Rexnord - Who is the real life Mr. Mowen?

Posted by  $  jbrenner 2 years, 3 months ago to Economics
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Rexnord is a company in Indianapolis that makes ball bearings. Wasn't that what Mr. Mowen's company made? Or was it switches?

I guess that makes Trump ... Mr. Thompson?

So much for draining the swamp. Trump is just going for the crony crapitalism in a different way than the Demoncrats have.
SOURCE URL: http://www.newsmax.com/Newsfront/donald-trump-slams-rexnord-move/2016/12/02/id/761954/


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  • Posted by coaldigger 2 years, 3 months ago
    Companies do not move production facilities capriciously. Abandoning a site raises many issues and costs. Building a new facility is costly, startup is costly, training new personnel is costly. Impact on distribution, communications and vendor relationships is disruptive resulting in quality control and other issues. There has to be a huge cost impact to take the risks of investing in a foreign country and labor is unlikely the only issue. What % of the cost of a ball bearing is represented by labor? This industry is so mature, I would expect a high degree of automation and that the throughput to be so high that labor is far from the primary cost factor. If their factory is obsolete and they are building a modern, highly automated plant in Mexico their advantage from a labor differential will be small and offset by other factors related to a foreign operation. I suspect regulations, taxes and restrictions due to the steel workers union are the primary causes and Rexnord doesn't want to say.

    I think that the US has been so hostile to all manufactures that they have been driving them out as fast as they could since the end of WW II. It has become so "normal" that it goes unnoticed and when it comes up, people just say it is due to hourly rates and "you wouldn't want to work for that would you" which ends the argument. I don't buy it.
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    • Posted by  $  Temlakos 2 years, 3 months ago
      I would guess that Mr. Trump is trying very hard to make sure the United States does not lose its entire manufacturing base before he has a chance to change the conditions driving the exodus.
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  • Posted by  $  CBJ 2 years, 3 months ago
    Mr. Thompson in Atlas Shrugged would not have advocated cutting the corporate income tax rate by more than half, or massively rolling back regulations.

    Whatever his attitude towards free trade (which has more in common with mercantilism than with crony capitalism), Trump is not Mr. Thompson.
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    • Posted by  $  2 years, 3 months ago
      Trump is not Mr. Thompson, but he is doing crony crapitalism. I exaggerated some to make a point.
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      • Posted by  $  Olduglycarl 2 years, 3 months ago
        You know, today, as I was listening to the 4 part interview of David; ADAPT2030, (posted this morn in new stuff) I had an insight...Maybe, given all the things going on in the world and our future climate issues, (solar minimum)...just maybe trumpet is exactly the inbetween step we need to survive.
        Check out the vids...Climate cycles and cycles of civilizations... and tell me if you get the same insight.
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  • Posted by IndianaGary 2 years, 3 months ago
    I'm not ready to accuse Trump of crony capitalism just yet. The Carrier thing was mostly symbolic and great theater. It was red meat for his followers and a great way to show that he means business. I'm a bit more troubled with his tariff rhetoric but let's wait and see how things play out. A lot of Trump's goals, such as relieving the tax burden on producers and getting rid of job-killing regulations are laudable and moral. Let's give him a few months in office. I'm less interested in what a person says and more interested in what he does. I can certainly see why Rexnord would leave; the unions in this country have done every thing they can to make it impossible for a company to make a profit. On top of confiscatory government intervention it's a wonder anyone has a job.
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  • Posted by chad 2 years, 3 months ago
    When you have unions or government telling businesses what to do and where they can build their manufacturing plants you can bet that they will move them. Financial reality sets in at some point. If the job is not worth $25 an hour paying that much will either push you out of the market or displace your workers someplace else. The difference is not just between $25 an hour & $3 an hour. Transportation back to your market is costly and paying border fees adds to your costs. If your true costs were all added in you might find that producing overseas or across the border differs by only $5. Another problem is the ACA which now adds an additional $20,000 in costs per employee to insure his family or turn him into a part time employee (which are always more transient) and hire more workers expecting they will absorb the $20,000 healthcare bill on a smaller salary. This is only part of the government costs of operation here. Add in OSHA (the business can be fined for filling out the form incorrectly let alone any imagined safety issues), EPA & a number of other bureaucracies just waiting to justify their existence with fines. Mr. Trump is proving to be a socialist in that he is threatening fines and the use of force to stop the movement of manufacturing instead of eliminating the problem creating the exodus.
    When I had a contracting business I figured how much I could charge my customer for my hourly labor, then I subtracted the matching SS I had to pay, the unemployment tax (then the unemployment I might have to pay because the tax didn't pay it) and all other government costs before I could tell the employee what he would make. If I charged $50 an hour I might pay the worker $20 an hour. He had to earn the money for the costs I was burdened with but he did not get paid any of it.
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  • Posted by andrewtroy 2 years, 3 months ago
    No, Mr. Trump is not Mr. Thompson. Remember that Mr. Thompson signed into law Directive 10-289, which froze and nationalized the economy. That does NOT seem to be Mr. Trump's objective. If the objective is truly to "make America great again", then it makes sense to incentivize manufacturing companies to manufacture in America through fair and free trade where value can truly be traded for value.

    This satisfies the purpose of a government, which is to protect the individual's rights, by strengthening our ability to use force if necessary and by enhancing our freedom to create and innovate.

    Job creation and wealth accumulation are not the objective, but the by-product of a government and a people who are free to trade through importation, exportation, and creation.
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  • Posted by Herb7734 2 years, 3 months ago
    Let's see:
    Hundreds of regulations. Highest taxes in the world. A hostile government (unless you donate a lot). Gee, I just can't understand why they want to leave.
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