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Bbc: Peugeot Job Loss Estimated At 9,200

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http://news.bbc.co.uk/1/hi/business/4919414.stm

No surprise as Peugeot pulls out of UK

By Jorn Madslien

BBC News business reporter

Peugeot says it could no longer justify producing the 206 in the UK
The decision to close Peugeot's factory in Ryton next year has dealt yet another blow to Britain's car industry.
But the resulting job losses - including
2,300 Peugeot workers and up to three times that in the West Midlands's supply industry
- had been widely expected.
Peugeot blamed "high production and logistical costs" for its decision.
The way the 206 model is set to live on in
Eastern European factories is in line with the car maker's strategy to shift production to countries where labour costs are lower than in Britain
and the rest of the European Union, Mr Nagley observes.
The 207 model is already being produced in Slovakia, for example.

It seems logical that Peugeot will move to where labour is cheaper. Why is labour cheaper in E Europe? Higher house prices mean people must be paid more to live--UK cost of living is simply too high to be competitive in the modern world.

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Why is labour cheaper in E Europe?

Wages are only part of the story, the real killer is regulation, it adds massively to costs, it requires additional staff and Man hours and it also forces business indemnity insurance premiums higher due to the claims culture.

The Unions and middle class liberal do - gooders have all but killed - off UK manufacturing.

Before anyone tells me regulation is a good thing and benefits worker moral, ponder this; Tomorrow you find yourself the owner of a manufacturing company. You are faced with a wall of regulation and the costs that accompany it. You ponder the workload and stress this will cause you. You fret over the high costs of regulation and note 2 key female staff members went on maternity leave promising to return but then at the last minute let you down (a few of my wives freinds did this btw), this ended up being very costly and stressful as you had no - one in place to replace them (given thier promised return).

You just want to do business, you dont want all these distractions.

Then you imagine vastly reduced costs and the regulatory burden removed at a stroke. You realise moving production abroad will be a hassle for a while but you can look forward to years of vastly lower costs and being ABLE TO GET ON WITH DOING BUSINESS RATHER THAN DISTRACTED BY RULES AND REGULATIONS.

You call your secretary and ask her to book the flight, ahhhhhhhh, peace at last.

Edited by dogbox

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It seems logical that Peugeot will move to where labour is cheaper. Why is labour cheaper in E Europe? Higher house prices mean people must be paid more to live--UK cost of living is simply too high to be competitive in the modern world.

Labour is cheaper in EE as they are generally less skilled, therefore wages are lower, therefore house price are lower (relative to UK wages)

Horse before cart comes to mind.

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Labour is cheaper in EE as they are generally less skilled, therefore wages are lower, therefore house price are lower (relative to UK wages)

Horse before cart comes to mind.

??????!!!!!

Nothing to do with the levels of bank lending then?

Nothing to do with regulation?

Nothing to do with high council rates paying for costly staff to live in a local area?

Nothing to do with trashed pensions, which are costing companies even more money due to a one-eyed interest rate policy.

Nope, the Eastern Europeans ar just less skilled and so can't spend as much money on housing.

You can have the most skilled workforce in the world, if it still doesn't pay with pro-rata productivity gains your economy is still just as screwed as if your populous were only fit to flip burgers. Worse, you train your population up and then only provide them with burger flipping jobs.

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All obvious stuff. What is left of UK manufacturing will continue to disappear abroad. Our economy will become progressively worse. Yet you lot are hoping for higher interest rates.

Not in your wildest dreams will you see interest rates higher than 5% in the next 10 years.

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??????!!!!!

Nothing to do with the levels of bank lending then?

Nothing to do with regulation?

Nothing to do with high council rates paying for costly staff to live in a local area?

Nothing to do with trashed pensions, which are costing companies even more money due to a one-eyed interest rate policy.

Nope, the Eastern Europeans ar just less skilled and so can't spend as much money on housing.

You can have the most skilled workforce in the world, if it still doesn't pay with pro-rata productivity gains your economy is still just as screwed as if your populous were only fit to flip burgers. Worse, you train your population up and then only provide them with burger flipping jobs.

Well, yes some of those reasons as well but mainly because earnings are lower in EE than UK. For example average earnings in Slovakia are only 15% of the UK average earnings. Do you really expect a house in Slovakia to cost the same as the UK? If they did then the average Slovakian would be spending about 4X what they earn on housing?!?!??

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I thought Ryton was 75% assembly with parts brought in from various European locations. So semi-skilled jobs rather than skilled. Plus high logistics costs. It's no surprise that the decision was made.

This sort of assembly will always lose to cheaper labour markets. Unfortunately semi-skilled work is not sufficiently value adding to compensate for our high cost of living.

I'm spending a fair bit of time in Prague at the moment. Huge numbers of lorries causing massive traffic jams as all the Eastern European production is trucked back west. Motorways are no fun when it rains!

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As well as the Ryton Plant in Coventry, there is a Peugeot sub assembly/powertrain plant in the Stoke area of Coventry. Its quite a reasonable size plant employing a large number of employees. This will be also efected i should imagine. No reporting of this plant in the National toilet rags is there. :(

Maybe they will carry on, i doubt it. This 2300 number is vastly underestimated by the Blair and Brown spinning machine.

Manufacturing in Coventry/Midlands is dead. This area of the country is the dumping ground, the only thing propping up the local economy is the low wage call centres, SME's paying very low wages, pound shops and two Universities which bring valuable income to the city.

Two up Two downs go for around 100k to 120k, rents yield less than 5% (450 to 500pcm max). This ripple effect will be felt elsewhere. I spent some time in the city a few years ago, its a gloomy place, prices in the city will be hit very hard, should base rates rise in line with expectations. These two up two downs were fetching around 36k to 43k in 1997, a big increase for pre world war one properties which require ongoing maitenance etc etc.

How many other cities in the UK will follow i do not know, but something must give, prices are too high, wages are too low, and real inflation can be felt increasing month after month by the man on the street.

He cuts back, spends less, only spends on essentials, this must be a common pattern across the country, very bleak.

Edited by Panda

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Labour is cheaper in EE as they are generally less skilled, therefore wages are lower, therefore house price are lower (relative to UK wages)

Yeah, because assembling cars these days is such skilled work. It must take a decade or more for the average Slovakian worker to figure out how to bolt a door on the right way up.

For example average earnings in Slovakia are only 15% of the UK average earnings. Do you really expect a house in Slovakia to cost the same as the UK?

So you seem to be agreeing that the high wages in the UK are needed because of high house prices, even while denying it.

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Yeah, because assembling cars these days is such skilled work. It must take a decade or more for the average Slovakian worker to figure out how to bolt a door on the right way up.

So you seem to be agreeing that the high wages in the UK are needed because of high house prices, even while denying it.

Yep, it's not a highly skilled job, so it goes to the cheapest place. My point, exactly

.

WE DO NOT EARN MORE JUST BECAUSE HOUSE PRICES ARE HIGH. We earn more because we are skilled (Well some of us), and therefore this makes houses high. Not the other way round. If Slovakia suddenly became highly skilled and and people earned an average of £300,000 do you think that their house prices would say the same price?

If you don't believe me, go to your boss and say "I live in Ken & Chelsea, and the average house price there is £750K. Therefore as prices are high where I live I want a pay rise!"

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So you seem to be agreeing that the high wages in the UK are needed because of high house prices, even while denying it.

How much have car assembly wages risen since 2000? No where near the house price inflation.

So unless Peugot workers have gone against trend and had huge increases over the last few years that argument is specious.

Wages are higher in UK because of many reasons but NOT high house prices. If they were directly linked house prices wouldn't seem so grossly inflated!

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We earn more because we are skilled (Well some of us), and therefore this makes houses high. Not the other way round.

so the rampant HPI of the last few years in places like barnsley or rotherham are related to the denizens of said towns attaining PhD's and/or high level finance jobs? :P

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WE DO NOT EARN MORE JUST BECAUSE HOUSE PRICES ARE HIGH. We earn more because we are skilled

No, we _have to earn more_ because our cost of living is vastly higher... and increasingly we earn nothing because our wages and rents are so out of whack relative to the rest of the world that companies can't justify operating here.

One way or another British wages will move to a rational level relative to the competition: and that's unlikely to be good news for people who want high house prices.

Edited by MarkG

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WE DO NOT EARN MORE JUST BECAUSE HOUSE PRICES ARE HIGH. We earn more because we are skilled (Well some of us), and therefore this makes houses high. Not the other way round.

So wages have trebled in the past 10 years? I'm obviously missing something!

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So wages have trebled in the past 10 years? I'm obviously missing something!

Yep, you are missing the point, that we are discussing why house prices in Slovakia aren't the same as the UK!

Has nothing to do with what our wages have done or Slovakian wages in the last ten years. Its because our wages are now higher than Slovakia that our houses are more expensive. (Not that our houses are more expensive , so our wages have to be higher as being argued by some people)

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Not that our houses are more expensive , so our wages have to be higher as being argued by some people

So, uh, why aren't the Peugeot workers offering to cut costs and save their jobs by working for minimum wage?

Hint: because no adult can live on minimum wage in the UK unless their mortage was paid off years ago, whereas the same amount of money would give you a reasonable standard of living in Slovakia.

Edited by MarkG

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Slovakian gfs dad is selling largeish house in slovakia with land for 150,000 ukp to a rich polish family. the avarage salary in slovakia is 200ukp a mounth.

a rather stunning 62.5 salary multiple, EE european countries have also seem massive HPI....

Edited by moosetea

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Japan and Korea had low wages and cheap property pre' thier entry into full industrialisation.

Slovakia et al as sure as eggs is eggs will have UK property prices within 15 years.

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So, uh, why aren't the Peugeot workers offering to cut costs and save their jobs by working for minimum wage?

Hint: because no adult can live on minimum wage in the UK unless their mortage was paid off years ago, whereas the same amount of money would give you a reasonable standard of living in Slovakia.

MarkG

I'm seriously starting to worry about you?

Your first sentence question asked

So, uh, why aren't the Peugeot workers offering to cut costs

and then you answered it in the same sentence

and save their jobs

What has min wage and buying a house got to do with anything? Should someone on Min wage be able to buy a house in the UK???

Someone on Min Wage is Slovakia (which I expect is FA if they even have one, probably not far above abegger) would IMHO be even poorer than someone in the UK on Min wage?

Or are you saying they earn the UK min Wage in Slovakia they would have a better standard of living. Well well done, the average Min Wage in the UK is the same as the average wage in Slovakia. So they would be Mr/MRs Average earner.

Perhaps if they go to East Timor and earn the average UK Salaries they will be rich as well, and I expect house prices are cheaper than the UK and even Slovakia.

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btw: mental note to self - never ever buy a peugeot.

granted, they might have done it for logistical/financial reasons, but i think the british public should now abandon peugeot brand products.

see how they like that.

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What has min wage and buying a house got to do with anything? Should someone on Min wage be able to buy a house in the UK???

Minimum wage is that lowest that it's legally possible to pay an employee in the UK, and, according to your figures, twice the average wage in Slovakia. If people don't need high wages to live in the UK, then the Peugeot workers could happily volunteer to work for the legal minimum.

But they don't. Why is that?

Ah, because the cost of living is so high that they're better off on the dole.

Do you get it now? Do you understand why wages are high in the UK? Can you figure out why no-one will work here for Slovakian wages, even when doing exactly the same job with exactly the same skills?

Or do you really think that British door-fitters are so much more skilled than Slovakian door-fitters that they're worth five times as much money?

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btw: mental note to self - never ever buy a peugeot.

granted, they might have done it for logistical/financial reasons, but i think the british public should now abandon peugeot brand products.

see how they like that.

Why stop at Peugeot? Let's not buy any French products at all.

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Minimum wage is that lowest that it's legally possible to pay an employee in the UK, and, according to your figures, twice the average wage in Slovakia. If people don't need high wages to live in the UK, then the Peugeot workers could happily volunteer to work for the legal minimum.

But they don't. Why is that?

Ah, because the cost of living is so high that they're better off on the dole.

Do you get it now? Do you understand why wages are high in the UK? Can you figure out why no-one will work here for Slovakian wages, even when doing exactly the same job with exactly the same skills?

Or do you really think that British door-fitters are so much more skilled than Slovakian door-fitters that they're worth five times as much money?

Mark

I have never said the the UK Door fitters are more skilled, I have said that is the reason these jobs have gone to the Eastern Europe is because the Skills are easily transferable

What I have said is that the UK workforce is on average more skilled than the Slovakian workforce (As shown by the non skilled jobs being shipped to cheaper places) or else they would be coming here

Therefore because we are more skilled the average person in the UK earns more, therefore average house prices are higher

Why do people not work for Slovakia wages here. Well because they can't afford to live here on them and our welfare state protects the weakest members. What would you do have then live on the street?

Therefore the main reason our house prices are higher than Slovakia (the point you keep challanging me on), is because our earning are higher on average, because we are more skilled.

Or do you think companies are running a charity in the UK and paying us huge wages compared to Slovakia when it has an equal skill base but can do the jobs cheaper.

You are mad, if you think that house prices determine wages rather than wages determine house prices.

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However, it appears that UK car production is currently at levels not far off those of the 1970s - regarded by many as the car industry's 'heyday'

Last year about 1.6 million cars were made here, not far short of record production levels reached during the industry's heyday in the 1970s, and pretty much all the remaining car factories in the UK are currently profitable, he points out.

Contrary to popular belief, Mr Robertson - who started out with Rover and has worked in the industry for 27 years - insists the UK has become a very good location for car makers.

Not only is there a large pool of skilled and flexible labour in the UK, but the infrastructure here is also very good with an efficient motorway network and good access to ports, he says.

http://news.bbc.co.uk/1/hi/business/4923610.stm

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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