French president says Peugeot layoffs are unacceptable

[Kralizec]

I'd like to agree with Panzer, but pragmatically speaking, this is apparently how the French do things and how companies expect things to be done. A couple of years ago Sarkozy supported Renault (I think) with loans under the condition that any lay-offs would occur in other countries, the Czech Republic in particular. That particular condition was, of course, not written on paper so there was some back-and-forth between France and the EU wether this amounted to protectionism. Not sure what happened afterwards though.

[Kralizec]

Workers' Rights, Environmental Protection, Anti-Monopoly measures, and all that good stuff are exactly what I was talking about. But, when you have a company that only exists because the taxpayers (French ones, in this case) have kept it afloat, it makes sense to be outraged when they turn around and fire thousands of taxpayers because the people at the top don't know how to innovate.

I somewhat agree. On a side note, in the Neth's there was some ruckus when banks (ING group, in particular) received bailout money yet continued to pay bonuses to their top management. The fact that some of the people who approved of those bonuses were former Labour politicians didn't help.

However, the financial support that these industries received were due to exceptionally bad circumstances that would have caused otherwise viable companies to collapse. The banks I talked of and Peugot are certainly viable in the long run. If it weren't for the crisis, Peugeot still might have considered to move jobs to cheaper countries because French workers are simply too expensive. It's easy to be indignant about such moves; but it would be better to implement policies and tax regimes that are beneficial and attractive to such companies.

I'm generally sceptical anyway when it comes to France and economic issues vs workers' rights - largely because of Spanish strawberries.

[Papewaio]

If you want to look to apartment housing solutions look at Singapore. After all they are essentially a country of apartment blocks. Very high ownership by owner occupier there.

[Crazed Rabbit]

Workers' Rights, Environmental Protection, Anti-Monopoly measures, and all that good stuff are exactly what I was talking about. But, when you have a company that only exists because the taxpayers (French ones, in this case) have kept it afloat, it makes sense to be outraged when they turn around and fire thousands of taxpayers because the people at the top don't know how to innovate.

Well then the taxpayers shouldn't keep poorly performing companies afloat. But they shouldn't demand nobody gets fired if that's what the company needs to do in order to compete. What if Peugeot's future as a company lies in being a smaller company?

This statement has so little thought put into it that I lost the will to comment on your post.

Which isn't all that bad, since the rest of your post seems to argue against points I have never made...

Meh, I don't worry about someone who doesn't understand economics not talking about economics.

CR

[HoreTore]

Meh, I don't worry about someone who doesn't understand economics not talking about economics.

CR

This is hilarious, coming from someone who believes the financial crisis was caused by too much regulation.

[Fragony]

This is hilarious, coming from someone who believes the financial crisis was caused by too much regulation.

It is, people tend to forget that banks weren't ALLOWED to refuse risky mortages because of the community reinvestment act. All good fun as long as the prices keep rising, but, well.... So yes regulation caused a big part of the crisis.

[HoreTore]

It is, people tend to forget that banks weren't ALLOWED to refuse risky mortages because of the community reinvestment act. All good fun as long as the prices keep rising, but, well.... So yes regulation caused a big part of the crisis.

Nobody told them to repackage them and sell them while pretending the packages were risk-free. The risky mortgages was what caused the bubble to burst, it was not what caused the bubble in the first place. And every bubble will burst eventually.

[Fragony]

Nobody told them to repackage them and sell them while pretending the packages were risk-free. The risky mortgages was what caused the bubble to burst, it was not what caused the bubble in the first place. And every bubble will burst eventually.

If it wasn't for the community reinvestment act people inproblematic area's would have been denied these mortages. That is no exact science but odd as it may sound, banks don't like giving loans to people who can't pay them back. Now the grapes are sour and these houses can't be sold, massive losses for the banks, because of politicians intervening in the market.

[Kralizec]

banks don't like giving loans to people who can't pay them back.

Banks don't care if their clients are solent as long as the collateral keeps rising in value. They also don't care if they can find ways to shuffle the risk of non-payment to other parties.

Why some people think that deregulation will invariably give better results is beyond me. Does anybody here seriously think that in the absence of a state, laws and financial oversight we'd have stock exchanges, or even universally accepted currencies?

Actually, I agree that politicians are largely to blame - but for the reason that they pushed deregulation as some sort of panacea. That bankers and other businessmen will cynically exploit the resulting gaps and loops is to be expected and being morally indignant when they do so is pointless. It's the governments job to provide the framework that discourages housing bubbles, ponzi schemes and other unsustainable practices.

[drone]

According to my limited quick research, I own 1.8% of PSA Peugeot Citroen. GM owns 7% and is the second largest shareholder after the Peugeot family. US taxpayers own 25% of GM through the bailout.

So, um, freedom fries and cheese eating socialist surrender monkeys?

[rory_20_uk]

Nobody told them to repackage them and sell them while pretending the packages were risk-free. The risky mortgages was what caused the bubble to burst, it was not what caused the bubble in the first place. And every bubble will burst eventually.

Repackaging the debt was not of itself the problem, it was the credit rating it was given that was the problem. Was it the banks or the credit agencies that awarded them the AAA ratings?

[gaelic cowboy]

Nobody told them to repackage them and sell them while pretending the packages were risk-free. The risky mortgages was what caused the bubble to burst, it was not what caused the bubble in the first place. And every bubble will burst eventually.

Indeed the bursting of any bubble merely reveals the extent of wealth that has already been destroyed through overinvestment, overcapicity or overconsumption. The bubble period is when the wealth is destroyed as it's just masked so long as said bubble inflates some more.

Basically there was a banking model based on easily available interbank credit which suffered a heart attack when the flow stops.

Repackaging the debt was not of itself the problem, it was the credit rating it was given that was the problem. Was it the banks or the credit agencies that awarded them the AAA ratings?

The credit rating agencies gave them the ratings because it was all wound up with potential extra business that they were touting for.

The credit rating agencies were therefore shall we say incentivised to give a good rating or they might not get business again.

But the banks had people selling loans regardless of the fundamentals because there compensation depended on new business.

This means even if a rating agencies had been more conservative they still would have been unable even to stand over there ratings.

[Sir Moody]

DING DING DING! Spot on.

It's obvious that property needs to be less profitable, while production needs to be more profitable. I do not claim to have a miracle recipe on how to accomplish that, of course. I do know I'm very skeptical of solutions which smells of ideological blindness though, like solutions that focus entirely on tax raises or entirely on tax cuts.

unfortunately this isn't possible for a completely different reason - the Foreign market

the reason manufacturing is having such a hard time becoming profitable in the Modern Western market is Government regulation.

There is cap in the number of man hours someone can work, a minimum wage, restrictions on how you hire and fire workers etc etc etc

this all pushes the cost up

now if this were true everywhere we wouldn't be in trouble, the problem is it isn't

The company I work for employs 2 printers - a British printer and a Chinese printer.

The British company is used to prototype new boxes and produce "emergency" orders - the cost of producing and delivery one box to us is around £1/box

The Chinese company is for mass production before the start of a new retail year - the cost of producing AND delivering is around £0.1/box

The cost of production and shipping is so much cheaper it makes perfect business sense to use the Chinese company for everything except short term orders (things that will need to be in a store within weeks not 2 or 3 months)

Where do these companies differ? well as far as technology is concerned they don't - they use the same machines and the same software - the difference is the labour laws

The Chinese workers work longer and for less which cuts the cost and increases production.

In order to allow the UK printer to produce the same volumes at similar costs we would need to cut back our labour laws - which as far as the Government is concerned (and if it were even allowed with EU laws) is political suicide - the people the current laws protect wouldn't look kindly on the Government allowing their employers to exploit them and they have an Organised voice in the form of a Union to let the Government know they aren't happy - its the biggest flaw in Democracy, they cant fix the problem without severely hurting their chances of re-election - the best they can do is "tinker" with the tax system and hope there's a magic setting which stops companies looking at cheap labour abroad for manufacturing

of course the biggest flaw is also its greatest strength - the same process (hopefully) stops Governments from abusing its people - fundementally its not soemthign we would actually want to fix which again is a lose - lose situation for us...

is there a solution?

damned if I know...

[Greyblades]

is there a solution?

damned if I know...

Yup, If all the third world countries' workforce were allowed to unionize to the extent of the west that would solve it. Of course making that happen is probably impossible.

[Crazed Rabbit]

This is hilarious, coming from someone who believes the financial crisis was caused by too much regulation.

Please show where I said that.

CR

[HoreTore]

Please show where I said that.

CR

Like I'm going to plow through two-three year old threads....

Anyway CR, are you of the opinion that government regulation played less of a part in causing the financial crisis than government deregulation?

[Fragony]

Like I'm going to plow through two-three year old threads....

Wasn't that the thread where you claimed that the holocaust is a zionist myth

[HoreTore]

Wasn't that the thread where you claimed that the holocaust is a zionist myth

I stand by my words.

The holocaust is a lie invented after the Jews destroyed the most brilliant, peace-loving and fair state the world has ever seen to give legitimacy to their crimes.

You're just brainwashed if you believe otherwise.