P3D Re: not 3D: Kodak Shifts ALOT of Jobs Overseas (fwd)

[roberts@xxxxxxxxxxxxxxxxx (John W Roberts)]

>Date: Sat, 8 Nov 1997 12:54:57 -0600
>From: P3D Michael Kaplan  <mkaplan@xxxxxxxxxxxxxxxxxx>
>Subject: not 3D: Kodak Shifts ALOT of Jobs Overseas (fwd)

>Kodak Shifts ALOT of Jobs Overseas

>Leading ALOT Member Shows Jobless Future if Fast Track Is Approved

>  Eastman Kodak Corporation is a leading member of  ALOT [America Leads on
>Trade] the pro-fast track business lobby.

>  Eastman Kodak Corporation Supported NAFTA.

>  Eastman Kodak's Promise of Increased Exports to Mexico if NAFTA were
>passed did not come true (see "NAFTA's Broken Promises, Failure to Create
>U.S. Jobs.) Instead, imports of Kodak products to the U.S. from Mexico
>increased.

I have some issues with the claims and implications made in this forwarded
article:
- The preceeding paragraph claims increased imports of *Kodak* products from
  Mexico to the US as indication that [overall?] exports to Mexico did not
  increase. Two major problems with that: (1) Increased imports do not
  necessarily rule out increased exports - the general idea of a free trade
  agreement is that imports and exports will both increase, and (2) Nobody
  that I'm aware of claimed that a NAFTA or other agreements would lead to
  a more favorable balance of trade for the US for *every single one* of the
  vast number of products that are imported or exported. There's an analysis
  produced on a regular basis (annually?) tracing the overall flow of money
  and products/services, broken down into (I think) thousands to hundreds of
  thousands of components, making it possible to get a better idea of what
  the actual trade situation is. If we are to make P3D a forum for
  macroeconomics and political policy, perhaps we could track down references
  like that - they're almost certain to be more useful than promotional
  articles and anecdotes.
- The article also refers to failure to create US jobs. I seem to recall that
  Mr. Greenspan has been saying recently that one of the most significant
  challenges to the continued growth of the economy at present is shortage of
  available workers to fill the needed jobs. I don't have the employment
  numbers at my fingertips, but that kind of sounds like employment is
  pretty high, and in particular higher than it had been in the past.
  If true, this raises the question - where did the new jobs come from?
  I know that among many political advocates it's popular to make learned
  pronouncements on time-delayed effects ("the current prosperity is a direct
  result of the policies of the Herbert Hoover administration, which are just
  now starting to bear fruit, and nothing done in the last few years has any
  relevance"), but I've become somewhat skeptical of the absolute certainty
  of these claims. If some trade agreements were put in place, and over the
  next few years employment seems to have gone up, how can we be completely
  sure that the trade agreements had nothing to do with it, directly or
  indirectly?

>  Now, according to the attached Reuters story, Kodak plans to eliminate
>14,000 U.S. jobs and shift production to Mexico.

- This statement gives the strong *implication* (without actually stating it)
  that 14000 US workers will be fired and 14000 workers in Mexico will be 
  hired to replace them - I didn't get that impression at all from the
  quoted article.

>  According to Reuters, "Assembly operations in some of its photo equipment
>units -- including the assembly of throw-away cameras -- are likely to be
>shifted from U.S. plants to sites with lower labor costs, like Guadalajara,
>Mexico."

>NEW YORK, Nov 5 (Reuters) - by Jeffrey Benkoe...

The quoted article is worded significantly differently from the version
posted November 6 by Erik Goldstein (perhaps a rewrite by the original
author?). The chief difference is that the version posted with the
forwarded article omits a few sentences from the end of the Reuters 
item, including "Looking at its future, the analyst said: 'Essentially, the
business will be dictated by the little yellow (film) boxes.'" That quote
would seem to indicate that operations such as assembly of disposable cameras
is likely to be de-emphasized within the company, In that context, the
hypothetical transfer of disposable camera assembly to a site in Mexico
might not be such a massive transfer of jobs to another country as the
article implied.

It should also be noted that the forwarded article attributed to Reuters
claims that Kodak plans to do various things - the Reuters article
attributes these statements to market analysts, not to Kodak.

Disclaimers:
- Massive restructuring and layoffs are very painful to company and
  employees - it's sad that these folks are going through this difficult time.
  It's also sad that their misfortune is apparently being used as a political
  argument for a situation that may not be entirely relevant.
- I'm not a professional economist or politician - I'm a 3D enthusiast (who
  would like to get back to things that are more directly 3D related :-).
  I don't personally know the overall net effect of various trade agreements
  on the economy.
- All opinions are my own.
John R


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