Worldwide Manufacturing in trouble

martin1016

Just watching the news feeds from Monday and here are some of the depressing headlines. The speed at which this is happening is frightening and it does not appear to be slowing. The China article is general and the other few headlines relate to electronics. I wonder how bad can this get globally? Has worldwide consumption collapsed completely?

China official says 20 million migrants lost jobs - Reuters

Some other headlines -

US OEMs to cut staff in Ireland
OEM - US based IBM is seeking 120 voluntary redundancies at its technology campus in Dublin. Also US maker of medical devices, Boston Scientific s closing a plant in Letterkenny.

What happens at Celestica, Ireland?
EMS - The Canada based EMS-provider has asked all employees to attend a general meeting at the facility tonight.

Philips lays off 199 in the Netherlands
OEM - Philips Lighting in Eindhoven plans to lay off 199 employees.

Panasonic to close 27 facilities
OEM - The Japanese company is to lay off 15.000 staff worldwide (by the end of March 2010) and close 27 of its facilities by the end of March this year.

Sanmina-SCI to lay off 550 staff in Hungary
EMS - The EMS-provider Sanmina-SCI is to lay off 550 staff at its manufacturing facility in Tatabánya, Hungary.

Sony to break with tradition and outsource more
OEM - Sony is considering outsourcing its TV manufacturing to cut cost, says CEO Howard Stringer. The company also announced on January 22, 2009 that it will close 5-6 of its worldwide manufacturing facilities.

Axeon lays off in Poland, Scotland and Germany
Equipment - Scotland based Axeon laid off a total of 200 employees in Poland, Scotland and Germany.

ST to lay off 1300 in Malta & Morocco
Components - ST, the biggest private employer in Malta - is said to implement downsizing plans for its facility Kirkop (Malta) as well as reducing staff numbers in Malta and Morocco.

They just go on but I decided to pick the major ones from Monday morning.

von Neumann

A huge portion of manufacturing engineer time is spent trying to remove people from the process i.e. automation.
So just because the head count goes down it does not mean that manufacturing is declining. Indeed strangely a head count reducing could be viewed as a good thing as it shows that a company is keep pace with developments.

However, unfortunately i think your right this time .

ongarite

I wish you were right von Neumann but the downturn in the semi-conductor, electronics sector is unprecedented. I have never ever seen a downturn as bad as it, this one is going to make 2001 look small by comparison.

The semi-conductor industry is going to be destroyed with only Intel & Samsung left standing. The demand has dropped by 50% making profitable FABs lose money and FABs that were just getting by, making small losses go into bankruptcy and liquidation.
The whole industry from FAB makers to equipment makers are making gigantic losses and only those with cash reserves will survive.
Its one the most capital intensive industries in the world and getting more expensive with every process jump, and the problem is the captial needed has dried up.

The losses all the Asian semi-conductors are facing is staggering, somewhere around €22billion in the last 3 months.

If you want some depressing reading, check out EETimes.

martin1016

Being in the industry I keep a close eye on it and as said above the current situation is really crazy.

Taking a step back from it I wonder has consumerism died or have companies stopped developing technology that offers enough benefits for people to buy.

Look at the iPod - huge sales because it made purchasing and storage of music very handy for the average person. Granted it has its flaws but it was a huge success.

PC manufacturers have been OK due to Netbook sales, again something that offered surfing and connectivity at a low price for casual use in a compact package.

Look at cars - last time I noticed any substantial improvement in cars was the mid 90's, 15 years on they have not moved forward vastly in terms of interior quality or refinement. So aside from the prestige of having a new car is there any need to change?

So, thinking out loud here, is part of the downturn due to a lack of development / innovation. Has demand slowed due to a lack of benefits / reason to change? I appreciate the current financial situation is a factor but if a product offered enough value in term of improvement, productivity or efficiency would people buy?