Mish's Global Economic Trend Analysis |
| Apple to Relaunch Manufacturing in US, Net Result +200 Jobs; Lights Out Posted: 11 Dec 2012 02:19 PM PST In bits and pieces, manufacturing is returning to the US. Unfortunately, jobs (at least human jobs) are not returning as well. For a case in point, the Fiscal Times reports Apple's Big Manufacturing Boom to the U.S. — 200 Jobs. At the end of last week, CEO Timothy Cook announced that Apple intends to invest $100 million next year to relaunch part of its manufacturing operations in the US.Forces in Play
Each point above provides incremental reason to repatriate manufacturing. Whether jobs return as well is another matter. Lights Out Labor costs are on the rise in China on a relative, if not absolute basis vs. the US. Concerns. Theft of intellectual property by China remains a serious concern. The higher the price of oil, the higher the shipping costs. Corporate tax advantages of overseas production will likely be negotiated away in Congress. However, the standout reason for the return of manufacturing to the US is automation. What used to take 20 workers may now only take 4 and in a few years 1. The actual numbers are irrelevant, the enormous trend towards lights-out manufacturing and robotics is not. The more robots are in use, the more labor costs are irrelevant, and the more manufacturing will return. It's that simple. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.  |
| Union "Victory": Chrysler Reinstates 13 Workers Fired for Drinking on the Job Posted: 11 Dec 2012 09:01 AM PST The following story proves what common sense has long ago suggested, that unions have outlived any possible usefulness and they are also hugely counterproductive to the goal of getting any work done. Please consider the Detroit News article Chrysler reinstates 13 workers fired for drinking on job. Chrysler Group LLC says it was forced to reinstate 13 workers who were fired from its Jefferson North Assembly Plant two years ago after being filmed by a local television station drinking and smoking what the network suggested was a controlled substance before and during work.Questioning "Conclusive Evidence" Since when does a film of workers drinking and smoking pot on the job not constitute "conclusive evidence"? I have the answer. Collective bargaining rules dictate arbitration, typically in a manner highly favorable to the union. Keep in mind that the mission of the union is to protect the drunks, the drug addicts, the sluggards, and the rule violators from dismissal. Why? That's easy. Because the more inept workers the union can keep employed, the more union workers will be required to do the job. The more union workers there are, the more union dues are collected. It's really that simple. The corollary is union pay scales reflect longevity, not production. If one-year employee Johnny B Goode can produce 10 times as much output as Johnny No-Longer-Gives-a-Damn, it's simply too bad for Johnny B Goode. What matters most to the union is keeping Johnny No-Longer-Gives-a-Damn employed. If anything, union pressure will be applied on Johnny B Goode to not produce as much, so management will not expect as much from everyone else. This absurd Chrysler ruling is part of a continual pattern that shows without a doubt, collective bargaining needs to go. Musical Tribute Let's go "back to the future" for a musical tribute. Link if video does not play: Marty McFly with the Starlighters "Johnny B. Goode" Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.  |
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