Australian Job Losses

[tech/a]

DocK

What % of Market share do you think you have?

Those who DO buy off you---Why?

Do you trade out of the Gold coast as well?--How far?

Your diversified areas
Are they growing faster than the core business.

Are there sectors that can be dropped.

Look at your business from the 80/20 perspective.

Which 20% is giving you the 80% return.

 

[sydboy007]

I hear ya. We're not cabinetmakers, but are closely alligned to that industry. Luckily we're a bit more diversified.

So far as rent is concerned, we're fortunate in that our SMSF purchased the factory from which we operate several years ago - so our business pays rent to our SMSF.

I think there are a lot of us in our last decade or so of running our businesses that echo your sentiment: "I've been in manufacturing for too long". As we retire, or give up and close our doors, I think a lot will struggle to find buyers for businesses that are becoming obsolete. Perhaps if China is somehow forced/enticed to allow free floating of their currency matters might improve - but I'm not holding my breath. The nature of the workforce in Australia will change over time, it seems inevitable. When ever anyone asks if our kids are likely to take over the "family business" we're quick to say "hell, no!".

China is already getting "expensive" when compared to Indonesia or Vietnam.

Economies change over the years. I think most people on this web site would agree we've generally benefited from free trade, and probably more than a lot of other countries due to the sclerotic nature of manufacturing in the country in the 80s.

We need to focus on areas where price is less a facotr. Look at Cochlear or CSL. They've been able to grow globally dominant business based on their know how.

We have some of the best small bio medical companies with novel products out there. Phosphagen and Sirtext to just name a couple I am very familiar with. We need to encourage these companies a lot more, and to help other in the field to develop their basic research and commercialise it.

We have sophisticated wealth management expertise, a lot of design nouse too.

We may not be a nation of shop keepers in 30 years, but I do hope we've been able to reshape the economy to take advantage of our strengths and provide the opportunities for the next generation.

We're too small an economy to fight the changes being forced on us. We just have to make best with the hand that is dealt us.

 

[Smurf1976]

I can see both sides of the tariffs debate. The upside of free trade is well documented but what about the downsides?

Ignoring your own position on whether or not CO2 is a problem, consider the carbon tax debate. The only thing which prevents Australia from taking action to reduce its' own emissions is free trade. With free trade, taxing energy-intensive industry here just results in it relocating offshore thus removing any environmental benefit and sending Australia broke in the process.

Energy is more of a key than most seem to realise. Cheap electricity underpinned the Vic, Tas and SA economies for decades and more recently it has been a key pillar in Qld as well. And look what's happening right now in the USA with the gas boom over there. It's not China with low wages etc that will take these industries off our hands. Penrice Soda (for example) is switching from local production to imports from the US.

Free trade has its' good points I agree. But it does prevent any one country, even the likes of the US or China, from taking action to address things like the environment. Even things like health and safety are starting to feel the same pressure - there's a limit to how much you can spend on safety when you have to compete against others with no safety laws whatsoever.

There are only two things that could possibly save manufacturing in Australia in my opinion:

1. The AUD needs to fall sharply

2. A return to cheap energy.

Neither are likely in the short term, and the latter is strongly at odds with the current policy of the Australian government as well as every state so it's not likely to happen either. RIP manufacturing as a result.

 

[DocK]

DocK

What % of Market share do you think you have?

Those who DO buy off you---Why?

Do you trade out of the Gold coast as well?--How far?

Your diversified areas
Are they growing faster than the core business.

Are there sectors that can be dropped.

Look at your business from the 80/20 perspective.

Which 20% is giving you the 80% return.

Yes, Tech, these are the questions we've spent a good bit of time on over the past couple of years. Our business has altered and adapted accordingly. As I said, we're a bit more diversified than some of our contemporaries, which has allowed us to weather the GFC, where a lot have sadly bitten the dust. We're also open to change, which is essential these days I think, as there are plenty of examples of the "dinosaurs" who've refused to change their way of business and have suffered accordingly. Adaptability can only take you so far though.

We've expanded into new areas, both technical and geographical, so far as has been practical so far. Our "edge" is our expertise (developed over many years and not easily replicated by competitors) and this is where our focus lies. We're able to do jobs that are just too intricate or difficult for others, and this is the area that we need to exploit to the fullest.

 

[MR.]

The only thing which prevents Australia from taking action to reduce its' own emissions is free trade. With free trade, taxing energy-intensive industry here just results in it relocating offshore thus removing any environmental benefit and sending Australia broke in the process.

and many local companies become even more less competitive.

1. The AUD needs to fall sharply

RIP manufacturing as a result.

The AUD needs to fall!

and additionally as docK mentioned a "Free float from China" would help. But someone else will step up to the plate!

 

[DocK]

I can see both sides of the tariffs debate. The upside of free trade is well documented but what about the downsides?

Ignoring your own position on whether or not CO2 is a problem, consider the carbon tax debate. The only thing which prevents Australia from taking action to reduce its' own emissions is free trade. With free trade, taxing energy-intensive industry here just results in it relocating offshore thus removing any environmental benefit and sending Australia broke in the process.

Energy is more of a key than most seem to realise. Cheap electricity underpinned the Vic, Tas and SA economies for decades and more recently it has been a key pillar in Qld as well. And look what's happening right now in the USA with the gas boom over there. It's not China with low wages etc that will take these industries off our hands. Penrice Soda (for example) is switching from local production to imports from the US.

Free trade has its' good points I agree. But it does prevent any one country, even the likes of the US or China, from taking action to address things like the environment. Even things like health and safety are starting to feel the same pressure - there's a limit to how much you can spend on safety when you have to compete against others with no safety laws whatsoever.

There are only two things that could possibly save manufacturing in Australia in my opinion:

1. The AUD needs to fall sharply

2. A return to cheap energy.

Neither are likely in the short term, and the latter is strongly at odds with the current policy of the Australian government as well as every state so it's not likely to happen either. RIP manufacturing as a result.

Completely agree with all points, Smurf.

One of my sons had an economics assignment at school based around the various effects of the introduction of the Carbon Tax - I took the opportunity to have a good old rant about how I thought it would affect his own parents, and many other small Oz businesses. I guess some of what I said made it into his written work because the next time I saw his eco teacher she gave me a big wink and said she completely agreed with "his" viewpoint.:

 

[sydboy007]

Completely agree with all points, Smurf.

One of my sons had an economics assignment at school based around the various effects of the introduction of the Carbon Tax - I took the opportunity to have a good old rant about how I thought it would affect his own parents, and many other small Oz businesses. I guess some of what I said made it into his written work because the next time I saw his eco teacher she gave me a big wink and said she completely agreed with "his" viewpoint.:

Is a return to cheap energy a wise thing to do?

How cheap is cheap?

How does Australian manufacturing stack up in terms of energy efficiency with other high wage countries? Would we be better off focusing on improving the efficiency of manufacturing that subsidising the cheap energy?

Who will provide the cheap energy?

We have Liberal Govts on the east coast now and they're all doing things that seem to be going in the direction of sending energy costs higher over the medium to long term. QLD has pretty much sold all CSG gas production for export. NSW has dug it's head in the sand and brought the CSG exploration to a complete stand still. A lot of VIC gas production is headed to QLD for export to top up any shortfall in production.

Do we stop some of the CSG exports from QLD and force them back into the domestic market? Who will compensate the shareholders for the lower income received? Should the NSW Govt stop pandering to the nationals and allow CSG exploration away from agricultural land, as well as removing their restrictive wind farm policy for vetoes by anyone living within 2KM?

 

[Smurf1976]

Is a return to cheap energy a wise thing to do?

How cheap is cheap?

How does Australian manufacturing stack up in terms of energy efficiency with other high wage countries? Would we be better off focusing on improving the efficiency of manufacturing that subsidising the cheap energy?

Who will provide the cheap energy?

Whether or not it is wise depends on what the alternatives are. Cheap energy was for a long time one of the key pillars of the Australian economy, and the only real competitive advantage in Vic, Tas and to some extent SA. It also played a big role in Qld.

Whether or not we ought to go back to that is best answered by a question. What other advantages does Australia actually have? A lot of cheaply extracted iron ore is about the only non-energy one that comes to mind which is large in scale, likely to last a while and not already maxed out or about to be (eg agriculture / water).

If not energy then what does make us competitive?

How cheap is cheap? Competitive internationally. The old benchmark that the utilities used to use was simply to look around the world and see what was on offer then try to beat it. That resulted in Australia having the most efficient fossil fuel power plants in the world as a direct result.

As for how energy efficient our manufacturing is, it varies. There are producers which are quite efficient but who are walking away (eg Penrice soda) and there are others that are less efficient. We're certainly not bottom of the heap on any measure I've ever seen.

Who would provide it? Well there lies the single biggest problem this country is going to face.The gas is being sold off as fast as possible and we're rapidly heading the same way with coal too. In the event that export prices rise, and that's certainly a risk, it means Australian power bills will also go through the roof. The end result? Probably very similar to what happened in several states in the first part of the 20th Century and which is now being done in a roundabout fashion with the NBN. Nationalisation of energy infrastructure and resources.

In a more general sense, we're in a rather strange era which seems to be heading toward some sort of "end game". I mean, look at the overall economy and it seems ridiculously unsustainable in every way. Losing key industries, selling off natural resources as fast we can, running up debts and so on. None of that seems sustainable to me.

 

[tech/a]

Doc

Certainly not wanting to come across as telling you what to do.

But 2 things have helped me dramatically.

(1) presence on the net, we changed our server and forgot to launch our website.
A friend alerted us that it wasn't up.
In the 3 weeks the site was down it was like the phones were down.
70% downturn. When it came back on line it took 2 days to pick back up.

Forget Yellow pages!!!

(2) develop relationships we do this face to face. Once we have a developed relationship competitors regardless of price just don't get a look in.
Ever tried to get in somewhere where a relationship with a competitor has been developed?


I wish you the best of business.
It's tough out there.

 

[DocK]

Doc

Certainly not wanting to come across as telling you what to do.

But 2 things have helped me dramatically.

(1) presence on the net, we changed our server and forgot to launch our website.
A friend alerted us that it wasn't up.
In the 3 weeks the site was down it was like the phones were down.
70% downturn. When it came back on line it took 2 days to pick back up.

Forget Yellow pages!!!

(2) develop relationships we do this face to face. Once we have a developed relationship competitors regardless of price just don't get a look in.
Ever tried to get in somewhere where a relationship with a competitor has been developed?


I wish you the best of business.
It's tough out there.

Thanks, Tech

We don't deal with the public much, most of our business is as the middle-man and most of our customers are businesses - our profits come mostly from large volume work, so Mum & Dad public are mainly just nuisance work. We've never bothered with Yellow Pages as 90% of our work comes from word-of-mouth referals, or the relationships that you describe.

We finally launched a website a year or so ago, when work started to drop off. We were in the fortunate position of having more work than we could handle until a year or two ago, so advertising was not at the top of our "to do" list. We've found the website to be a great marketing tool - even if simply as a link you can direct potential customers to so they can see what we do, and view some of our finished products and customer testimonials etc. Lately we're finding an increasing % of new work coming via the website, so we're very pleased we made that move. Gotta keep up with the times

Surprisingly, we've actually picked up a fair amount of work via an Ebay store. We listed a couple of generic products on Ebay a couple of years ago more as a "what the hell, it can't hurt" exercise - and the response has been surprisingly good.

One of our main problems is ourselves , as we're not the best "marketers". The spouse and I are both pretty good at what we do, but neither of us is comfortable or keen on cold calling prospective new clients, and the whole "networking" deal. Fortunately our "customer satisfaction" score is high, so we do get a lot of referal work from our existing customer base. It's an area that we're just going to have to get comfortable with if things don't improve - or we might look at a sales rep.

Thanks for the good wishes - and back at ya! One of the silver linings of recent times is that a lot of the "cowboys" have disappeared, and business relationships between suppliers, customers and even competitors have been made stronger in a lot of cases.

 

[Trembling Hand]

(1) presence on the net, we changed our server and forgot to launch our website.
A friend alerted us that it wasn't up.
In the 3 weeks the site was down it was like the phones were down.
70% downturn. When it came back on line it took 2 days to pick back up.

Jees that is some sloppy work Tech?

 

[tech/a]

Jees that is some sloppy work Tech?

Sure was very costly.
The cost of delegation.

DocK

I also work with the larger side of town
Civil guys. Many dont know us,on a level that is
conducive to continued support.
Weve been doing what we do for 30 yrs
and the people we deal with "These days"
may only be in the job for a few months.
We are for ever building new relationships.

Mind you many who move to other companies take us with them (as a contact).

It really is a continual slug.
Worth it as the less aggressive fall by the way.

 

[DocK]

Mind you many who move to other companies take us with them (as a contact).
It really is a continual slug.
Worth it as the less aggressive fall by the way.

Yes, this is common in our area also. It also pays to get to know who is genuinely going to send work your way, and who is just using you as a pricing mechanism. We've found that our reputation for top notch workmanship and reliability is the major thing that has worked for us, and is worth protecting at all costs. It's also something that can't be imported cheaply from overseas

I didn't mention something that is giving us, and a lot of our associates in small business land, hope - an election. Just read this http://www.businessspectator.com.au/bs.nsf/Article/How-Abbott-would-lay-a-new-foundation-for-Australi-pd20130129-4DSH5?opendocument&src=idp&utm_source=exact&utm_medium=email&utm_content=171553&utm_campaign=kgb&modapt=commentary and my first thought was "bring it on!"

 

[Julia]

I didn't mention something that is giving us, and a lot of our associates in small business land, hope - an election. Just read this and my first thought was "bring it on!"

It sounds good, and not just for business.
It's a relief to see the opposition bringing out something positive. Hopefully more of the same to come.

 

[Bushman]

Telstra is set to axe up to 650 jobs from Sensis, reports say.

Read more: http://www.theage.com.au/business/telstra-to-axe-650-jobs-reports-20130221-2esmj.html#ixzz2LU2XNMij

Its always the banality of these statements that get to me. These are 650 individuals who may well have kids, mortgages and limited choices who have just had their lives upended. How long will it take this 650 to re-integrate into the workforce? Or will they be forced into lower paying jobs in different industries? Shrug

In the 24 hour news cycle, they are the faceless sound byte that will be instantaneously forgotten.

PS - job cuts at Amcor too. Down down, employment is down ...

 

[tech/a]

Its always the banality of these statements that get to me.

Unfortunately I dont know of anyway of making the news softer.
I have at times had to cut a lot of my own staff and these people are good hard working people who have done nothing wrong.If the work isnt there we cant run the presses to print money to pay them.

I guess Police have the same problem when informing people of deaths from accidents etc and
Doctors letting you know you or a loved one have cancer.

Life can be cruel.

 

[Julia]

Telstra is set to axe up to 650 jobs from Sensis, reports say.

Read more: http://www.theage.com.au/business/telstra-to-axe-650-jobs-reports-20130221-2esmj.html#ixzz2LU2XNMij

Its always the banality of these statements that get to me.

I understand what you're saying, Bushman.
Does the company have any option? They have an obligation to maximise profit and if business conditions change and people become redundant, I suppose there's no nice way of managing this.

 

[boofis]

I understand what you're saying, Bushman.
Does the company have any option? They have an obligation to maximise profit and if business conditions change and people become redundant, I suppose there's no nice way of managing this.

Really, is it an obligation?
"In 2011-12, total revenue was $25.4 billion and reported EBITDA was $10.2 billion." from the telstra site directly.
Why shouldn't they maintain profit rather than grow it? Perpetual growth has to be one of the biggest fallacies of the modern world.

 

[againsthegrain]

I understand what you're saying, Bushman.
Does the company have any option? They have an obligation to maximise profit and if business conditions change and people become redundant, I suppose there's no nice way of managing this.

Those jobs are going to be outsourced as usual to overseas. In a capitalist economy thats how it goes, but as for pointing fingers and blame game alot of people have themselves to blame for it. Our dollar has gone so high and is constantly being fuelled by people asking for more, constant strikes for more, wanting to sell their houses for more but when it comes to paying up they will shop online and complain prices are high.

Unfortunately you can't have it both ways and the effects of people's greed are starting to show

 

[Trembling Hand]

Really, is it an obligation?

YES