In the October 25 issue of Chemical and
Engineering News, Marc Reisch has an article entitled, "Dow And DuPont Unveiled
Job, Plant Cuts". Reasons for the reductions are indicated as operating in a
slow growth and volatile world.
Dow will eliminate 2400 jobs and shutdown 20 facilities.
DuPont will eliminate 1500 jobs, shutdown a polyethylene facility and sell off its automobile coatings business.
Why is this? The simple answer is that business is bad.
Dow, DuPont, and chemical companies in general make basic materials which are then formulated by other companies into consumer products. Business is bad for the formulating companies, and they reduce their purchases of basic materials from the chemical companies.
Why is business bad for the formulating companies? With a general reduction in household income, consumers are reducing purchases of formulated or consumer products.
How do we arrive at a general reduction in household income? A large amount of unemployment has led to a significant reduction in the average household income pie.
Are there any other factors which discourage the consumer from buying? Other than the fact that he has less money, the average consumer also has higher expenses. Gasoline prices are significantly higher. The price of bread is up about 80% in the last 15 years. Healthcare costs are up. Costs for restaurant meals and entertainment are up. Local taxes continue to increase. In general, cost-of-living continues to climb.
Why is cost-of-living up when household income is down? Cost-of-living is primarily related to the value of the dollar, which continues to shrink. The shrinkage is caused by inflation, which is a result of the overprinting of money by the Federal Reserve.
Why does the Federal reserve overprint money? Because government needs money to continue its operations. Government cannot obtain sufficient funds from public taxation or from borrowing.
Why doesn't government spend less money? There are several reasons. Government officials feel a sense of power when they are in control of spending public funds. Government officials also feel a need to be reelected in order to maintain their sense of power and personal high incomes. Reelection require satisfying the local electorate, which can be accomplished by bringing back from the federal coffers more money for local spending then has been obtained from taxes. In other words, at bigger piece of the pie.
Until most of these problems can be resolved, Dow, DuPont and other chemical companies will continue to see their businesses decline, which will require further employee layoffs and a shutdown of manufacturing facilities.Dow and DuPont shutdowns and layoffs
Dow will eliminate 2400 jobs and shutdown 20 facilities.
DuPont will eliminate 1500 jobs, shutdown a polyethylene facility and sell off its automobile coatings business.
Why is this? The simple answer is that business is bad.
Dow, DuPont, and chemical companies in general make basic materials which are then formulated by other companies into consumer products. Business is bad for the formulating companies, and they reduce their purchases of basic materials from the chemical companies.
Why is business bad for the formulating companies? With a general reduction in household income, consumers are reducing purchases of formulated or consumer products.
How do we arrive at a general reduction in household income? A large amount of unemployment has led to a significant reduction in the average household income pie.
Are there any other factors which discourage the consumer from buying? Other than the fact that he has less money, the average consumer also has higher expenses. Gasoline prices are significantly higher. The price of bread is up about 80% in the last 15 years. Healthcare costs are up. Costs for restaurant meals and entertainment are up. Local taxes continue to increase. In general, cost-of-living continues to climb.
Why is cost-of-living up when household income is down? Cost-of-living is primarily related to the value of the dollar, which continues to shrink. The shrinkage is caused by inflation, which is a result of the overprinting of money by the Federal Reserve.
Why does the Federal reserve overprint money? Because government needs money to continue its operations. Government cannot obtain sufficient funds from public taxation or from borrowing.
Why doesn't government spend less money? There are several reasons. Government officials feel a sense of power when they are in control of spending public funds. Government officials also feel a need to be reelected in order to maintain their sense of power and personal high incomes. Reelection require satisfying the local electorate, which can be accomplished by bringing back from the federal coffers more money for local spending then has been obtained from taxes. In other words, at bigger piece of the pie.
Until most of these problems can be resolved, Dow, DuPont and other chemical companies will continue to see their businesses decline, which will require further employee layoffs and a shutdown of manufacturing facilities.Dow and DuPont shutdowns and layoffs
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