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Europe set to shed 150,000 engineering jobs
Financial Times ^ | June 16 2002 21:51 | By Peter Marsh

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.


TOPICS: Business/Economy; Foreign Affairs
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To: jadimov
We have great net connectivity in the Pocatello area. Lots of cheap real estate too. Idaho State University in on the south end of town. All the ingredients are here to create a clean, high tech software/academic style of business. Instead, the locals were talking about frittering away funds that were intended to attract quality business to the area on building an ice skating rink in a run down part of downtown. There is inadequate parking for such a facility and no hope of making it a financial viable, self-sustaining entity. It would be a millstone around the necks of local property owners in the form of higher taxes.

The cost of living in Pocatello is such that a $70K annual income is as good or better than a $108K income in San Diego, CA. Lots of houses with 2000 to 5000 sq ft for very reasonable prices as a consequence of local businesses shutting down.

41 posted on 06/16/2002 11:52:44 PM PDT by Myrddin
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To: College Repub;RLK
...engineering is dead in America...

Many entrepreneurial start-ups are scrambling to move
overseas to lower-tax and lower-regulation (lower-BS) jurisdictions.
(It ain't just Stanley Tools, folks...)

I have reason to know. It's simply a matter of survival
in the current political-economic context.

42 posted on 06/17/2002 1:11:53 AM PDT by XLurk
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To: jadimov
Well the technician job title lso required they program the switch and other various tasks in the central office. It's just they never had to perform that aspect of the job that often.
43 posted on 06/17/2002 4:49:50 AM PDT by Bogey78O
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To: Mariner
Maybe they got thier act together since the 80s but the DMS-10 switch was a bloated, slow, and underpowered switch. You have to build every connection manually, nothing is performed automatically, and it takes ages to be able to access it. In my area the DMS-10 been nothing but trouble. We only have 6 in Louisiana which I'm thankful for.
44 posted on 06/17/2002 4:54:06 AM PDT by Bogey78O
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To: XLurk
As of about five or six years ago an engineer in China was paid about $1,200 a year. The Chinese university system now has about 30,000 Oh. D. engineering faculty members educated at Caltec, MIT or any of the other top schools in the world. These people are, in turn, reprocuding themselves at the rate of tens of thousands a year. That's the place to go if you want something done cheap. As an engineer here, I can't compete with that. My auto insurance and gasoline to get to work are more than that.
45 posted on 06/17/2002 8:51:01 AM PDT by RLK
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To: RLK
Could you compete if your company and therefore your job was in an area like Pocatello, Idaho? It has a state college. It's starting to collect good businesses and it has a low cost of living.

The current wave of competition may force American companies into a diaspora away from the expensive cities and urban/suburban areas. American companies changed to fight the Japanese economic threat of the 70s, 80s, and 90s. That led to quality initiatives throughout the country. Many companies died. Many more were born. All of the survivors are stronger. Perhaps the new challenge will strengthen America too by spreading technology and jobs into the rural regions.

46 posted on 06/17/2002 9:13:41 AM PDT by jadimov
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To: RLK
That should read: The Chinese university system now has about 30,000 Ph. D. engineering faculty members educated at Caltec, MIT or any of the other top schools in the world.
47 posted on 06/17/2002 9:43:51 AM PDT by RLK
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To: jadimov
Could you compete if your company and therefore your job was in an area like Pocatello, Idaho?

-----------------------

Look at the figures. The answer is no. An area such as Pocatello would be personally preferable than other places in the U. S. But I still can't complete with a good engineer making $1,200 a year, or even $1,2,00 a month. What's being done is to ship the work out, pockets the increased profits and put me out of the loop.

48 posted on 06/17/2002 9:49:22 AM PDT by RLK
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To: dr_lew
They had big plans for this industry as an employer, but they don't need anybody to make the things anymore - they're trinkets now. ... and this is in Malyasia!

I was involved with HDD a few years back & traveled on occasion to Malaysia. That country was heavily depending upon that industry economically...

49 posted on 06/17/2002 10:00:20 AM PDT by skeeter
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