Kimberly-Clark: Venezuela seizes and re-opens US-owned factory
Source: BBC
The government of Venezuela has said it has seized a factory owned by the US firm Kimberly-Clark.
The firm had said it was halting operations in Venezuela as it was unable to obtain raw materials.
But the labour minister said on Monday that the factory closure was illegal and it had re-opened "in the hands of the workers".
Kimberly-Clark, which makes hygiene products including tissues and nappies, said it had acted appropriately.
Read more: http://www.bbc.com/news/world-latin-america-36771022
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cstanleytech
(26,281 posts)how the hell the government thinks it will be able to get the materials if Kimberly Clark was unable to?
7962
(11,841 posts)anigbrowl
(13,889 posts)Businesses are generally not in the habit of shutting down production just to see f it will shake things up economically, especially given that people's need for toilet paper and other sanitary products is largely inelastic regardless of who is in power. It's not like they're likely to sell twice as much under a different president, is it?
Statistical
(19,264 posts)7962
(11,841 posts)Meanwhile, the citizens flee to Columbia just for food to survive.
The biggest failure in decades.
Elmergantry
(884 posts)
BlueEye
(449 posts)In the long run, Kimberly-Clark can probably make hygiene products more efficiently than a Venezuelan "soviet", but in a crisis, sometimes these things have to happen to prevent deepening chaos.
And for what it's worth, Kimberly-Clark has probably accommodated the potential for hostile government expropriation in its risk management calculations. They will be fine, despite what Faux News will say.
Statistical
(19,264 posts)The Texas-based company said in a statement: "If the Venezuelan government takes control of Kimberly-Clark facilities and operations, it will be responsible for the well-being of the workers and the physical asset, equipment and machinery in the facilities going forward."
The question is who would be stupid enough to invest in Venezuela, open a factory, upgrade an existing factory, or even sell any raw material imports (except maybe on a cash on delivery basis where cash is us dollars or gold only)? At this point any foreign owned asset in Venezuela is essentially a zombie the owners are just waiting on when not if it gets stolen. Venezuela can keep stealing assets and running them into the ground but that isn't going to change anything for the citizens.
BlueEye
(449 posts)The insurance payout due to the expropriation is probably worth more than the cash flows it would yield in continued operations.
I would imagine a lot of these companies had operations in Venezuela pre-Chavez and there was enough contribution margin to keep it alive. Going forward, even after Venezuela's insane policies are resolved, you're right that companies will require very restrictive trade terms to do business there again. Insurance rates will likely be very high, which would be passed through to consumers.
The future is bleak there. But to be clear, I'm not advocating the Chavez/Maduro brand of socialism at all. Just saying that at this point they're in full-on crisis management mode, which is (ironically?) one area where government takeovers (in America we call them bail outs) actually sometimes make sense.
jonno99
(2,620 posts)Given that - as you say - Venezuela is
seabeckind
(1,957 posts)The same way operations work everywhere.
hack89
(39,171 posts)that is what forced Kimberly-Clark to shut down.
seabeckind
(1,957 posts)We have no idea whether that is true since we only see half the arguments.
Perhaps the price or these materials didn't allow K-C to maintain the profit margin they needed. I suspect the people of Venezuela don't have a lot of money since they've been caught in the austerity punishment cycle.
So K-C can't charge what they need to charge to feed their stockholders.
hack89
(39,171 posts)it is not unique to K-C. That is why there are food and medicine shortages in VZ - there are no dollars available to import food and medicine. This is not a new story - their currency problems have been known for several years.
seabeckind
(1,957 posts)Perhaps each case has different factors involved in those decisions.
We're talking about toilet paper.
hack89
(39,171 posts)which are extremely hard to find in VZ due to government policy.
You want to focus on one company while ignoring the thousand of others that are shutting down.
The VZ economy contracted 15% last year and will contract even more this year. Inflation is over 700%. All of that indicates an economy in systemic crisis and collapse. And it all stems from poor government policies and decisions.
anigbrowl
(13,889 posts)Venezuela doesn't have a very strong agricultural sector and imports pulp for making paper. In fact, Venezuela doesn't even print its own currency, they have to import that too and it's becoming a problem because currency manufacturers aren't being paid either: http://www.bloomberg.com/news/articles/2016-04-27/venezuela-faces-its-strangest-shortage-yet-as-inflation-explodes
anigbrowl
(13,889 posts)I mean, they are the market leader in the production of sanitary tissue products already. Why would you think the VZ government is going to find someone better than a firm that specializes in this?
seabeckind
(1,957 posts)But the whole point of this OP is that they closed the factory and left.
IOW, they are no longer in the toilet paper business in that country.
So the new company will hire a new guy to run the new factory.
Hel, might even be the same guy. But I doubt it. I think he already proved he couldn't make a go of it.
anigbrowl
(13,889 posts)I hear they're sort of an essential economic input for manufacturing.
seabeckind
(1,957 posts)There was nothing anywhere that said there is a sudden shortage.
It's most likely the fact that they couldn't purchase those materials at a low enough price to make a profit based on the operating costs of the company.
Eliminating the global mgmt structure, stockholders always hungry for more dividends, etc,
reducing operating costs.
IOW, we have a whole new equation, don't we?
Then there's the idea of an alternate source for those materials. It isn't like paper pulp is only available thru a K-C subsidiary.
anigbrowl
(13,889 posts)I mean the currency controls and resultant rampant smuggling in Venezuela are not exactly a secret. Nobody wants bolivars because they are worthless outside Venezuela and largely worthless within it. The official exchange rate is something like 6.5 Bolivars to the dollar, while the black market rate is about 800:1. So there's about a 120x mismatch going on there, hence the ~500% inflation rate in VZ these days.
Did you remember the fact that the government already seized some other toilet paper factories a while back? You know what happens? People take the toilet paper to the border with Colombia or other neighboring countries and sell it on the black market in order to get hard currency to buy food and other necessities. Suppliers elsewhere are not willing to provide pulp at official market prices any more, and industrial producers don't have the option of buying bulk raw materials on the black market as a) it's not possible to conceal the existence/transport of industrial manufacturing quantities to a known location and b) because the Bolivar is almost worthless chances are good that they simply don't have enough cash on hand to pay black market prices anyway.
As I already pointed out to you, venezuela doesn't even manufacture its own paper currency, and they're having trouble getting more currency because they can't pay the firms that manufacture paper currency for them in other countries. And yet you think they're competent for some reason.
Igel
(35,300 posts)You have an investment. It doesn't produce enough money.
You liquidate part of it for the cash you need. It produces less money.
You liquidate more for the cash you need. And receive less money from the investment.
Until finally you still have the same need for cash, but you have no investment and nothing to liquidate. You move on to the next thing you can seize and liquidate.
At best you beat entropy by seizing a lot of stuff and using it to build something. But it still doesn't produce enough to avoid liquidation. Because the cash need is too great and needs justify everything.
anigbrowl
(13,889 posts)like an invasion or a natural disaster. If you are the cause of the crisis in the first place, you probably shouldn't be too optimistic about your management skills.
seabeckind
(1,957 posts)What's the primary goal of the new factory?
Make toilet paper.
If there's no profit overhead, no outrageous salary to mgmt and boards, no intense pressure to provide dividends to stockholders,
the cost of production would go down.
Perhaps we got caught in the wrong spiral.
Loki Liesmith
(4,602 posts)At last we'd have a worker's paradise. Why has no one tried this before?
seabeckind
(1,957 posts)Why would the gov't take over operations? Give it to the workers.
https://en.wikipedia.org/wiki/Mondragon_Corporation
and the International Co-operative Alliance
https://en.wikipedia.org/wiki/International_Co-operative_Alliance
AntiBank
(1,339 posts)No cooperative today, no matter how successful, can operate outside the demand of the “market” — and the capitalist market is the aggregate interests of the world’s largest industrialists and financiers. As more industries follow the leads of textiles and electronic gadgets — that is, move production to places with ever lower wages and ever less regulations — the more pressure there will be to follow suit or go out of business. Fagor will not be the last cooperative to face this dilemma. It is inevitable as long as cooperatives remain small islands at the mercy of capitalist competition.
A better world, a rational economy geared to human need, requires a different system. As large as Mondragon is, it is has no ability to operate outside the logic of capitalism. Overall, it has thus far competed successfully, but at the price of becoming too large to integrate all its workers. The world would need many more Mondragons, cooperating and negotiating with one another, to even begin to crack the façade of capitalism, and capitalists are not likely to sit by idly while an alternative to their rule grows.
As worthy a model as cooperatives can be, they are not a substitute for working people around the world struggling collectively to create a better world. All the advances of the 20th century are the product of collective struggles, but because those movements settled for reforms while leaving the system in place, the gains have steadily been taken back.
seabeckind
(1,957 posts)Pointing at a failure of a cooperative doesn't prove that a non-cooperative will succeed.
Some cooperatives succeed. Some fail.
Some conventional corporations succeed. Some fail.
Isn't your position an argument fallacy? Something about Correlation and Causation?
(added) As I read it again, I realized that the piece was talking about difficulties of scale. That a multi-national, cooperative would collapse under its own weight.
hack89
(39,171 posts)if Kimberly-Clark couldn't get enough raw materials, what makes you think the government can?
seabeckind
(1,957 posts)Perhaps it's the cost of the raw materials and K-C can't maintain their required profit margin with that front end cost.
hack89
(39,171 posts)the real reason is that K-C can't convert bolivars into dollars so it can't purchase raw materials on the global market. The lack of dollars is the underlying problem behind VZ's economic collapse. Industry after industry is shutting down because they cannot import necessary parts and materials. That is why their health care system is collapsing with nationwide shortages of supplies and medicines - they don't have the dollars to buy them.
seabeckind
(1,957 posts)hack89
(39,171 posts)Say the same thing then I tend to believe the .
seabeckind
(1,957 posts)hack89
(39,171 posts)VZ is not a closed country . It is easy to learn the ttruth
seabeckind
(1,957 posts)in any way proves that this particular piece of information on this particular issue is true
is quite a stretch.
I could probably find an argument fallacy that describes it. but it's not worth the effort.
hack89
(39,171 posts)why is it so hard to imagine another one doing the same? The entire VZ economy is contracting. K-C's given reason is believable precisely because it is so common.
seabeckind
(1,957 posts)hack89
(39,171 posts)that is why VZ can't import raw materials, food or medicines - they lack US dollars.
anigbrowl
(13,889 posts)I can't believe I need to explain such basic things to someone on DU. Do you understand that the raw materials have to be imported from other countries and that suppliers want payment up front in a stable currency?
Throd
(7,208 posts)And the labor to transport them.
anigbrowl
(13,889 posts)surely you have noticed that many large companies sometimes run at a loss for several years and borrow money to stay afloat. Not being able to make a big profit for a few years in a small country is not that big of a deal to a large multinational firm like K-C, it's more rational for them to just ride it out and wait for better economic times in which they will still have a big share of the market.
All your arguments depend on the premise that Kimberly-Clark is lying while at the same time you're unwilling to admit that any of this could be the fault of the Vz government. Are you willing to at least consider the possibility that the government there is simply incompetent and doesn't know what it's doing?
seabeckind
(1,957 posts)They aren't running at a loss, they aren't running.
They are an ex-factory.
anigbrowl
(13,889 posts)seabeckind
(1,957 posts)All I know for absolute certainty is that K-C closed it down and walked away.
They are no longer a factor in any decisions, are they?
I'm not totally sure but I suspect there are a whole bunch of out of work guys standing around who might know how to make toilet paper.
ProfessorGAC
(64,995 posts)In this whole thread, you have one premise: K-C lied about why they closed the factory.
Nowhere did you explain how it is less beneficial for them to close a factory and eat the loss rather than operate as before.
Hence, the explanation they've given is far more logical than anything you've asserted.
I'm going with the "lack of raw material supply" statement as the truth.
It makes more sense than you do.
seabeckind
(1,957 posts)The premise was based on the absolute total, irrefutable fact that
K-C closed a factory.
They said they couldn't get raw materials. I suggested that the reason may not have been that there wasn't any to be had but that they couldn't pay the upfront cost of that material and still make a backend profit.
I was suggesting that perhaps their business model might be skewed a little. That perhaps there was profit but not enough to satisfy the corporate culture. That maybe if they cut costs in some other areas, they could make a profit.
But we'll never know -- cause they made the business decision to quit. Left. Closed the factory. Nowhere did I suggest they should operate at a loss.
So then the second part of my premise comes in.
Does Venezuela have the right to reopen that factory to supply toilet paper to the populace?
ProfessorGAC
(64,995 posts)You're logic is badly skewed.
Running a factory with no raw materials is not a matter of margins. If you are making nothing, then every cost is a loss. It's not a matter of whether it's profitable enough. It is, to use your pet phrase, an irrefutable fact(!) that there is negative profitability. (aka, a loss)
Those are two VERY different reasons to suspend or cease production. So, your irrefutable premise is actually in error because you keep bringing up the business model. No business model works when the net gain is negative.
As to your second point:
Since i don't ascribe to state ownership of the means of production, no i don't think they have the right to appropriate somebody else's property.
Here we call that abuse of eminent domain. Does it happen? You bet! is it right? No.
seabeckind
(1,957 posts)Those are your words.
The fact is that the factory is closed. Abandoned. Gone. Regardless of the reason K-C has decided to leave their chips on the table and walk away.
That is the irrefutable fact. You can argue all day about why that occurred but the irrefutable fact is that it did occur.
Let me repeat that. The reason for abandoning the market doesn't change the fact that they did.
Nobody said the state will control the means of production. That may or may not occur. What the state most definitely has the right to do is decide just what operation can be performed inside their country. K-C abandoned the field. At this point the gov't can hand that charter to whomever makes a good case for getting it.
Just like we do in this country when we grant a corporation the charter to operate. That corporation is born based on a piece of paper filed in a gov't office. They are granted NO inalienable rights.
The rest of your point sounds a lot like a libertarian viewpoint. I don't care much for libertarian. Let me explain why. The very existence of this "property rights" idea stems from societal laws that provide for the property being protected. In effect all the rest of us have agreed that under these conditions you get to control that property as long as you meet those conditions that we, as a society have determined.
And the only thing that grants you that control is a piece of paper filed in a gov't office. And the rules and laws regarding it.
If you lose the rights to control that land and the loss is upheld by a court of law... nobody cares if you think it's fair. That argument makes as much sense for an adult as it did for a 10 yo.
And like I tried to point out... corporations don't even have those rights.
MohRokTah
(15,429 posts)They have a tendency to seize privately held property and give it to the government with no compensation.
Statistical
(19,264 posts)I would have no problem investing in Norway, Iceland, or Switzerland (socialist democracies w/ strong contract law and effective legal systems) on the other hand I wouldn't put a nickle in a country like Venezuela (defacto 'socialist' dictatorship w/ no respect for property rights).
GulfCoast66
(11,949 posts)One of the most important descriptions of these excellent nations: capitalist.
Granted regulated, but capitalist none the less.
seabeckind
(1,957 posts)That's the factor that makes capitalism a successful model.
Without regulation there can be only one.
At that point the whole shebang is out the window.
GulfCoast66
(11,949 posts)And would add strongly regulated
guillaumeb
(42,641 posts)who seize publicly owned assets and give them to the 1% with no compensation to the public.
Great system you are defending.
Rex
(65,616 posts)Lulz! 
scscholar
(2,902 posts)attitude you have there.
scscholar
(2,902 posts)hurts foreign investment when no study has ever shown that it has.
Throd
(7,208 posts)MohRokTah
(15,429 posts)
Archae
(46,318 posts)Sit in the non-functioning factory, playing cards and hoping they get a paycheck?
christx30
(6,241 posts)Igel
(35,300 posts)Perhaps make the toilet paper that's their currency nice and fluffy.
No, wait. I've used socialist-produced toilet paper. "Soft and fluffy" caters to bourgeois tastes.
They should start using smooth stones. That's what the Romans used. Then you can hire somebody at a living wage to clean them.
DustyJoe
(849 posts)or their left hand, no trees killed there either
seabeckind
(1,957 posts)Does a nation have the right to decide which foreign company gets to have a presence in that nation?
In this particular case it looks as if the factory is abandoned property to me. In a few months when the United Technologies investment corporation closes the Carrier factory in Indiana in search of cheap labor south of the border, just what would be wrong with declaring the factory abandoned property and keep making furnaces? BTW, the Carrier division made in excess of a billion dollars profit last year. Profit.
Unable to obtain raw materials? You mean forests?
On a somewhat related note, billions of pounds of paper is wasted every year because the cost to recycle is more than the cost to use a raw material.
hack89
(39,171 posts)that is the only reason they shut down.
seabeckind
(1,957 posts)And keep focusing on propping up a failing business model?
K-C has decided to quit making toilet paper. The people need toilet paper more than they need K-C to make a profit.
So how do you respond to the points I made?
Does a nation have the right to decide which corporations operate inside their country?
Is a closed factory abandoned property?
If a company is not able to maintain a front-end supply of materials, wouldn't it make good business sense to look to alternatives?
hack89
(39,171 posts)and they are all shutting down for the same reason - there are no dollars available to buy necessary materials. K-C did not choose to stop making tp.
The government is to blame here - they are the ones responsible for enacting currency laws that allow business to access dollars.
The government will have the same problem K-C had - they have no dollars either. If the government can't buy food and medicine, what makes you think they will be able to buy toilet paper?
seabeckind
(1,957 posts)See above.
I just got finished pointing out that you only get to see one piece of the issue. And even that piece is a snapshot in time.
And from that tiny morsel of information, no matter how tenuous its veracity,
you extrapolate across an entire spectrum.
You still have not addressed any of the points. Not the first set, nor the next set, and I don't think you're going to do this one either.
hack89
(39,171 posts)All of that indicates an economy in systemic crisis and collapse. And it all stems from poor government policies and decisions. VZ can't feed it people. They can't provide basic health care. The government has stopped functioning with most government offices open two days a week. Their murder rate has skyrocketed and is the highest in the world.
You want to talk just about toilet paper because you want to ignore that the entire economy is collapsing. You act as if the government is making rational decisions instead of desperately grasping for straws.
christx30
(6,241 posts)that are going to cease operations in Venezuela? They are cancelling because of the same reasons K-C shut down operations: They can't get the dollars they need to get fuel and parts from overseas.
Unless Venezuela is making spare parts for airplanes and jet fuel, they have to go to other countries to get the stuff.
seabeckind
(1,957 posts)I very much suspect that for the vast majority of Venezuelans this won't cause them much grief.
On the bright side, they won't have to maintain an air travel infrastructure.
hack89
(39,171 posts)all it does is isolate it further. Besides tourists with their tourist money, air cargo is a vital part of any economy - for example, it is the most common means medicines are shipped.
seabeckind
(1,957 posts)No one said that Venezuela will no longer do air travel and become isolated.
The big commercial airlines are abandoning that market cause it isn't profitable for them.
Which opens up the market for competitors who might have a better business model.
hack89
(39,171 posts)A fact you refuse to admit. No company can survive in VZ without a steady and reliable source of dollars.
seabeckind
(1,957 posts)I do believe that borrowing those dollars in order to feed some foreign corporations led to these difficulties.
I also think we see this same scenarios being played out in quite a few countries around the world.
Greece, Spain, etc.
At some point it has to become glaringly obvious that it is a failed model.
It looks like Venezuela is getting rid of the moneychangers.
hack89
(39,171 posts)All because of government monetary policy that has made dollars impossible to get. What has failed is the government - when you spend more than you bring in, bad things happen
anigbrowl
(13,889 posts)If you would actually think about this for a couple minutes you might realize how ridiculous your comments sound. Big commercial airlines are abandoning Venezuela not only because it is not profitable but because they have lost so much money already. Lufthansa is out about $100 million already so I find it rather hard to blame them for not wanting to lose more.
Do please tell us what you think is wrong with their business model and how a competitor is going to make money with this imaginary 'better business model.'
seabeckind
(1,957 posts)It's obvious that the market doesn't support their product. So they are abandoning a market.
Just what is it you are arguing?
My point is that without Lufthansa cluttering up the playing field the market is now open for a new model that be able to make it work. Maybe Air France will pack their planes a little tighter.
And if it doesn't, it was never meant to be.
hack89
(39,171 posts)seabeckind
(1,957 posts)Maybe they don't live and think inside little boxes.
Who knows, who cares.
It's a hypothetical, not a literal.
hack89
(39,171 posts)the entity that tightly controls the currency market? There use to be plenty of dollars - what changed?
christx30
(6,241 posts)people in Venezuela would buy the tickets in Bolivars and the government would convert them to dollars so the could pay for fuel and maintenance on their planes. Problem was that the Maduro government reneged on contracts to provide those dollars. After they coudn't for a while, Maduro's government decided they simply wouldn't pay what it owed the airlines. So the currency controls hurt businesses, and fixed prices, which were less than what the airlines needed to sustain their businesses.
Quick economics lesson. Let's say I make and sell toothpaste. It costs me $2.50 per tube to make it. With costs of materials, labor, marketing, ect, I figure I'd need to sell it for $3 per tube to stay in business. Maduro's government says I can only sell for $1.50, so I'm losing $1.50 for every tube I sell. I can't make what I need to stay in business. So I have no choice but to close down my factory, lay off the workers, and move out of the country. Now people can't get what they need.
Marksman_91
(2,035 posts)In fact, how is it good for ANY nation to become more and more isolated as the world becomes more and more globalized? They'd be like N. Korea, which is just a shithole.
anigbrowl
(13,889 posts)This might be the most stupid post I have ever seen on DU. Now I understand how Communists in Asia wrecked their domestic economies by forcing all the bourgeousie to become subsistence farmers to 're-educate' them. You actually think they'll be better off letting all their airports and other air travel infrastructure crumble? Why not the ports and roads too, and go back to living in caves so they don't have to maintain houses and apartment buildings?
Oh wait, because it costs a lot more to rebuild that stuff from scratch than it does to maintain it, so failure to maintain it means it will be more expensive to replace later.
seabeckind
(1,957 posts)The post above said that "the airlines that are going to cease operations in Venezuela".
This implies to me that they are foreign owned airlines that will no longer offer travel for Venezuela. So what?
All this does is open a market. Nature abhors a vacuum.
hack89
(39,171 posts)you can't run an airline with Bolivars.
Travis_0004
(5,417 posts)It will be sold, or at the very least they will be paying property taxes on it, and still retain ownership.
And what does the US government know about building air conditioners? Are they going to rip off carriers patents on design?
Also, I assume carrier will be selling all the equipment or taking it with them, so its just an empty building that wont be setup to build air conditioners anymore.
and I'm sure kimberly clark knows how to buy trees, the problem is failed government polices led to hyper inflation, so things are more expensive to buy, yet with price controls they can not raise prices. Kimberly clark is not going to make toilet paper, then sell it at under their cost.
seabeckind
(1,957 posts)United Technologies owning a building that is doing nothing but providing a place to hang a "for lease" sign.
Or the gov't taking over that production.
Ya think there might be another alternative? Like the gov't offering the means for the current workers to continue to make furnaces as a cooperative?
Almost like a .... wait for it..... small business loan.
I'll bet just about every patent that Carrier got came from a worker at that company.
BTW, did you know that United Technologies at one time sold a patent that came from the old Mostek corp (that they also shutdown) that ended up being the basis for much of what Intel accomplished?
Lost their ass....
Travis_0004
(5,417 posts)Carrier owns the patent, they paid the workers for that.
Even the workers can not design and build an air conditioner. Yes, they are very great at building a specific model, but the workers have no right to just copy that model. Even the engineers know how to design different air conditioners, but most of their knowledge is likely covered in patents (and they are probably still working for carrier in CT).
I can't imagine starting a new air conditoning company, and on day one hiring 1500 factory employees. The idea is crazy.
You would have to start small and slowly scale up, you would need a year or two in engineering to design your products, and test them. Meanwhile you have 1500 employees doing nothing, and it might take 10 years before you scale large enough to hire them all. Meanwhile your factory is over sized, and your overhead is killing you, and likely to bankrupt you before you begin.
seabeckind
(1,957 posts)The existing plant is being closed and reopening in Mexico. The investment company (CT part) that owns Carrier is upfront about the reason... labor costs.
BTW, Carrier makes state of the art multi-fuel, very high efficiency furnaces. What makes it such a fantastic product is its control systems. Its electronic ignition. It is far beyond an air conditioner. You might peruse their Infinity series.
Carrier might own the patent on that design but it does not own the brain that made that design. When that guy walks out the door, he takes that part with him. All it takes for him to make a new design is the tools and a place to work. I guess you haven't heard of companies which were started by employees who left a company. Perhaps you might look into it. In fact there's a different company here in Indianapolis which is very successful and did that very thing.
When this factory closes there will be around 2000 factory employees who know how to assemble furnaces. State of the art multi-fuel, very high efficiency furnaces. You see they aren't leaving. This wouldn't be a NEW factory, just a NEW owner.
When the existing operation moves to Mexico they will be in the position you say. They will have to train and hire people.
What I find so amazing these days is the depressing attitude about taking on a challenge.
FrodosPet
(5,169 posts)They will be safe and high quality and economical and energy efficient? So people will want to buy them over all others?
Or should we nationalize the entire industry, set a universal national design for each capacity range, and sell them all at a controlled price?
Suppose the factory is losing money, not making it. Is it owned by workers, or the state? Is the U.S. Government, or the employees, responsible for the debt? Or do you just nationalize the production of the subcomponents as well, and force them to sell to the government owned HVAC factory at a lower price so the numbers for it work, and it can stay in business?
seabeckind
(1,957 posts)Who said anything about nationalize?
FrodosPet
(5,169 posts)So you are a "mandatory worker's co-op" person.
Not everyone is. It is hard to tell sometimes. Other times, it is not.
seabeckind
(1,957 posts)You imply I'm a socialist? Expecting me to somehow disprove your opinion?
Nah. You'll just keep picking the things you think you can argue and ignore the actual argument.
I have no idea what a "mandatory worker's co-op" person is.
Did you make that up? Sounds almost communistic.
I guess the end result of your exercise is that you really have no rebuttal for what I said.
Hmm, what might the next strawman be? Almost can't wait for the next installment.
anigbrowl
(13,889 posts)You ask what would be wrong with declaring the Carrier factory abandoned property. Well, there's a whole lot of property law about that, which says that the owner of something gets to make the decisions about how to dispose of it - so most likely, the factory will be sold to some other firm and used for something else. We have a constitutional prohibition on the government just taking stuff without asking, perhaps because the founders thought it objectionable when the British government did that sort of thing during colonial rule.
Even if the factory were abandoned, chances are that Carrier are not going to leave all the manufacturing equipment just sitting there rather than moving it to Mexico, because they are not idiots. Even if they were idiots, and even if they did abandon all the factory and all the equipment (see how far I am going to try to accommodate your economic fantasy), then yeah, you could keep making furnaces...but chances are nobody would buy them because they would prefer to buy cheaper but equally good models made in Mexico. So you'd just end up with a bunch of unsold furnaces that you'd eventually have to give away below market price.
This is the problem with many socialist proposals; it sounds great in principle but when you run the numbers they simply don't add up. I know you like to tell yourself that it's all being sucked out by corporate fat cats and so on, but reality is not on your side. You say the Carrier division made a billion dollars in profit last year, but that's across global operations, not just in Indiana. In fact, Carrier already had factories in Mexico and has had them there since 1969, long before NAFTA. So it's meaningless to compare global profits with the economic conditions of a single factory, because you have no clue what %age of revenue comes from that one factory.
People in Mexico are willing to work for less than people in the US due to the lower cost of living, and the quality of their work appears to be as good as that of US workers, so it would be irrational for the company not to manufacture where their costs are lowest. I'm pretty sure you shop for groceries and other purchases wherever you get the best deal, because that's what almost everyone does; it would be foolish of you not to do so.
seabeckind
(1,957 posts)a bit bitter for the privileged class but for people who just lost a job?
Goes well with a nice DOMESTIC beer made by an American company in an American brewery.
The one thing Carrier will not take is the expertise that made the company what it is today. And the equipment? More jobs for somebody who makes that equipment.
Carrier is owned by a Connecticut investment house. They probably couldn't find the furnace in their own house.
We might need the furnaces but we sure don't need the stockholders.
Y'all have a good evening, now.
GulfCoast66
(11,949 posts)In there a mysterious toilet paper tree I am not aware of?
Otherwise they will need a pulp mill which is a giant industrial operation. They could seize that as well, but apparently they are all in other countries making seizing one rather difficult.
So they are left with having to have one built using imported industrial machinery. Only the have no dollars and their bolivars are worthless.
So unless they plan on starting to sell leaves for people to wipe their asses, those forests do them no good.
seabeckind
(1,957 posts)Yes, there is. It's called a sawdust tree.
Some plants other than trees are suitable for paper-making. In areas without significant forests, bamboo has been used for paper pulp, as has straw and sugarcane. Flax,h emp, and jute fibers are commonly used for textiles and rope making, but they can also be used for paper. Some high-grade cigarette paper is made from flax.
Cotton and linen rags are used in fine-grade papers such as letterhead and resume paper, and for bank notes and security certificates. The rags are usually cuttings and waste from textile and garment mills. The rags must be cut and cleaned, boiled, and beaten before they can be used by the paper mill.
http://www.madehow.com/Volume-2/Paper.html
A pulp mill is not a "giant industrial operation". The process has been around for a long, long time. Most paper mills in the US had a pulp section inside the factory.
As I tried to point out, this might be an excellent opportunity for the country to rid themselves of 20th century technology.
GulfCoast66
(11,949 posts)I have. Both. My family on both sides worked in them for 60 years.
And you are correct the process has been around for a long, long time. Hell, I could go out in my yard, harvest pulp and make paper in my garage. A really small amount of really crappy paper that would not be suitable for any real use.
We are talking about enough paper to make toilet paper for millions of people. To make that much paper you will need train loads of pulp coming into a pulp and paper mill. The scale insist it must be a giant industrial operation. Just the machine equipment necessary to put into onto rolls or package it into folded packages would qualify as a factory.
I respect your enthusiasm and willingness to defend the indefensible to fit your ideology. But you are just flat out wrong about this.
And your final sentence really takes the case. If this is an opportunity for the country to rid itself of 20th century technology, then why are we even discussing toilet paper? Because that is a 20th century invention. Just pass out corn cobs to the proletariat. It was good enough for their grandparents. How dare them demand such luxuries and the industrial base necessary to produce it for millions of people.
And next time you eat corn on the cob. Dry out the cob and use it to wipe your ass. You will quickly gain a new appreciation for 20th century technology.
Have a nice evening.
seabeckind
(1,957 posts)Does that or your experience in any way change the factors in this case? (BTW, that's an arguiment fallacy -- The formal title of it isn't important but in effect it is: if you only knew what I know you'd never question my position)
There are 2 ways to satisfy the needs of scale. One involves a great big operation. The other involves many smaller operations.
Your corncob business is an argument to the absurd to defend the status quo because you can't envision an alternative.
It's the equivalent of the 19th century farmer who makes fun of a noisy machine that plows fields.
And yells "get a horse".
GulfCoast66
(11,949 posts)all using pre-20th century technology. Because I would have no problem raising the capital to build a modern TP infrastructure and selling better toilet paper to the people for less cost, meanwhile make a higher return. And I could hire the former low-tech workers and pay them a higher wage with better working conditions since my operation would be more efficient. And of course supporting a strong union among them(-:
And your farmer analogy totally fails. They were among the first to see the advantages of leaving horses behind. If for no other reason than they no longer had to devote 30% of their land to feeding the horses and could devote it to raising commodity crops. Plus, driving even an old tractor beats the hell out of walking behind a plow. Which I have done exactly once in my early teens. My grandfather still had a horse(mule in reality) pulled potato plow and had me use if for about 50 feet. I hated it as much as I loved driving his tractor.
All this talk about going back to earlier technology in an attempt to bring on the socialist paradise is a pipe dream. No one wants to work in a preindustrial paper factory just like no one wants to plow a field behind a horse all day long. And the irony is that those longing for these times never envision themselves as the one behind the horse!
What is happening in Venezuela is tragic. Had Chavez even tried to emulate Northern Europe with their highly regulated capitalism, he might have had a chance. But he went full Castro and the results are the same. And like Castro had the Soviet Union to support him for a while Chavez had high oil prices.
When left on their own devices both nations are basket cases.
seabeckind
(1,957 posts)You made the statement that a pulp mill is a giant industrial operation. In terms of a particular paper mill it is far from a giant operation. It's not particularly difficult and the process has been developed to the point where it can easily be implemented.
So to make your "giant" assertion reasonable you decide to build scale into the equation.
The technology being used to make paper today is far from modern. It is basically 20th century technology. It is taking a model and replicating it. Corporations don't do much in the way of true innovation.
But a new company? They aren't locked into the corporate box. That's how we got the very machine you are using to do these comments.
Your assertion that a modern TP factory would succeed is proven false by this very OP. The empirical evidence is right here for us to see. The K-C factory has closed. It failed.
Who in the world said anything about going to a previous method? Perhaps you misunderstood the premise. The current method is the status quo. It's pretty obvious that K-C won't make any quantum leaps in new methods and procedures in VZ.
That doesn't mean that the country doesn't have the potential to become a vanguard in a breakthru in new materials or methods.
As an example of a company that failed to adapt, look at Kodak corporation.
GulfCoast66
(11,949 posts)To watching Venezuela continue on their route to becoming a vanguard in a breakthru in new materials and methods. Perhaps even make some quantum leaps. Maybe a Great Leap Forward!!
Have a nice evening.
SheriffBob
(552 posts)
seabeckind
(1,957 posts)Tho this deals with law in the USA and is derived from english common law,
Property is generally deemed to have been abandoned if it is found in a place where the true owner likely intended to leave it, but is in such a condition that it is apparent that he or she has no intention of returning to claim it. Abandoned property generally becomes the property of whoever should find it and take possession of it first, although some states have enacted statutes under which certain kinds of abandoned property – usually cars, wrecked ships and wrecked aircraft – escheat, meaning that they become the property of the state.
https://en.wikipedia.org/wiki/Lost,_mislaid,_and_abandoned_property
Seized has such inflammatory connotations. Perhaps we in the USA should look to solving some of our factory closings by taking this approach. As we have seen, and the purpose is thrown at us all the time,
the reason for the closing is most often that the corporation doesn't make enough profit to satisfy investors. Maybe we need to remove one piece of the cost overhead.
Didn't President Obama give a speech at a window company that was turned into a worker cooperative?
guillaumeb
(42,641 posts)of predatory capitalism and showing how weak their arguments really are.
Profit before people is the essence of capitalism.
anigbrowl
(13,889 posts)Frankly the pro-VZ arguments here are impressive only for the degree of ignorance on display.
guillaumeb
(42,641 posts)defenders of the US Empire are remarkable for their avoidance of the fact that the US works to destabilize any government that will not accept the US Empire as the world leader.
An avoidance made possible by being ignorant of history. Google "Monroe Doctrine" or "Carter Doctrine" and read a bit about how the US Empire sees its role.
Marksman_91
(2,035 posts)guillaumeb
(42,641 posts)just as the election of Salvador Allende did for Chile.
Marksman_91
(2,035 posts)That doesn't mean that Chavismo was a success, though. On the contrary, it was an utter failure, and Venezuelans are suffering for it now. If you think the US had most to do with it, you're gravely mistaken
Response to guillaumeb (Reply #52)
mahatmakanejeeves This message was self-deleted by its author.
hack89
(39,171 posts)really?
Bradical79
(4,490 posts)The statement posted almost sounded a bit relieved. They save money with the government just taking it. They didn't have the raw materials and were in a country with a colapsing economy. They weren't going to be making money on that opperation any time soon.
Rex
(65,616 posts)Most people just ignore them and look for sincere posters to have discussions with. You OTOH keep nailing the fact free with facts!
Imagine! Winning an argument using facts!
hack89
(39,171 posts)Because they have no dollars.
Marksman_91
(2,035 posts)That oughta give you a better impression of why the country is going down the shitter.
Here's a hint: it has to do with the administration of someone whose last name starts with M and ends with Aduro
seabeckind
(1,957 posts)
treestar
(82,383 posts)They still own it all and can sell it off.
seabeckind
(1,957 posts)might be used. Another option is to make use of eminent domain.
In effect by closing a factory that makes a particular product and not using it, the factory itself becomes a blight on the area, its existence as it decays becomes a common nuisance (seen images from the closed factories in the US?),
and at the same time the company that owns the factory has denied its use for be betterment of the people who used to be employed at that factory.
They are taking their ball and going home and putting a fence around the field.
In my city there are many, many abandoned properties that are owned by banks and those banks are not maintaining the properties, not selling them, they are a blight.
This is not an isolated problem.
The attitude shouldn't be to kowtow to some corporation because we play by rules.
seabeckind
(1,957 posts)I am an amateur student of the factors leading to new innovations that force a profound change in the status quo.
I believe the modern, profit-oriented mega-corporations absolutely smother innovations. They make their profits by tweaking existing paradigms not by doing new stuff.
And it's getting worse all the time as those corporations become more voracious.
This situation in Venezuela may prove to be something that could totally revamp the way we handle paper products. How uch wasted energy and materials go into a Huggie that eventually ends up in a landfill?
This new factory in Venezuela may offer an alternative.
We have a pretty good chance that K-C would fight that if they're running the factory.
Enjoy.
hack89
(39,171 posts)because of gross government mismanagement and you are talking about new ways to make paper? Have you forgotten that the government can't feed the people? That their health care system has collapsed? You can't blame corporations on that.
seabeckind
(1,957 posts)One factory making a product.
And now you extrapolate that to a whole country's failed economic model.
Maybe if they get rid of the riffraff carpetbaggers things will improve. You're already pointing out how bad it is now.
I'm saying that the elimination of this K-C controlled factory and most likely the profit obsessed attitude might turn out to be a good thing.
Anecdotally, I had the most awesome 35mm camera. One night it was stolen. At the time I was devastated.
When I replaced it I went to a highend digital. And then when I saw the capabilities, I built a cottage industry around the conversion of all those fading photos people have around with no indexes and no easy retrieval.
Turned out to be a good thing.
hack89
(39,171 posts)And they are failing precisely because of an entire country's failed business model. When a country runs out of food and medicine there is no one else to blame but the government.
seabeckind
(1,957 posts)No use trying to change anything.
hack89
(39,171 posts)civil war or a military coup is where they are heading unless Maduro recognizes the will of the voters.
COLGATE4
(14,732 posts)complete and total lack of any knowledge of the causes of the disastrous economic situation in Venezuela coupled with so many totally incorrect and frankly laughable pronouncements regarding it. Don't quit your day job.
seabeckind
(1,957 posts)Nowhere did I say anything about the general economic situation in Venezuela, except for a passing reference to Chicago boys and carpetbaggers.
I was focused on one specific factory which a foreign company decided to close.
And I felt like Venezuela, as a nation, could determine the disposition of that factory as they chose.
And perhaps we in the USA might take a similar approach to all of our empty factories.
Cause the last time I was out and about, there was still quite a bit of products being purchased. No reason they can't be made here.
We keep hearing the jobs aren't coming back but it sure looks like there's a demand.
COLGATE4
(14,732 posts)seabeckind
(1,957 posts)Perhaps you might reread what I just wrote.
Or not.
Doesn't seem to matter.
Sunlei
(22,651 posts)If a Corp closes, take your factory with you or write it off as abandoned.
seabeckind
(1,957 posts)When I was much younger I lived near a paper mill. Very stinky but that's why my parents could afford the rent.
Anecdotally I learned much about anatomy by perusing the magazines that were bundled on pallets awaiting their trip into the pulp mill. That recycled material was an essential part of the process.
Tho I have no idea how many of these mills were in operation around the country at that time I can guess there were quite a few. Each doing a small part of the great paper machine.
As mergers and acquisitions became the rage, the economy of scale became the driving force... the quest for profits. Many of those small regional centers were abandoned.
At the same time the recycled paper had nowhere to go.
I saw a video a while back that showed a warehouse full of discarded paper. Rotting away.
Perhaps the recycling dilemma is being exacerbated by the monster factories. Add in the relocation of those factories to a foreign land and it gets even worse.
Just a thought.
(On a related note... does anyone think that the airbag problem would not be as bad if there were more airbag manufacturers? Takata supplies over half of the airbags on the road).
TheFarseer
(9,322 posts)Good, fuck you for outsourcing in the first place KC. But I don't know the whole story such as were these products being sold locally or sent to the US, which would kind of matter.
