“The whole system was designed to produce quality products at the most reasonable cost possible.
So you don’t go and add a lot of extra cost to go handle a once-in-a-100 year situation.”
So says Steve Meyer, an economist, talking about what to do about three meat packing companies dominating the North American industry.
All are trying to lower costs as much as they can.
That’s what consumers want. That’s what restaurants want. That’s what food retailers want.
We’ve said before, if these companies could figure ways to have their plants in China or India, they would. That’s what so many other companies have done, from those who make nuts and bolts, to medicines to T-shirts and sneakers to TVs and computers. Now, the proverbial toasters have come home to roost.
Years ago, an Alberta premier we believe it was, commented on why there are so few manufacturers in his home province. Many reasons. How many are “good” reasons is a fair question. Among them, a banking and investment system that favours Ontario and Quebec manufacturing companies.
An oil industry that, in good times, pays both investors and workers wages nobody – not even government or nuclear – can compete with.
Now, entrepreneurs have to compete with ever growing public sector wages and benefits. Plus, there is more opportunity in servicing governments than in setting up a manufacturing plant.
Clusters, those businesses mostly involved in the same industry, often supplying bigger, similar companies up the food chain, are hard to form. In Alberta, it’s easy to get involved in a cluster serving the oilpatch, or forestry. Not so easy servicing the auto industry.
That last item is interesting. The auto industry is based in Ontario. Big companies like Ford and GM are mostly assemblers, not manufacturers. Where are their clusters? Right beside them in Ontario, Mexico, or China. Leather seats, or real wood finishing it seems, cannot be made in Alberta.
That same Alberta premier said, with a wise face and a serious tone, “There will never be an auto manufacturing business in Alberta.”
Of course, he didn’t have a serious investor like Elon Musk building Teslas in California. Or Malcom Bricklin building Bricklins in New Brunswick.
People have to be ready, and willing, to throw down their money. Like the folks across Alberta who bought the Edmonton Oilers hockey team years ago. Alberta desperately needs more people like that.
Recently, we had American president Barack Obama. Same wise face. Same serious voice. He said to a crowd of people, “Look around you. Factories are closed and closing. They are going overseas.
Those jobs are never coming back.” How wrong both leaders continue to be.
These days, current President Donald Trump continues breaking whatever “rules” big business was operating under. He is bringing jobs back from overseas. More will return, as we see the failures of “just in time” supply lines and “offshoring,” exposed by the Wuhan virus.