The effect of automation in Manufacturing in the world - Page 10
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    There are advantage and disadvantages for automation. Its good that everything is automated nowadays it makes life easier and efficient but on the downside lots of jobs for man power industry will be decrease.

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    Quote Originally Posted by Mcgyver View Post
    sure, but all things being equal, of course it does. I think its obvious a statement like that implies all things being equal, and equally obviously (i hope) its one of many factors. You're hardly going located your billion $$ company HQ in the Sudan because taxes are 10% lower. Having been in the advisory position to fortune 500's on making those decisions, it as absolutely guaranteed an important factor on where business locate.....along with a list of other criteria.

    I guess we're saying the same thing, but a good example of how impactful lower taxes are was the development pattern in the GTA where pretty everything is the same on either side of an imaginary line vs the other, except industrial taxes. There was an exodus to the low tax area.
    Moving 5 miles in the Greater Toronto Area is one thing- but much more common in the USA is a computer assembly firm deciding whether or not to move to rural Wisconsin, or within 100 miles of Silicon Valley, where there are subs who specialize in every obscure factor of computer parts.
    Or BMW, deciding between adding capacity in South Carolina, where, over the years, 100 different subcontractor factories have sprung up, versus lower taxes in, say, Louisiana, where everything needs to be trucked in 500 miles.

    all things are almost never equal.
    Greater Toronto may be one of the very few areas in North America where a 25 mile move gives you everything the same except some (but certainly not all) taxes being lower.

    In most cases, industrial development happens in clusters, and is based on easy access to transportation, employees, and subcontractors and suppliers.
    The big tax giveaways in the USA have happened in remote, largely rural states, with generally not much else to recommend them besides tax give-aways and cheap, but unskilled, labor.

    This has worked in a few cases, usually when a European or Japanese company with a long history of extensive employee training is willing to commit for long term investments- it took close to a decade for each of the Southern US auto making areas to reach the level of support and infrastructure to mean the plants were really profitable. They needed cooperation with glass factories, wiring harness plants, local community colleges, utility companies, and the local government on many levels, much more than just a single, initial tax break, or a lower net corporate tax rate- which, most corporations do not actually pay at all.

    It can work when somebody like Amazon wants to build a server farm, which means very few jobs, almost no traffic, and just needs cheap real estate, cheap power, and cheap taxes. Or a distribution center, where you want a few hundred people to pack boxes for the lowest possible wage. Again, no need in either case for much infrastructure beyond a road.

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    Quote Originally Posted by Mcgyver View Post
    its not scary, its wrong. Get your fiscal house in order and lower taxes for all (if you think that is the main thing attracting jobs) rather cutting special deals to
    I don't know if it's really that cut and dry.

    What if let's say I as a business owner with perhaps 80% involved in aerospace manufacturing decide that I'm too single sided, and try to break into a different market, medical for example,
    and in order to do so I cut my shop rate by 10-20% for non-aerospace work.
    Or, what if I find a person who I'd really need and would like to have on the team, and decide to hire him at a considerably higher wage than average, even if it means stealing it from someone's employ?

    Now turn this around and look at it from the perspective of a local or state government.
    What-if the state has an over abundance of low skilled labor force, but not enough businesses to absorb them.
    Or perhaps there is an existing infrastructure that is necessary for the state's current operation - say roads, railroads, ports, shipyards etc. - but it is way under utilized or running a deficit even.
    Or perhaps a state decides to increase it's involvement in a specific field - medical, high-tech, aerospace etc. - for the hopes of future growth.

    Is it really wrong for a local or state government to take necessary steps towards achieving their goals?
    And if the method of doing such is by way of tax incentives, then so what? Who is helping who? Who is being wronged?

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    Quote Originally Posted by SeymourDumore View Post
    Is it really wrong for a local or state government to take necessary steps towards achieving their goals?
    And if the method of doing such is by way of tax incentives, then so what? Who is helping who? Who is being wronged?
    Fiscal policy is key way government achieves its objective, agreed. However policy is just that, a framework that applies too all. What I object to playing favorites, some politician picking an individual firm for preferential treatment over other firms in the same situation. That's not policy, that's pork barrel stuff. i.e. every one occupying an industrial building in municipality X pays Y psf in tax. Some politician shouldn't get to decide one particular company gets to pay 1/10 Y. That's not a policy, that is favoritism.

    I don't buy your comparison to a businesses looking at getting into a new market. Businesses are suppose to act in their own interests to the exclusion of others and there is no obligation for equal treatment. Government has an entirely different mandate. Its to establish that framework applying blindly to all, not just to Bob Smith at 123 Industrial Blvd. Business, being out for itself, is free to give Bob preferential treatment, but its the worst slippery slope once we start thinking that's ok for politicians to do. If there was an analogy to business it would be you work for someone else but arbitrarily, at your discretion, and contrary to normal pricing, ring a sale up to someone, buddy, cute girl, whatever at 90% off - should the owner be ok with that?

    So long as the rules applies equally to all, no issue. Its when the rules is like this tax break is specifically for Bob and no one else that I have a problem. That's when you move from government making policy to pork barrel nonsense and what I object to. A fiscal policy of say lower industrial taxes or faster depreciation on capital spends, lower taxes for an environmental cleanup etc etc are legitimately policy not pork barrel as they don't have a politician picking and choosing which individual benefits, anyone meeting the criteria is treated equally

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    Quote Originally Posted by Mcgyver View Post
    I don't buy your comparison to a businesses looking at getting into a new market. Businesses are suppose to act in their own interests to the exclusion of others and there is no obligation for equal treatment. Government has an entirely different mandate. Its to establish that framework applying blindly to all, not just to Bob Smith at 123 Industrial Blvd. Business, being out for itself, is free to give Bob preferential treatment, but its the worst slippery slope once we start thinking that's ok for politicians to do. If there was an analogy to business it would be you work for someone else but arbitrarily, at your discretion, and contrary to normal pricing, ring a sale up to someone, buddy, cute girl, whatever at 90% off - should the owner be ok with that?
    I think we'll just have to agree to disagree about the validity of the comparison.

    Sure, if Company A, B and C is in the very same line of business, then equal treatment by government is absolutely expected.
    If OTOH Company A is say Caterpillar but the state is looking to boost it's presence in the pharmaceutical field, an incentive by way of tax benefits to Company B who
    happens to be Pfizer is OK in my opinion.

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    Quote Originally Posted by SeymourDumore View Post
    I think we'll just have to agree to disagree about the validity of the comparison.

    Sure, if Company A, B and C is in the very same line of business, then equal treatment by government is absolutely expected.
    If OTOH Company A is say Caterpillar but the state is looking to boost it's presence in the pharmaceutical field, an incentive by way of tax benefits to Company B who
    happens to be Pfizer is OK in my opinion.

    I don't know that I at all want a government pulling the strings what business is considered good and what is bad (there is SO much wrong with that) , but what if Rouche was already in the municipality? still ok to give a freebie to Pfizer but charge Rouche full fair? Or are you saying you think it ok to charge real estate taxes based on what industry they are in (vs the characteristics of their industry, i.e polluting polluting or not, retail, manufacturing, office etc )?

    R Its a slippery slop when a politician gets to pick and choose like that. Why not instead figure out what fosters and attracts the type business you want and offer it to all rather than one company a politician selects? It works perfectly here. Also, as I said, Its not creating jobs, its shifting them with a clearly negative net result - unfair taxation of some companies while others have a free ride and taxes shifted to citizens and no net increase in anything.

    Politicians getting to picking and choose who pays and who doesn't? If m BIL is mayor and says I don't pay but you do, I doubt that would be ok with you? Why? Its much of a stretch as when politicians have that discretion it will get dirty.

    I guess i'm am fundamentally opposed to those elected to a democratic government doling money to specific individual firms they arbitrary choose. I don't think its right and I resent paying taxes into that environment.

    If we brainstormed we could come up with a long list of legitimate policy items that would likely encourage pharma industry locating there. Implement those, then its blind and applies to all ......and is sustainable - those that move there do so for real reasons vs cash inducement by some politician picking their favourite company.

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    Quote Originally Posted by Mcgyver View Post
    i'm am fundamentally opposed to those elected to a democratic government doling money to specific individual firms they arbitrary choose to. Its not right and I resent paying taxes into that environment.

    .
    See, I might be looking at that from a different perspective.
    Crooked politicians aside, I am not thinking it's doling money to a specific firm, rather a specific industry or profile that best suits the needs of the particular area or government plan.

    In your example, if Roche was already in the state, and the state has so planned that it wants to become a pharmaceutical powerhouse, made investments in the field of training, additional
    laboratories etc, then sweetening a deal to convince Pfizer to relocate ... Why not?
    Now if Roche pipes up and is looking to get the same or similar deal in order to stay in the state? Well, if that is the means to an end, then so be it and give it to them as well.

    Let's not forget that it is a business deal after all with a quid-pro-quo. The State agrees to do X for Company A, who in turn agrees to provide Y for the State, whatever those demands be.

    But again, we can simply agree to disagree.

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    Historically government does pass laws to foster certain needed industries even subsidizing them to a very large extent. This was done for the so called robber barrons and likely it will continue to be the case in the future. It kicks pure capitalism right in the hind. That is the way of things and likely not to change.

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    Quote Originally Posted by SeymourDumore View Post
    See, I might be looking at that from a different perspective. . .

    Seems to me that both you and Mcgyver could be right.

    As Mcgyver says, it's hard to justify giving one firm in an industry a break, at the expense of its competitors.

    As you suggest, there can be all sorts of policy reasons why we might want to accelerate investment and the experience curve in particular industries; in order to better compete locally or nationally in the years ahead.

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    I think you have be specific. First my objection has zero to do with encouraging an industry. There are all kinds of good ways to encourage say pharma, but real estate taxes were suggested. If that's what you want, just make real estate for pharma X% and Y for everyone else. I think that is terrible idea (for real estate tax!) as, there are better ways to encourage the result you want as it deviates from the spirit and logic of real estate tax methodology, which is well understood,entrenched and more or less far.

    However, as a bad policy as that would be (done via real estate taxes), it would be a policy - a set of rules known and open to all. That is hardly what I object to (Which I tried to be clear about, but must have failed.) The objection is politicians picking individual companies for a reward - which btw for the most part is exactly how municipal tax concession are done! A big firm has a bake off with a bunch of municipalities and they drop their drawers on taxes for 10 years for example - its done specifically for that company. i'm surprise anyone would have issue with objecting to that given the unfairness, obvious opportunities for abuse and that nothing is net accomplished job wise.

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    Quote Originally Posted by Mcgyver View Post
    . If that's what you want, just make real estate for pharma X% and Y for everyone else.
    Yupp, that is what I was trying to point out. Targeted incentives based on what is best for the locality.


    Quote Originally Posted by Mcgyver View Post
    I think that is terrible idea (for real estate tax!) as, there are better ways to encourage the result you want
    Can you elaborate please?
    But since I am in the state of Connecticut,...
    How can the State of CT encourage Silicon Valley to relinquish it's stronghold on computing tech?
    How can the State of CT encourage Detroit to relinquish it's stronghold on automobile tech?
    How can the State of CT encourage Texas to relinquish it's stronghold on oil research tech?

    In our case, we have UTC, P&W, and we have Sikorsky. We used to have GE-corporate as well.
    Hartford CT used to be known as the Insurance Capital.
    Why is it wrong if the state of Connecticut decides to build on that heritage ( on it's own accord ) and give freebies to continue said heritage for as long as it can?
    And, in the meanwhile saying the hell with oil extraction, coal mining, solar technology, chemical research or whatever else.

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    Quote Originally Posted by SeymourDumore View Post
    Can you elaborate please?
    I appreciate the polite request - Spinit, this place is improving

    I don't think we are disagreeing with an outcome or that government should have their hands tied, its just that how attempt to do this carries real dangers and unintended consequences

    Why (imo) its a bad idea to start tweaking real estate taxes based on industry sector. New topic, its not what I objected to earlier, and it would be a legitimate policy, just not a really good one imo.

    1)Real estate taxes are an extremely broad tax base, its hard to think to think of a tax with more jurisdictions. It works on two simple principals - charge based on the value, and charge based on the type of use. I think there is simple logic to that, value would roughly equate to ability to pay and use would equate to the impact to the municipality and community. Reason one, it works, its simple, its fair, is understood and given the huge number of collecting jurisdictions, there is a lot of risk tampering with that - law of untended consequences.

    Secondly, the huge potential for abuse. If municipal politicians get to pick tax based on industry sector, the potential for abuse is endless. Here's $5000, lower the tax on dog leash manufacturers, Mayors BIL has GM dealership so town lowers the tax on car dealerships starting with G. It would endless and produce exactly the result you don't want - business success based on politics versus the merits of a good business.

    Good bureaucracy has to transcend politicians and election cycles. Can you imagine the economic anarchy if businesses developed based on rewards from municipal politicians, and then every four years they changed it up? It would be an economic disaster, decrease global competitiveness (punishing business that are viable while propping others that are not) and have a huge human toll with a big increase in frequency of business failures (as their sector fell out of favour)

    The most important reason though is it encroaches on why private enterprise models succeed vs socialist ones. Remember socialist models are those where the means of production are owned or controlled by the state. Giving politicians the ability to financially reward sectors just because they like them, starts to look like an element of central planning control. Business is suppose to succeed based on its merits, efficiency, meeting the needs of market etc, not whether its favour with a politician. Its advantage over socialism is the decentralized decision making. I believe putting that lever in politicians hands contravenes the basic reasons why the system works better than other systems. I shudder at the notion of system where the government will determine hardware is better than software say, let alone that we want an Apple and not a Microsoft. Its not what government is suppose to do.

    We see some of the fourth point happening at the federal and provincial/state level. I don't think its right there either (corporate wealfare), but least there are a smaller number of jurisdictions who are (hopefully) a little better than scrutinized than thousands of municipalities.

    But since I am in the state of Connecticut,...
    How can the State of CT encourage Silicon Valley to relinquish it's stronghold on computing tech?
    How can the State of CT encourage Detroit to relinquish it's stronghold on automobile tech?
    How can the State of CT encourage Texas to relinquish it's stronghold on oil research tech?
    First of all, I the notion of what is a good or bad idea also needs to be viewed in a national context. As soon as you start giving companies money directly to induce a result that would not happen on its own, its a danger sign that that test may fail or at least be on shaky ground.

    How would you propose to get those industries? Maybe you can't, maybe its not the best thing to get in any event. But if you want to, imo, the right approach is for jurisdictions to think in terms of the results they want and the characteristics of economic development that provide that, NOT financial inducements to industry sectors or individual firms. That's the only way to have a even playing field and keep the government out of picking ponies and pork barrel hand outs. You as a municipality or state could certainly target pharma, but do so on the merits of your competitive commercial industrial tax base, great school system, educated diverse workforce, and on so on....but keep fiscal policy transparent and even playing field

    You might decide you want to attract knowledge bases business with lots of highly paid STEM workers. Brainstorm what those business want and start to figure out how to deliver it .....and in end, who cares what company you get or what sector provided it has the characteristics of the corporate citizen and employer you want?

    And, in the meanwhile saying the hell with oil extraction, coal mining, solar technology, chemical research or whatever else.
    I'm guessing your issue is with some result or characteristic of having these around? So deal with that, penalize infractions, don't giving drilling licenses or mining permits in any area where it could hurt things (kind of all them), regulate waste etc. I'm not saying what to do, I'm saying there is a very long list of options, with teeth, that do not involve the slippery slope of politicians picking sectors and companies. No one is saying government should not have an active role in this stuff, just that its wrong to do it via tax incentives awarded out by politicians to specific sectors

    Why is it wrong if the state of Connecticut decides to build on that heritage ( on it's own accord ) and give freebies to continue said heritage for as long as it can?
    Government taxing people to carry on a business not sustainable on its own? yes I see lots wrong with that.

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    I mentioned the fact that historically the politicians in the United States did in fact get very involved in the building of Infrastructure. The railroads are a fascinating study in this vein. The men who became super rich were made so by their shrewdness in business while others sought out government subsidies some even based upon miles of track laid.

    The down side of these subsidies were that the taxpayer was bilked (yet the railroads were completed) and even paid more for train traveling on certain lines whereas others were built with better quality, better chosen course, and for less cost. It highlighted the men who did the job right and did it on their own without subsidies and those who took the subsidies and wasted the money. Those who were ideal had costs per mile lowest. Hind sight is 20/20.

    Overall there some some kind of factor which played in, that was known (The benefit of the end result) and that was interconnecting the cities in the U.S. to transportation of people , goods and services.

    Land purchase was involved big time and the railroads prospered mightily. It wasted a lot of money because after it was all said and done looking back it became clear the ones who did more miles at less cost and with greater short term profits and long term excelled without subsidies. The men who accepted no money were mad as he++ about their competitors being subsidized because it effected true competition. It is a valid point today.

    The whole robber baron era is down right fascinating to me and I can not get enough of it. These were men who delivered energy to the world despite their competitors were subsidized by their governments and also the fact that their oil was superior in quality!

    One man had fast ships and connected to Japan and also to China. He increased exports to China which has always been a huge market and still is. The way it went for this man is that government interfered in his success and so that trade did not last.

    I understand that finally our trade is said to be highly desired as far as making lots of money. It is about time we were valued more. In my life it has been a decline and it is hard not to remember what happened. I am glad to see the young guys entering the trade who can actually turn a wrench and make something. For their sake I am glad . There is enough business for all countries to continue to prosper and for less developed countries to get involved.

    There is still a lot of growth which needs to happen.

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    Fair taxation has always been a big issue. The fact that the internet was free of the that burden to support growth was a good move.

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    Today I watched the morning news and again the topic of automation in transportation driver-free transport is a huge focus. It would supposedly save trillions and make transport much safer.

    On a lighter note I would not only want tax breaks but also heavy subsidies to compete with Mcguiver.

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    Quote Originally Posted by Mcgyver View Post
    I don't know that I at all want a government pulling the strings what business is considered good and what is bad (
    This reminds me of my very first girlfriend when I was a young teenager.
    She told me- "Wanting isnt Getting".

    What you want, unfortunately, contradicts what every single government in the history of humanity has done- that is, pick winners and losers.
    Kings gave concessions to friends, European governments invented the first major companies- like, say, the Dutch East India Company, Hudsons Bay Company, or the Honorable East India Company, and gave those companies exclusive rights, government and military assistance, free real estate, government funds, and in most cases, freedom from competition.

    Thats how large capitalist companies began, historically.

    Since then, in every single country, there have been special laws, special tax breaks, company and industry specific regulations, government no bid contracts, loans, government banks to support specific companies and industries, subsidies, giveaways, and more.

    EVERYWHERE.
    ALWAYS.

    There is not now, and has never been, a capitalist libertarian paradise where this does not happen.

    So, while I sympathize with you wanting and not getting (I did not, in fact, get what I wanted for quite some time in that relationship), I think you have set your expectations a bit high.

    Governments, both US and Canadian, as well as States and Provinces and Cities, have always, and will continue to, pick winners and losers.
    Everything from selecting a single utility provider and giving them state purchased infrastructure, to setting specific tax rates that vary from company to company, to allowing lobbyists to write laws that benefit ONE single company.

    This will change in the USA about the time that AOC gets elected Queen.

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    Companies compete.
    Is it wrong for local governments to do do so?
    How did we end up on taxes in the question about automation and "the realities of automation in our trade? "
    Any hope to steer this ship back on it's course?
    Bob

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    Bob I agree. Taxes and incentives are trailing off. I suppose the things that fill clear immediate needs could be obvious to discuss. These robot parts loaders are interesting things. I have seen a couple of outfits who make them showing how they program the arms to pick up a piece of material and move it to another place.

    As far as automation speeding up a shop Programming and QC are areas that always seem to be overwhelmed.

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    Quote Originally Posted by CarbideBob View Post
    Companies compete.
    Is it wrong for local governments to do do so?
    where do you see anyone advocating they shouldn't? I think and have said they should - with transparency, equality and without prejudice. They also have a different mandate than companies, which should be obvious.

    Any hope to steer this ship back on it's course?
    Get us back on track with a good question or comment on the subject.....otherwise after 200 posts, its kind of been well flogged and the discussion wanders....

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    No, mostly what government does is NOT pick winners and losers, but create the environment and framework for commerce and business to exist. Nevertheless, Its unclear what the point of all that your wrote is. Of course its gone on in the past and still does, that make it ok with you? You think corporate welfare or that the tax you pay depends on your relationship with a politician is ok? And some here, maybe you, seemingly want to invite municipal politicians in on the action?

    We should be opposed to things that are unethical and wrong, the fact that you may never eliminate it entirely not notwithstanding.

    Quote Originally Posted by Ries View Post
    This reminds me of my very first girlfriend when I was a young teenager.
    She told me- "Wanting isnt Getting".

    What you want, unfortunately, contradicts what every single government in the history of humanity has done- that is, pick winners and losers.
    Kings gave concessions to friends, European governments invented the first major companies- like, say, the Dutch East India Company, Hudsons Bay Company, or the Honorable East India Company, and gave those companies exclusive rights, government and military assistance, free real estate, government funds, and in most cases, freedom from competition.

    Thats how large capitalist companies began, historically.

    Since then, in every single country, there have been special laws, special tax breaks, company and industry specific regulations, government no bid contracts, loans, government banks to support specific companies and industries, subsidies, giveaways, and more.

    EVERYWHERE.
    ALWAYS.

    There is not now, and has never been, a capitalist libertarian paradise where this does not happen.

    So, while I sympathize with you wanting and not getting (I did not, in fact, get what I wanted for quite some time in that relationship), I think you have set your expectations a bit high.

    Governments, both US and Canadian, as well as States and Provinces and Cities, have always, and will continue to, pick winners and losers.
    Everything from selecting a single utility provider and giving them state purchased infrastructure, to setting specific tax rates that vary from company to company, to allowing lobbyists to write laws that benefit ONE single company.

    This will change in the USA about the time that AOC gets elected Queen.
    Last edited by Mcgyver; 04-13-2019 at 10:35 AM.


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