Labour costs

[Jack Slade]

I saw the CEO of Dupont Chemicals interviewed on CNN this past weeekend.  He stated that labour costs are only 8% in his industry.  I wonder how much this varies in other industries,  such as automotive parts manufacturing.  Does anybody know?   This figure, alone,  does not seem enough to kill industry here,  so what has?  Is it the costs of complying with all the other regulations that businesses have to comply with?  I know that some of these regulations are needed,  but have we gone over the top in the regulation field?   Jack Slade

[Dennis Manning]

I think that 8% is misleading. If Dupont spends 80% on materials what portion of that 80% goes for labor?

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[Jerry Roane]

Dennis

From Wikipedia

"He was first eligible for parole January 29, 2009; however, it was denied. DuPont's maximum sentence would have ended on January 29, 2026, when duPont would have been 87.^[11] The U.S. Supreme Court upheld the verdict in 2000. In 2010 the 3rd Circuit U.S. appeals court in Philadelphia rejected all but one issue raised on appeal (involving his use of a Bulgarian prescription drug, scopolamine, before he fatally shot Schultz in 1996), and requested written briefs.^[12] However, DuPont died in prison on December 9, 2010." 

This Dupont?  Perhaps misleading is the least of the issues.  DuPont is a multinational company with their chemicals in a significant number of manufactured goods.  It would be near impossible to put an 8% figure on labor on chemicals if again we get into the externalities discussion again.  

The trade problem is we don't charge enough tariffs to balance commerce.  It is a delicate balancing act to make manufacturing equal.  We are not balanced today and I see no direction headed toward getting a level playing field for American manufacturing.  I have been manufacturing in the US for my career and I have a bird's eye view of the plummet.  I witnessed the computer memory market being taken by the Japanese government from Texas.  5 years after the damage was done the US slapped the hand with a trivial fine and now America does not dominate computer memory manufacture.  That is one easy clear example where we just laid down and died.  Industry after industry we let go away with tactics that were ethical and tactics that were illegal and morally wrong but the end is the same.  American manufacturing is in decline and not likely to come back without significant change in policy.  

Cars are no exception.  Watch as the bailed out automakers dive for the borders with our stinking money.  (for you Kirston)  I say that as I dive for the borders only preferring to manufacture in the country where I intend to sell those units.  Economics as they are will not allow that and remain competitive.  

Jerry Roane 

[Jack Slade]

He did not say what his materials cost was,  but there are other costs....equipment,  buildings, vehicles, taxes, heat, electricity,  and others that I can't even guess at.  I also don't know if he was talking total manpower or just production staff.  In some businesses sales staff are very important, but they are not really producing anything.    I once calculated production costs for the parts for my system,  and  $20 on average per hour did not seem like a big obstacle.  What I could not even guess at was the non-productive staff that I would have to hire to comply with different regulations in whatever Community I chose to set up in,  plus Federal and Provincial regs.    I would really expect figures to vary within different industries,  but have no idea by how much. --- On Tue, 9/27/11, Dennis Manning <john.m...@comcast.net> wrote:

[Jack Slade]

No,  not this guy...he is dead.  It was a CEO, and he was alive and kickin on Sunday.  I know I said Dupont,  but it may have been Dow Chemicals,  as I did not catch the full program.   I can agree with the economics of doing most manufacturing in the area where your sales are,  especially for heavy items that would run up the freight bill.   Jack Slade --- On Tue, 9/27/11, Jerry Roane <jerry...@gmail.com> wrote:

From: Jerry Roane <jerry...@gmail.com> Subject: Re: [t-i] Labour costs To: transport-...@googlegroups.com

[eph]

Did you know that Haiti wanted to raise the minimum wage to $5 per DAY and the US gov't arranged to have it remain at $3 for textile the industries so that Levi Strauss and Hanes can keep its profits?
http://www.thenation.com/article/161057/wikileaks-haiti-let-them-live-3-day

$3 per DAY compared to $10 per HOUR in Ontario.  On an 8 hour day, 80/3 or 2666% (26.66x) more for wages in Ontario.  No tax or red tape elimination will bridge that gap.

Even if wages represent "only" 8% of a company's expenses, that 8% may represent the whole profit margin.

F.

[eri...@shaw.ca]

Edmonton Transit’s labor costs are 75% of their operating costs

 

Eric Baumgartner

 

From: Jack Slade

Sent: Tuesday, September 27, 2011 11:12 AM

To: Transport Line

Subject: [t-i] Labour costs

 

I saw the CEO of Dupont Chemicals interviewed on CNN this past weeekend.  He stated that labour costs are only 8% in his industry.  I wonder how much this varies in other industries,  such as automotive parts manufacturing.  Does anybody know?   This figure, alone,  does not seem enough to kill industry here,  so what has?  Is it the costs of complying with all the other regulations that businesses have to comply with?  I know that some of these regulations are needed,  but have we gone over the top in the regulation field?   Jack Slade

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[Jack Slade]

Since the U.S. Govt does not control Haiti,  I think you may be passing on info that somebody has told you,  and that somebody was talking through his hat.  While you may think that 8% is a good profit margin,  I have personal doubts that you would buy stock in any Company that set it's sights that low....it leaves no margin for error, business slumps, variation in raw material prices, etc. I know that I wouldn't.   I don't know of one product that is produced in Haiti,  so how is your comment relevant?   Jack Slade --- On Tue, 9/27/11, eph <rhaps...@yahoo.com> wrote:

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[Jack Slade]

That's about the same figure as for the TTC here in Toronto,  but I was talking about the costs of manufacturing things,  such as busses and PRT and other systems, and why a lot of such manufacturing has moved offshore.  In other words,  is it because of labour costs only,  or the cost of doing business in general.   At a glance,  each little rule that business has to comply with ay cost peanuts....half of one percent or less.  When you add up the cost of complying with hundreds of such rules,  the cost may be staggering.   This is a discussion that I would like to see taking place our legislative bodies,  instead of some of the drivel that I hear from them most of the time.   Frank:  I already know your answer.  No,  I would not like to see all the rules cancelled,  just the useless and most restrictive ones.  Eg:  I do NOT think that a can of paint should have a skull and crossbones on it,  EPA be dammned.   Jack Slade --- On Wed, 9/28/11, eri...@shaw.ca <eri...@shaw.ca> wrote:

From: eri...@shaw.ca <eri...@shaw.ca> Subject: Re: [t-i] Labour costs To: transport-...@googlegroups.com

[eph]

Please re-read my post and click on the link provided therein.

F.

[eph]

Here is a link to statistics by industry that includes wages and net profits.
In transportation, net profit is 4.3%
In Clothing manufacturing net profit is 7.12%
http://research.financial-projections.com/IndustryStats-GrossMargin

F.

[Dennis Manning]

One element of regulation is higher cost of doing business. Another is raising the cost of entry into a business sector. All too often it's corporations themselves who rig the the game to protect their industry. 

 

So the regulations I'd like to see lowered are the ones that create phony barriers to entry. Our classic case is the brick wall stopping distance regulation.

 

Dennis  

[eph]

Do these APM regulations exist in every country with cities that could afford a PRT system?
Is it time to get an association that could create PRT regulations (somehow)?  Exceptions were quickly made for driverless cars, so maybe a subsection of APM regulations for very light weight, few passenger vehicles?
Just throwing some ideas out there.

F.

[Richard Gronning]

APM regs in the U.S. are standards. I don't know what they are in the
rest of the world. A standard may be broken if safety and other
considerations can be demonstrated. It has always seemed to me that
Europe has the brick-wall stop as an actual regulation (law). It has
been treated as such.
Dick

[Jerry Schneider]

At 08:47 AM 9/28/2011, you wrote:
>APM regs in the U.S. are standards. I don't know what they are in
>the rest of the world. A standard may be broken if safety and other
>considerations can be demonstrated. It has always seemed to me that
>Europe has the brick-wall stop as an actual regulation (law). It has
>been treated as such.

If you have any evidence of that, I'd like to see it. Perhaps some of
your Swedish contacts could provide it. What happens if a client
incorporates the APM standards in his request for proposals and the
selected proposer agrees to accept them - in totality?

[Jack Slade]

If you give me a link that is not blue, and underlined, then it is a link that does not work.   Try to understand also that I am concerned with the industries that are leaving Canada,  just as they are leaving the U. S. I don't take a hand in trying to discuss or fix the standard of living in other Countries.  That is the job of their Govts,  just as it is the job of ours to look after things here,  and I wish they would start sensible discussions about doing just that.   I noticed the influx of help To Haiti when that earthquake happened.  What I did not see was any bleeding hearts offering to help New Zealand a few months later.  I also don't see much when one happens in California.  I guess you have an explanation for that too.   Jack Slade

--- On Wed, 9/28/11, eph <rhaps...@yahoo.com> wrote:

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[eph]

If manufacturing Fruit of the loom products in Haiti cost 25x less than doing the same work in Canada, how can your Canadian-made company compete? 



You could just copy the URL and paste it into your web browser or get better software.

http://www.thenation.com/article/161057/wikileaks-haiti-let-them-live-3-day

Does this link work?

F.

[Jack Slade]

Yeh,  works fine.  Alternately,  you could take the trouble to post it properly,  and then I would not have to bother with copyand paste. Importing needs transportation,  so that takes up some of the savings.  If you have a link for labour regs in Haiti I would be interested in reading that....also whether they have to have heating and A/C,  separate washrooms for male/females, paved parking lots,  and a whole lot of other things that are regulated here. What I am trying to say is "the cost of doing business is less, in every way".

Jack Slade --- On Wed, 9/28/11, eph <rhaps...@yahoo.com> wrote:

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[eph]

I will post links the other way.  My web browser just highlights when it sees "http://"

I understand that you want to make a case that regulations here are killing business, but I'm saying that even without regulations (which would be a bad idea) it's still MUCH cheaper to manufacture in developing countries even if you include shipping costs.  I know this because lots of companies have been doing this for a long time and those companies count every penny because they are competing for the same customers.

F.

[Jack Slade]

That may be why all the people who discuss this problem have no solution,  because they are only discussing part of the problem,  and then ignore other factors such as  the cost of doing business on this Continent.  I doubt if you can cure anything by ignoring such a major factor. I am just trying to figure out if I could manufacture a system here, and, if not,  why not.   My first job, in 1949, paid less than $3 per day,  so Haiti is 50 years behind that standard.  We would still be there if we had Papa Doc and his son Baby Doc as leaders,  but we might still have all our industries intact also.  Who knows?

Jack Slade --- On Wed, 9/28/11, eph <rhaps...@yahoo.com> wrote:

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[Kirston Henderson]

On Sep 29, 2011, at 1:19 AM, Jack Slade wrote:

Jack,

Face it, U.S. labor costs are heavily driven by Federal Government
regulations and taxes. For the most part, it is the Feds that are at
the root of unemployment in the U.S. although there are some states
such as California and New York that are not far behind.

Kirston

[eph]

Kirston,
Can you elaborate on exactly how Federal gov't and regulations in all the countries listed below have arranged for higher labour rates than the US?  Can't it be some other factor like national prosperity or GDP or something else?

Denmark, Australia, United Kingdom, Luxembourg, Netherlands, Belgium, France, Canada, Ireland, New Zealand, San Marino, Switzerland and Saudi Arabia.
http://en.wikipedia.org/wiki/List_of_minimum_wages_by_country

F.

[kirston henderson]

on 9/29/11 7:12 AM, eph at rhaps...@yahoo.com wrote:

Kirston,
Can you elaborate on exactly how Federal gov't and regulations in all the countries listed below have arranged for higher labour rates than the US?  Can't it be some other factor like national prosperity or GDP or something else?

Denmark, Australia, United Kingdom, Luxembourg, Netherlands, Belgium, France, Canada, Ireland, New Zealand, San Marino, Switzerland and Saudi Arabia.
http://en.wikipedia.org/wiki/List_of_minimum_wages_by_country

   Sorry, but I don't have the time and I don't think that you are going  to find many other business people who are going to even try to answer your question.  However, just about anyone operating any manufacturing business is painfully aware of them.

Kirston Henderson

[Richard Gronning]

I saw a post that Sweden is actually attracting corporations, as is Switzerland.
I'll speculate that medical insurance for both labor and management in the U.S. may be a factor.

Dick

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[eph]

Fine, then I'll keep saying the U.S. is losing manufacturing jobs because labour is cheaper in developing countries and globalization has removed large Federally imposed taxes and duties on imported goods.

F.

[Jack Slade]

I don't remember any of our industries fleeing to the Countries you have mentioned. If Kirston did all this work, what would it prove?   If there is a point to make,  I suggest that you do the research yourself,  if you are trying to justify your own opinion,  and pick the Countries where our former industries are now operating.  Some of them may permit websites that allow us to look at their rules,  but not all.   Jack Slade

--- On Thu, 9/29/11, eph <rhaps...@yahoo.com> wrote:

From: eph <rhaps...@yahoo.com> Subject: Re: [t-i] Labour costs To: transport-...@googlegroups.com

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[Michael Weidler]

A chemical plant is a highly automated creature. There are relatively few actual bodies needed to run the thing.

---

From: Jack Slade <skytr...@rogers.com>
To: Transport Line <transport-...@googlegroups.com>
Sent: Tuesday, September 27, 2011 12:12 PM
Subject: [t-i] Labour costs

I saw the CEO of Dupont Chemicals interviewed on CNN this past weeekend.  He stated that labour costs are only 8% in his industry.  I wonder how much this varies in other industries,  such as automotive parts manufacturing.  Does anybody know?   This figure, alone,  does not seem enough to kill industry here,  so what has?  Is it the costs of complying with all the other regulations that businesses have to comply with?  I know that some of these regulations are needed,  but have we gone over the top in the regulation field?   Jack Slade

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[Michael Weidler]

The only time we should have "free trade" is with our equals. As Ross Perot said "hear that sucking sound?"

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From: Jerry Roane <jerry...@gmail.com>
To: transport-...@googlegroups.com
Sent: Tuesday, September 27, 2011 1:59 PM

Subject: Re: [t-i] Labour costs

[Michael Weidler]

Jack - popped your $3/day into one of the inflation calculators. $3 in 1949 = $27.14 in 2010. What were you doing in 1949 which paid so little money?

---

From: Jack Slade <skytr...@rogers.com>

To: transport-...@googlegroups.com
Sent: Thursday, September 29, 2011 1:19 AM

Subject: Re: [t-i] Labour costs

[Jack Slade]

I was a teacher for 1 year,  in a much poorer Province, but the military paid  more  when Korea heated up the next year.  The average wage did not get above $1 per Hr in most factories in Toronto till minimum wage was introduced,  about 1965. --- On Sun, 2/19/12, Michael Weidler <pstr...@yahoo.com> wrote: