Carrier Workers See Costs, Not Benefits, of Global Trade


#1

NY Times:

Carrier Workers See Costs, Not Benefits, of Global Trade

And Mr. Trump vows not to take Carrier’s calls until it agrees to change course. “As sure as you’re here, they will call me up within 24 hours,” he promises, and say to him, “‘Sir, we’ve decided to stay in the United States.’”
It is powerful talk.

The relentless loss of American manufacturing jobs, however, goes back nearly half a century, driven largely by forces beyond the control of any president. The advances of technology, the diffusion of industrial expertise around the world, the availability of cheap labor and the rise of China as a manufacturing powerhouse would have disrupted the nation’s industrial heartland even without new trade deals.

Nor are tariffs likely to bring many of these jobs back, said David Autor, a professor of economics at M.I.T., who is one of the country’s foremost specialists on the pluses and minuses of free trade. “We don’t have silver bullets,” he said.
“When I learned about the impact of trade agreements, the theory was that workers would be ‘released’ into the labor market and hired back at slightly lower salaries,” Mr. Autor said. “That’s not what happened. And no amount of cheaper air-conditioners will make these workers whole.

I’m sure this story will benefit Trump.

I am not anti -free trade but this story illustrates what is wrong. Carrier already has a skilled, well-trained workforce, moving to Mexico will only benefit the shareholders and executives who get paid in stock options.


#2

It will also benefit Mexicans who could not afford to buy the air conditioners made in Indiana. That is not insignificant since Mexico is a growing market for air conditioning. A country with only 5% of the world’s population cannot expect to sell much to the other 95% if it has higher costs of labor and government regulation. Companies that pay higher wages need greater productivity to remain competitive, but a lot of government policies are at odds with that goal. Our energy policies that the destroy the possibility of cheap and reliable domestic energy are but one large example.


#3

Wouldn’t that be incentive for Mexican entrepreneurs to begin manufacturing air conditioners for their own people? Why does it have to mean an American company has to move its manufacturing to Mexico?


#4

It would be if Mexico had both capital and management expertise to go with cheaper labor. Mexico, like many countries, has its own problems with government, especially widespread corruption. Labor unions cannot be expected to admit it, but management and our financial infrastructure also are big factors in competitiveness. I am not at all pleased to see a large factory only 120 miles from me to close. Skilled labor has a much better chance of finding other jobs that can use those skills than the unskilled.

I used to work in the steel industry in the 1970’s and 1980’s, where US Steel also announced this week that it is closing three more plants and 8 of the 10 largest steel companies from my time have gone bankrupt at least once. My own experience was that management was terrible in that industry for a very long time. Some of the stories I could tell would not be believed today.


#5

If manufacturing keeps moving outside the US, where will the skilled laborers find these other jobs?

I know people in banking, and over the past decade there have been massive layoffs in that area. Now we have hundreds of people trained in banking competing for a handful of jobs :frowning:

I used to work in the steel industry in the 1970’s and 1980’s, where US Steel also announced this week that it is closing three more plants and 8 of the 10 largest steel companies from my time have gone bankrupt at least once. My own experience was that management was terrible in that industry for a very long time. Some of the stories I could tell would not be believed today.


#6

I think the problem is a lack of personal responsibility. The economy is dynamic and changing. Workers need to take responsibility to ensure that their skills match the demand in the market. To make consumers pay more so workers can sit on their laurels benefits nobody in the long run.

I know people in banking, and over the past decade there have been massive layoffs in that area. Now we have hundreds of people trained in banking competing for a handful of jobs

They have had eight years to update their skills, if they can’t find a job, they have nobody to blame but themselves.


#7

How exactly are workers supposed to predict the future to know what skills will be in demand? A couple terms I’ve seen bandied about seem to apply, ‘creative disruption’ and ‘disruptive technology’. Nobody can predict what the next new thing will be to wipe out a lot of jobs and create a few new jobs.

Even if someone tried to anticipate what would be opening up it would be daunting to work full time, raise a family and learn a new skill set that you hope will serve you in future.

They have had eight years to update their skills, if they can’t find a job, they have nobody to blame but themselves.

Were did you get the eight years thing? I reread the article and I didn’t see any reference.


#8

Carrier may find itself having to write a big check to the cartels each month if it moves its factories to certain regions in Mexico, they charge ‘operating fees’ to US companies if the factories are on cartel territory.

I know about this first hand, there is no one the US companies can call for help with this either, most companies end up paying the fee each month to avoid kidnappings and murder.


#9

It is very easy to determine what skills are in demand. Just look at salaries being paid. If companies are starting people out at $100k per year, then that tells you those skills are in demand.

Were did you get the eight years thing? I reread the article and I didn’t see any reference.

That was in response to another poster who said that people in banking cannot find jobs.


#10

Yeah, because it’s so easy to update skills when you are in debt from getting the previous set, when you still have to support your family, etc.

The reality is that workers invest also. If workers were stockholders who suddenly had their shares removed from them and handed off to foreign countries, everyone would say, there’s a problem! When people get a degree in a field such as you describe, like computer science, and then are laid off with a package that requires they train their H1 replacements… what, are all the displaced workers supposed to become doctors?

We live and contribute to a society in which companies can grow. To abandon that society for another to increase profits is wrong.


#11

I have not seen anything about eight years’ notice either.

But if it wasn’t so, and well known, there were probably people in other industries who thought that learning the skills for the air conditioning industry was the thing to do. One trouble with these kinds of moves is that nobody can truly anticipate them.

Reminds me of a friend who, right out of high school, thought the best trade for him was in learning to be a skilled butcher. He no sooner got out of training for that than the whole industry turned to “boxed meat” (already cut, ready for the store coolers).

Technology and efficiencies can destroy the utility of some skills. But so can corporate greed. I have seen nothing telling me that Carrier wasn’t making any money.


#12

I don’t think Trump is the answer… But after visiting friends recently in a fairly large town on the edge of Appalachia, I can see why people are angry at the government and considering Trump. The plants are closing. People say that the government regulations are killing some industries there (coal mining, coal power plants), and that imports are killing others (steel mills). But the end result is the same. Jobs are scarce and you feel like you’ve won the lottery if you get any job, even part-time at $8/hour. People can’t move, because they don’t have the money to move, and they couldn’t sell their houses anyway. And that’s a large town, not in the heart of Appalachia. The smaller the town and the farther into the mountains you get, the worse the picture becomes.

Rural poverty is different than urban poverty, but it’s still poverty, and the government has just been ignoring the poor and pretending that the recession is over and everyone has jobs and it’s all dandy. Which of course isn’t true at all. Jobs are scarce in many parts of the country, and nothing seems secure anymore. If you’re in the working class or the middle class, it’s constant stress worrying about what might happen to your job or your spouse’s job and struggling to make ends meet.


#13

I was the one who made the 8 year comment. It was in response to a poster who claimed that people couldn’t find work in the banking industry. My response is that the financial crisis was eight years ago and if they can’t find work in banking and refuse to train for another job, then there is no real reason for others to be concerned.


#14

Got it.

Just wondering here. Does anyone actually expect the price of Carrier air conditioners to go down now?


#15

Yea right, how often do cost savings get passed to the consumer? LOL

I have a feeling, come July4th, Carrier will probably be touting how ‘patriotic’ they are too, how proud they are to be an ‘american’ company…LOL


#16

Carrier is profitable.

Last year, Carrier produced a significant chunk of total profits for its parent company, United Technologies. Of $7.6 billion in earnings in 2015, $2.9 billion came from the Climate, Controls & Security division, where Carrier resides. Profits from this division have expanded steadily in recent years, which is not what you’d expect from a unit desperate to cut labor costs.

Source: Salon


#17

making them in Mexico means import fees to bring them to the USA…that cost will probably affect the cost of the air conditioners


closed #18

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