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If it is profitable, why close it? What else is going on? Bringing jobs "home"?

"Once in awhile we get shown the light, in the strangest of places, if we look at it right" - Hunter/Garcia
by whataboutbob on Wed Apr 19th, 2006 at 10:23:38 AM EST
Over in the Breakfast thread we were discussing the possibility that Peugeot would move the plant to Slovakia, so the jobs are definitely not "going home" to France.

If the plant is profitable, it might be a question of opportunity cost. It might be more profitable elsewhere.

If Peugeot expects most of future sales to be in Eastern Europe, the "logistical costs" will be reduced by moving production, not to speak of lower labour costs.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman

by Carrie (migeru at eurotrib dot com) on Wed Apr 19th, 2006 at 10:33:59 AM EST
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In the FT article on this topic today, they quoted a Peugeot guy saying that each Peugeot 206 cost them 415 euros more than in their French plant.

They also noted that it was part of a strategy to close off smaller plants and focus on the big plants in France (which were likely to have their employment trimemd down as well) and new plants in Eastern Europe.

Financial analysts said it was "logical" and "necessary" in an industry with overcapacity.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Wed Apr 19th, 2006 at 10:48:39 AM EST
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