>> The same could be true for quite a lot of parts from Thailand. >> the same is true for many other industries and services; and which is why the uk faces a bleak future with its high cost of labour and land. take computers - ibm have just sold off their pc making business to the chinese. why ? because there is no more margin to tbe made in them to support western lifestyles. soon the major cost of a pc will be that of the outer-case and metal faraday-cage, rather the innards. and even those parts costs will be a fration of the license for the software that is bundled with the pc. take restaurants in london - without the east-euorpeans who provide most of the waiting staff, where would we all eat? take cleaning and security services - without the nigerians and ghanians, where would we be. take nursing - without the filipina and south-african nurses, wher would we be. take accountancy and law - a firm i deal with is curretnly outsourcing work to india to highly qualified accoutnants who cost just 10% of the wages of equivalent people in the uk. we are doomed, doomed - all doomed. so its time we all stop moaning, be grateful our access to top quality cars, and enjoy our freedom to enjoy our motoring, and 4x4's while we can. before red-ken and two-jags and al-quaeda put a stop to it all.
Well, I wonder how so many other Western countries manage without importing cheap labour? Aparently we need them because we have such a shortage of labour - yet there are plenty of people unemployed and 'parked' on incapacity benefit, 'early retired' etc etc. And I wonder how the Germans. French etc are going to manage without being able to outsource all their call centres to India (or are they going to teach the Indians to speak French and German?). I'm still waiting for a flood of European jobs to come to the UK (since we're told they have much higher labour costs than we do; but strangley enough charged-out labour rates over there are lower - weird!). Maybe we shouldn't believe quite so much of the propaganda printed in our newspapers.
I have visited China this year (as part of a delegation of people to look at trade in the automotive sectors). The statistics on China aren't *quite* as impressive as you might think. Despite the enormous population, total Chinese GDP is only about 25% that of Japan. The country is only just managing to feed itself - the effects of global warning could easily spark a famine. The country is short of energy and much of it still doesn't have electric power and won't for at least another decade. Remember the 'showcase cities' we see reported on TV only house a tiny fraction of the population.
The thing that struck me most from my visit was that China is an environmental catastrophe waiting to happen. Much industrialisation has taken place for no sound economic reason (everything is run by the local 'party men', often at a loss and with terrible corruption) and pollutants are simply dumped anywhere that is convenient (sometimes into the local reservoirs!).
I could go on. No doubt the Chinese will slowly prosper, as well they should given the size of the country, but at the moment we exploit them rather than the other way around. They are also dependent upon us to buy their products at large mark-ups. A downturn in the West will affect them very badly, since their domestic market is still quite small.
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Well, I wonder how so many other Western countries manage without importing cheap labour
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partly in answer to this, and partly in answer to hj as to why thailand (or india, or china, or usa, or whatever) are so much cheaper for parts than the uk:
generalising, and very broadly speaking - in addition to high cost of land and labour, we also have a bureacracy which applies the law to the letter.
in europe, the eu laws/rules are seen as made to be broken, whereas in the uk they taken to be applied to the n-th degree. i could give examples of health & safety inspectors, environmental health, etc. visits with ridiculous time and money wasted to deal with their demands. same with tax and vat inspectors.
pile on top of that the paperwork that businesses have to deal with in order to set up premises and employ people. at the moment the uk economy is surviving on tourism income and its financial service industry, and because many us companies prefer to set up european hq's around london (to take advantage of the common language).
for parts prices to achieve the levels of thailand and china, we will have to have the same base costs: e.g. the same health&safety, environmental & employment laws; and the same social/health benefits, and the same wages, overhead costs, fuel taxes, income taxes, etc.
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>at the moment the uk economy is surviving on tourism income<
Dalglish: Do you have any figures to support this? I am no great authority on the subject, and could be wrong, but my impression is that tourism/holidays (via aircraft) is a net exporter of stirling to the tune of about £1 bilion a year.
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Do you have any figures to support this? .. is a net exporter of stirling to the tune of about £1 bilion a year.
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buzbee
you can find all the figures you need at
www.statistics.gov.uk/cci/nugget.asp?id=199
the uk economy is bleeding at the rate of £40 billion a year, i.e. about £110 million a day. which sector contributes the most/least should be availbale from the stats.
aprilia - re. your reference to germany in the post below. have you considered that perhaps that explains why the german economy is doing so badly compared to the uk.
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in europe, the eu laws/rules are seen as made to be broken, whereas in the uk they taken to be applied to the n-th degree. i could give examples of health & safety inspectors, environmental health, etc. visits with ridiculous time and money wasted to deal with their demands. same with tax and vat inspectors. pile on top of that the paperwork that businesses have to deal with in order to set up premises and employ people.
So 'Johnny Foreigner' is a dodgy blighter, eh? Well, I spend quite a bit of my working life in Germany and I can tell you that they apply rules and regulations with a vigour unmatched by our redoubtable British jobsworths! Their tax laws make ours seem very relaxed (the Germans claim that half of the printed paper produced on the planet comes from the German tax office). Mind you, they have ID cards and anyone who shouldn't be in the country is put on the next plane out - along with whacking great fines for anyone who employs 'illegals'. Apparently this is something we can't do in the UK because so much of our economy depends on these people (building labour, fruit picking etc etc. we are told).
at the moment the uk economy is surviving on tourism income and its financial service industry, and because many us companies prefer to set up european hq's around london (to take advantage of the common language).
Like to see some figures on tourism - I suspect we 'export' quite a bit of money to France, Greece and Spain every year.....
for parts prices to achieve the levels of thailand and china, we will have to have the same base costs: e.g. the same health&safety, environmental & employment laws; and the same social/health benefits, and the same wages, overhead costs, fuel taxes, income taxes, etc.
Yes, I would agree with this. Again though, spending time in Germany I am puzzled how main dealers over there can charge hourly rates a lot lower than UK dealers and yet the mechanics earn more. This is true even in a very high-cost city like Munchen.
One thing that is very noticable is that the German education system is well funded and of a very high quality, levels of factory investment are very high too. This leads to productivity that is much higher than the UK's (I've heard 40% quoted) and this must be a factor in keeping prices low. Don't know so much about France, but I gather their productivity is a good deal higher than ours too.
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Again though, spending time in Germany I am puzzled how main dealers over there can charge hourly rates a lot lower than UK dealers and yet the mechanics earn more. This is true even in a very high-cost city like Munchen.
As you suggest, I'm sure that education has part in it. But it's partly a matter of financial structures. British capital usually seeks returns of around 20%, whereas the Germans have usually satisfied themselves with 10%.
Things were different when Britain had regional banks, as it did in the 19th century, and Germany still has. Nowadays, though, remote finaciers tend to be in the driving seat in England.
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