So today Airbus announced a $600M investment in Alabama which they say will employ 1,000 people. 1000 good paying, relatively high skilled jobs in a good old right to work state. I LOVE IT. As an anti union, anti tax Texas resident I love seeing companies pour money into our southern right to work states. Most of the major foreign car manufacturers, now the world’s 2 major aircraft companies, Caterpillar expanding into Texas, etc.
With the exception of Indiana, are any of the northern states expanding their manufacturing employment and getting any of this foreign investment? Will the northern states wake up and realize this shift before it’s too late, or will they wake up one day and realize they have a ton of retirees and all the actual workers and their jobs have moved to South Carolina, Alabama, Mississippi, and Texas?
Dude, there is a BMW plant in South Carolina. People will flow to the jobs. As an example, North Dakota now. People are living in RVs and work camps like something out of Grapes of Wrath to work in the oil industry.
don’t underestimate the government’s ability to force outcomes it wants (creating 10 more problems compared to the one it was trying to “fix”) or it’s ability to crush outcomes it doesn’t want. We’re on a steady march fellow AFers. if your children want freedom and prosperity they will have to find it in another country. i’m planning my move for sometime in the next 20 years. the two candidates i’m giving serious consideration to are switzerland and australia, both in the top 5 on the economic freedom index.
Why is Airbus opening manufacturing plants in the US? Is this a political/PR thing?
Edit: If it’s a long distance plane, you would think that Airbus would build it in Europe (or somewhere cheap), and then fly it to wherever the plane was supposed to go. Maybe there are certain models that can’t make the trans-Atlantic trip? Not sure how this works.
Airbus has seen more production delays than you can shake a stick at due to their European production base. A lot of the Japanese auto manufacturers have been moving production to the US. It’s no longer as expensive as you’d think and companies with precision designs are finding you just can’t get the same quality work overseas.
It’s the end of the Made in China era folks. Wages have risen, currency manipulation is unsustainable for them, so basically their wages are rising. Angry Chinese workers are going to make China into the worlds largest General Motors. All of this before they have to spend 30 days at see shipping everything.
Hmm. I guess it’s true that EU unions had Airbus by the balls. Though, I can’t imagine French/German people are happy about a big government-aided company shifting manufacturing to the US with record high European unemployment.
Tikka hit it pretty well. I’m bullish US long term despite the nitwits in DC doing their absolute best to screw things up. The US has great demographics for working age people for the next 50 years, unlike the declining populations of Europe and Japan. It now is worth putting down some stakes in the US to alleviate foreign currency risk and get the good legal and property rights of the US. That’s partly why some companies won’t work in China is their complete disregard for intellectual property rights.
Anyway this move is partly politically motivated, but back in Europe I’m sure they’re not happy about it but Airbus will still have to buy a lot of the parts from European suppliers, so in theory as long as the US plant isn’t cannibalizing production from their EU factories, it should still lead to more sales to the EU suppliers. But we’ll see how it all shakes out.
There are political motivations, but the main objective is to go after Boeing’s 737. Having a production facility in the US will allow Airbus to compete more effectively in the US market for twin-engine jets. It will also position them better to compete for US DOD contracts.
I’ve driven past that factory before, it’s absolutely gigantic. I was by there last month and saw one of the new Dreamliners all painted up and ready to go off to Air India. Also saw their custom built freight plane, the Dream Lifter. It’s a heavily modified 747 they designed to fly the dreamliner parts from the suppliers to their factories.
Hahaha nice picks, they are also extremely socialistic compared to the united states. New Zealand also scores very high on the economic freedom index as does Canada, are you sure thats the right measure for you?
In terms of the ‘shortsighted-corporatist-ayn-randesque-political-policies’ index America ranks as one of the best, you should be happy where you are.
I agree with you, any student of history will see the parrells between China’s labour market as it is now and the labour market of the United Kingdom prior to the second industrial revolution (150 years ago). There likely will be social unrest as workers agitate for better working conditions and wages just as they did in every other industrialized country. That will reduce the price competitiveness of China, also while American workers are more expensive, as Black Swan mentioned the quality of their output is much higher.
I think North American manufacturing will make a strong comeback.
There are still a few smaller countries like Vietnam which may be even cheaper than China and may take longer to have their wages raise to more global levels - this may dampen the New China effect to some extent
Also, aren’t there still (hundreds of) millions of rural poor people in China? Even if the current factory laborers graduate into city jobs, there are still people to take their place for a couple of generations. It’s hard to assume a uniform global wage for a country with 1.5 billion people.
It wasn’t the lack of a ready supply of labour that caused the social unrest that led to the labour movement in the western world. It was the precieved inequality and corruption faced by the bulk of the labour force along with their aspiration towards better working conditions and stronger civil rights that reflected their improved economic situation.
It appears that this is currently an emerging issue within China, it certainly has the Chinese authorities terrified.