The factory that makes Dunlop and Falken tires in Buffalo was shut down (Source).
Politicians are wailing that they were not consulted. They say that the loss of 1550 union jobs with excellent pay will be devastating to the economy and the tax base.
Sumitomo Rubber USA, the owner of the plant attempted to divest it but there were no serious offers to buy it.
As serious as a heart-attack
I have a proposal: The City of Buffalo, New York should buy the plant and run it. As simple as that. Sumitomo was looking for a buyer. How hard can it be? Is it any harder than running a water-treatment plant or keeping the streets clear of snow in the winter?
Buffalo takes on the contracts, pensions, healthcare benefits and payroll for the plant. I suspect that the City can find a few managers with a little bit of spare time on their hands.
A signal to the legacy media
Donald Trump refused to participate in any debates on the "mainstream media" after he was corn-holed by the "moderators" in the first one.
I thought that was a horrible idea and would be a disaster. That would have been true in the 1990s but mainstream media "news" now has all of the impact of a televised, LPGA tournament with a $1.5M purse.
It made ZERO difference in the outcome.
Sometimes the chickens come home to roost. Sounds like what happened in Buffalo.
ReplyDeleteWhy would a company want to be in New York?
ReplyDeleteThank you Mr. Wilder. And get off my frequency. Heh.
ReplyDeleteGovernments of any stripe have never run a business at a profit to my knowledge. While I know nothing about running a large business outside my own narrow specialty, looking at socialist government run economies, I doubt Buffalo would be an exception.
ReplyDeleteCome on now! After all Buffalo has done so well running the city finances.
DeleteWho is going to get the blame? Biden or Trump?---ken
ReplyDeleteERJ - Two items in the article that stick out:
ReplyDelete1) "Sumitomo said it has spent a staggering $140 million in recent years to modernize the plant, but the investment was not enough to rescue its struggling bottom line. "
2) "Poloncarz claimed that Sumitomo made no efforts to halt the closure of the factory through the local government.
'At no point did Sumitomo ask for any additional assistance to remain in operation, despite the fact we have always supported their efforts to succeed here in Erie County with tax incentives and assistance through the Erie County Industrial Development Agency,' he said. "
Responses
Item 1): If true that $140 million was invested in recent years, then the decision to walk away means that what they are going to "save" is worth more than $140 million.
Item 2): Companies, to my knowledge, need only file a WARN act with state governments. There is not requirement for them to reach out to governments with their business plans.
I suspect there is a backstory here that we are not hearing.
Of note in a link in that article, Tupperware is closing their last US manufacturing site (in South Carolina) and moving that production to an existing plant in Mexico. 148 workers affected.
DeleteI lived in South Jersey, a family thing, up until 4 years ago and worked in the oil and chemical industry. Over 30 years I was laid off several time, bought and sold, divested and one time contracted out. When the Philly region saw most of their refineries closed, many cheered and were happy to see that industry go away along with the good paying jobs. No one cared one bit. Fortunately my family commitments in Jersey were over and I departed the state which my family had called home since 1700. I’m not missing it one bit and I hope they enjoy their super high cost of living.
DeleteAnon - The same thing is about to happen at some scale - maybe larger - in California with at least part of the refining industry. Although they will have the same initial reaction about the departure of such an environmentally unfriendly industry, that - and the recent increase that is now coming on the fuel tax - will mean they have the pleasure of enjoying less well paying jobs, less available fuel, and higher costs for everything. The people least in a position to influence policy are the most impacted.
DeleteHow bad is the negative cash flow from the plant? That could stop anyone taking it on, even for free. But if it could be turned around cash-wise, they might be able to do what the original ESOP employee buyout deal did. Look up the story of Springfield Remanufacturing. They pioneered broad employee ownership and open-book management, and made many of their shot floors millionaires as the revitalized company succeeded. Another bad example in today's news is MSNBC: Comcast would have to pay someone to take it, as the company bleeds like a stuck pig.
ReplyDeleteHaving private business taken over by a "City Government" makes me shudder. How many examples of "Governmental mismanagement and fraud" do we need?
ReplyDeleteI suspect way too much political fraud-Union graft and hostile business processes from bureaucrats had a lot to do with this decision.
Not like Tires are going out of style and the prices are always going up.
While I haven't looked up the details, I would bet money that local and state regulations and the union cost the company heavily. Utilities and transport could have been factors also.
DeleteThis IS New York after all, where all of those are expensive.
What surprises me most is that a tire factory was still operating in New York!
Jonathan
OT, but thought you might be interested as this is in your neck of the woods - https://slaynews.com/news/multiple-fit-healthy-michigan-hunters-drop-dead-heart-attacks-november-deer-hunt/
ReplyDeleteIf it is the vax damage kicking in, it might get ugly this winter as everyone starts to clear snow.
Anon
I think Trump correctly saw that the first debate bought him a sympathetic reaction for its unfair premise, and that further attempts would be diminishing returns.
ReplyDelete