Re: HP : Massive strike and protest march today

From: David J Dachtera (djesys.nospam_at_comcast.net)
Date: 11/02/05 

Date: Tue, 01 Nov 2005 20:13:02 -0600

"Dr. Dweeb" wrote:
>
> David J Dachtera wrote:
> > "Dr. Dweeb" wrote:
> >> [snip]
> >> Again, a patently ridiculous statement. Physical plant is costantly
> >> being renewed and replaced in the mfg industry - any assertion to
> >> the contrary is incompatible with the known facts !
> >
> > Haven't worked in older factory, have you?
> >
>
> And the relevance of that statement is ???

...quite obvious to those who have the experience mentioned.

> Age and economic value are not linearly related. It is entirely possible
> that older plant is more economically viable in a given market and financial
> situation than replacing same plant with new plant. It depends on the sums
> (I shall not bore everyone with the relevant factors here).
>
> Old != Uneconomic.

Precisely my point.

> By the way, I am not a factory worker by trade - however I have worked for
> clients with some aging plant. The fact of the matter was that it was not
> economically the best alternative to replace it at that moment in time.

I am no longer a factory worker by trade. However, that is among the
origins of my working experience.

> >>> Therefore, the production had better be rather spectacular by
> >>> comparison.
> >>>
> >>> Employees are no different. You cannot "cheapen" the staff without
> >>> modifying the process and, as others will be quick to point out,
> >>> process modification comes only at a price. You have to increase
> >>> production to offset those costs, *AND* you have to find cheaper
> >>> labor to realize any savings to pay for those costs.
> >>>
> >>> Sometime that results in a big win for the company. Often times, it
> >>> does not.
> >>>
> >>> ...and lest we forget, over-seas shipping and trans-continental
> >>> transport are not donated to anyone. That also comes at a cost.
> >>>
> >>> Take all that into account and much hoped-for "savings" by switching
> >>> to overseas slave labor quickly evaporate.
> >>>
> >>
> >> Not any time soon - because part of relocating mfg overseas is the
> >> NEW PLANT which will always be superior from a cost accounting
> >> productivity
> >> viewpoint - as well as the cheaper labour. Its the package, and
> >> trust me, doing this sort of investment analysis is non-trivial and
> >> all the factors are taken into account - including cost of shutting
> >> down current plant and firing everybody if necessary!
> >>
> >> No one invests $3B in a plant in China without knowing EXACTLY what
> >> its costs and returns are.
> >
> > Never said anything to the contrary.
>
> You claimed that "much hoped-for "savings" by switching to overseas slave
> labor quickly evaporate."

Research does not guarantee success. If it did, there would be no
corporate failures among those who endeavour to do their research and
due dilligence.

> My statement stands. You make an implicit claim that companies relocating
> overseas have failed to do their sums accurately.

Nope.

> Suggesting that they
> somehow fail to account for obvious factors that even Noddy would be aware
> of. This smacks of ignorance or something worse - a personal score to
> settle.

It smacks of over-generalization on your part.

> Now, not all massive new plant investments result in a perfect outcome, but
> most of them do - cost accountants may be amongst the most boring
> individuals on the planet - but they serve a purpose.

Yes: to inflate budgets - rather like lawyers. 

-- 
David J Dachtera
dba DJE Systems
http://www.djesys.com/
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