Anti-Globalization Will "Eat Our Lunch"

Discussion in 'Economics' started by ShoeshineBoy, Jun 9, 2008.

  1. Then why are our exporters doing GREAT?!? I would agree with you if our exports were dwindling. But they're not. Earnings are up on virtually every SnP company overseas' sales. Caterpillar, Coke, Pepsi, MacDonalds - the list goes on and on.

    Btw, Starbucks is an interesting example. It's US operations are dismal and so they're shutting down stores stateside. But they're actually expanding overseas in order to hopefully save their a$$. Their CEO recently said, "My worst decision was not investing earlier in international. The international markets don't have as quick returns as the U.S. But if I'd known the U.S. economy was going to crash, I would have invested earlier".

    http://starbucksgossip.typepad.com/_/2008/06/former-starbuck.html

    So I just don't know where some of you guys are getting the idea that we can't compete overseas. America is still an excellent country with excellent products and we are doing fantastic in foreign markets.

    What will really kill our economy is silly government interventions and interference!
     
    #31     Jul 1, 2008
  2. Details:

    "Schultz told Germany's Frankfurter Allgemeine Zeitung (FAZ) that the company plans to license 150 new coffee shop locations in Germany, Britain and France in the next three years, with 120 of those in Germany. "The international business is cushioning the weakness in America at the moment," Schultz said. Starbucks is aiming to raise its sales abroad by 20 percent per year over the next three years while annual growth of only six percent is expected in the United States, the FAZ said."

    http://www.chinapost.com.tw/business/europe/2008/06/17/161409/Starbucks-plans.htm
     
    #32     Jul 1, 2008
  3. Detroit is another beautiful example. Supposedly we have been crushed by Asia, right? Wrong! Ford and GM are doing very well overseas and that fact has resurrected their previously lifeless corpses. (See below.) Sorry but all the pessimism about this great country is simply unfounded. The only way we'll lose the war is if the bozos in Washington install a bunch of protectionist measures or our central banks turn us into a "Japan".

    http://www.kiplinger.com/businessresource/forecast/archive/global_sales_can_help_detroit_080604.html

    For ailing auto titans Ford and General Motors (GM), seeds of a rebirth lie in foreign soil. Overseas operations are already quite profitable and will generate real economic payoffs in the U.S.

    From a relatively small base, Ford and GM can double sales in China and India by 2015, upping global sales by as much as 10%. GM already outsells Toyota in 16 of the world's 20 hottest markets. Look for GM and Ford to make their biggest overseas sales gains in the fast-growing Asian auto markets, boosting 2007 sales about 75% to 1.4 million vehicles in 2015. U.S.-engineered vehicles, especially sedans, carry cachet among the emerging middle class in China, India, Russia, Brazil and elsewhere. Buicks, Cadillacs and Chevys are very popular.

    Cost cutting moves here are helping U.S. automakers boost exports. By 2010, savings written into union contracts that include worker buyouts, lower pay rates for new hires, shifts in health care liabilities to unions and plant closings will trim production costs for Ford by $3000 per car. GM's savings: $5000. Using standardized parts and bodies worldwide will slice up to 50% from development costs.

    "Achieving cost reductions of that magnitude can be a game changer, since it would permit GM, for example, to produce a vehicle at lower cost than Toyota, vastly improving GM's profitability," says David Cole, chairman of the Center for Automotive Research, an automotive consulting firm.

    Toyota won't stand by idly, but its cost cutting initiatives are limited by growing health care legacy costs -- expenses that GM, Ford and Chrysler will jettison for good in 2010.

    Billions saved will help keep U.S. brands competitive in world markets. And as long as the dollar stays weak, American cars are less pricey abroad. The result of cost reductions and a weak buck create financial breathing room for struggling automakers, allowing them to focus on growth strategies, not just domestic survival.

    George Magliano, director of automotive research at Global Insight, a consulting firm, says: "Ford's seriously tackling new product development, such as a new Ford Edge, Flex and Lincoln MKS by around year's end and a new F-series pickup and Explorer in a few years."

    Between year's end and 2010, GM will roll out the revamped Malibu, Cadillac CTS and a bevy of crossovers, such as the Chevy Traverse and a new GMC Acadia truck.

    Of course, the carmakers will need luck, too. They can't afford economic or political turmoil to derail growth in promising markets. Neither can they withstand a worsening of U.S. economic woes.

    Detroit is confronting two very challenging years in its biggest market. Sales could fall 15% from a year ago in the U.S. Blame high gas prices and hard-to-get credit. Plus anxious consumers aren't in the mood to buy. The Detroit 3's share of new sales may dip below 50% this year, a first. Chrysler, in the worst shape of the three, may end up on the auction block.

    But if things break their way, the overseas gambit is the carmakers' route back to prosperity. Earnings abroad will help automakers create jobs in the U.S., mostly for engineers, marketers, strategists, designers and others of that ilk. And foreign sales will help preserve production jobs in Ford and GM factories and at plants that make some parts for cars assembled abroad.

    Even more important, global profits create domestic opportunity. A steady revenue stream will give Ford and GM the flexibility and funds they need to revive sales in the U.S., allowing them to continue improving the design and overall quality of their cars and trucks.
     
    #33     Jul 1, 2008
  4. Cesko

    Cesko


    The $USD is weak because:

    1. We overconsume... on credit... we borrow from everybody with virtually no chance of ever paying back (at least not "in kind").

    2. Our labor expects to make $18+ per hour, while workers in Chindia make <$1 per hour. We can't be net exporters to them due to labor cost differential.


    On the other hand, Euro is strong because European labor is so cheap.
     
    #34     Jul 1, 2008


  5. It's more expensive than US labor, where do you get your info?
     
    #35     Jul 1, 2008
  6. Seems that you are trying to convince yourself more than anyone else about this "Globalization Great for All" myth. Maybe you should disclose your bias, like your relatives & friends in India which depend on the offshored US jobs.

    When US really crumbles, you will see the true effects of globalism. What will your countrymen do when corporate downsizing hits India? What about when multinationals start moving their operations from India? Can't go back to the old way of self substinence.
     
    #36     Jul 1, 2008
  7. You mean East European?
     
    #37     Jul 1, 2008
  8. gnome

    gnome

    I believe the Euro is strong mostly because "it isn't the dollar".
     
    #38     Jul 2, 2008
  9. gnome

    gnome

    Seems to me you're getting only about half the picture.
     
    #39     Jul 2, 2008
  10. Kanzei

    Kanzei

    I wish we could be "HURT" by protectionism....

    you know, the way we were from 1789 until 1970 when we had an average tariff of 40%+.... you know how much it "HURT" us then... we only became the most powerful and prosperous nation in world history.

    and I really wish we could be "HURT" by protectionism the way China is right now... you know, with 12% GDP growth and capital investment that is off the charts.

    Yeah... that's the type of "PAIN" we need.

    sheesh.
     
    #40     Jul 2, 2008