Caterpillar Trying to Cut Wags & Benefits by 50% when Profitable

[Wild Bill]

It is truly sad that the mainstream Left has not embraced this obvious point.

Back in the psychedelic 60's a comedy group called Firesign Theater gave the best description of Marxist economics I've ever heard?

"First, take off your shoes! Now, can't you see how increased spending opportunities makes more work for everyone? And more of it, too!"

The workers paradise is where they control the shoe making machines, buying shoes from themselves. Need more production? Everyone throw their old shoes away! Need more shoes? Speed up those machines!

Of course, this never works in the real world, as the USSR so tragically proved. Production and demand must be real, not wishful or political.

Meanwhile, what I have never in my life heard a Lefty address is the notion of dreaming up better shoe making machines. Why should a smart person bother if there's no incentive? The usual response is to make some blanket statement that everyone should work for the betterment of society, even creative people like inventors.

No, the Left seems to think that we will just run the same machines forever, wearing the same shoes!

If those apes on the African plains eons ago were unionized, we'd still be in the trees! Name me ONE equivalent to Thomas Edison or Henry Ford from the Left!

[August1991]

No, the Left seems to think that we will just run the same machines forever, wearing the same shoes!

To be honest, there are many on the Right who also think that it would be better to stop new technology, or restrict foreign trade.

Why let the Chinese make our stuff! is an easy, lazy populist argument. Leftist tend to make it, but some on the Right too. Left or Right, how many ask: Why let computers do our jobs!

Yet, whether computers or Mexicans/Chinese, the argument/question is the same. It is simply better if we can do things more efficiently.

What Canadian would stop using American light bulbs and choose to light only with Canadian (natural wax) candles at night?

Or, what Canadian would live only with sunlight - because it's natural, and Canadian, while artificial light is so American.

Edited January 6, 2012 by August1991

[Wild Bill]

To be honest, there are many on the Right who also think that it would be better to stop new technology, or restrict foreign trade.

Why let the Chinese make our stuff! is an easy, lazy populist argument. Leftist tend to make it, but some on the Right too. Left or Right, how many ask: Why let computers do our jobs!

Yet, whether computers or Mexicans/Chinese, the argument/question is the same. It is simply better if we can do things more efficiently.

What Canadian would stop using American light bulbs and choose to light only with Canadian (natural wax) candles at night?

Or, what Canadian would live only with sunlight - because it's natural, and Canadian, while artificial light is so American.

However August, there was a time when Canada invented a lot of new stuff too! Just google "Canadian inventions".

We still invent stuff. We just don't build it here. That means jobs for engineers, not manufacturing workers.

I've always agreed with you that in the long run things work out but when the rate of change is so rapid a LOT of folks get screwed!

Including myself, I might add. A lot of my choices didn't work out and now at my age there's nothing I can do to correct that.

I'll get by but there are LARGE numbers of displaced workers who are unlikely to simply sit there and accept it. We might end up seeing some unpleasant social unrest soon. That's just simple reality.

[waldo]

When we discover new technology, or we open to trade, the effect is the same. We have the opportunity to do something at lower cost, with fewer resources. Society is better off.

what a load of clap-trap when applied to this Caterpillar vs. Electro-Motive London plant workers... in any case, it's always reassuring to read someone presume to label and denigrate 'leftists' by posturing a 'rightist' altruistic "society is better off" bleat! Clearly the Canadian economy and London in particular thanks you for considering the probable shifting of manufacturing to alternate Caterpillar U.S./Mexico/Brazil plants as an overall "society gain"... ya, ya, those resultant U.S./Mexico/Brazil "societies" will surely be better off and will every day give thanks to the out-of-work London Canadians!

what you altruistic (/snarc) 'rightees', clamoring all over yourselves to prop-up the corporateMan conveniently continue to ignore/avoid, is any discussion of the opportunity Harper Conservatives had to... attempt... to leverage the Canada Investment Act to... attempt... to provide some greater degree of protections for the London workers... you know, that segment of the London/Canadian, uhhh... society! Hey?

[August1991]

what a load of clap-trap when applied to this Caterpillar vs. Electro-Motive London plant workers...

clap-trap? Caterpillar workers?

Waldo, if Martians decided to drop locomotives to Earth, would you refuse their gift? Heck, if you won a free Lexus, would you refuse to accept it?

IOW Waldo, if your wife finds a better way to drive to work, would you stop her from taking that route?

To help you answer, consider this: if your wife takes a new faster route, others on the new route suffer since there's another driver. Then again, on the older route of your wife, there is one less driver.

----

More likely, and to put this question into a proper context: if a Chinese/Mexican woman finds a better way to get to work, should I in Canada be angry?

Waldo, here's my opinion: I think that it's a good thing if an ordinary woman in China finds a better way to get home. What do you think?

Edited January 6, 2012 by August1991

[waldo]

Waldo, if Martians decided to drop locomotives to Earth, would you refuse their gift? Heck, if you won a free Lexus, would you refuse to accept it?

are you being purposely obtuse? Why not just say it clearly? What's with your talking in riddles nonsense?

[August1991]

are you being purposely obtuse? Why not just say it clearly? What's with your talking in riddles nonsense?

There's no riddle.

If Martians sent us flatscreen TVs for free, would that be bad for our economy?

And to me, if a women in Santiago finds a faster way to get home to see her kids, that's the same.

The world is a better place.

Edited January 6, 2012 by August1991

[waldo]

There's no riddle.

If Martians sent us flatscreen TVs for free, would that be bad for our economy?

in what context are you attempting to attach/associate this 'question' to the Caterpillar - Electro-Motive London employees situation being discussed?

[August1991]

in what context are you attempting to attach/associate this 'question' to the Caterpillar - Electro-Motive London employees situation being discussed?

If we can accomplish something more easily, the world is a better place. No? Edited January 6, 2012 by August1991

[waldo]

If we can accomplish something more easily, the world is a better place. No?

it's slow... I've got all night. Again, relate this to the thread - you know, the one titled, "Caterpillar Trying to Cut Wages & Benefits..."

[Michael Hardner]

it's slow... I've got all night. Again, relate this to the thread - you know, the one titled, "Caterpillar Trying to Cut Wages & Benefits..."

I'll step in here to offer an answer: competitive advantage. If Canada were to shut out all food imports, we would spend more resources growing our food than we would have to spend if we imported it.

This is why globalized trade makes sense on an economic level.

Of course, there are losers. The idea is that government sets the rules of the game, so if they change the game to allow an overall economic advantage, they have a responsibility to mitigate the costs for the economic losers.

Some will say that they don't have such a responsibility, that it should be every player for himself. However, this negates the fact that the government has always protected and continues to protect certain players, and that Canada subsidizes industries so that they can succeed for all of our benefit.

[waldo]

Michael, your prowess in deciphering August1991 is acknowledged! And even if it's really not even close to what he was saying, your comments are note-worthy:

I'll step in here to offer an answer: competitive advantage.

in this case, one level of 'competitive advantage' has been dealt with directly - Caterpillar has gobbled-up one of it's principal competitors.

If Canada were to shut out all food imports, we would spend more resources growing our food than we would have to spend if we imported it.

This is why globalized trade makes sense on an economic level.

yes, and the prevailing sentiment has GM Diesel establishing the initial plant in Canada as their preferred alternative to paying import tariff duty costs... that was GM's willing cost to do business in Canada - ergo, the related Investment Canada Act (ICA) law/provisions were applied.

Of course, there are losers. The idea is that government sets the rules of the game, so if they change the game to allow an overall economic advantage, they have a responsibility to mitigate the costs for the economic losers.

in this case, the referees... Harper Conservatives... had the rulebook that included the prevailing ICA framework. The change and mitigation you speak of could be interpreted as the act of negotiating 'some degree' of protection for the London plant worker's wages/benefits. Now, we're speaking to a sale-process in play - even if Caterpillar expressed resistance to the Electro-Motive Canadian division angle, the greater sale prevails... that is to say, typically, Investment Equity firms would view the additional costs a simple matter of closing the greater sale. Or, alternatively, would Caterpillar have refused the sale conditions of purchasing U.S./Canada Electro-Motive from the Investment Equity firms that owned Electro-Motive, because of the relatively minimal cost impacts that the Harper Conservatives might have been able to leverage in terms of wage/benefit protections for the London plant workers? I seriously doubt it... Caterpillar had 2 significant drivers; 1- it coveted the described technological advantages held by Electro-Motive, and 2- it relished eliminating one of it's key competitors.

Some will say that they don't have such a responsibility, that it should be every player for himself. However, this negates the fact that the government has always protected and continues to protect certain players, and that Canada subsidizes industries so that they can succeed for all of our benefit.

in this case, from a Canadian perspective, the Harper Conservatives made an Investment Canada Act decision... one that included no protections for the London plant workers affected.

[bush_cheney2004]

....in this case, from a Canadian perspective, the Harper Conservatives made an Investment Canada Act decision... one that included no protections for the London plant workers affected.

Why would they...is London, ON a hotbed of CPC support? I think not. Why would protection be afforded to a higher cost, lower productivity locomotive plant? Is that the "liberal" way to become more competitive...by protecting the dinosaurs?

[dre]

When we discover new technology, or we open to trade, the effect is the same. We have the opportunity to do something at lower cost, with fewer resources. Society is better off.

It is truly sad that the mainstream Left has not embraced this obvious point.

Whats truly sad is your appeal to silly absolutes in suggesting that "all trade is good", or trying to equate offshoring production with pioneering new technology.

These silly absolutes are the biggest problem, and neither free trade or protectionist absolutists really understand any of these issues.

As for your desperation to turn every freaking issue into a tirade against the left, that has no meaning. Its just a meaningless strawman, and this "left" you mention as being a bunch of people with uniformly anti trade views exists only in your head.

"Trade" is fine. Trade imbalances however are NOT fine and will eventually be corrected. Really most of the phenomenon known as "globalism" isnt any real sea change in how we do business. Its a temporary trade imbalance, that can only go on in the presense of massive debt financed consumption. If China for example stopped manipulating its currency, it would be roughly 2.5 times as high and rising, and we would already be starting to think twice.

The massive flow of goods from east to west is reliant on some western countries running huge trade defecits. These defecits will continue to put downward pressure on domestic currencies until imports are no longer affordable, and then all that production is going to have to come back.

You also ignore the kind of practices we encourage by always chasing the cheapest labor which always comes from places where laborers are treated the shittiest.

Take the Chinese factory that makes Iphones... Workers make about 12 dollars PER MONTH, they are forced to work 70 hour weeks, and they are forbidden from talking to each other during their shifts. It sucks so bad to work there that 30 people attempted suicide by jumping from the factories roof last year alone, 18 were successful. They are installing nets now ... Probably not because they really give a shit about the workers dying, but instead because they are concerned about the productivity lost due to the resources required to clean the blood, guts, bones, and brains of their worker of the pavement.

How low would our wages have to get to "compete"?

Edited January 6, 2012 by dre

[dre]

Why would they...is London, ON a hotbed of CPC support? I think not. Why would protection be afforded to a higher cost, lower productivity locomotive plant? Is that the "liberal" way to become more competitive...by protecting the dinosaurs?

That entirely depends, you would have to run the numbers. The government should possibly look at alternatives like investing in some of this activity by using SWF's like Singapore does.

[TimG]

That entirely depends, you would have to run the numbers. The government should possibly look at alternatives like investing in some of this activity by using SWF's like Singapore does.

The Singapore government spends half of a what Canadian governments (measured as a percentage of GDP) spend. This significantly changes the dynamics of the economy. If you want to use Singapore as an example then the Canadian govenment needs to start by reducing spending to Singapore levels (which would require massive cuts to various entitlement programs). Until that happens you are comparing apples to oranges. Edited January 6, 2012 by TimG

[dre]

The Singapore government spends half of a what Canadian governments (measured as a percentage of GDP) spend. This significantly changes the dynamics of the economy. If you want to use Singapore as an example then the Canadian govenment needs to start by reducing spending to Singapore levels (which would require massive cuts to various entitlement programs). Until that happens you are comparing apples to oranges.

Singapore doesnt need as much social spending because its unemployment rate is 2%. The more jobs that leave, the more government spending will be demanded because the number of people that can support themselves shrinks.

And Im not comparing anything. Im saying that in some cases it would be worth our while to take similar steps to encourage domestic production.

[TimG]

Singapore doesnt need as much social spending because its unemployment rate is 2%.

Singapore has a low unemployment rate because Malaysians without a job are sent back to Malaysia where they are included in the Malaysian unemployment rate. It has absolutely nothing to do with government sponsership of industry. Singapore also has no minimum wage and minimal unemployment benefits which will have a much bigger effect on unemployment than any government inteference in industry.

The more jobs that leave, the more government spending will be demanded because the number of people that can support themselves shrinks.

Or you can do what Sinapore does and kick out anyone without a job. An approach that costs a lot less. Edited January 6, 2012 by TimG

[dre]

Singapore also has no minimum wage and minimal unemployment benefits which will have a much bigger effect on unemployment than any government inteference in industry.

Silliness. The government accounts for almost 1/2 of the capital investment in singapore firms. To suggest this investment has no bearing on employment is not even an assertion worthy of comment.

Singapore has a low unemployment rate because Malaysians without a job are sent back to Malaysia where they are included in the Malaysian unemployment rate.

Again, too silly to comment on. The unemployment rate there is low because a mountain of new jobs were created. Mainly because theres more skilled workers, the government has lots of programs to support entrepreurs, and they invest in business through SWF's.

But of course. Their unemployment rate is low simply because they kicked out some malaysians :lol: Nothing at all to do with the 3000 multi nationals that have set up shop there due to a skilled workforce, modern infrastructure, and heavily public investment in tech industry.

Singapore is aggressively promoting and developing its biotechnology industry. Hundred of millions of dollars were invested into the sector to build up infrastructure, fund research and development and to recruit top international scientists to Singapore. Leading drug makers, such as GlaxoSmithKline (GSK), Pfizer and Merck & Co., have set up plants in Singapore. On 8 June 2006, GSK announced that it is investing another S$300 million to build another plant to produce pediatric vaccines, its first such facility in Asia.[19] Pharmaceuticals now account for more than 16% of the country's manufacturing production.

Singapore's largely corruption-free government, skilled workforce, and advanced and efficient infrastructure have attracted investments from more than 3,000 multinational corporations (MNCs) from the United States, Japan, and Europe. Foreign firms are found in almost all sectors of the economy. MNCs account for more than two thirds of manufacturing output and direct export sales, although certain services sectors remain dominated by government-linked corporations.

[TimG]

The unemployment rate there is low because a mountain of new jobs were created. Mainly because theres more skilled workers, the government has lots of programs to support entrepreurs, and they invest in business through SWF's.

BS. The unemployment rate is low because the government adopts a pro-business policy with low tax rates, no minimum wages and a bare minimum social safety net that is largely driven by the 'user pay' principle. Add in an worth ethic which puts your average Canadian union hack to shame and you have a recipe for a strong economy.

As I said above: Canadian governments consume about 40% of GDP. In Sinapore the government consume only 17%. This difference is huge and cannot be explained away by an 2% unemployment rate. It has to do with a culture of governance which repudiates many of the things you claim to support.

[MiddleClassCentrist]

Meanwhile, what I have never in my life heard a Lefty address is the notion of dreaming up better shoe making machines. Why should a smart person bother if there's no incentive? The usual response is to make some blanket statement that everyone should work for the betterment of society, even creative people like inventors.

The irony, Wild Bill, is that you have it wrong.

Western capitalism thrives on making consumer products just good enough that you feel ok about them but, timed to break or become obsolete quickly. The Lightbulb is a shining example. Basic lightbulbs are marketed at 1000hours. Almost 100 years ago they were marketed with 1500-2000 hours. Why is this? Western capitalism is efficient and needs to keep selling. If they innovated and made a really good lightbulb, people would need less lightbulbs. Lightbulbs are cheap to make so they need to rely on selling a lot of them... solution, make it break easier!

iPods don't have a replaceable battery, why?

My car's stabilizer links, an annoying by not a safety issue, are a known problem in my model of car since it was first designed, why haven't they fixed them in 10 years?

Printers just stop printing with an error code after a certain number of prints, why? (this one is answered in the Documentary: The Light Bulb Conspiracy)

Western Capitalism works by making things work just long enough to break by the time you can afford a new one. Western capitalism makes a good product, and then redesigns it to break a little easier.

This isn't so that everyone can keep a job... this is so that profits can continuously be made.

Eastern economies were inefficient. Designers were rewarded for making products last because it was more difficult to generate material to replace it. That's why Germany was known for it's high quality machines.

Edited January 7, 2012 by MiddleClassCentrist

[Shady]

Reading the posts of Leftists on this board in this thread (Waldo, MCC, Rick, Waldo, Topaz, punked), I have the impression that if they had lived in 1900, they would have defended the right of the Horse-Breeders Union to forbid the sale of these new-fangled (imported) automobiles. Imagine if such people had won the argument. Internet? We would be having this discussion by pony express!

Exactly. That's why I like to refer to them as the flat-earth, no growthers. They pretend to be progressive, but they're actually quite regressive.

[dre]

BS. The unemployment rate is low because the government adopts a pro-business policy with low tax rates, no minimum wages and a bare minimum social safety net that is largely driven by the 'user pay' principle. Add in an worth ethic which puts your average Canadian union hack to shame and you have a recipe for a strong economy.

As I said above: Canadian governments consume about 40% of GDP. In Sinapore the government consume only 17%. This difference is huge and cannot be explained away by an 2% unemployment rate. It has to do with a culture of governance which repudiates many of the things you claim to support.

No its not BS, unlike your about kicking out malaysians accounting for the 2% u rate.. Those are exactly the reasons businesses give for going there. And the only reason they can maintain low tax rates, is because the government owns almost 60% of the shares in all firms, and collects much of their revenue through dividends.

Edited January 7, 2012 by dre

[Wild Bill]

The irony, Wild Bill, is that you have it wrong.

Western capitalism thrives on making consumer products just good enough that you feel ok about them but, timed to break or become obsolete quickly. The Lightbulb is a shining example. Basic lightbulbs are marketed at 1000hours. Almost 100 years ago they were marketed with 1500-2000 hours. Why is this? Western capitalism is efficient and needs to keep selling. If they innovated and made a really good lightbulb, people would need less lightbulbs. Lightbulbs are cheap to make so they need to rely on selling a lot of them... solution, make it break easier!

iPods don't have a replaceable battery, why?

My car's stabilizer links, an annoying by not a safety issue, are a known problem in my model of car since it was first designed, why haven't they fixed them in 10 years?

Printers just stop printing with an error code after a certain number of prints, why? (this one is answered in the Documentary: The Light Bulb Conspiracy)

Western Capitalism works by making things work just long enough to break by the time you can afford a new one. Western capitalism makes a good product, and then redesigns it to break a little easier.

This isn't so that everyone can keep a job... this is so that profits can continuously be made.

Eastern economies were inefficient. Designers were rewarded for making products last because it was more difficult to generate material to replace it. That's why Germany was known for it's high quality machines.

You happen to have hit my forte, MCC. Volts are my specialty!

You're talking about planned obsolescence. Light bulbs were never made to deliberately blow early. 2000 hr or more lifetimes we're common up till about 20 years ago. Then, offshore bulbs came into the market. Domestic manufacturers immediately were at a price disadvantage offering quality product. They could not compete on price with the 200 hour foreign bulbs. Simply put, better quality was NOT a competitive advantage. Most of the market went for the cheaper bulbs and then later bitched about them burning out, never making the connection.

A programmed lifetime for a printer is ridiculous. Why bother? They're made out of such cheap materials that the printhead burns out in a year or two of heavy use anyway. Actually, I bought a LexMark last spring and the printhead burned out in 3 weeks! The price determines the quality, which determines the life expectancy.

However, it would be stupid to build a better quality printer, because of the rapid rate of technological improvement. In 2-3 years your printer is passe and most of the market will buy a newer, snazzier one.

The market has been conditioned to change, upgrade and replace products from printers to refrigerators to televisions. As an older guy this is often hard for me to accept but if I were a manufacturer and followed YOUR philosophy I'd go bankrupt! The world is what it is.

As for your car, if it's not a safety issue your manufacturer is simply too cheap to give a damn! Unless it affects sales nobody reacts. I would listen to you and avoid that model. If we scoured the continent we might find one other person to make me part of a pair.

Consumers, like voters, deserve to get what they want!

[MiddleClassCentrist]

You happen to have hit my forte, MCC. Volts are my specialty!

You're talking about planned obsolescence. Light bulbs were never made to deliberately blow early. 2000 hr or more lifetimes we're common up till about 20 years ago. Then, offshore bulbs came into the market. Domestic manufacturers immediately were at a price disadvantage offering quality product. They could not compete on price with the 200 hour foreign bulbs. Simply put, better quality was NOT a competitive advantage. Most of the market went for the cheaper bulbs and then later bitched about them burning out, never making the connection.

A programmed lifetime for a printer is ridiculous. Why bother? They're made out of such cheap materials that the printhead burns out in a year or two of heavy use anyway. Actually, I bought a LexMark last spring and the printhead burned out in 3 weeks! The price determines the quality, which determines the life expectancy.

However, it would be stupid to build a better quality printer, because of the rapid rate of technological improvement. In 2-3 years your printer is passe and most of the market will buy a newer, snazzier one.

Consumers, like voters, deserve to get what they want!

http://www.youtube.com/watch?v=endUcoHsCVY

Edited January 7, 2012 by MiddleClassCentrist