/Health_care_in_the_United_States

    http://www.nybooks.com/articles/18802

    http://www.michaelmoore.com/sicko/index.html

    Yes siree jimbob, that capitalist health system sure looks good! Not.
65. burt 65

    22 April 2008 at 6:41 pm

    rOb

    It’s not about what National might do, it’s not about what the US do, it’s about today, it’s about here and it’s about Labour.

    Look – plain and simple. MP have had circa 10% pay rises every year since 1999, Dr’s haven’t. We have no shortage of MP’s, we have a shortage of Dr’s. What grounds have the MP’s got for rejecting a 10 10 10 pay rise?

    If the Dr’s union wanted to play hard ball they could pick any three years of percentage increases in the Cabinet Ministers salaries and demand this as a three year package retrospectively applied as MP’s salary increases always are. It pays to remind the govt how many people are lining up to take their place and that Dr’s are in short supply.

    Correlation or causality on the supply and demand differences between MP’s and Dr’s and their respective gross salary increases in salary over the last 9 years?
66. burt 66

    22 April 2008 at 6:47 pm

    rOb

    Let me clarify one thing, I don’t really give a toss the MP’s get good pay rises. Their salaries had to rise as historically Politics as a career (in NZ) didn’t compete with corporate employment, this made good talent hard to attract and retain.

    I just wish the govt would acknowledge that the same conditions exists for Dr’s (and others) and rectify it for “all of us” like they have already done for themselves.
67. r0b 67

    22 April 2008 at 7:20 pm

    Burt, you need to make up your mind who you are.

    Do you want to be taken seriously here? Do you actually want to engage in constructive debate? If so, you need to drop lines like “Sad sad socialists making a pudding of public health”. You should also give up gutter stuff like calling Helen Clark a “lying bitch”, and your desperate fixation with the retrospective validation of government accounts (a standard process which occurs in most years).

    Some of your posts have potential Burt, but you too often ruin it with the nonsense I’ve just described, so I usually can’t be bothered to engage.

    So really, please – work out who you are. If you’re a serious commenter, then lift your game. If you’re just a troll, then trot out some of your typical lines, maybe the one about shooting the messenger or something, and I’ll move you down my list of people I’m interested in engaging with.

    Who are you Burt?
68. burt 68

    22 April 2008 at 8:01 pm

    rOb

    Who I am has stuff all to do with anything, I’m an x-Labour voter.

    Who the govt think they are declining a pay negotiation where the demand is similar to the sort of pay rises they have had every year since 1999 is a big question.

    Teachers and Police have the same gripe. Do we see a pattern here?

    Another big question is where are the union advocates here at the standard, why are they not singing the praise of the union for standing up to an employer that behaves like a corporate CEO getting their annual cream while the workers get buttons?

    Do the standard union activists loose their voice when the employer is govt? Luckily the Dr’s union has some balls and principals. Dangerous and risky – but lucky.
69. Tane 69

    22 April 2008 at 8:17 pm

    Hi burt, I haven’t had the time really – simple as that. There are any number of industrial disputes I don’t have the time to write about. It goes without saying I support the junior doctors on this one.

    Anyway burt, what makes you so sure I’ve never been involved in an industrial campaign against the government?
70. Tane 70

    22 April 2008 at 8:25 pm

    Oh and burt, just caught up with your earlier comments in this thread – I’d wondered why you were berating me about slave labour over at KB the other day.

    To answer your question, I do try where possible to buy ethically, but realise that’s not always feasible in our society. It’s not really the point either – I don’t believe any fundamental social change can come through consumer choice. So I do what little I can to not make things worse, and involve myself in political activity to try and make the world a more humane place.

    The way I see it, you’re on a hiding to nothing if you think you can separate yourself entirely from the society you are trying to change, and you’re even more deluded if you think buying fair trade coffee is going to save the world.

    There you go burt – that’s a thoughtful reply. You reckon you can pay me the same respect?
71. burt 71

    22 April 2008 at 9:08 pm

    Tane

    irigate is possibly a little less pragmatic than yourself, apologies for grouping you with irrigate on the matter of;

    “refusing to buy goods made with slave labour and making sure that companies know we will not support them in their attacks on us and workers around the world.”

    I think he/she has bitten off a little more than they can chew with that stance.

    I look forward to the standards coverage of the Dr’s strike, I expect you could do a pretty analysis of how Dr’s pay compares to Aussie over the National years and the Labour years. It would be interesting to see given the high profile nature of this current industrial action. Additionally did you see the letter in this weeks Listener by Kevin Atkinson? It’s on page 8 and it’s titled “David Cunliffe”.

    Health looks like it might almost rival the EFA as an election issue.
72. burt 72

    22 April 2008 at 9:29 pm

    Tane

    Reading that… do a pretty good analysis of hows Dr’s pay….

    Sorry, I wasn’t denigrating you based on the presentation of the graphs, rather that it would be well represented on bar graphs.

    [lprent: looks like you lost a bold tag or two. I’ve corrected it as it looked a bit loud. Hope it is correct]
73. Tane 73

    22 April 2008 at 9:52 pm

    Hey burt, I’ll try and do something if I have time. As you’ll have noticed my posting has dropped off in recent times, and I’m largely limited to making the comment. And no, haven’t seen the Listener – I stopped watching it after Pamela Stirling dragged it to the right and made it into a baby boomer magazine.

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1. Outsourcing jobs - whats the issue? « The visible hand in economics: posted on 18 April 2008 at 7:56 am

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