Redcar Steel plant
Discussion
cardigankid said:
This x10. Financial system meltdown my fat arse. What Gordon Brown did was to let bankers con him into paying off the fraudsters they were in hock to, using our money.The banks should have been put into receivership.
The core of Brown's voting base would have been the worst impacted by allowing the first few to go to the wall. So that was never likely to happen (same way as pensions will not see meaningful reform until we run out of cash).And the potential impact of some of the later players going under would, indeed, have been pretty catastrophic.
I still think it would have been the better option all round, but people bleating about austerity now would have thought this was holiday season by comparison.
V8 Fettler said:
The cash flow crisis in 2008 could have resulted in empty cash machines = food riots in four days or so.
Companies not being able to pay suppliers or their staff - leading quickly to bankrupt companiesPension funds going bust over night
No possibility to borrow money
In essence the Govt had no choice - sadly Brown forced Lloyds against their will to buy HBOS and one wonders had that not happened would the tax payer have had to dig so deep.
The key question is though what would have happened had the Fed bailed out Leman Brothers could that have prevented the carnage? Or would it simply have kicked the can down the road for a bigger crash? Or would the regulators come in heavy quickly to stop things getting worse and then it would resolve itself with normal interest rates.
Blayney said:
Feel free to shoot me down in flames. I don't pretend to be an expert in economics etc. However I think it's incorrect to think they only way to make money is to manufacture.
This is something that has done the rounds recently and I think it's really interesting. All of these companies offer a service rather than a physical product.
A lot of companies are becoming service orientated now as that is how they make their money. Even traditional engineering firms. Take Rolls Royce for example... they make jet engines. Something like 50% of their business is now "power by the hour". Airlines aren't buying engines they are buying the USE of them.
Unfortunately this isn't a business model that helps the Steel industry I don't think. I'm just pointing out that you don't have to make something to make money.
edit - it is worth pointing out that in all the examples given someone, somewhere did have to make something though! There's just more money in the service than the product.
It is worth pondering for a minute how many employees each of those companies has, employees not contractors earning barely the minimum wage after costs (as with uber). How much corporation tax each pays as internet service companies have proved particularly adept at gaming the tax system as it operates internationally. This is something that has done the rounds recently and I think it's really interesting. All of these companies offer a service rather than a physical product.
A lot of companies are becoming service orientated now as that is how they make their money. Even traditional engineering firms. Take Rolls Royce for example... they make jet engines. Something like 50% of their business is now "power by the hour". Airlines aren't buying engines they are buying the USE of them.
Unfortunately this isn't a business model that helps the Steel industry I don't think. I'm just pointing out that you don't have to make something to make money.
edit - it is worth pointing out that in all the examples given someone, somewhere did have to make something though! There's just more money in the service than the product.
Also worth bearing in mind as well for those who say our future prosperity depends on China that in most areas of internet trading there is usually a Chinese alternative that outperforms them in China itself.
No our economic future does not necessarily depend on making a particular physical product. But we have to seriously question what sort of economy and society we wish to live in and one where the top 10-15% make their living from tradable business services and for the rest there is only the hope of a government job, otherwise it is the minimum wage, doesn't sound particularly great to me. This is not only a question for business strategy but also immigration.
Europa1 said:
Did I see on a rolling news channel that Sajid Javid arrived at Port Talbot in a Jaguar? I can understand the pressure to be in a British built of set of wheels, but maybe not the best choice in the circumstances.
Be fair, whatever is happening at Tata steel, JLR have been and continue to invest huge amounts in the Midlands.As for CMD, this popped up on FB at the weekend and made me chuckle:
Europa1 said:
Did I see on a rolling news channel that Sajid Javid arrived at Port Talbot in a Jaguar? I can understand the pressure to be in a British built of set of wheels, but maybe not the best choice in the circumstances.
I think any minister is damned if they do and damned if they don't. You could start digging into all the tech, where are all the cameras made that are filming the event (high end stuff so not sure), smart phones and tablets etc. What stuff they have at home and all that. Typed up on something made in China and I will be driving around in what is seen as a British car made in France later today, and later coming home to cook tea on a British built cooker that is pants. Pants are probably made in China as well.
A lot of companies are becoming service orientated now as that is how they make their money. Even traditional engineering firms. Take Rolls Royce for example... they make jet engines. Something like 50% of their business is now "power by the hour". Airlines aren't buying engines they are buying the USE of them.
Same can be said about buying a car - you lease it, you dont own it but rent it for a period of time paying a few that is basically markdown plus fee.
Psst Ill tell you something, you still have to have a product to sell. You still need have something to actually get the punter in to spend money. This is where we are going down the tubes were making nothing, you can have all of the service industry that you need but if you have nothing to 'service' then you are not going to make it.
Where do we fall down, well looking at where we stand you have a large number of people going through school thinking that they are management material, that they are better than the herd. so they trot of to uni and get a degree. then they realise that there are no jobs, that it takes more than a piece of paper to actually get a management role. <=== service industry education system self perpetuating the foder required for the education system - They love this and they dont care about the aftereffect just about ensuring that there is a steady flow through the halls of the local polytechn... sorry satellite university campus.
Then we have the benefit system that actually encourages people not to work. If you can make a decent living off of the benefit system then you wont work. <===== you seen the amount of people employed in the benefit system, Job centers etc. amazing when you think about it, all those people actually not making anything.
The way we are now ? we have let the system deteriorate, we sat back and just watched the erosion of our manufacturing industry. all those plonkers coming out with management degrees thinking outsource cut costs move manufacturing abroad... its coming home to roost now. what industry to we have left ?
Same can be said about buying a car - you lease it, you dont own it but rent it for a period of time paying a few that is basically markdown plus fee.
Psst Ill tell you something, you still have to have a product to sell. You still need have something to actually get the punter in to spend money. This is where we are going down the tubes were making nothing, you can have all of the service industry that you need but if you have nothing to 'service' then you are not going to make it.
Where do we fall down, well looking at where we stand you have a large number of people going through school thinking that they are management material, that they are better than the herd. so they trot of to uni and get a degree. then they realise that there are no jobs, that it takes more than a piece of paper to actually get a management role. <=== service industry education system self perpetuating the foder required for the education system - They love this and they dont care about the aftereffect just about ensuring that there is a steady flow through the halls of the local polytechn... sorry satellite university campus.
Then we have the benefit system that actually encourages people not to work. If you can make a decent living off of the benefit system then you wont work. <===== you seen the amount of people employed in the benefit system, Job centers etc. amazing when you think about it, all those people actually not making anything.
The way we are now ? we have let the system deteriorate, we sat back and just watched the erosion of our manufacturing industry. all those plonkers coming out with management degrees thinking outsource cut costs move manufacturing abroad... its coming home to roost now. what industry to we have left ?
Its the system that is wrong not the good people of Redcar or Port Talbot but unfortunately money is king.
Added to which we are all hypocrites. They used to make a lot of TV's in South Wales but not any more .
We like to buy large Screen TV's for £300-£500 and it would be twice that price if they were still made there.
we are all to blame.
Added to which we are all hypocrites. They used to make a lot of TV's in South Wales but not any more .
We like to buy large Screen TV's for £300-£500 and it would be twice that price if they were still made there.
we are all to blame.
johnxjsc1985 said:
Its the system that is wrong not the good people of Redcar or Port Talbot but unfortunately money is king.
Added to which we are all hypocrites. They used to make a lot of TV's in South Wales but not any more .
We like to buy large Screen TV's for £300-£500 and it would be twice that price if they were still made there.
we are all to blame.
Figures like these are often bandied about.Added to which we are all hypocrites. They used to make a lot of TV's in South Wales but not any more .
We like to buy large Screen TV's for £300-£500 and it would be twice that price if they were still made there.
we are all to blame.
In actual fact the direct manufacturing labour cost of a product is around 5-15% in a whole range of industries. Clearly the west isn't going to be making cheap textiles or toys again (nor should it want to) but the overall business environment is more important IMO than just comparing labour costs.
We have some of the highest energy costs in the western world for industry. Business rates are also a significant burden.
JagLover said:
We have some of the highest energy costs in the western world for industry. Business rates are also a significant burden.
Both the company and the unions involved with the Teeside closure both affirmed this.You also have the matter of subsidy, which is no doubt the case with China. As for the raw material costs of steel, they are globally commoditised, so very little regional variation, certainly not right now with so much excess mining capacity.
Digga said:
oth the company and the unions involved with the Teeside closure both affirmed this.
You also have the matter of subsidy, which is no doubt the case with China. As for the raw material costs of steel, they are globally commoditised, so very little regional variation, certainly not right now with so much excess mining capacity.
IndeedYou also have the matter of subsidy, which is no doubt the case with China. As for the raw material costs of steel, they are globally commoditised, so very little regional variation, certainly not right now with so much excess mining capacity.
I find it depressing how many just seem willing to give up "oh we will never be able to compete".
If the issue is energy costs then stop subsidising an affluent few to produce "renewable energy" and question why does it benefit Gaia to close down our heavy industry and import the same products from China?
If the issue is rates then move the burden of taxation away from production and towards both consumption and unproductive investment (in non-new build residential property)
If the issue is infrastructure then build some.
If the issue is Chinese dumping then apply proper anti-dumping duties.
What isn't the case is that you cannot manufacture in the west due to differences in labour costs.
JagLover said:
johnxjsc1985 said:
Its the system that is wrong not the good people of Redcar or Port Talbot but unfortunately money is king.
Added to which we are all hypocrites. They used to make a lot of TV's in South Wales but not any more .
We like to buy large Screen TV's for £300-£500 and it would be twice that price if they were still made there.
we are all to blame.
Figures like these are often bandied about.Added to which we are all hypocrites. They used to make a lot of TV's in South Wales but not any more .
We like to buy large Screen TV's for £300-£500 and it would be twice that price if they were still made there.
we are all to blame.
In actual fact the direct manufacturing labour cost of a product is around 5-15% in a whole range of industries. Clearly the west isn't going to be making cheap textiles or toys again (nor should it want to) but the overall business environment is more important IMO than just comparing labour costs.
We have some of the highest energy costs in the western world for industry. Business rates are also a significant burden.
Even with "cheap" labour, the actual labour content of lifestyle items rarely accounts for more than 10% of the retail price, usually 5% so even if the labour were here with fair wages the cost would only double overall (transport etc inc.) the real money is mostly after the thing has been built, retailing is still the Midas in the equation. The reality is that despite huge streamlining and the growth of JIT serviced internet sellers with very small comparative overheads the post manufacture margin has not changed since the 1960s.
The growth of streamlined buying and selling has only marginally helped the consumer and hasn't helped the conventional retailer at all, the benefits have all gone to the hangers-on, the middle man army of Banks, Financiers and Commissioners who have for 50 years now hugely over-valued their part in this chain. The reality is that re-evaluating their part, by their revelation of their extraordinary margins, usually something like 10 or 20 fold on the sum invested, it is shocking to behold the level of return. If there was the 'churn' of Businesses that I've written about previously (a desirable thing imo) then these margins would make good sense as the risks would be fairly rewarded. But this sector is rife with cronyism of the most vile kind and there is no churn, the risks are virtually eliminated so the 10 or 20 to 1 returns cannot be justified.
For 50 years now these these vile cronies have been cutting the cake and taking it all, it is why they are so powerful, a power that is used to cynically set-aside the truth of it.
JagLover said:
Figures like these are often bandied about.
In actual fact the direct manufacturing labour cost of a product is around 5-15% in a whole range of industries. Clearly the west isn't going to be making cheap textiles or toys again (nor should it want to) but the overall business environment is more important IMO than just comparing labour costs.
We have some of the highest energy costs in the western world for industry. Business rates are also a significant burden.
The cost coming off the production line is the problem regardless of how its arrived at and we all demand cheap goods.As I say we are all to blame.In actual fact the direct manufacturing labour cost of a product is around 5-15% in a whole range of industries. Clearly the west isn't going to be making cheap textiles or toys again (nor should it want to) but the overall business environment is more important IMO than just comparing labour costs.
We have some of the highest energy costs in the western world for industry. Business rates are also a significant burden.
Blayney said:
Feel free to shoot me down in flames. I don't pretend to be an expert in economics etc. However I think it's incorrect to think they only way to make money is to manufacture.
This is something that has done the rounds recently and I think it's really interesting. All of these companies offer a service rather than a physical product.
A lot of companies are becoming service orientated now as that is how they make their money. Even traditional engineering firms. Take Rolls Royce for example... they make jet engines. Something like 50% of their business is now "power by the hour". Airlines aren't buying engines they are buying the USE of them.
Unfortunately this isn't a business model that helps the Steel industry I don't think. I'm just pointing out that you don't have to make something to make money.
edit - it is worth pointing out that in all the examples given someone, somewhere did have to make something though! There's just more money in the service than the product.
erm, according to the media recently Uber has supposedly bought, or is in the process of buying, 100,000 MercsThis is something that has done the rounds recently and I think it's really interesting. All of these companies offer a service rather than a physical product.
A lot of companies are becoming service orientated now as that is how they make their money. Even traditional engineering firms. Take Rolls Royce for example... they make jet engines. Something like 50% of their business is now "power by the hour". Airlines aren't buying engines they are buying the USE of them.
Unfortunately this isn't a business model that helps the Steel industry I don't think. I'm just pointing out that you don't have to make something to make money.
edit - it is worth pointing out that in all the examples given someone, somewhere did have to make something though! There's just more money in the service than the product.
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