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Posted on 06/16/2002 7:16:25 PM PDT by DeaconBenjamin
The European engineering sector is likely to shed 150,000 jobs this year as a result of a continuing slowdown in demand, and as companies shift manufacturing to lower-cost countries, according to industry projections.
The forecasts by Orgalime, a Brussels-based body that represents 100,000 engineering companies in 21 countries, underlines fears that the weak world economy will cause problems for business for some time.
According to Adrian Harris, Orgalime's director- general, the industry has been particularly affected by the "brutal slowdown" in telecommunications, which is having a big knock-on effect among companies producing mobile phones and switching equipment.
Engineering employs 7.6m people across Europe, with total sales adding up to more than E1,000bn ($945bn) a year. The sector is one of the best bellwethers of the overall performance of industry.
Orgalime's economists believe output by the sector will decline 1 per cent this year, after a 0.5 per cent fall last year. There will be a small bounce back next year.
While many European engineering companies have been hit by the slowdown in the US, a big export destination, the competitive pressures has led many to redouble efforts to shift production out of high-cost countries in the western part of the continent.
Mr Harris said beneficiaries of this trend, in terms of employment, were countries such as Poland, the Czech Republic and Hungary.
Also there was evidence that the shifts eastwards were becoming more pronounced. "We are starting to pick up anecdotes of companies based, for instance, in Slovenia moving production to Romania because costs are lower," Mr Harris said.
Countries in North Africa also appear to be increasing engineering employment, as a result of relocations. For instance, companies in Spain were finding they could set up plants that were more competitive in countries such as Morocco, Mr Harris said.
The trend towards companies moving their plants out of the "core" European countries shows up in Orgalime's forecasts for investment by the industry in plant and buildings.
Spending by the engineering industry on these areas is set to decline 1.5 per cent this year, after a 2.7 per cent fall in 2001.
Finland this year appears to be leading the way in terms of an investment drop, with a projected decline of 11 per cent. Some of this is linked to a downturn in the mobile telecoms sector and the problems facing Nokia, the large Finnish mobile phone company. France is forecast this year to see an investment decline of 5 per cent.
Falls in investment are also likely in 2002 in Germany, Sweden and Britain while Austria, Italy and Belgium are considered likely to buck the trend and show an upturn in spending.
Join the club Europe, the U.S. has lost well over a million engineering jobs and we still import foreign workers and ship work outside our borders. At least this article attributes the loss to cost cutting, not the phony shortage our political class and their corporate sponsors attempt to foist on us.
It's a race to see who can achieve Third World status first: the European Union or the U.S.!
That's a shame. Back in the 80s Bell bought a few switches from Siemen's. From what I heard the only trouble they had was they were so low maintenance the technicians assigned to them would forget how to work on them due to the infrequent need to. Thos Germans can do some mean engineering.
Now Canada on the other hand.
Don't worry; we have guns.
And an abundance of Nukes.
Why guns, of course. Everyone knows that...
They're just realizing this now? Take a look at the stock price of Lucent, it seems the investors have known for quite some time.
I am concerned whether this is just a delayed reponse to America's slowdown, or if it is forshadowing even deeper cuts into the American economy. But I am happy to note that our economic output was up over 5% in the first quarter of the year.
A smart business man would have fired the repair technicians and contracted the Siemens repair guys to do the repair work. It would be cheaper than keeping your own guys idle. (Picture the Maytag repairman.)
I remember reading a report that mentioned that. Low tech manufacturing will continue to leave the country as companies seek lower labor costs. We will lose jobs making shoes and cardboard boxes. High tech and high quality manufacturing will remain in the US over the long run. Better educated, higher skilled Americans are more productive and do better work than their counterparts overseas. Even when higher labor costs are factored in, Americans are better bet economically. Some companies will move jobs overseas and will be driven out of business by those who remain here.
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