U.S. Beer Industry Blames Trump Tariffs for 40k Job Losses | Hacker News Reader

U.S. Beer Industry Blames Trump Tariffs for 40k Job Losses

bloomberg.com

28 pointssmacktoward16 comments

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So, uh, a merger of the two largest beer companies in the world couldn’t be at fault here, could it?

Nah. Let’s blame the guy we don’t like instead.

Citation?

I don't understand how there could be that many jobs eliminated by a merger while the beer output remains the same.

It also often takes years for mergers to completely eliminate redundant employees.

It's hard to believe any manufacturing industry org has an anti-Republican political agenda.

> I don't understand how there could be that many jobs eliminated by a merger while the beer output remains the same.

This is what a merger is for. You use it to enhance "synergy" (I hate that I have a legitimate for this now) and in so doing can fire as many people as possible to maintain production.

> It also often takes years for mergers to completely eliminate redundant employees.

It is possible to prepare for a merger by pre-emptively selecting/preparing a dossier (if that is necessary, this is the US so probably not) so you can fire them as soon as all the paperwork clears.

> It's hard to believe any manufacturing industry org has an anti-Republican political agenda.

I don't see why, but I'm also not at home in this political setting.

I know what merge are for and how they work.

I’m skeptical of the number. Even half of 40,000 is a huge number for a company with ~170,000 employees, especially in manufacturing.

Cutting almost 25% of the workforce due to the merger is at least theoretically possible.

Cutting 25% of the workforce because aluminum process went up (and beer consumption fell 1%) certainly looks like too much of a stretch.

I have no idea how it is with the openness of paperwork/tax filings in the US, but if you are very interested I'm sure you could investigate the veracity of these claims. I agree with you in principle that it is a high number, but I do not think it is unthinkable. Especially if there have been "too few" firings over the years and a company has accumulated a relatively large amount of supporting staff.

40,000 in the INDUSTRY.

An industry of 2,190,000 people.

That’s less than 2% over three years (including 2016, 2017, and 2018 according to the article).

You think an international merger couldn't affect 40k jobs while maintaining output (mergers ought to increase efficiency or output. If they weren't beneficial they wouldn't be done considering immense risks), but you think tariffs that are still plausibly temporary and which have only been in effect for a week would cause those 40k jobs? Why?

The tariff on aluminum is from March 2018, not a week ago.

Assuming the merger in question is the acquisition of SABMiller, then the number of jobs eliminated was ~6,000[1]. That’s a merger of the two largest (at the time) brewers.

Either way, an industry spokesman isn’t going to throw out numbers from a single company.

1. https://www.chicagotribune.com/business/ct-ab-inbev-sabmille...

And given that Trump announced his desire for tariffs around those products even earlier, I expect the prices began rising in anticipation.

Tariffs were 10%.

That’s less than the fluctuation in gasoline prices over the course of a year.

Source: https://ycharts.com/indicators/gas_price

You should be more skeptical. A LOT more.

Take a look at this article, which is a brief summary [1]. Among other things is this paragraph:

“A spokeswoman for the Beer Industry told Bloomberg that though the tariffs are not “100 percent” to blame for the industry’s losses, there is reason to believe that “brewers are making fewer investments because of the added cost of aluminum.” In the year before the tariffs were put in place, beer jobs had grown by 27 percent.”

Read that again - a whopping 27% increase in jobs in ONE YEAR!!!

Also in the article...

ALL alcohol sales declined in the following year. And beer jobs are UP 8%. And aluminum costs “doubled” despite a very modest 10% tariff.

I could go on, but my god, this report is 100% full of shit. And I’m being kind. Seriously. And I don’t care if they hate trump (or any other president). They should be called out for such BS. But because Bloomberg hates Trump, they won’t do it, which is dumb. Either call someone out when they are full of BS (regardless of political persuasion), or get out of the business.

[1] - https://splinternews.com/trump-is-killing-the-beer-industry-...

At 'retail' spot prices, Aluminum is around $1,885.29 a metric ton.

There are about 0.5714 ounces of aluminum in a typical can of beer.

That is, there is around $0.03 of Aluminum in each can. (Actually, it is a lot less as, obviously, canning companies buy Aluminum in bulk.)

Average can of beer is $1.15.

Thus, Aluminum makes up -- at most -- 2% of the price.

Assuming the "10% tariff" is completely passed on to the consumer, the increase in price would be -- wait for it -- less than a penny.

In short, the article is complete BS.

Yet the end of the article says that beer drinkers have been switching to wine and spirits. I don't think I trust the industry to be unbiased when explaining it's layoffs. Having worked for a corp that had a huge annual layoff season - it's all about saving face.

It's going to be wild to see what happens come Q1 2020, after everyone has had a chance to publish their 2020 price lists and push these tariffs down the supply chain.

Craft beer taste better anyways.

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