News & Analysis
Comment
peter.clarke
Kaiser Silicon
There is an alternative. Create an ISO-9000 sort of standard for worker ...
Europe's NXP pay out misses the PE point
Peter Clarke
9/3/2010 1:09 PM EDT
I have to admit that I didn't know there was a Globalization Adjustment Fund in a piggy bank somewhere in Brussels. Well 512 workers formerly with NXP in Nijmegen are now set to benefit from it to the tune of about $4,500 each because they have been the victims of "globalization" in the semiconductor market.
At least that is the European Commission's justification for the pay out.
Interesting then that readers of EE Times seem to lay the blame at the door of the private equity consortium that paid Philips for an 80 percent stake in NXP and then loaded the newly-formed company with the billions of dollars of debt the consortium had incurred.
I have sympathy with the former NXP workers but don't agree with the European Commission's justification for putting up 1.8 million euros (about $2.3 million) of European tax payers' money to support the former NXP workers. The term globalization is anonymous, and while it may be a phenomenon it is not a real entity and should not be a trigger for pay outs. On the other hand U.S. private equity making a mess of things provides a real door to go to seek compensation. It is not that there was anything malicious about the screw up, it was just one of the many banking excesses that preceded the crisis of 2008.
Many people in the past and more in the future will lose employment due to "globalization" but will not get money from this fund, so I suppose we could say "good luck" to those from Nijmegen. But fundamentally the exodus of manufacturing from Europe is about the competition between policies in Europe and the East and free-market companies playing on that field.
The long-held concern has been that once manufacturing goes east it is only a matter of time before design follows. The historical record is not clear cut on this but it remains the prime argument of those that would encourage, protect and even subsidize domestic manufacturing.
The British let high tech manufacturing go in the 1980s and 1990s and are coming to regret the lack of such capability now. The word "re-industrialization" was being whispered by the outgoing Labour party government earlier this year. As Philips turns itself into a "life-style" company the Dutch are apparently going through the same cycle a decade or two later.
Germany may yet be an animal of a different stripe. It still has a lot of manufacturing in the automotive and industrial sectors that is does not want to lose. And so around Dresden it is encouraging companies to invest in manufacturing. It is not without mishap but is a different and a more positive use of tax-payers' money than pumping it into a fund to alleviate the problems of manufacturing redundancies.
|
|
|
|
|
Rich Krajewski
9/5/2010 2:41 PM EDT
Here are some long sentences, but I ran out of time to edit them down, so pretend they are part of a complicated computer program:
IF Europe and America want manufacturing to return, BUT they still want pollution controls and protections for workers, THEN they either have to convince the Far East to add pollution controls and protections for their own workers (not likely, as the lack of them is an economic competitive advantage for Asia), OR Europe and America will have to add tariffs to imported goods from Asia to protect the local manufacturing base from competition. Otherwise it will be like a soccer match where one team uses guns and the other wears targets.
The only other courses--it seems to me--are to remove pollution controls and protections for workers in Europe and America (wouldn't be surprised to see that happen), or start promoting the Amish lifestyle, where no high tech jobs are needed (and where no high tech sales are made, either). Not likely we'll see the latter, as then we'd be painting big signs on our backs that say, "Conquer Me, Please."
So, concerning the payoff to NXP workers, it's probably easier for government to just give $4500 per worker to a small handful of them (this way government makes a slightly better impression on workers in general, and maybe buys their compliance), then to face these harder, larger issues.
Sign in to Reply
Baolt
9/7/2010 12:17 PM EDT
EU is simply cleaning back result of its gappy laws with giving some €s to "Poor" ex-workers of NXP. From very begining EU legislation would need to block such sales agreements. If they are so concerned to help on EU work force in trouble, should start with workers of GE(opel), AMD etc. What makes NXP guys so special? Anyone idea?
Sign in to Reply
iniewski
9/13/2010 8:49 PM EDT
I feel I am getting globalized out ;-)...I could use some of these Globalization Adjustment Fund money! where do I apply? (tongue firmly in cheek)...but the serious question is: what happens once all manufacturing has moved out to Asia??? Kris
Sign in to Reply
Kaiser Silicon
9/14/2010 5:50 PM EDT
There is an alternative. Create an ISO-9000 sort of standard for worker protection and pollution controls, and make it plain to companies in China that if they don't comply they can't do business. It's a silly game to play, but as long as the Chinese artifically depress the value of the Yuan, it may be a necessary evil. And besides, it isn't a tariff, which is a no-no in free trade.
Sign in to Reply
peter.clarke
9/16/2010 8:54 AM EDT
@Kaiser Silicon
ISO-9000-CSR (corporate and social responsibility) might not be a tariff but it might be considered an "artificial barrier to trade" which is also a no-no.
A bit like a customs office requiring forms in triplicate and then taking 6 months to clear consumer electronics for entry into the country. No barrier to trade their except foreign goods are just a little bit behind the times when they get on the shelves. I will leave people to guess who operates that system....please send answers to this thread.
But the IS0-9000-CSR idea is interesting. Tell me more.
Sign in to Reply