Can local manufacturing save our economy?

[Blurock]

It is general knowledge that manufacturing creates jobs. Not just sweepers and labourers, but sustainable jobs where people are trained with specific skills. Unfortunately we are losing those skills as we have done away with apprenticeships and also import far too much at the expense of our local factories.

I found this article interesting as it comments on the youth unemployment rate in the USA. They have nothing, compared to the 50% or thereabouts youth unemployment that we have.

http://www.linkedin.com/today/post/article/20130819165448-77238165-the-simple-solution-to-tackle-youth-unemployment?trk=eml-mktg-inf-w-celeb-eas-link2

Once a country loses its manufacturing skills it is doomed.

[Dave A]

Once a country loses its manufacturing skills it is doomed.

Or as in our case, overly reliant on our resources (which admittedly will have an end point somewhere along the line).

I agree manufacturing capacity and manufacturing skills is an incredible economic driver, but I wouldn't ignore agriculture as an alternative driver. Or tourism. Plenty of countries do quite well out of those too.

My personal view is it's crazy for us to pick and choose - we've got the potential to drive and deliver in all these areas...

But, there is no state funding for this training. We are paying the cost ourselves. We believe it’s a smart investment in the long-term success of our company. The investment we make pays off in a workforce of long-term, highly dedicated, highly skilled employees.

Funnily enough, I've been shaping up a blog entry on this very subject. Watch out for "Why every business needs a duck factory" - coming soon.

[Blurock]

The strongest economies in the world are built on manufacturing. China, Japan, Korea, Germany etc. The USA has realised that they are exporting jobs by outsourcing every possible manufacturing function and are bringing a great number of manufacturing jobs back on-shore.

South Africa has much to learn from these countries and the government should invest much more in re-industrialising and less on party politics.

Agriculture is the backbone of any country and is also a source of employment. Also important due to food security. Unfortunately very basic skills are required in the labour market, whereas manufacturing jobs mostly require higher and more technical skills which are more sustainable and has higher earning power.

Tourism is the duty of every citizen; even if just to make tourists feel welcome. Tourism also create jobs in support functions such as transport, hospitality etc. However, apart from tour operators, owners of establishments etc, the lowly skilled waiters and cleaners also do not earn much.

[ghostwriter]

Tourism is the duty of every citizen; even if just to make tourists feel welcome.

political chinwagging cant help these chaps

[desA]

During an inflight impromptu meeting between myself & the then cabinet minister - Nkonde Balfour - on a flight from East London, SA to Jhb, SA - some 15 years ago - questions were raised in regards to future job creation in South Africa & how the ANC was gearing up to address it.

NB's answer was:

The poor people need to come to us with their ideas

My reply:

The poor people are where they are because either they do not have the required ideas to move the nation forwards, or education, finances, coaches. Something more tangible has to be done

1. Create vision
1.1 Government-sponsored think-tanks.
1.2 Discover what is uniquely South African.

2. Develop action plans
2.1 Develop an action plan to fully exploit & leverage this unique position.

3. Seek assistance
3.1 International & local sponsors to support the new direction.

4. Build local support capability
4.1 Develop required skills - professional, trades...

...

An offer was made that I could discuss the matter further with him, at any time. Nkonde's gold-foil on white business card e-mail address bounced when I attempted to follow up on our meeting!

Final outcome : Zero

[Phil Cooper]

Manufacturing can conribute HUGELY to our economy.

Problem is

- untrained people cannot do what is necessary

- People thrilled to get jobs for a month or two - then join the strikes for more benefits and money without any rise in productivity

- companies are scared to hire people because of potential strikes, and inability to fire if the staff member does not prove to be effective.

As a result more and more mechanisation is happening, stopping job creation as it is safer to do it by machine.

[Justloadit]

Manufacturing can conribute HUGELY to our economy.

Problem is

- untrained people cannot do what is necessary

- People thrilled to get jobs for a month or two - then join the strikes for more benefits and money without any rise in productivity

- companies are scared to hire people because of potential strikes, and inability to fire if the staff member does not prove to be effective.

As a result more and more mechanisation is happening, stopping job creation as it is safer to do it by machine.

Absolutely.
I am in a similar situation, on the verge of getting substantial orders, and my immediate thought is how to do the order with out employing a single soul more in my organization on a permanent basis. Mechanization, with short term contracts, where I simply do not employ the person who has worked for me again for at least a year after their contract expires. This can be done due to the high number of unemplyed looking for work.

The labour laws just make employment a nightmare. One will always be taken to CCMA, even if procedurely correct, and yes you win the case, but the cost to fight and time wasted is just not worth employing anyone on a permanent basis.

[IanF]

Absolutely.
I am in a similar situation, on the verge of getting substantial orders, and my immediate thought is how to do the order with out employing a single soul more in my organization on a permanent basis. Mechanization, with short term contracts, where I simply do not employ the person who has worked for me again for at least a year after their contract expires. This can be done due to the high number of unemplyed looking for work.

The labour laws just make employment a nightmare. One will always be taken to CCMA, even if procedurely correct, and yes you win the case, but the cost to fight and time wasted is just not worth employing anyone on a permanent basis.

I have given away old duplicating machines, no one wanted to buy them, and use digital copiers now. Slightly more expensive but all I do now is hit print check a proof copy and run the rest.
BTW anyone want to buy a 10 bin collator?
I wonder will we be able to get back to motivated employees?

[desA]

Phil Cooper:
Manufacturing can conribute HUGELY to our economy.

Only if there is a external market to sell into.

People (country) don't (doesn't) pay themselves (its people) to take in their own washing.

JustLoadIt:
The labour laws just make employment a nightmare. One will always be taken to CCMA, even if procedurely correct, and yes you win the case, but the cost to fight and time wasted is just not worth employing anyone on a permanent basis.

One arm fighting with the other arm while taking in your own washing.

IanF:
I wonder will we be able to get back to motivated employees?

When they get hungry & the rules of washing removal become sensible.

[ians]

I have managed to find enough work to keep 2 to 3 teams busy, finding the work is the easy part, finding the right people to do the work is the challenge. Between smoking and social media, I would need the teams to work a 12 hour day to make up all the lost time, when I mentioned this to my staff they find it rather amusing.

[roryf]

I run a manufacturing company and I am wanting to automate as much as I possibly can.I have tried and am still trying to create employment but it is not easy. The two major problems for me are:


Labour
The labour laws need to be relaxed.Just about every time I dismiss an employee I get taken to the CCMA.This is after following every procedure,getting in an outside Chairperson,having an appeal process.

Productivity is not nearly what it should be,despite tasking work and adding incentives.

Sick leave and just not pitching on the day.

TB and AIDs is a major problem too.

Government
We are inspected by Dept of Environmental Health/SARS/Dept of Labour at our various outlets and are often criticized for not having enough plasters in the First Aid box or the Fire extinguisher is almost out of date.All petty stuff! When you ask about the person/company that are really taking chances across the road,you get attitude.We need to have a system that is more fair.

The local service providers Eskom and Telkom also need mentioning as their service leave a lot to be desired.



I have considered getting all my product made overseas and then just shipping it in on demand.It would be risky for me to do that at the moment but could be a reality soon.For my short term planning I will be automating more.

[Incentive]

The DTI has made various incentive schemes available for manufacturers, where they can improve their competitiveness and sustain employment numbers, such as Manufacturing Competitiveness Enhancement Programme (MCEP), Export Marketing and Investment Assistance (EMIA) and Manufacturing Investment Programme (MIP). These incentive schemes are actually well-run and extremely well-funded, unlike the National Jobs Fund that was managed by the Developmental Bank of SA. With the abovementioned DTI incentives, you can get up to 50% of your funds back from the DTI.

The problem with the incentive schemes is two-fold:
1.) Most people are not aware of them, and applying for them is quite technical. Most smaller manufacturers cannot afford to employ a dedicated person to manage the application and the claims.
2.) Many people misinterpret the incentives as funding that will allow them to expand/invest in new plant & machinery, where in reality the incentives is a facility to get money back after your expenditure. You just need to apply for the incentives at least 3 months prior to taking the new machines into production.

If you are interested in applying for these incentives, it is best to make use of third-party consultants, due to the amount of work involved. Just be careful when choosing a consultant, as some consultants charge a very big fee upfront, with no guarantee of success, whilst others charge a small fee for the application, and will only charge a percentage of what you get back from the DTI, once you actually receive money back. This leaves the motivation with them to ensure you get money back, while you focus on managing your company.

[Blurock]

I have considered getting all my product made overseas and then just shipping it in on demand.It would be risky for me to do that at the moment but could be a reality soon.For my short term planning I will be automating more.

Very, very risky as you will be exposed to currency risk, as well as performance risk from the manufacturer. The sad thing is that you will be exporting jobs and technical skills that is sorely needed in this country.

I understand your plight, but we have to start somewhere. Remember the story about the boy and the starfish. It made a difference to the ones that he saved.

[adrianh]

People in this country seem to think that they are owed jobs and once they have they jobs they are free to abuse the employer and his business to their delight through strikes etc. My view is that business generally takes the path of least resistance. Why in the world would anybody put up a factory in this country and deal with the daily labour nonsense if they could put the same factory up in India or simply import from China.

The locals are simply incapable of understanding that people are in business to make money, they are not in business to employ hundreds of lazy ass strikers who do as little s possible. I will employ people as long as its productive and cost effective to do so.

The masses need to learn that nobody owes them, they need to get off their asses and work for a living, like we all do. The fact that I make X amount because I spent 40 years learning how to run my business gives them no right to demand and destroy.

What they don't understand is that many skilled employers can pack up and go to another country and start afresh. If I were to go to OZ today I could earn a living and start a business fairly quickly because my skillset is in my head. The masses are knocking nails into their employment coffin every day that they demand and destroy. When skilled people leave the masses will be left with nothing but industries that they destroyed themselves.

[Justloadit]

How long can the bully(NUMSA) continue his reign?

Are we beginning to see the cracks with the petrol attendants strike?
Most people are quite happy to pump their own petrol and if is a cheaper price all the better.


I heard an interesting caller on 702 radio yesterday, which was about the forced retirement of the Prisons commissioner, where an oldish gentlemen, over 60 years old called the radio station and commented that whilst he understands that you retire people to give the youngsters employment, that they have no skills due the poor education, or lack there off, and that he had been at a construction site, in which all the attendees, from quantity surveyor, engineers, were all over the 60 year age. And that the reason that they were currently employed was due to the years of accumulated knowledge, and that the older people tended to make far less mistakes.

A few years back I was very concerned due to the lack of young engineers, but after this comment, I am very chuffed, it simply means that I have protected employment for at least another 20 or 30 years, well into my retirement age


Well done to our current government, ensuring my continued employment for many many years to come.