The Chinese Link

I am interested by the link between China and the U.S. in this economic cycle. Here is a story about Chinese migrant worker Dong Bo:

But as with many of China's 130 million migrant workers, the grim realities of the global economy weigh heavily in Dong's heart. For the first time since leaving home seven years ago, the 25-year-old does not have a job waiting for him after the weeklong festival ends.

Dong and many others like him plan to go back to coastal cities that for three decades have been churning out goods for American consumers and improving the living standard of China's peasant farmers. But with the Chinese economy in the throes of its worst industrial decline in years, analysts say, there won't be enough jobs to satisfy the crush of returning workers -- raising the specter of more social turmoil and, for those staying in villages, conflicts over land and farming rights.

Dong was laid off from an electronics factory in southeastern Guangdong province, one of countless plants in China suffering from a drop-off in orders from the U.S. and Europe.

Was it OK to lose the Dodo bird?

Tom Petruno of the L.A. Times lays out some of the current facts of life.

Any capitalist nation must be willing to embrace some level of economic Darwinism: the notion that the fittest survive while the less robust fall away.

But what America is living through now is a drastic and high-speed wave of Darwinism that reaches every corner of the economy and financial system.

We're on failure overload -- which is why this all feels so frightening and why markets remain in disarray.

Plant Closing #19

Can a plant be closed temporarily until mid-2010? if it is a brick plant, maybe.
From the San Antonio Times:

Express-News -
Fort Worth-based ACME Brick temporarily will close its McQueeney plant near Seguin next month because of the downturn in residential construction, according to a report in the Seguin Gazette-Enterprise.
ACME said it will begin closing the plant at the end of February, and it will remain closed until at least mid-2010.
The number of workers affected wasn’t disclosed, and a company spokesman couldn’t be reached for comment late Monday.

More Automotive Infusions

From The Times (of London, of course)

French carmakers will receive a government bailout of up to €6 billion (£5.5 billion) in return for pledging to keep factories in France open, Francois Fillon, the Prime Minister, said today.

This includes Renault, Peugot, and Citroen.

Here is an interesting comment attributed to Carlos Ghosn:

He urged lower taxes for French-made cars and a tax hike on imported cars, claiming that French vehicles cost on average Euro1000 more than foreign rivals because of French fiscal rules.

Plant Closing #18

The weakened economy is forcing the consolidation of weaker factories. I suppose that on the other side these companies will be stronger. Via WSJV news in South Bend IN.

Dexter Axle is closing its plant in Elkhart as part of a consolidation that will
cut 92 jobs.
The company says the closure in July is part of a plan to consolidate four northern Indiana plants into two at Albion and Fremont. The company previously announced it would close its plant in North Manchester.
The company will meet with officials of International Association of Machinists and Aerospace Workers Local 1315 to negotiate a separation agreement with the 70 production workers at the Elkhart plant. Shetterly said the company hopes to retain some of the workers as it expands the plants at Albion and Fremont.

Happy New Year! (??)

Well, it has been a long winter nap for me.
Seems like yesterday that the whole world was crumbling.
I have not posted in a while. The holidays and the shutdown played a toll.
I am back and rested.

Thanks to those that commented or emailed. I appreciate your insight.

Here is to a happy 2009