Falling dollar pushes manufacturing out of Europe

[Skybird]

http://www.spiegel.de/international/business/0,1518,665862,00.html

As usual, politicians say that this could not have been forseen years back.
Companies and investement interests know no national loyalty, and money does follow the sun around the globe for 24/7.

[AVGWarhawk]

Hey, VW is also opening a factory in Tennesse. :up: :O: Business is business Skybird. You understand surely. :D

[Letum]

Excuse my ignorance, but if your looking for lower production costs; why
move from Europe to America?
There are far cheaper 2nd world countries with enough good
infrastructure to move to that will offer much cheaper manufacturing.

[Torvald Von Mansee]

Excuse my ignorance, but if your looking for lower production costs; why
move from Europe to America?
There are far cheaper 2nd world countries with enough good
infrastructure to move to that will offer much cheaper manufacturing.

Well, I'm sure they did an exhaustive study as to why. I guess you'd have to ask them.

[Skybird]

The market for several models from German car makers is america, that is especially true for certain models by Mercedes, VW and Porsche. Move the production to where the customer is - saves shipping.

Also, we have seen not really a flood but a slowly but constantly growing number of companies relocating from Asia back to Germany, for wages in those countries are not as low anymore as they once have been (especially true for china), and once low production costs additionally got put into relation by worse education standards of the workers, resulting in declines in production quality, again this is especially true for China.

Regarding China, German manufacturers with knowledge on inventions in new machinery have learned the hard way that they first sell away their products, than their knowledge, and then do not sell products anymore, for the Chinese now produce them themselves - with the once German knowledge. Maybe you took note of the row there is that the Chinese are trying to get patents of Western and German machinery - for free, and no licensing fees anymore. Behind the official curtains, it is a pretty big issue in German-Chinese relations.

Sources for the above content: economic programs on TV, occasional random findings in German newspapers. i do not skim economic news systematically, it bores me.

[Snestorm]

Ja. USA today, China, Mexico, or Guadamala tommorrow.
Just follow the cheap labor road.

[Snestorm]

Hmmm. Skybird just educated me as I wrote the last post.
That exlains why they didn't go to China.
Thanks for the info.

[Skybird]

Yes, china tries to couple new "joint ventures" (often sooner or later under total chinese control with help of obstruse juristic allegations) with total neutralising of patents, saying they do not wish new joint ventures if they do not get all the patents for free. Their concept of "intellectual property" leaves much to be desired. Product piracy is what they still are best in. For Germany, excelling in car technology is an industrial key branch. We have understood that it is insane to help them boosting their own car production in quality. so far all their exports reaching the german market scored the worst notes in crash tests in all history of german crashtests, but they are cheap. To help them staying cheap but imporving their qulaity would be suicidal for the car business. Nevertheless, I think several german car akers, if not all, are present in Chian already, I am not sure. you cannot afford to ignore that market, unfortunately. It's too big. It's kind of a dilemma, me thinks.

[Oberon]

It kinda reminds me of what the PLAN have done with their submarine fleet, they'd get a couple of originals from the Soviets, Foxtrots and the like, and then produce their own home-baked version which usually, due to manufacturing issues, was just below par with the original, but it encouraged home industry and they learnt. Several years on and their fleet is starting to take shape. I think their next project is a home grown carrier based on what they've learnt from the Varyag, although I think that the original casino plans for her were scrapped and now she's going to be the PLANs first operational carrier.

But I digress, and I'm not entirely surprised, we saw the migration of business to Europe long ago in the UK with the various sell-outs and fold-ups of our own companies. The competition in the market is pretty intense, particularly with China growing stronger and more self-sufficient in designs, and so you've got to go where the money is.

[AVGWarhawk]

The market for several models from German car makers is america, that is especially true for certain models by Mercedes, VW and Porsche. Move the production to where the customer is - saves shipping.



Correct. VW will be stopping production of the Passat and build the replacement in the new Tennesse factory. BTW, VW/Porsche/Audi are one and the same. Here the company is called VOA (Volkswagen of America). From what I understand VW might be buying into Suzuki as well. I suspect most if not all VW for America will be made in America. With exception of the Jetta. That VW is made in Mexico.