Nice Portugal Plans To Fail — Demonstrates Previous Suyts Posit!!!

 

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Well, I should thank Portugal for the timely affirmation of one of my posits seen in one of my previous posts written today.  We’ll get to that in a minute.  Portugal is having a hard time kick starting their economy.  And, to their credit, they see a glimpse of why. 

Analysis: Easier said than done for Portugal to revive industry

They start with an unproven and probably wrong premise.

TORRES VEDRAS, Portugal (Reuters) – For Portugal to succeed in ambitions to reindustrialize its shrinking, debt-laden economy, it will not be down to the revival of mass manufacturing but to the sprouting of high-tech start-ups such as UAVision.

Personally, I don’t see this happening.  Sure, one might gain some high-tech companies, but, I don’t see Portugal as any sort of base for such.  And, there is no replacement for mass manufacturing.  Worse, because of Portugal’s position it would be much more difficult for them to succeed than other emerging nations.  Later in the article we see a glimpse as to what has happened…..

It grates with Economy Minister Alvaro Pereira that Portugal has lost too many jobs and industries to the likes of China and eastern Europe.

Manufacturing accounts for about 13.5 percent of national output. That is more than in Britain and the Netherlands, but Pereira would like to get the share back to 20 percent, where it stood in 1989, by 2020.

But, then we see a very common folly…….

“One of the problems that we’ve had in Europe in the last few years was to think that investing in industry was not sexy,” Pereira said in London recently. “We don’t need to bring back all our industry, but we definitely need to have a stronger industrial base in Europe.”

He rejects old-style industrial policies and focuses instead on improving conditions for manufacturing, such as by expanding vocational training.

Wow, one could have said the same thing about Obama.  But, for Portugal the problem is compounded by the nature of the EU.  If Portugal ever got to the point of training and educating high-tech workers, would they stay in Portugal?  If they created a talent pool worth having, German companies would buy them up in a second.  In the EU and especially in the Euro zone the national boundaries are less defined.   The only real boundary they have is the Euro.  But, that’s the tech business in general, as well. It knows no boundaries.

Successful collaboration with Embraer not only will demonstrate that Portugal is capable of high-tech innovation but also will help change the nation’s mindset, said Jacinto Moniz de Bettencourt, chairman of EEA, a group of 35 suppliers to the Brazilian company.

“We are capable now of making some products that 10 or 20 years ago we wouldn’t have believed we could do,” he said.

Yes, that’s true.  But it is also true in just about every other nation around the world.  The tech business knows no boundaries.

But, that brings us to the affirmation of what I stated earlier today.  Earlier I wrote, They believe they deserve rather than they should earn.  Until those beliefs change, there’s nothing to be done.”

From this article…….

Steiff, the German maker of expensive teddy bears, recently closed a factory in the central town of Oleiros with the loss of 100 jobs. It shifted production to Sidi Bouzid, Tunisia, the birthplace of the Arab Spring uprising in late 2010.

“Salaries in Tunisia are less than half those in Portugal, so that was the key problem,” Jose Marques, the mayor of Oleiros said. “This was pure greed. I see no other reason.”

Well, you can call it whatever one wishes to call it.  The point of a business is to maximize profits.  One has to provide value more than others.  Once you don’t, businesses will be looking for a way to get the highest value.  This covers everything from workers to materials.  The reason why the company moved production is because they saw a greater value (or less costs) in Tunisia than Portugal.  It’s that simple.  Does Portugal think there’s something magical about high-tech manufacturing as opposed to other manufacturing jobs?  It’s laughable. 

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15 Responses to Nice Portugal Plans To Fail — Demonstrates Previous Suyts Posit!!!

  1. Latitude says:

    They are in deep doodoo if they’re complaining about 100 jobs……

    …I never thought they were going to make it at all

  2. Bruce says:

    Portugal has one rather unexpected advantage it should press as hard as it can. They are a safe tourist destination.

    We’re running out of safe tourist destinations.

    All the Egypt adverts have disappeared from the travels supplements. Can’t go to Syria, Libya, Mali, Nigeria, Tunisia. India and Brazil look suspect – there was a horrific rape of a tourist in Brazil overnight. Likewise there have been a few in the Caribbean. Turkey is iffy. Argentina is a worry, so is Bolivia. Columbia, Mexico and the Philippines still have active kidnappers. Cyprus and Greece are probably unwise destinations too, until the dust settles. Iran, no. Iraq and Pakistan, no. And these are interesting places with lots to see.

    It would only take a few million in advertising and wining and dining travel journos and I think they’d boost their tourism receipts a lot.

    As to the continuing financial crisis keep watch on Malta and Slovenia as the most likely places to blow up next. They’ve been in the news this week, mainly to deny there’s any problems with their large banking sectors…

  3. DirkH says:

    “If Portugal ever got to the point of training and educating high-tech workers, would they stay in Portugal? If they created a talent pool worth having, German companies would buy them up in a second. ”

    We like to have subsidiaries outside Germany when the wage level is lower. Places like Rumania have skilled programmers and we do use them. Portugal might not offer enough of a cost advantage since they have the Euro.

    In the past 10 years wages in South Europe and France have risen faster than in Germany. So they priced themselves out of the market.

  4. DirkH says:

    “Steiff, the German maker of expensive teddy bears, recently closed a factory in the central town of Oleiros with the loss of 100 jobs. It shifted production to Sidi Bouzid, Tunisia, the birthplace of the Arab Spring uprising in late 2010.

    “Salaries in Tunisia are less than half those in Portugal, so that was the key problem,” Jose Marques, the mayor of Oleiros said. “This was pure greed. I see no other reason.””

    Steiff counts as luxury toy maker and has a hard time competing against Chinese imports even given their splendid reputation. Rather the will to survive than greed.

    The average Portuguese politician is slightly left of Mao. (José Manuel Barroso, emperor of Europe, was a Maoist student leader)

  5. cdquarles says:

    These folks don’t know what greed is. Greed is wanting something for nothing, particularly something someone else worked to obtain.

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