Posted on 3/1/2006, 11:05:18 PM by A. Pole
The Dubai Ports World deal is waking Americans up to a painful reality
[...]
we've abandoned the principles of tariff-based trade that built American industry and kept us strong for over 200 years.
The old concept was that if there was a dollar's worth of labor in a pair of shoes made in the USA, and somebody wanted to import shoes from China where there may only be ten cents worth of labor in those shoes, we'd level the playing field for labor by putting a 90-cent import tariff on each pair of shoes. Companies could choose to make their products here or overseas, but the ultimate cost of labor would be the same.
Then came the flat-worlders, [...] Do away with those tariffs, they said, because they "restrain trade." Let everything in, and tax nothing. The result has been an explosion of cheap goods coming into our nation, and the loss of millions of good manufacturing jobs and thousands of manufacturing companies. Entire industry sectors have been wiped out.
These policies have kneecapped the American middle class.
[...]
Because our so-called "free trade" policies have left us with an over $700 billion annual trade deficit, other countries are sitting on huge piles of the dollars we gave them to buy their stuff (via Wal-Mart and other "low cost" retailers). But we no longer manufacture anything they want to buy with those dollars.
So instead of buying our manufactured goods, they are [...] buying us, the USA, chunk by chunk. In particular, they want to buy things in America that will continue to produce profits, and then to take those profits overseas where they're invested to make other nations strong. The "things" they're buying are, by and large, corporations, utilities, and natural resources.
[...]
(Excerpt) Read more at opednews.com ...
Thom Hartmann is a Project Censored Award-winning best-selling author of over a dozen books and the host of a nationally syndicated noon-3pm ET daily progressive talk show syndicated by Air America Radio.
I think it is much more important if what you say is true or false, than what are your credentials or politcial affiliation.
The President mentions that there was once 12 workers to support 1 on social security but now there are 3. He is wrong on this. The other 9 are in China and they are not paying into social security. That's the problem which should be addressed before some Wall Street stock market 'privatizing'.
I think that's what you told me when you posted from LaRouche's website as well.
"The other 9 are in China"! This is a good one :)
Hey, even LaRouche (weird guy, to say the least) is right sometimes while your beloved Rush is wrong not less frequently :).
Do you have any arguments beside personal attacks on the author?
The old concept stopped working when the unions saw to it that American workers got paid $10 for that $1 worth of labor.
As Rush would say, pointing-out that some self-described "progressive" has a program on Air America radio is not a personal attack.
Two words: Smoot-Hawley.
America is now living like a wastrel heir, who inherited a magnificent estate and mansion.
To fund his 24/7 party, he has sold off the land, acre by acre, right up to the mansion.
Sharecropper Nation.
Exactly - we can't turn the tide back now - China will soon leave us in the dust anyways.
Maybe some facts are in order:
HOUSTON In the outcry over who should run America's seaport terminals, one clear trend appears to have been overlooked: U.S. companies began withdrawing decades ago from the unglamorous business of stevedoring, ceding the now-booming industry to enterprises in Asia and the Middle East.
People in the shipping industry have watched with dismay as their fast-evolving business is sometimes misinterpreted in the uproar over the $6.8 billion sale of a venerable British concern, Peninsular & Oriental Steam Navigation, to Dubai Ports World, a rising operator from the emirate.
It is no accident that U.S. companies are not in the top ranks of global terminal operators, which have ridden the coattails of the explosion in world trade. That shift has transferred growing financial clout to a handful of seafaring centers in Hong Kong, Singapore and now Dubai.
Indeed, the takeover of P&O came down to a battle between two foreign, state-backed companies: Dubai Ports World, owned by Dubai's royal Maktoum family, and PSA, the world's second-largest port operator, which is part of the Singapore government's investment arm.
The acquisition price also reflects the advantage that a number of the fastest-growing companies enjoy - their governments' deep pockets.
Dubai Ports World paid about 20 percent more than analysts thought the company was worth. Publicly traded companies that were potential bidders were scared off long before Dubai Ports World's final offer.
Some non-American operators also have been more profitable because they are vertically integrated: They operate terminals at the export site, manage the shipping lines that transport the cargo and then operate terminals that unload the cargo at the other end, often in the United States.
Such soup-to-nuts management allows these operators to cut costs, increase efficiencies on high volumes and achieve higher margins.
Moreover, the international shipping business has evolved in recent years to include many more containers with consumer goods, in addition to old-fashioned bulk commodities, and that has helped lift profit margins to 30 percent, from the single digits. These smartly managed operators now manage about 80 percent of port terminals in the United States. The figure is 90 percent in Britain, a country that used to be the world's biggest shipping power.
Though two U.S. companies now rank eighth and ninth among the world's top 10 operators, it would not be easy for other American companies to get into the business.
The retreat began decades ago amid rising labor costs and slow growth, while non-U.S. companies spotted opportunities.
"For a long time in the United States, no one wanted stevedoring on their business card because it was not a glamorous job," said Prabir Bagchi, a specialist on supply-chain management at George Washington University. "Control of many of those low-paying jobs went east, and now look who's cheapest and best at providing customer service."
The biggest players in the global port and terminal management industry are a mixed group. Some are state-owned, some are publicly traded, some have shipping operations, and many are still run by wealthy families or their founders.
Hutchison Whampoa, the world's biggest container port operator, for example, is a conglomerate that is publicly traded in Hong Kong. The company's founder, Li Ka-shing, is often referred to as China's richest man, but the company has been priced out of recent bidding wars, in part because Hutchison's mobile phone business is cash-strapped.
APM Terminals of Denmark is part of the shipping giant AP Moller-Maersk, which is publicly traded but controlled by the Moller family of Denmark. The group has been buying up shipping assets, and purchased the container carrier P&O Nedlloyd in January.
"Certain port operations in certain locations recognized the potential years ago, and embarked on acquisitions," said Neil Davidson, a container ports analyst at Drewry Shipping Consultants in London. When approached, "P&O had an obligation to their shareholders," he said. "An offer came in which was too attractive to turn down."
P&O earned $383 million on revenue of $2.4 billion in the first six months of 2005. The company itself grew in the United States through an earlier wave of industry consolidation, taking over local companies like Gulf Service of New Orleans in 2000 and International Terminal Operating of Jersey City in 1999.
Similarly, Neptune Orient Lines of Singapore in 1997 acquired one of the oldest American terminal operating and shipping companies, American President Lines, which originated in the Gold Rush of 1848.
The opportunities for well-run non-American terminal operators to grow in the United States are clear. American ports are considered somewhat backward by shipping experts outside of the country.
For example, most major ports overseas operate 24 hours a day, seven days a week. But until recently in the United States, ports were shut down at night. Transmitting shipping orders electronically to some American ports does not necessarily save time because the orders need to be rekeyed into the ports' computer systems, a concession to unions trying to preserve jobs.
Operators outside the United States, on the other hand, have benefited by running several lower-cost port operations around the world in places like Hong Kong, Singapore and Dubai, all of which have become huge export and transshipment centers for international trade. Ports in the United States operate largely as local harbors, receiving ships with goods meant for nearby consumption.
"It's like we're used to flying out of a small airport while they've been using O'Hare or JFK," said Bob Watters, vice president of SSA Marine, a family- owned company in Seattle that is the largest terminal operator in the United States and that has been a force behind developing a large transshipment port in Panama.
With large volumes of trade, some of these non-U.S. operators have leveraged ties with their major customers, the large shipping lines, into much closer relationships. The arrangements resemble that of FedEx with Cisco Systems, where FedEx does everything from air and road transport to minor assembly to procurement from suppliers, said Bagchi, the professor at George Washington University.
HOUSTON In the outcry over who should run America's seaport terminals, one clear trend appears to have been overlooked: U.S. companies began withdrawing decades ago from the unglamorous business of stevedoring, ceding the now-booming industry to enterprises in Asia and the Middle East.
People in the shipping industry have watched with dismay as their fast-evolving business is sometimes misinterpreted in the uproar over the $6.8 billion sale of a venerable British concern, Peninsular & Oriental Steam Navigation, to Dubai Ports World, a rising operator from the emirate.
It is no accident that U.S. companies are not in the top ranks of global terminal operators, which have ridden the coattails of the explosion in world trade. That shift has transferred growing financial clout to a handful of seafaring centers in Hong Kong, Singapore and now Dubai.
Indeed, the takeover of P&O came down to a battle between two foreign, state-backed companies: Dubai Ports World, owned by Dubai's royal Maktoum family, and PSA, the world's second-largest port operator, which is part of the Singapore government's investment arm.
The acquisition price also reflects the advantage that a number of the fastest-growing companies enjoy - their governments' deep pockets.
Dubai Ports World paid about 20 percent more than analysts thought the company was worth. Publicly traded companies that were potential bidders were scared off long before Dubai Ports World's final offer.
Some non-American operators also have been more profitable because they are vertically integrated: They operate terminals at the export site, manage the shipping lines that transport the cargo and then operate terminals that unload the cargo at the other end, often in the United States.
Such soup-to-nuts management allows these operators to cut costs, increase efficiencies on high volumes and achieve higher margins.
Moreover, the international shipping business has evolved in recent years to include many more containers with consumer goods, in addition to old-fashioned bulk commodities, and that has helped lift profit margins to 30 percent, from the single digits. These smartly managed operators now manage about 80 percent of port terminals in the United States. The figure is 90 percent in Britain, a country that used to be the world's biggest shipping power.
Though two U.S. companies now rank eighth and ninth among the world's top 10 operators, it would not be easy for other American companies to get into the business.
The retreat began decades ago amid rising labor costs and slow growth, while non-U.S. companies spotted opportunities.
"For a long time in the United States, no one wanted stevedoring on their business card because it was not a glamorous job," said Prabir Bagchi, a specialist on supply-chain management at George Washington University. "Control of many of those low-paying jobs went east, and now look who's cheapest and best at providing customer service."
The biggest players in the global port and terminal management industry are a mixed group. Some are state-owned, some are publicly traded, some have shipping operations, and many are still run by wealthy families or their founders.
Hutchison Whampoa, the world's biggest container port operator, for example, is a conglomerate that is publicly traded in Hong Kong. The company's founder, Li Ka-shing, is often referred to as China's richest man, but the company has been priced out of recent bidding wars, in part because Hutchison's mobile phone business is cash-strapped.
APM Terminals of Denmark is part of the shipping giant AP Moller-Maersk, which is publicly traded but controlled by the Moller family of Denmark. The group has been buying up shipping assets, and purchased the container carrier P&O Nedlloyd in January.
"Certain port operations in certain locations recognized the potential years ago, and embarked on acquisitions," said Neil Davidson, a container ports analyst at Drewry Shipping Consultants in London. When approached, "P&O had an obligation to their shareholders," he said. "An offer came in which was too attractive to turn down."
P&O earned $383 million on revenue of $2.4 billion in the first six months of 2005. The company itself grew in the United States through an earlier wave of industry consolidation, taking over local companies like Gulf Service of New Orleans in 2000 and International Terminal Operating of Jersey City in 1999.
Similarly, Neptune Orient Lines of Singapore in 1997 acquired one of the oldest American terminal operating and shipping companies, American President Lines, which originated in the Gold Rush of 1848.
The opportunities for well-run non-American terminal operators to grow in the United States are clear. American ports are considered somewhat backward by shipping experts outside of the country.
For example, most major ports overseas operate 24 hours a day, seven days a week. But until recently in the United States, ports were shut down at night. Transmitting shipping orders electronically to some American ports does not necessarily save time because the orders need to be rekeyed into the ports' computer systems, a concession to unions trying to preserve jobs.
Operators outside the United States, on the other hand, have benefited by running several lower-cost port operations around the world in places like Hong Kong, Singapore and Dubai, all of which have become huge export and transshipment centers for international trade. Ports in the United States operate largely as local harbors, receiving ships with goods meant for nearby consumption.
"It's like we're used to flying out of a small airport while they've been using O'Hare or JFK," said Bob Watters, vice president of SSA Marine, a family- owned company in Seattle that is the largest terminal operator in the United States and that has been a force behind developing a large transshipment port in Panama.
With large volumes of trade, some of these non-U.S. operators have leveraged ties with their major customers, the large shipping lines, into much closer relationships. The arrangements resemble that of FedEx with Cisco Systems, where FedEx does everything from air and road transport to minor assembly to procurement from suppliers, said Bagchi, the professor at George Washington University.
A glib answer. So if you are not able to attack the argument you refer to the party affiliation.
This is the biggest blunder of the Bush Presidency.
I keep hoping this will be the wake-up call as to what's happening to the economic integrity. This didn't start under him, but he's allowed it to accelerate.
Americans must be spoiled and lazy if they do not want to work for $1 per hour.
Because our so-called "free trade" policies have left us with an over $700 billion annual trade deficit, other countries are sitting on huge piles of the dollars we gave them to buy their stuff (via Wal-Mart and other "low cost" retailers). But we no longer manufacture anything they want to buy with those dollars.
Didn't we export over $1.3 trillion last year?
And it's not like we don't manufacture anything.
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