Hereward the Wake

With identical shipyards in Britain and Poland the Polish shipyard will have an advantage because overall wages are lower in Poland.

Also the pound is overvalued due to the financial services industry and our stable relatively solvent government. This makes it dificult to produce manufactured goods which are the basis of our prosperity.

Paul Birch

It would if they were identical, but in general they're not. Eastern Europe is undercapitalised compared to Western Europe.

If the pound is pushed up by demand for our financial services, this makes those services "the basis of our prosperity" more than, say, the shipyards. If we have a comparative advantage in the production of financial services, it is those we should be exporting, not products where we have a comparative disadvantage (those we should import).

PeterRisdon

I know you can't draw general conclusions from a single example, but I've been involved in one recently that highlights a couple of issues. A company I give IT support to went INTO phpbb_administration recently and the IP and assets were purchased as a going concern. The manufaturing is being outsourced to Poland. The manufacturing (metal bashing) plant is being shipped out there because the Polish company did not have it and lacked the capital to invest themselves (viz Paul's point above). But two additonal factors contributed:

1. A tea-break culture in the workforce, many of whom hardly seemed to care whether they had jobs or not and refused to put themselves out even though they knew the firm was struggling. People refused to travel for the company, refused to load vehicles even under severe time pressure if on tea breaks, and so on.

2. A recent health and safety inspection which demanded "improvements" to the shop floor that were uneconomical, so a lot of the production areas had to be closed and people, who had been perfectly happy with working conditions, laid off. This reduction in manufacturing capacity led fairly directly to the administration. The Poles seem less troubled by such considerations, even though I assume they are governed by the same directives.

I suggest both of these could be classified as cultural, whereby Britain has a culture that is less amenable to successful manufacturing. Out of interest, one of the administrators told me that they were struggling to cope with the workload of manufacturing company administrations and liquidations at the moment.

Paul Birch

Yes, that's long been a brake on British productivity, especially in manufacturing.

This is supposed to be the same in both countries now. I dare say the Poles may be less punctilious about complying with EU over-regulation, though.

C_steam

1. A tea-break culture in the workforce........

Which is down to management to sort out - as has been done very succesfully in the motor industry (HOnda, Nissan, Toyota and many 1st tier suppliers) and is cascading to aerospace, but NOT, as you may have seen, MG Rover or a number of lower tier suppliers.

2. A recent health and safety inspection which demanded "improvements" to the shop floor that were uneconomical.........

Not sure I agree this one. The UK has one of the best records for H&S in Europe, based on risk assessment and 'reasonably practicable' - and this latter phrase includes economic cost of implementation.

To compare, you need to look at multi-nationals with set ups in all these countries, and having seen four plants across Europe ran by the same company, (with company 'standard' industry leading H&S policies across each plant) I believe the biggest differentiator is purely wage cost. A second factor in Polands favour is the presence of a highly educated engineering workforce, including electronics and IT.

In the case of Turkey, the wage differential is most marked but - perhaps contrary to what some people would imagine - the education system is also very good. They also have compulsory national service - one company which I am familiar with in Turkey ONLY recruits shop floor production staff who have completed technical high school and only then on completion of national service. Add to that 10 million unemployed and you end up with an educated, disciplined workforce who really really want to be at work - a workforce who'll walk, cycle or ride on horseback to get in to work on the day after an earthquake has destroyed roads and flattened their homes (yes, really).

Bluemerle

UKIPScot, you came across brilliantly in the Strawpoll broadcast. Mark Leonard was completely thrown by your argument, but of course, he is only concerned with the European dream. :roll:

UkipScot

Thankyou Bluemerle. I spoke completely off the cuff although it was my main intention to highlight Fergusons, something no-one did.