Conference 7.286::digital

>    I'm upset that I as a taxpayer subsidize the tax havens,
>    so they can inturn take my job away.
    

	Hi,

	I sympathize with your plight.  However, if you'd like to
	rail at someone, rail at your government.  US manufacturing
	is moving overseas due to a number of things that have made
	it increasingly difficult  to earn money building "things" 
	in the US:

	1) Increasing taxes - income, property, workers comp, etc.
		High capital gains taxes, taxes on inventory on
		hand at the end of the year....  All these gouge
		huge chunks out of the money available to corporations
		to invest in manufacturing, R&D, employees, etc.

	2) Increasing environmental restrictions - new wetlands
		protection laws now make development of current
		properties impossible in many areas.  The new
		ruling about women and hazardous chemical environments
		puts the employer between the Supreme Court and
		a pack of tort lawyers.

	3) Increasing worker costs - Health insurance costs are
		going through the roof, workers want/need more
		money as the government devalues the currency and
		taxes workers more.  The employees then put pressure
		on manufacturers for more bucks to compensate them
		for their continuing loss of income.

	4) New rules in some states about plant closings.  If a
		a company has to keep a plant open past the point
		where it is not productive....it is LOSING MONEY.
	
	These are just a few of the incredible morass of regulations
	and restrictions facing US manufacturers.  Folks that let their
	legislators pass these rules, or let federal and state
	bureaucracies "make law" are now beginning to pay the price...
	with their jobs.  Looks like it may be a pretty large number
	of us Deccies.

	If you were U.S. Widgets, Inc., wouldn't Hong Kong or
	Mexico, or Ireland, or Taiwan look pretty good to you ?

	Regards, and try to keep a stiff upper lip,

	Steve H

    Thank God (and government) for all the things you mentioned.  Would
    you seriously suggest that we pay our workers thirty bucks a week like
    in Mexico.  Do you want them to live in tin shacks and S---- in the
    street?
    
    U.S. firms that move manufacturing abroad should be FORCED to
    compensate workers who lose their jobs for as long as it takes to
    find a new, equivalent job.
    
    The WSJ had a good article this week on how Mexican plants doing U.S.
    product work grossly violate child labor laws....and the Mexican
    officials and U.S. managers look the other way.
    
    I really expect better of Digital.

	Gee, COOKIE::LENNARD, your previous reply is the only thing
	you've written in this conference that I disagree with ;^)  !

	Unfortunately, forcing companies to pay employees
	whose jobs are lost is just another instance of the
	same problem.  What it means in the long run is that
	the NEXT plant to be built will NEVER be built in the
	US.

	I don't recommend that US companies pay folks $30 a week,
	and so forth.  We both know nobody would work for that
	wage here.  As long as the hiring is a mutual, non-coerced
	agreement between employer and employed, then the
	wage paid will be a "market" wage.

	But if a Mexican worker can choose between $30 a week and
	starvation, who's to state that it's degrading to work
	for $30 a week ?

	Manufacturing moves to other countries are a direct RESULT
	of policies/laws like the ones you suggest in .2 .  The more
	we ( workers, employees, citizens ) hamstring business,
	the more WE hurt.  Guaranteed.

	Steve H

I don't think you can totally blame the government for the flight of
manufacturing jobs from the U.S.  Manufacturing moves to Europe because
of European restrictions that require local manufacture.  Manufacturing
moves to the third world because of lower labor costs.  Neither of these
factors is within the control of the U.S. government.

    I don't wanna hamstring business, but I sure want to hamstring
    corporate greed!  If we have to lay people off and move work to
    whatever to be competitive, there is something radically wrong.
    
    Actually, I don't give a damn as I'm about 2-3 years away from retirement
    and they could lay me off today, and I would be just fine.  But what
    are my kids and grandchillen gonna do?  Fry hamburgers for the friggin'
    Japanese?
    
    I can just see it now...Corporate headquarters full of MBA's giving
    profitability presentations to armies of new vice presidents, and all
    the rest of us on welfare.  I'd as soon see DEC close it'ss doors
    than go this way.

    Our last president, Reagan, went to Japan right after he was out of
    office to receive a $2 million dollar gift for giving a short speech. 
    I believe the $2 mil was for protecting Japan's interest.  If the
    president earns $200K a year then that means Japan paid our
    ex-president more than the American Tax payers paid him.
    
    What do you think Bush has on his mind when he makes decisions around
    trade.
    
    It would seem to me that if we are governed by laws to manufacture then
    we should allow trade only with those countries who comply with our
    laws.  IE; minimum wages, polution standards, and labor laws, OSHA.
    
    
    Dave

    So Mark, what WILL be done in BTO?  Or are they gonna completely close
    down what we "expatriates" still fondly refer to as "the Great Green
    North"?
    
    								-Steve

    Is it only because of tax shelters that U.S. business is moving off
    shore? 
    Is it only because of lower labor cost that U.S. business is
    moving off shore?
    Is it only because of excessive regulation that U.S. business is
    moving off shore?

    NO! and NO! and No!

    Tax shelters are a big help to the corporate bottom line but they are
    not the only thing that is looked at. How about the hourly/weekly
    payroll? yes a Mexican may only earn $30 a week but to him that is a
    small fortune.  Also, when you look at corporate overpopulation in the
    U.S. you can understand why a company would want to get the h**l out
    of here. Why should they pay 4 people to do the job that really only
    needs 2 to do safely. Yes, a worker needs a break for a smoke , coffee,
    p** but----- should it be mandated by law or union contract that the
    worker get 10 minutes every hour as in the auto industry. 

    One other major factor in cost is the zoning/environmental issues. Yes
    - I am in favor of keeping the earth as green as possible for as long
    as possible. Yes I like to breathe fresh air and drink clean water, but
    do I want to give up watching television in an air conditioned house
    because some ecologist thinks that maybe someday there might possibly
    be some kind of animal that may want to make a nest some where in the
    area where the plant that will employ 1000 people or provide power for
    a city of 50,000. Do I want to keep my car and be free to move around
    or do I want to be forced into living in an area that is determined by
    how far I can walk, or my horse can walk in a day, because an
    environmentalist thought that maybe ------ so the oil and gas are
    restricted and no autos are built and jobs are lost to overseas and
    when or if the plant is finally opened the cost is staggering because
    of all the extra restrictions placed on it, or the length of time it
    took to get built because of legal and ILLEGAL delays.   

    I think it's definitely worth the cost to save what's left of the
    environment.

    The loggers are making a big fuss over the possibility that they may
    not be allowed to cut down our last old-growth forests in the Pacific
    Northwest.  If they're allowed to cut down the trees, they will soon
    need to look for other work anyway.  But they will have destroyed an
    ecosystem that took THOUSANDS of years to build in the process.  Isn't
    97% of the U.S. continental land area enough for us humans?

    Bush wants to let oil companies drill in the Alaskan National Wildlife
    Refuge.  Yet he opposes car fuel-economy standards that would save more
    oil than anybody expects to find in the wilderness.  If he gets his way,
    we will risk serious harm to this national treasure just so that we can
    immediately waste all of this oil pumping extra CO2 into the atmosphere.
    Does driving inefficient cars help or hurt our national security?

    Rainforests are disappearing from Central America at a horrifying rate.
    These ecosystems contain so many species that scientists have not begun
    to catalog them.  Many important medicines are derived from plants found
    there.  Do you believe it's worth throwing away possible cures for cancer
    so hamburger can be a few cents cheaper?

    Do you look forward to explaining to your children that "elephants only
    exist in books; my generation killed them all"?

    Japan and many Western European countries have put far greater emphasis
    on energy efficiency than the United States has.  Do you think it helps
    U. S. competitiveness to use more energy for every widget produced?

>    <<< Note 1431.2 by COOKIE::LENNARD >>>

>    U.S. firms that move manufacturing abroad should be FORCED to
>    compensate workers who lose their jobs for as long as it takes to
>    find a new, equivalent job.
 
To put it politely, I disagree somewhat with the above statement.

Enivonmental issues teach us the same as issues economics do. We all
share the same planet. You'd better learn to live with that fact. 
Note 1431.1 is pretty much on the ball. Why on earth should Digital
pay anyone any compensation because it makes sense for the company to transfer
work overseas? Much of the Scottish steel and shipbuilding industries has
been lost to plants in the far east. The trend isn't all towards Europe.
It is expensive to produce products in the US because of the high
wages there (amongst other things). The US is pricing itself out of the
world market. We live in a world where Japan has one of the worlds
strongest economies and the EC has a market 25% bigger than the US.
It can hardly said to be a US led world economy, and when you're 
not the dominant economy you pay the price. Price yourself out the
world market and you lose jobs. Lower your wages and you might get
some jobs back. If US employees were paid a European salary you might
not be losing so many jobs as you are. When it becomes easier to 
manufacture goods anywhere in the world, then companies look abroad
to manufacture there and save costs. I would have thought than in the US
of all places, you would understand concepts such as a free market
economy and market forces. As it becomes easier to do business
anywhere the world, so the countries with the highest production
costs will probably pay the highest price in terms of redundancies.

>    I really expect better of Digital.

Digital is a company which needs to make profit to stay in business.
Digital isn't the world's ethical policeman.

Craig

    RE: "All in the name of profit"
    
    
    When I lived in Colorado Springs, much like one of the responders,
    I learned what unchecked free enterprise does.
    
      o  Borrows large sums of money from banks to build excess housing.
    
         Result:  The average digital employee in Colorado Springs has
    	    	  negative equity, potentially no job, and maybe no 
    		  money because his money went to Neil Bush (The 
    		  presidents son).  
    
    	 Other local opportunities:  Training wage at the Hamburger Stand.
    
    
    I now live in an area of the country with strong wet-lands laws, strong
    zoning, moderately liberal government, sh*tty weather.  Whay do I have,
    maybe no job, money in the bank, and a house worth twice what I paid 
    for it.  (Offseting the worthless one I still own in Colorado Springs).
    The posibility of other employment outside of Digital that might be 
    as good as Digital can be.
    
    
    The bottom line of this discussion underlines the fact that tying
    politics to success is ludicrous.  It has absolutingly nothing to
    do with the current problems in the computer industry.  Digitals
    problems are not related to taxes etc., rather to some serious
    market miscalculations and management errors.  
    
    Initially the cuts appear to be in the people at the lowest levels.  
    These in most instances are the wrong people to get rid of.  
    Baseball teams do it right, when a team fails, fire the manager.
    I know Ken understands that issue and that's why compensation packages
    are being offered.  The silver lining maybe that many of the people
    transitioned will become digital customers.  If they leave on a good
    note, they will our most valuable resource.  This is the same policy
    employed by such firms as IBM and Arther Andersen.
    
    I'm sorry that the company is planning on closing the BTO facility
    because Burlington is one of the nicest places in the US to have
    a plant.  It's a said loss that IBM will be left as the only mfg
    to have facilities there.

    
    
    	I've been reading some of the notes about the restrictions and
    business going overseas, etc.  Well, didn't we (USA) get in a mess the
    same way with cars, TV's and electronics.....because we didn't want to
    be bothered with some rules.
    
    Volvo, MB, and other car companies are making hay about the safety
    aspcts of a car, I can remember when US auto manufaturers were
    screaming that the American consumer wont buy a safe car, it will cost
    toooo much.
    
    Is this happenming now wit{ the environment?  Europe is moving ahead
    with environmental regulations and programs and services, etc. Here in
    the US we're BITCH'N about the rules and waiting for the solution to
    come from across the ponds on each coast. We should start on our back
    yards and get the business going here.
    
    nuf sed....for now

    BTO still has a fighting chance to survive, in spite of System Power
    Business (SPB) manufacturing going away.
    
    The truth of the matter is, BTO is downsizing.  But, I believe there's
    a chance that one day BTO will become a manufacturing site again...and
    we may see some rehiring...
    
    I would like to believe that BTO plant will not shut down.... ever.
    
    John
    

    re .10 ..... I beg your pardon, but U.S. factory wages are
    significantly lower than in Japan and most Western European countries.
    On top of that, benefits packages are absolutely medieval compared
    to Europe...not to mention lack of long vacations, etc.  You are
    dead wrong, Sir.  Our minimum wage is also a starvation wage...not
    the case in many European countries.
    
    Also don't forget that our unemployment insurance system only covers
    SIX MONTHS.  After that you are literally on the street, and can and
    often do lose everything you've spent a lifetime accummulating.
    
    The whole "pricing ourselves out of the market" syndrome has not been
    operative in the U.S. for at least ten years.
    
    Accuracy, please!!!

People, let's not confuse American industry going out of business because the 
Japanese, Germans, et al are more competitive, with American firms shipping 
their jobs overseas.

I've worked in Burlington for the last eight years.  There has been a constant 
line of programs and plant themes which were going to increase our 
competitiveness.  We went through MRP II Class A, Dr. Deming and TQC, JIT, 
Valueing Differences, Self Directed Work Teams, Statistical Reporting, ad 
infinitum, ad nauseum.  Each of these programs was sold to the work force with 
varying degrees of non-too-subtle Jap bashing.  The message was that you had 
to do this stuff to keep your job - if you failed, the yellow peril would put 
you (and DEC) out of business.

Well, guess what.  We went through all of these programs and got pretty good 
at them.  And, guess what.  It didn't mean squat.  When times got rough, we 
didn't lose our jobs to Fujitsu or NEC or Mitsubishi.  We're losing them to
folks in Hong Kong, Aguadilla, Chihuahua City, and Galway.

DEC is in trouble.  I'm not sure who caused the problem, but there are a few
things that seem clear.  I'm pretty sure that the folks that have been bolting 
power supplies together out on the line didn't say that Unix was snake oil, or 
decide to flush $300,000,000 down the toilet to develop Argonaut, or spend 
half a billion on Aquarius (which, if we are lucky, might return 20% of this
figure before end of life), or keep DECNet level V six months from completion
for the past six years.  And yet, when the going gets tough, who is going to 
be on the bricks?

Larry Rogers

> Fry hamburgers for the friggin' Japanese?
    
When we are dealing with the crises of losing co-workers and shutting down
manufacturing operations, I'm sure it's just a breath of fresh air to our 
Japanese/American and Japanese coworkers to read your note.

Barb

    I musta got cross-circuited in here with PEAR::SOAPBOX.

    Gimme a break about the "happy workers".  I'm driving off a WSJ
    article this week about a 12-year old factory worker, who had to
    be hospitalized for awhile from inhaling cement fumes (in violation
    of Mexican law), and whose "home" is the size of a railcar within
    24!!!inhabitants.  Oh, and I almost forgot all those happy workers
    in Haiti.
    
    .16 .....I don't know what to tell you.  Just what in the hell am I
    supposed to call them??  Take your political-correctness somewhere
    else please.  We're having a serious discussion here.  I consider
    Japan, Inc., a most serious threat to our nation, our people, our
    way of life, etc.  I think they are out to reduce us to absolute
    colonial servitude, and I reserve the right to call them Japanese.

re .19

If Japan competes and wins, what's wrong with that?  This is a world economy.
The US can no longer think of itself as an island.  The exploitation of workers
*anywhere* is not tolerable, however.

And as far as "our way of life" goes, if that includes our current wasteful,
polluting, drive-your-personal-car-that-gets-20-miles-a-gallon-everywhere-you-go
I'd gladly see that go away.

Paul, who is contributing to this note straying from its original topic...

    Are you for real?  Japan, Inc. is not a competitor.  It represents a
    total national effort, industrial and governmental, to destroy us.  I figure
    we have 3-5 years to fight back or lose it all.  I would favor a total
    boycott of Japanese goods for six months for starters.
    
    BTW I am not willing to give up any of the "wasteful" things I have
    acquired in my 40 years of working.  They'd love your attitude in
    Bejing where they all run around on damned bicycles.

    ...just got the message.  Enfield, CT. is closing too.  Transfer
    of operations to SPO (whatever that is) is cancelled.  Who's next?
    CXO maybe.  But not to worry, maybe Japan, Inc. will give us a loan.

Not to further the rathole, but .21 speaks some truth appearantly...rumor
has it that "Japan Inc." is trying to buy outright the conglomerate
known as the Iowa Beef Producers which does ~65% of the beef production
in the USA. Rumor also has it that beef prices will double or triple if
this happens.

What would happen if "Japan Inc." could buy DEC or run us into the ground?

Lee

    
    Re: .21
    
    > I would favor a total boycott of Japanese goods for six months
    > for starters.
    
    First of all, YOU need to get real.  This may be an exaggeration
    on your part or perhaps it's not, but it would throw us into total
    economic chaos if we did this.  If you want people to listen to
    your concerns and take them seriously then you have to make it
    clear that you're thinking and not blindly reacting.
    
    >BTW I am not willing to give up any of the "wasteful" things I have
    >acquired in my 40 years of working.  They'd love your attitude in
    >Bejing where they all run around on damned bicycles.

    Yes and and that "I got mine; s*** the rest of the world" attitude
    is precisely why we're in this mess.
    
    There is now a global economy.  NO industrialized country can exist
    today without cooperating with the rest of the world.  Wake up.
    
    Steve
    

    Take care friends with comments that border on racial.  It's a small
    planet and we (your friends in GIA) have computers too.  It's funny to
    me that you decry stovepipes in one breath and champion national
    separatism in the next.  We're all in this together. Don't go looking
    for scapegoats.
    
    Chris, 

re .19:

I don't think .16 objected to your calling the Japanese "Japanese."
He probably objected to your calling them "friggin' Japanese."

I think that a lot of the invective in this note is completely out of
place.  I'm going to write-lock this topic for a day or two in order for
things to cool down.  Digital, and this conference, is a community of people
from many nations; jingoism and bigotry has no place here.

I'd welcome constructive suggestions for how to handle this by mail.

				Steve - co-moderator

I've reopened this topic - please avoid the insults and derogatory comments
about other countries and their people, and try to keep the discussion
germane to Digital.

				Steve

    I apologize to our GIA folks for any possible insults.  I just get a
    bit warm around the collar on this issue.  I will limited my comments
    to "Japan, Inc."....OK?  If it's good enough for the WSJ, we ought to
    be able to handle it.
    
    The Iowa Beef comment is a perfect illustration of my point.  JI has
    fought every attempt to open up their market to our beef for 25+ years.
    BUT, if they can own it, control it, and take all the profit, then
    suddenly there is no problem.  Exactly what Great Britain was doing to
    us prior to the revolution.  It's called colonialism.  
    
    I'm serious about the six-month moratorium.  Of course it would hurt
    like hell, but it's necessary to get their attention.  An analogy is
    the old story of hitting the mule between the eyes with a 2x4 to get
    it's attention.
    
    JI could shut Digital down today.  We buy 69% of our product components
    from Japan.

Re: .29 and others

It's interesting that you continue to refer to the Japanese people as "they", 
"them", etc.  Take a look in the Digital phone book and you'll find that 
Japanese facilities take up 5� pages, about half as much as all those 
facilities in Masachusetts which many people consider to be the whole of 
Digital.

Some of "them" are a big part of "us".

-  David

    Back to my base note. Alot of my gripes are with my government,
    but some is also with Dec management.
    
    The government:
    
      The U.S. government provide large tax incentives to U.S corporations
      to located in Puerto Rico. The way that we had it explained to us
      is that essentially labor is free for companies operating there
      because of tax incentives. This gets back to my point of being
      very frustrated. I as a taxpayer am funding the tax
      incentives that will take my job away.   It is not right and I have
      let my representatives know that and I will continue to let them
      know.
    
    Dec Management:
    
      I am upset that we were misled about what it was, we needed to do
      to be a succesful plant in the eyes of Dec management. I' m not
      sure there is anything we could have done. The goal of some
      management in this corporation is to move manufacturing off-shore.
    
    
    I saw in one of the earlier notes where the noter was saying that
    the point is that the company needs to make money. If that means
    closing mfg plants in the states, then do it. I couldn't help
    think that this person feels like he is in a job that is safe and
    that his function will not go off-shore. But you know what, if
    the US continues on it present course, more and more job functions
    will leave. First it is manufacturing, next it may be a lot software
    jobs and then other areas. Before you know it there will only be  a few 
    corporate officers and a bunch of lawyers left running the company.
    
    Mark
    
    
    
     

In what countries does DEC have manufacturing facilities?  Is Japan among them?

    You're absolutely correct, and I share your frustrations.  Probably
    the next big group to hit the bricks will be anyone associated with
    hardware engineering, that is once we've destroyed manufacturing.
    
    I don't feel quite as bad about Puerto Rico...after all it is a U.S.
    Commonwealth...and I think most of the so-called tax exemptions are
    those offered by the government of PR to encourage plants to relocate
    there.  Also, the healthier the PR economy is, the fewer welfare dollars
    we have to send down there.
    
    But, I do get absolutely rabid when we send jobs to Third-World
    countries which are clearly exploiting U.S. Corporate greed, not to
    mention their own people.
    
    And meanwhile our so-called government which has never met a war it
    didn't like, sits on their hands on this most-important issue.
                      

    RE -1
    
    >hardware engineering, that is once we've destroyed manufacturing
    
    Ay-uh.....particularly MECHANICAL engineering, bottom feeders
    that we are....:^)
    
    Mark

  <<< Note 1431.32 by NOTIME::SACKS "Gerald Sacks ZKO2-3/N30 DTN:381-2085" >>>

>In what countries does DEC have manufacturing facilities?  Is Japan among them?

I don't have a list of all the countries, but a walk through the back of the 
Digital phone book will tell you.

Yes, Japan is among them.  Listed is:

  "(Chiba) Japan Manufacturing/Ichikawa Plant/QAM/SDD Distribution Center"

or GYT for short  :-)

-  David

    
>>    I don't feel quite as bad about Puerto Rico...after all it is a U.S.
>>    Commonwealth...and I think most of the so-called tax exemptions are
>>    those offered by the government of PR to encourage plants to relocate
>>    there.  Also, the healthier the PR economy is, the fewer welfare dollars
>>    we have to send down there.
  

      No argument with the original premise of the tax breaks.  Many US
      companies have opened facilities there, boosted segments of the local
      economy, and done quite well.  

      This was also all first put in place before manufacturing in the
      U.S. was chasing cheap labors dollar around the world.  Things are
      different now.  

      I think that we're smart enough in manufacturing now to compete with
      countries offering low cost wages.  We have other competitive edges.

      What we CAN'T compete with is the tax havens (granted by our own 
      government, and lobbied for continuance by U.S. firms).  We also
      can't compete when major markets are effectively closed to us due
      to protectionism of other conuntries.  

      All I want is to be able to compete on even footing.  Yes, the world
      IS moving towards more of a world economy.  The U.S. will never
      dominate manufacturing like it once did.  However, put us back on
      even ground with all the other countries, and I'm positive that
      our competitive drive will allow us to recapture our fair share
      of the business.

      Manufacturing plants in the U.S. in Digital are almost unilaterally
      deemed "uncompetitive" with non-U.S. plants.  Studies done, however,
      have shown that take away the tax advantages, and no such 
      uncompetitiveness exists.  

      Manufacturing in Digital has been hurt by the lack of a long-term
      strategic plan.  This was obvious to me when I started here over
      10 years ago.  The situation has only gotten worse in the intervening
      time.

      Plants, with a few exceptions, didn't have clear-cut charters that
      lasted for long.  This left plants on their own to scramble for 	
      products.  In addition, somewhere along the line, growth projections
      and volume projections for new products reached the level of
      absurdity.  It was as if the company expected to continue to grow at
      30% forever.  

      All of this resulted in massive over-capacity.  It is those of us
      in these manufacturing plants that are bearing the brunt for this
      now.  No one can be expected to be competitive when they're only
      utilizing 10% of their capacity.  

      The answer is complicated.  Today's problems are coming from years
      of not understanding the fact that manufacturing needs to be a 
      key part of the corporation's strategic plan.  Unfortunately, the
      solutions that are forthcoming are designed to maximize short-term
      profitability.  The people that will pay for that the most will be 
      many of those who have dedicated so much to plants like Burlington,
      Enfield, and all the others over the years.

      -gary
      

AOH Austin, TX - Oak Hill/- Discrete Manufacturing Services
APO Andover, MA - Semiconducter and Manufacturing Technology ( SCMT )
BBP Birmingham, England - Manufacturing Industries Customer Centre
BOO Roxbury, MA - Manufacturing Plant
BPO Marlboro, MA - GIA Manufacturing and Engineering Support Headquarters Staff
BSM Bristol, England - Southern Manufacturing Applications Centre
BTO Burlington, VT - Central Processing and Manufacturing Plant
BXC Boxborough, MA - Small Systems Manufacturing - Admin
ENO Enfield, CT - Manufacturing Plant
FXO Franklin, MA - Systems Manufacturing 
GYT Chiba, Japan - Ichikawa Plant/Quality Assurance Manufacturing/QAM/SDD
HKO Kwai Chung, Hong Kong - Manufacturing Plant
HZO Hudson, NH - Low Volume Software Manufacturing
ICO Chelmsford, MA - Manufacturing Strategic Collaberation/N.E. Volume District
KBO Kaufbeuren, Federal Republic of Germany - Manufacturing Plant
KLO Clonmel, Ireland - Manufacturing Plant
LJO Littleton, MA - Small Systems Manufacturing Group/Personal Computing Sys.
MEX Chihuahua, Mexico - Mexico Manufacturing
MLO Maynard, MA - Corporate Headquarters/Engineering/Manufacturing/Plant
MOO Marlboro, MA - GIA Manufacturing and Engineering Support/MIS
NIO Salem, NH - Systems Manufacturing Plant
NSO Salem, NH  - Field Service Manufacturing/East Coast DLO
PNO Phoenix, AZ  - Manufacturing Plant/Computer Systems Mfg./Terminals Mfg.
SGO San German, Puerto Rico - Manufacturing Plant
SPO Springfield, MA - Manufacturing Plant
SQF Livingstone, Scotland - Semiconducter Manufacturing
TAO Taoyan, Taiwan - Manufacturing and Engineering Plant (Republic of China)
TWO Tewksbury, MA - Computer Systems Manufacturing Engineering and Technology
VLO Valbonne, France - Manufacturing Plant
WJO Westford, MA - Computer Systems Manufacturing Business Unit
YKO Holoyoke, MA - Westfield Manufacturing Stockroom
ZGO Singapore, Singapore - Manufacturing Plant

    Re:.37
    	You also missed AGO - Aguadilla Mfg. in Puerto Rico, although both
    San German and Aguadilla are under the same management and are called
    Caribbean Operations Manufacturing, functioning as one "virtual"
    facility.
    	
    	A short comment on tax breaks in Puerto Rico:
    Puerto Rico is subjected to the same minimum salary wages as the
    U.S.A.. Pharmaceuticals are the most benefited from the tax
    breaks and have given a bad reputation to the "936" companies. 
    Electronics and textile mfg. enjoyed a "boom" 10-15 years ago before
    the Far East was "discovered". The few remaining electronics and
    textile mfg. are competing for business by:
    1. Doing more with less
    2. Keeping infrastruture cost down (we don't pay heating bills :-) )
    3. Offering high quality products/highly trained workforce.
    
    Miguel A. Alvarez
    

    	I'm sure that "tax haven" may have something to do with 
    plant closures, but let me submit that this is NOT the biggest
    portion of the problem.
    
    	The problem is competitiveness.
    
    	In storage, we benchmarked ourselves in the thin-film
    heads business against another AMERICAN company in the same
    business, who builds comparable heads (we buy them).
    
    	This, like much of Digital's manufacturing, is a CAPITAL-
    INTENSIVE business, meaning that a substantial portion of 
    product cost is depreciation-related, and then there's also
    maintenance, etc., of all that capital.
    
    	Our capital, per million heads producible/year (not produced),
    was 12 X as much investment as our American competitor.  Surprisingly,
    most of the model names/numbers were identical.
    
    	The analysis indicates that we could do a LOT better.  For
    instance, the cryogenics of a complex system had to have maintenance
    1 day out of 7.  We duplicated the entire system, the competitor
    duplicated only the cryogenics, and dual-ported the system.  
    We use permanent full-times and temporary full-times; they use
    permanent full-times and a flexible hour work-force--which stays
    trained all the time.  We have dedicated lines, and unique 
    products; they push familiness and share the lines.  Our teams
    and work styles don't keep the equipment UTILIZED as many hours
    as theirs.  Well, you get the idea--it goes on and on...
    
    	In another business, I understand that Digital, WORLDWIDE, 
    has a cost of 28-28 cents/insertion (fully burdened) of components.
    Many of our competitors, regardless of location, are less than 
    1 cent/insertion.
    
    	Taxes don't explain this kind of difference.  Not even wage
    rates do, since the last example includes Digital off-shore.  We
    need to change the entire paradigm of how we think and work to 
    become competitive, or these plant closings will, unfortunately,
    just be the first of a domino effect worldwide.  I hope the rest
    of us can move fast enough, but I believe that the jury is still
    out.

    Great to hear from someone in the guts of the operation with real
    data.  Reaffirms my feeling that we can never be competitive with
    our massive overhead, armies of non-contributors, and runaway
    corporate silliness like "Valuing Differences".  (That's only an
    example...PLEASE I don't want to discuss VD...).
    
    I'm in CXN-1.  We are probably 30% empty and have been for over a
    year.  We have an empty library and several acres (slight exaggeration)
    of indoor foliage, all of which is STILL under maintenance by outside
    folks.  The whole facility is over-kill, and I'm not aware of anything
    being done to get us out of here.
    
    I'm worried about CXO....I don't think they are gonna make it, and that
    will have a devastating impact on the 2,000+ people who work there.
    I was once told by someone I have reason to believe that if a plant
    isn't running three shifts, they are not making good use of their
    facility or equipment, and are in trouble.  Any comments?
                                                             

Re:   <<< Note 1431.42 by COOKIE::LENNARD "Rush Limbaugh, I Luv Ya Guy" >>>

>   I'm worried about CXO....

Just to clarify, I assume you're talking about CXO1/2 here.  CXO3 (the CSC) is 
in a different business...

-  David (just moved from CXO1 to CXO3 :-)

    	I'm worried too, and I reside here here in CXO1/2!!!
    
    	All I can tell you is that we in CXO manufacturing are
    absolutely focused on competitiveness, and we realize we have
    a very short time to get there.  Can we all do the hard things
    necessary to get there?  I don't know.  I'm not sure if all
    sites, or all of our engineering/CSSE/etc. partners are 
    equally focused.  I'm not blaming, just hoping they are...

    re .41
    
    >        The problem is competitiveness.
    
    I sat there and listened to the BTO plant manager say
    that because of the tax break, DEC can build the 
    products virtually for NOTHING.
    
    Can't even start to compete with that.
    
    
    Mark

    To amplify on some of Barbara Cranes's point in 1431.41....

    In general the cost to manufacture a computer system is becoming a
    shrinking percentage of the transfer cost of goods. During
    11-780/PDP-11 days the Mfg value added was on the order of 30-40% of
    the transfer cost, today it is on the order of 10%, and for future
    products it will be well below 10%.

        The problem for Mfg is that while we have driven down the cost to
        manufacture by a factor of four, the volumes we have sold have not
        increased by a factor of four. 

    Another cost factor to consider is that in the 11-780/PDP-11 days
    the ratio of Direct Labor (Wages) to Depreciation Expense was on the
    order of 1:1. These days it is on the order of 1:5 (and even higher
    in the module and semiconductor lines). The reason for this is that we
    are automating more and more of the assembly and test processes within
    manufacturing, thus decreasing the labor content, while increasing the
    depreciation expense.

        This leads to another problem for manufacturing in that the labor
        required to build a system is shrinking even faster than the value
        added.

        The final problem is that Mfg costs now depends totally on the
        volume through the facility. If I have machinery capable of
        producing 10,000 widgets per year, at a fixed cost of $1 million
        per year or $100/widget. If I build only 1000 widgets, my Mfg cost
        is now $1000/widget.

    Manufacturing once accounted for about one out of every three to four
    noses in the company, we now account for about one out of five, and in
    the future that is planned to be even lower.

    ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

    The biggest contributor to the transfer cost is what we choose to
    build. We pride ourselves on building very reliable, very error
    tolerant gear, the rest of the hotbox industry doesn't. We build
    systems that are highly expandable and cutomizable. All of this has a
    cost. Others involved in our marketing/sales will have to tell me
    whether this product differentiation/capability is worth the cost.

    ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

        Another thing to note is that I recently attended a presentation
        where the cost for administration was analyzed. It turned out that
        the cost for the order processing was on the order of half my Mfg
        Value added for that computer system.

        I also had to review our Material Acquisition charges (aka
        purchasing, A&T, Comp Eng, ..) and found them to be on the same
        order as my Mfg value added, and projected to be higher than the
        Mfg Value added on a future system.

    In parting I would also like to note that our PCU's LRP lists two of
    it's three cost reduction programs to be reduction of Mfg costs.

    /jim

re .44
>    	I'm worried too, and I reside here here in CXO1/2!!!
>    
>    	All I can tell you is that we in CXO manufacturing are
>    absolutely focused on competitiveness, and we realize we have
>    a very short time to get there.  Can we all do the hard things
>    necessary to get there?  

Probably not - and if you could, it probably wouldn't matter.

Reread my .15 - I don't think a manufacturing plant's working to get
competitive matters a damn.  We went through all of it in Burlington and,
when the going got tough, we were told we weren't good enough.

Larry

    I fear .47 is right.  Disks have become a classic commodity item, and
    I fear we don't know how to do that.  The only hope I have for CXO is
    if the Dell business model could be adopted almost immediately....
    and then you're probably still looking at a 50% in staff, and probably
    80% in overhead.
    
    CX03......I wouldn't get too comfortable if I were you either.  Your
    
    

    re: .48
    
    Still there, Dick?  :-)  From the way your message abruptly ended,
    I had a mental image of a VP with a vaudeville hook yanking you away
    from your terminal in mid-reply!  Nothing would surprise me anymore!...
    
    Chris

    ...nah, I just drifted off.  I was gonna say that CX03 has some very
    serious cost problems as well, that make offering competitive services
    increasingly difficult.
    
    If CX03 thinks they aren't going to be nose-to-nose with third-party
    software support outfits in our brave new world of distributed, open
    computing environments.........well, are they ever in for a surprise.
    

    
>    If CX03 thinks they aren't going to be nose-to-nose with third-party
>   software support outfits in our brave new world of distributed, open
>    computing environments.........well, are they ever in for a surprise.

	Hi, COOKIE::LENNARD, we're back in agreement again !

	What with the increasing management obstacles being placed
	in our way here at CXO3, and the steady exodus of top-flight
	senior folks, I'd say the support center's gonna
	feel the pain pretty soon.

	There's only one reason I'd pay for software support from
	DEC if I had  a big programming shop with DEC equipment:

	So I could belong to the "Patch of the Week CLub", and
	get access to the steady rain of fixes for busted software
	products....

	Steve H    

    
    re: .51 - why bother when you will probably be able to pick up
    	your very own very senior DEC software person or even a software
    	support person for far cheaper than to buy support services.
    
    	wish i could add the smiley face...
    
    		bob
    

              <<< Note 1431.37 by RICKS::PHIPPS "DTN 225.4959" >>>
        -< FYI - (Current) Manufacturing Sites. I'm sure I mssed some. >-

  It appears that these are all the sites that have "manufacturing" in their
name in a directory. Some of these are NOT mfg sites:

>BPO Marlboro, MA - GIA Manufacturing and Engineering Support Headquarters Staff
  This never was a mfg plant, and recently closed.

>BXC Boxborough, MA - Small Systems Manufacturing - Admin
  I don't think this is a mfg plant.

FXO Franklin, MA - Systems Manufacturing 
  Systems mfg moved out of this site 5 years ago, but nobody updated the dir-
ectory. Not a mfg. plant.

>MOO Marlboro, MA - GIA Manufacturing and Engineering Support/MIS
  I don't think there is any mfg here.

>NIO Salem, NH - Systems Manufacturing Plant
  Little or no mfg here now.

>NSO Salem, NH  - Field Service Manufacturing/East Coast DLO
  Not a mfg plant.

>PNO Phoenix, AZ  - Manufacturing Plant/Computer Systems Mfg./Terminals Mfg.
  History as of 4/1/91.

  There are probably a few others that are non-mfg plants. And there are some
mfg plants that are not on the list, such as ABO, GSO, and CXO.

    Don't forget the Cupertino, CA plant where we manufacture the MCM's
    for the VAX 9000.
    
    Brian

    
    It's interesting to note the myths being perpetuated in this note. The 
    Japan bashing and the blame being placed on foreign countries. I spent
    last Tuesday in Boston testifying before the Massachusetts
    Legislature's Education Committee. I was there as a School Committee
    member to testify on a bill that would allow the use of raised funds
    for textbooks and supplies. The morning was devoted to another bill
    that is near and dear to my heart and, IMHO, at the heart of why U.S.
    manufacturing jobs (and others too) are leaving this country in
    droves. This bill proposes to add 40 days to the Massachusetts minimum
    requirements for the school year. What does this have to do with 
    foreign jobs? The education systems in most foreign countries we 
    compete with in the global marketplace are turning out a better
    educated, more skilled workforce. Yes, Japan is right up near the top
    but other countries included in studies on this issue that beat the 
    USA include England, Germany, Hungary, Thailand, Korea, Finland, 
    Sweden, and New Zealand. The top 1% of our 12th grade students can't 
    compete with the average student in most of these countries in math and
    science. The bottom line is that all of the systems studied had two
    things in common. They all went to school longer and they all had to
    pass exams based on a quality standard to graduate from high school. 
    
    	If America is to compete in the global marketplace it must wake up 
    and commit itself to educate it's future workforce and return
    manufacturing competitiveness to the U.S. This isn't a low wages issue.
    Most foreign countries where the new technologies are locating have
    equivilant or higher wage scales. This isn't a Japanese threat. It's a 
    world market that is quickly leaving America behind because we won't
    see the forest through the trees and recognize that this is an issue 
    of world competitiveness not one of petty protectionism.
     

re .-1
    
>    It's interesting to note the myths being perpetuated in this note. 

It certainly is.  If I understand your reply correctly, you are saying that 
the reason our jobs in Burlington are going overseas is because the 
educational system in Aguadilla, Puerto Rico, Chihuahua City, Mexico, and Hong 
Kong is superior to what we have in this country.

Gee, and I thought it had to do with tax haven status, cheap labor costs, 
nearly non existant environmental and worker safety regulations, much lower 
costs of doing business, etc..  Silly me!

Wake up and smell the coffee!

Larry

    
    Re: .56
    
    Certainly the points you make are legitimate, but .55 has hit
    at least one of the nails right on its head.
    
    We *are* falling behind the rest of the world in educating our
    workforce and that *is* one of the things contributing to the
    competitive advantage that many countries have over us.  The
    length of the school year, however, is only one of the issues.
    One *very* big contriubutor is the typical public school
    curriculum.  The typical curriculum in a US high school, for
    example, is a based on US society in the 19th century.  It
    needs to be totally revamped.  I taught high school English
    for 10 years before coming to DEC.  From what I have learned
    here about what people need to be successful in their work
    life, if I went back into the classroom I would be a radical
    agitating for sweeping change.  We *desperately* need it.
    
    The point about education is that is is needed to support
    the transition to manufacturing competitiveness that has
    eroded over the years.  We still operate as if the typical
    production line worker in a factory just puts nuts on bolts
    as a widget passes by on  the line.  Those days are gone, but
    our educational system does not realize that, and we are becoming
    less able to fill the jobs in modern production lines.  Digital
    has to make moves *now* that will ensure that we stay in business.
    I would bet that some of the decisions to source things outside
    the US have as much to do with what we expect to be dealing with
    five years or more down the road than the current climate.
    
    fwiw,
    Steve
    

    I haven't said much about the education issue, up to now.  But, this
    debate about adding school days is a quantity versus quality issue.
    My opinion is that more school days is not the same as a quality
    education and until politicians focus on quality instead of quantity
    they will not get my support.  
    
    I realize that massive quantity has a quality all its own, but this is not 
    why students do better in other countries.  They do better because they 
    are motivated and hungry for success.  They do better because they are
    operating smarter with what they have.  (Kind of like how we win wars,
    isn't it?  No surprise.  They learned this tactic from us.)  I would wager 
    that if you cut back on the number of days they spend in school, they 
    would still have a competitive edge.  And, if you lengthen the number of 
    days without changing the quality in our schools our students will show 
    negligible improvement.  But, you will see a higher tax bill to show for 
    it.
    
    I have known students in European schools.  I have seen what they go
    through when they hit exams in high school.  There is a drive there
    that is unmatched in most of our American schools.  Our students, with
    exceptions, are functionally illiterate because they have forgotten
    or have never learned that education is not something that is simply
    purchased.  They have not learned that they, the students, are the ones
    who are primarily responsible for their own education and that if they
    miss the opportunity they will not be competitive in the job market.
    When they learn this, they will become motivated as many are now who
    learn this lesson late in life.
    
    Steve

    re: 1431.56
    
    You might want to check what the safety standards and work environments
    are in Puerto Rico. They have the same OSHA standards and requirements
    that we do. Their pay is on a par with most of the United States and 
    they happen to have a very good educational system.
    
    Both facilities, Aguadilla and San German, have enthusiastic employees
    who work very hard to make their products.
    
    - John

     Re: .55

     The issue is far, far from being that singular.  The disparity in
     educational standards has long-term, far-reaching implications
     in regards to our future position as a technological leader.
     It is NOT, however, what has created the current mess.  We are
     not currently moving jobs out of the U.S. to low-labor cost
     countries because out work force isn't as smart as theirs.

     The issues are varied and complicated.  The Savings and Loan scandal
     has nothing to do with the fact that many foreign students are better
     educated than their American counterparts.  The tax breaks afforded
     to firms doing business in other parts of the world has nothing to 
     do with educational levels.  

     The mess was created by a complex fragile set of tax laws, 
     costly regulatory requirements, greed, etc.  I haven't seen much
     of what amounts to Japan bashing in here at all.  

     Re: .59 

     I agree that Puerto Rico has a well-educated, dedicated work force.
     I've worked with many people from our plants there over the years,
     and have a lot of respect for them.  All I want is to be able to
     compete on equal footing.

     -gary

    
    I agree that this is a complex issue. I don't pretend to believe that
    education alone is to blame. It is a large factor that was not being
    discussed. There is a great myth in this country that we're still the
    world leaders in everything and people can't seem to fathom that "made
    in Japan" or "made in Hungary" means anything. They use excuses like
    the cheap labor myth and the tax shelter myth to perpetuate the root
    problems. In fact the cheap labor myth began to dissipate with the
    oncoming of the global economy. Congress here and foreign governments
    overseas have already begun to dissipate the tax shelters involved in
    offshore manufacturing. Someone a few replies back asked if I thought
    the education systems in certain places were better than ours. Note 
    the following statistics:
    
    	In an international study of students by exam.
    
    	Student Achievement by Subject Area (U.S. 12th grade equivalent)
    
    Advanced Algebra	Calculus		Geometry
    1. Hong Kong	1. Hong Kong		1. Hong Kong
    2. Japan		2. Japan		2. Japan
    3. Finland		3. England/Wales	3. England/Wales
    4. England/Wales	4. Finland		4. Sweden
    5. FL.Belgium	5. Sweden		5. Finland
    6. Israel		6. New Zealand		6. New Zealand
    7. Sweden		7. FL. Belgium		7. FL. Belgium
    8. Ontario		8. Ontario		8. Scotland
    9. New Zealand	9. Israel		9. Ontario
    10.FR. Belgium	10.FR. Belgium		10.FR. Belgium
    11.Scotland		11.Scotland		11.Israel
    12.British Columbia 12.United States	12.United States
    13.Hungary		13.Thailand		13.Hungary
    14.United States 	14.Hungary		14.British Columbia
    15.Thailand		15.British Columbia	15.Thailand
    
    Of the 15 countries participating the U.S. had the lowest number of
    eligible students (13%). In the Opportunity to Learn study that
    accompanied this exam the question was asked "Had the key mathematical
    concepts required to answer the questions been taught to them at
    anytime in class?". In Japan the answer was 92%, In England it was
    85%, In Hungary 67% and Thailand 63%. In the U.S. only 54% of the
    key mathematical concepts had been covered in classes that represented
    to our system advanced mathematics. In a similar study on sciences
    our top science students placed 11th in Chemistry, 9th in Physics,
    and last in Biology among 12 countries including Hong Kong, Singapore,
    and Thailand.
    
    The question is not one of simply longer days but better quality as
    well. However, Lester Thurow, MIT Professor and board member for a
    number of Hi-Tech firms wrote in 1985:
    
    "The standard American response to proposals for a longer school year is
    to argue that Americans should learn to more efficiently use the
    current 180 days before they worry about adding more days. such a
    response is to get the whole problem backwards. Instead of starting
    with what is easy to do - work longer and harder - Americans start
    with what is more difficult to do - work smarter. The argument is also
    a form of implicit American arrogance. Americans think that they can
    learn in 180 days what the rest of the world takes 220 to 240 days to
    learn. It also forgets that the rest of the world is trying to use
    220 or 240 days more efficiently."
    
    
    
    
        

    There is an article in today's Boston Globe about ability to reason
    and today's teaching techniques. The Massachusetts Commissioner of
    Education says that children are not learning to think clearly and 
    logically in the classroom because teachers are focused on producing
    good scores on multiple choice tests.
    
    I can personally vouch for the truth of this statement. For a brief
    time twenty-one years ago, before I was a secretary, I was a math
    teacher. I taught Algebra, Geometry, and General Math. I was teaching
    Geometry in the traditional manner, using theorems and proofs to teach
    logical thinking as well as mathematical information. About four months
    into the year I was called on the carpet by the head of the math
    department. I was told that I was to stop teaching in this manner and
    to use numerical examples, since that was what was asked on the SAT's. 
    When I tried to point out that a person who understood the concept
    of a theorem well enough to do a proof would also be able to apply it
    in a numerical problem my protests fell upon deaf ears. The goal was
    not knowledge but high SAT scores. I'm sure nothing has changed in that 
    school system.
    
    
    Linda 

    Not to discount broader issues of education, cultural arrogance and the
    like, I would like to go back to the issue originally raised. DEC is
    moving production to overseas locations.  No one said it was because
    the workforce in BTO was less educated or that their childeren only
    went to school for 180 days. In the future the reasons may be
    different.
    
    It was simple....costs.  Now I know you mentioned that manufacturing
    tax havens have begun phasing out. If so, it has been within the last
    few months. If you don't believe me just look at our annual reports.
    
    Below is an expansion of the notion.  Sorry for its length.
    

Subject: Write your local politician

    Of course your local pol probably already knows and is about waste....
    that is waist-deep in the intricacies of "what's in it for me".
    
    The note below (about BTO) is an interesting one to consider.  Reminded 
    me of a note I wrote to my senator about five years ago.  Basically, I 
    noted that companies not only got incentives (like no local taxes) from the 
    governments of places like Ireland, Singapore, Taiwan, Scotland, 
    Malasia, Puerto Rico...but the good old IRS gives tax credits for 
    manufacturing in these locations as well.  It's embarassing, but 
    reported in our annual report, that we do not pay the statutory 
    corporate rate because of mfg sites in P.R., Ireland, Singapore, 
    Taiwan. The statutory rate since 88 has been 34%; we pay 25%.  Prior to 
    that, for years the rate was 46%....in 84 we paid 18%, in '83 31%, and 
    82 it was 38%.
    I don't know if I need to point out that a difference of 10%-20% in tax 
    rate can often turn a break-even year into a mild success and and a 
    mediocre 10% year into a really outstanding performance....by the 
    measures of Wall Street.
    
    It's not just us; I know Polaroid, for example has moved most of it 
    film production to Ireland.  They talked about competition, but it was 
    the tax and political incentives which made the decision. In a way 
    the political can also be capital and/or investment related since 
    the offers often include building the site, acquiring the land and
    training the people.  One must admit that they have a smarter 
    'model' than we do....most of these deals have 10-20 year guarantees 
    on the tax holidays or subsidized training.
   
    
    I guess the point is, this is the way our laws are.  DEC and others 
    just use them to their own best advantage.  But why are the laws this 
    way?  Is it really the intent for US labor to "invest in foreign 
    manufacturing"?  because that's who is actually doing it....it's not 
    really the companies....they just broker the deal...the money comes 
    via our government, from the people.  I know we all get tired of 
    hearing about competition....but when one side is not only subsidized 
    by  their government (to be expected) but also by our own....what does 
    competition really mean?  It seems the better we do, the worse off we 
    will be.  And the worse they do, the bigger the subsidy.
    
    In some strange way it seems like the government we have been electing 
    is not "our" government in the traditional sense.  They appear to be a 
    world government just elected by us.  The problem is that since only we 
    vote for them, they have little following or influence with the rest of 
    the world.
    
    

    	
    	The US suffers from other additional problems.  In general,
    	the public has been lead to believe (and doers believe) that
    	business is BAD and Profits are worse!
    
    	Look, what do you think when you hear Exxon made $1 Billion
    	a quarter, or GE made $800 million.  Most people think those
    	"greedy corporations", we are going to have to TAX them because
    	they must be doing something improper to make that much money.  If
    	the press (led by the liberals) would let people know that on
    	the basis of their gross revenues, these sums are not out of
    	line, and even if they were out of line, let them make the money!
    
    	But no, profits are bad. Business is always portrayed as evil,
    	greedy, corrupt, inept, and so busineses say I am not going
    	to deal with this nonsense.  They are not going to deal with 
    	bureaucratic politicians, telling them what they can and cannot
    	do.  The Congress keeps making these laws that make it much
    	more favorable to do business in the US as a foreigner.  In
    	the Securities businesses it is much more advantageous to
    	have off-shore havens, for tax and other reasons.
    
    	But the only time the people complain is when their jobs leave.
    
    	This is not something new.  We use to make Shoes in the US,
    	but people have no trouble paying $80 for Nikke for shoes made
    	in low wage countries.  Most of the textiles you are wearing
    	right now, were formerly made here.  Did you complain when the
    	Textiles went overseas?Shoes? Stereos? No, and you buy the imports!
    
    	Why should people care now that its the computer industry's
    	turn?                                                              
    
    	They will not. And until we get some guts, to throw these
    	guys in Washington out, both Democrats and Republicans, and
    	get some people who are really concerned with making this
    	place better, things will continue to flow to other countries.
    
    	Bush forgave $7billion in debt to Egypt, and $2.5billion to
    	Poland.  Meanwhile Us banks and Insurance companies decay.
    
    	Did you hear and politician Republican or Democrat complain?
    	Did you complain? 
    
    	Roland

    re the last few...Very well said.
    
    When all is said and done, there will be nothing left
    but facsimile "cardboard cutout" companies in the US.  
    
    Who's going to buy all this foreign made stuff if nobody
    has a job?  K-Mart will be a ghost town.
    
    Mark                  
    

    
    RE: Unions and laws
    
    There are unions in Japan and Mexico. In fact there are unions just
    about everywhere in the world. In Japan, Mexico, and most European 
    countries you will find that the laws governing labor and labor
    relations are even more restrictive than in the U.S. Ask any of
    your European counterparts about the differences in benefits between
    the U.S. and Europe. Ask the folks in Kaufbauren about the guy who goes
    around the plant at the end of the day to make sure that everyone
    has conformed to the law and gone home. Ask the Europeans why any
    layoff in a European country is more complicated and more generous
    than most U.S. programs. The cost to manufacture in Europe and to some
    degree elsewhere in the world is not that much different than in the
    U.S. What is different is worker attitudes toward change and new 
    things. The tax incentives in almost all foreign countries run out
    sooner or later but companies continue to stay there for a mix of
    reasons. One of them is purely political presence in order to continue
    doing business in a certain marketplace. If a U.S. company, despite
    tax incentives, cannot find a workforce of educated and skilled workers
    in a foreign country the cost of moving workers to that country would 
    more than negate both the tax incentives and the cost of market
    presence in most cases. Lots of people don't see the threat on the near
    horizon. A European marketplace without borders creates one of the
    largest economic powers in decades. It also contains better educated,
    skillful workers in almost all disciplines with much more ability
    to move freely around Europe. The European boom originally expected
    in 1992 might be delayed because of the costs of putting Eastern Europe
    back together but by the middle to the end of the 1990's Europe will
    more than likely be a world economic power and much more of a threat
    to the U.S. economy than any other world power. 
    
    

    
    Re: .67
    
    You are right; you are making sense, but I fear that you
    are falling on deaf ears.
    
    As Americans we have somehow come to believe that we have an
    inalienable right to be fat, dumb, and happy without thought
    or effort on our part.  We seem to think that the rest of the
    world has no right, hold that - even that they have some nerve,
    to rain on our parade by wanting the good life we've had since
    the end of WWII by being willing to figure out to woo our
    customers away.  We want life to be fun, free, and without
    effort or care.
    
    Well, the rest of the world wants those things too and they're
    quickly figuring out how to get it.  It is causing us some
    pain, and we don't like that.
    
    Frankly, that's just too bad.  If we want to keep what we've got
    then we had better be willing to fight for it.  Fight means
    compete to keep our customers.  I'm not saying that we should
    like this idea or welcome it, but only that that is how it is
    like it or not.  WE AREN'T CALLING THE SHOTS ANYMORE.  That is
    the simple reality.
    
    The rest of the world does not owe it to us to lie down and let us
    bumble along overfed while they starve.  Wake up, America, stop
    bitching, and start figuring out how to meet the challenge, because
    that's the only choice you've got anyway.
    
    fwiw,
    Steve
    

    There seems to be one simple question we should be asking ourselves,
    and the question is; Are our elected officials looking out for the best
    interest for the citizens of this country.  And that question goes for
    all levels of government.  
    
    It is quite clear to me that Politicians can say and promise anything
    they want to get elected, and what surprises me is once elected they
    tend to get reelected.
    
    Dave

>      <<< Note 1431.67 by FSDEV2::MGILBERT "Paul Tsongas for President" >>>

 Very well said.

>    horizon. A European marketplace without borders creates one of the
>    largest economic powers in decades. It also contains better educated,

Only decades? When was the last time there was an economic power with
over 330 million inhabitants? 

Craig

     Re: .64

     Just like trying to lay all of the blame on the educational 
     system, you can't lay it all on unions, either.  There are a
     few industries where unionization was a major impetus to move
     jobs offshore, but for the most part that wasn't what did it.

     When the textile industry initially started moving off-shore,
     it was into low-paying sweat shops that had few if any health
     and safety regulations.  

     Despite the popular misconception by many union-bashers, unions
     WANT the companies their members work to succeed.  Many unions
     are recognizing the need for their industries to become more
     competitive, and are working closely with their companies to 
     do so.

     -gary

     

    
    	Re: .61 and elsewhere
    
    	Everytime I see or hear these test results about American
    	education I really want to spew.  
    
    	Why is it you only want to focus on scientific and technological
    	expertise, Propeller Heads?  It is necessary to understand the
    	entire process of learning not merely one segment.  Americans
    	are woefully behind in education as a whole, not merely your
    	precious technology.  Ever read C.P. Snow?  Stop being so damned
    	myopic.  Scientific education is not our savior.  Liberal arts
    	education is.  The Trivium and Quadrivium are still valid.
    
    	Technology has always outdistanced humanity's ability to under-
    	stand and use it constructively.  In the end civilizations are
    	remembered primarily for their contributions to culture and the
    	arts rather than to the sciences.
    
    	I would rather hire a person who knows Latin and Minoan art
    	than someone who scored 800 on Math Level II.
    
    	Stick that in your VAX and puff on it awhile.

    Re:                      <<< Note 1431.72 by ASABET::COHEN >>>

>    	Stick that in your VAX and puff on it awhile.


**** FATAL BUG CHECK, VERSION = V5.4     NOTFCBFCB, FCB linkage broken

    CRASH CPU: 00        PRIMARY CPU: 00

    ACTIVE/AVAILABLE CPU MASKS: 00000001/00000001

    CURRENT PROCESS = ASABET::COHEN

    REGISTER DUMP

	R0 = 8028D460
	R1 = 00000000
	R2 = 801994E8
	R3 = 8028D460
	R4 = 801994E8
	R5 = 80245C70
	R6 = 00000000
	R7 = 00000001
	R8 = 7FF9C19C
	R9 = 00000000
	R10= 7FF9C0C0
	R11= 7FFA2C40
	AP = 7FF9BF64
	FP = 7FF9BF50
	SP = 7FF9BF48
	PC = 7FFAB828
	PSL= 00000009

    KERNEL/INTERRUPT/BOOT STACK

	7FF9BF50  00000000
	7FF9BF54  20000000
	7FF9BF58  7FF9BFA4
	7FF9BF5C  7FF9BF6C
	7FF9BF60  7FFA6B86
	7FF9BF64  00000001
        [etc]

    re.72
    
    I like that.
    
    Would you hire someone that could Spanish, and
    knew baseball art?
    
    
    buzz

	re: .72 and civilizations not being known for their
	science, hiring Latin majors over mathematicians, etc.


	Well, since science as we know it has only been around 
	a couple hundred years, it's likely that OUR civilization 
	will be known for its invention of science ( as in the
	scientific method ).

	While I think that the study of dead languages has value,
	I would rather have a real scientist or engineer design my bridges,
	airplanes, vaccines, power plants, houses.

	The thought of an Etruscan Poetry major directing someone's
	heart or liver transplant gives me the willies....

	The universe is really very unforgiving of this sort of thing.


	Steve H

    
    
    Hey, lighten up on .72!  I think that he's right on the
    money.
    
    Most of Digital's problems have nothing to do with technology,
    in fact, IMHO, most of our screw ups are BECAUSE we focus so
    much on technology.
    
    If more of us knew how to work effectively together and, God
    forgive me for this dirty word, COMMUNICATE then more than
    half of our business AND technology problems would disappear.
    
    Steve
    

    
    	Why math and science? 
    
    	1. easier to quantify results. 
    
    	2. those are the skills employers tell educators they need.
    
    
    I agree that it's the entire well balanced education that needs
    enhancement. 
    
    

    Good points by all...
    
    One of the most valuable things I've learned in the past fifteen 
    years in the engineering field is that about 75% or better 
    of this business seems to be communicating and "getting along".  
    
    There are a lot of truly bright folks, who, because of their
    attitudes, lack of communications skills or just being a 
    general pain in the ass are cancelled out of the equation
    when it comes to gathering resources.  
      
    Mark                  

I've read all 77 replies so far and believe there's an element of truth in most
of them, even the ones that appear contradictory. I believe the following to
be three of the highest causes of loss of business in the US:

	1. The US educational system is lousy. When we concentrate on getting
	those test scores higher by drilling children for weeks in advance of
	CATS testing on material they'll forget two minutes after the test
	without bothering to teach them that learning is fun, exciting, and
	challenging then we've missed the boat entirely. Our children (our
	future) need to be encouraged and taught how to learn in an atmosphere
	that engages them intellectually, emotionally, and socially.

	2. We don't play on an even field everywhere in the world. Other
	countries governements such as in Japan seem to be partners with
	business. In the US our government seems to be in partnership with the
	thieves who steal from the less fortunate to enhance the gross wealth
	of the very few. We have no national energy policy, no national
	technological development policy, no long term view of the future.

	3. The US has lost it's national pride in its own workmanship and
	desire to back it up with our hearts, blood, sweat, and wallets. We are
	the worlds greatest consumers which gives us tremendous power. Yet we
	moan and groan about how we are losing our work to "overseas" companies
	and employees. How many of you folks in this note who've moaned about
	manufacturing moving out of the US buy goods that are produced mostly
	in the US? We want the freedom of choice as consumers to buy Sony
	camcorders, Toyotas, and other "superior" products made elsewhere at the
	same time we bemoan the erosion of US industry. 

Some solutions:

	1. Get INVOLVED with your local educational system. Force the system
	to work for you and your children.

	2. Write letters to your duly elected officials and tell them your not
	satisfied with how our government is being run and if they don't fix
	it you won't support them in the future.

	3. Be selective in your buying habits. Contrary to popular belief
	there are still execellent products made in the US. It would be a
	very time consuming task to buy only US made products but take them
	into consideration when you find them. The job you save may be your
	own, or your neighbors, or even your children's.

-Terry

...and yes, I participate in my own way in all three of my suggested solutions.

    
    Re: .78
    
    Right on!
    
    I would only disagree with your estimate of 75%.  My bet is that
    it is higher!
    
    Steve
    

     Re: .79

>>   1. The US educational system is lousy. 
>>   2. We don't play on an even field everywhere in the world. 
>>   3. The US has lost it's national pride in its own workmanship.

     Your categorizations are a good start towards showing how complex the
     problem is.  I think the second paragraph is the biggest, along
     with one you didn't mention.  Perhaps it's an off-shoot of 2:

      - An economic system that focuses on short-term profit optimization.

     The education problem is not so big yet that Americans don't
     come up with their fair share of innovations.  Where we've been
     falling short is bringing those innovations to market.  In many
     cases, companies can realize greater short term profits by merely
     licensing their technological innovations to whoever want them than
     taking the time and expense to develop the resulting products.

     I was disturbed when I read a summary of what investors liked and
     didn't like about our Q2 results.  On of the things our investors 
     reacted favorably to was a reduction in $$'s spent on R&D.  Reducing
     R&D in a technology-dependent company can only have adverse long-term
     impacts.

     We need an economy (and goverment) that is supportive of R&D and
     bringing new products to market.
     
     -gary

>            <<< Note 1431.10 by SYSTEM::COCKBURN "Airson Alba Ur" >>>

Re my earlier comments about US wages:

>It is expensive to produce products in the US because of the high
>wages there (amongst other things). The US is pricing itself out of the
>world market. We live in a world where Japan has one of the worlds

>not the dominant economy you pay the price. Price yourself out the
>world market and you lose jobs. Lower your wages and you might get
>some jobs back. If US employees were paid a European salary you might
>not be losing so many jobs as you are. 

You might find the following article interesting, it appeared in the UK
Times today, P21

US Bosses' pay soars above staff

The pay gap between corporate America's shopfloor and its top floor has
risen to unprecedented levels. 

According to the latest American executive survey compiled by Businessweek
and Standard and Poor's Compustat services, the typical chief executive made
85 times the pay of the average factory worker last year, compared with 17
times shopfloor pay received by bosses in Japan.

The best paid American executive was Stephen Wolf who runs United Airlines,
which started flying into Heathrow this month. His pay, bonuses and share
options totalled $18.3 million, in a year when profits fell 71%, which is
1,300 times the starting pay of a stewardess which, at $14,382 has not been
increased for five years.

The $11.2 million package of Michael Eisner, Walt Disney's chief executive,
meant he earnt more in a day than the average Disney employee earns in a year.
And Lee Iacocca, the Chrysler chief received a 25% rise in compensation to
$4.8 million, despite a near 80% drop in profits.

...

America's leading institutional shareholders are concerned about executive pay,
and many are seeking to ensure that compensation is set by a committee of
independent directors.

Over the past decade, Businessweek says, the pay of chief executives has
jumped 212%, while profits have risen 78% and the pay of a factory worker
by 53%, and engineer by 73% and a teacher by 95%.

A Boston Red Sox Pitcher earns $5.3 million a year, whereas Norman
Schwartzkopf earns $0.104 million a year.

    Much earlier, someone stated that wages in the U.S. were now
    comparable (in Manf. terms) with those of Europe. I asked around
    regarding average earnings of a Grunt on the Manf. line here
    in Ayr - salary $16,000.
    Manf Line Supervisor - salary $24,000 
    Project Manager (Manf. Software Appl. development, again here in 
    Ayr) - salary $31,000. 
    
    All figures are converted from UK sterling at an exchange of 1.6
    dollars to the pound.
    
    So how does that compare (bearing in mind these are best guesstimates
    from speaking to people who were willing to divulge their
    compensation).
    
    Don H.

re: .83

Don,

I don't have an answer to your question, but I think there are more factors
involved in relative compensation than just the salary aspect. The cost of
living in the geography, the company provided benefits, etc. Even within
the US, an employee in the Southeast making the same salary as an employee in
the Northeast will in some states have more spendable currency after the basics
are taken care of because housing, taxes, etc. are generally less expensive in
some Southeastern states.

-Terry

    Re: .83
    
    Salary is only a small part of the cost equation. As we automate more
    and more the manufacture of modules and semiconductors, capital
    equipment depreciation will become the dominant cost factor. The salary
    of the person doing the job is now the minor part of the equation.
    
    If a plant has a burdened labor rate of $100, the person doing the work
    out on the line is still getting only $10, and fringes of another $10.
    Plant and equipment depcreciation runs $30-40 . 
    
    /jim

     Re: .85

     And it's not even due to too much automation in some cases.
     When you're only utilizing a small percentage of your overall
     module capacity across a company, that depreciation expense
     becomes and even bigger chunk of the piece part cost.

     

    Re: .86
    
    Agreed - In principle capital depreciation is a 'fixed' cost that is
    written off on the volume. The higher the volume, the lower the
    contribution per widget. The most efficient use of any manufacturing
    operation is to run it 2-3 shifts per day (assuming that 'fixed' costs
    are less than the shift differential costs). Today most digital plants
    that I deal with run about 1.5 shifts per day.
    
    One of the problems with determining the effect of those costs is the
    Byzantine method of cost reporting. We set a standard based on an
    assumed volume. We then report variances to that standard. The
    variance cost ends up being close to 30-50% of the value added. This
    makes it difficult to figure out what they true cost is.
    
    Either way, one of the internal studies done recently calculated that 
    for our typical mix of modules, and a perfectly matched production
    capability (capacity=volume) the depreciation expense about matches the
    labor expense (both DL and IL). If one assumes that future modules will
    feature more Surface Mount, the depreciation expense exceeds labor cost
    by a factor of 2-3. 
    
    As a side note, it generally only takes about an hour to assemble the
    average module.
    
    /jim

    	re:  European salaries vs US salaries

    	In a nutshell, those salaries are lower than salaries I know
    	about in the US.  HOWEVER,  you can't just compare salaries
    	dollar for dollar.  If I understand correctly, don't European
    	employees enjoy better benefits?  (Like more vacation time
    	for starters...)  Don't the Europeans also get a shorter
    	workweek and more paid holidays?

    	Hasn't this already been discussed in this conference somewhere?

    	Joe Oppelt

    
    Here's the facts as told to me by the Education Commissioner the other
    day:
    
    1980 - U.S. ranks 1st in world-wide wage scale
    
    1990 = U.S. ranks 12th in world-wide wage scale
    
    2000 - U.S. expected to rank below 25th in world-wide wage scale
    
    
    1980 - U.S ranks 1st among creditor nations
    
    1990 - U.S. ranks 1st among debtor nations
    
    

    RE: -1
    
    1960 - U.S. House & Senate controlled by Democratic Party
    
    1970 - U.S. House & Senate controlled by Democratic Party
    
    1980 - U.S. House          controlled by Democratic Party
    
    1990 - U.S. House & Senate controlled by Democratic Party
    
    See any trends?
    
    Just My $.02 Worth

    re .90:
    
    Yup, it appears that as soon as the Democrats lost control of the
    Senate, and the Republicans took control of the White House, the
    economy went to hell!  Solution is pretty obvious from that point of
    view...
    
    This is also an excellent example of how to mislead by telling only
    part of the truth.
    
    /Dave

    re .90 &.91
    the Dems lost the senate for 2 years only. Now let's see, 
    a.Senate goes to Rep. control for 2 years
    b.House of Reps originates tax bills
    c.CONGRESS votes/establishes budget
    
    Yep that's it.
    Ted Kennedy for King
    free sex, welfare nation
    Long live the King!
    
    I think I get the picture

    RE: The Last Few.
    
    I take the good points on depreciation of Capital assets. Now, some
    other figures for comparision regarding cost of living here in the
    UK...
    
    1 gallon of petrol    $  3.30
    1 pack 20 cigs        $  3.20
    1 off-the-shelf suit  $240.00
    
    Income tax + National Insurance = 28% of Gross up to $48000
                                      45% over that.
    
    Holidays (digital - Ayr) 4weeks per annum plus 3 days for 3 years
    service going to 5 days for 5 years plus 1 day for your birthday
    plus 3 statutary days - all paid leave.
    
    Standard working week is 37.5 hours. (Most folks go over the standard
                                          without overtime payments).
    
    Don H.
    

re .93:

Is that an imperial gallon or a U.S. gallon?  I believe an imperial gallon
is 120% of a U.S. gallon.

    RE: .94
    
    Yes, it is an imperial gallon - I should have stated that. I'm not
    sure how they compare, however some comparative current figures
    for said commodities in the U.S. would be interesting.
    
    Don H.
    

You want comparison?

		U.K.					U.S.

    1 gallon of petrol    $  3.30		$1.25 -	$1.60 (Imperial gallon)
    1 pack 20 cigs        $  3.20		A lot less.  Should be more!
    1 off-the-shelf suit  $240.00		from $150 to $350.
    

How about some other numbers?

1 month's rent or mortgage? (I don't know averages for this area, so I won't
supply figures.)

1 month's transportation - include gas/petrol, public transportation, insurance,
etc. (Note that most DEC engineering facilities are nowhere near public
transportation, at least in the US.)

Health care. (Going up rapidly in the US.)

    Actually, I can get a reasonable suit from about $165. The current
    specimen (yes, I have a suit) cost about $330 tho'.
    
    My mortgage is $1150/month. As my wife is epileptic, our car insurance
    is untypical, but say about $500/year, plus $165/year car tax, plus about
    $350/month for petrol (on one car).
    
    Hope this is what you wanted.
    
    	- andy (in the UK)
    
    ps exchange rate used $1.65/�

    Health care is funded from a 6% levy on salaries, unless you chosse to
    pay extra.