Friday, September 22, 2006
It's the economy stupid!
The local "news"paper reports here on some local job losses. Basically Nestle which some years ago took over Rowntree Macintosh is transferring some production to the continent.
No great surprise I suppose, obviously with these new EU members with much lower wages and production costs and all part of the euro zone there's no way we can keep up.
So where has production moved to? I quote: "... production of Aero Minis and Snacksize would transfer to Zora (in the Czech Republic)". Well they don't use the euro do they? They still have the Czech crown. Well wages are probably lower than here so nothing we can do about that.
"...yet another product, White Crunch, was going to move to San Sisto in Italy." Italy, they have the euro (just I believe), but you don't expect to find Italy well above the UK in terms of productivity. It's a pretty poor look out.
Let's see which other countries gain: "Production of the remaining volumes of Big Break and Snacksize will move to Hamburg and Sofia factories (in Germany and Bulgaria)". Well Bulgaria will be cheap, but it isn't part of the EU yet never mind the euro, in terms of wages alone obviously we cannot compete with Bulgaria. Finally, Germany, yes we all know about German efficiency, but this is really bad news, I mean wages and such like will be similar, I don't believe the productivity rates will be vastly different between the workers, they will have been pre Mrs Thatcher, but not anymore.
So what does this show us? Basically it is proof of just how badly our economy is being run. The main difference between us, Germany and Italy when looking at it from a Nestle perspective are going to be taxes for companies and the economic environment for manufacturing, Nestle are no fools and they're making a decision based on the long term perspective, I don't think it bodes well for any of us economically.
No great surprise I suppose, obviously with these new EU members with much lower wages and production costs and all part of the euro zone there's no way we can keep up.
So where has production moved to? I quote: "... production of Aero Minis and Snacksize would transfer to Zora (in the Czech Republic)". Well they don't use the euro do they? They still have the Czech crown. Well wages are probably lower than here so nothing we can do about that.
"...yet another product, White Crunch, was going to move to San Sisto in Italy." Italy, they have the euro (just I believe), but you don't expect to find Italy well above the UK in terms of productivity. It's a pretty poor look out.
Let's see which other countries gain: "Production of the remaining volumes of Big Break and Snacksize will move to Hamburg and Sofia factories (in Germany and Bulgaria)". Well Bulgaria will be cheap, but it isn't part of the EU yet never mind the euro, in terms of wages alone obviously we cannot compete with Bulgaria. Finally, Germany, yes we all know about German efficiency, but this is really bad news, I mean wages and such like will be similar, I don't believe the productivity rates will be vastly different between the workers, they will have been pre Mrs Thatcher, but not anymore.
So what does this show us? Basically it is proof of just how badly our economy is being run. The main difference between us, Germany and Italy when looking at it from a Nestle perspective are going to be taxes for companies and the economic environment for manufacturing, Nestle are no fools and they're making a decision based on the long term perspective, I don't think it bodes well for any of us economically.
