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Comment by adventured | Hacker News Reader

Rising living costs due to inflation and a few other reasons (such as global supply chains being a mess), will force workers into a scenario where they have no other reasonable choice but to strike as a bargaining tactic (if they can), as the companies aren't going to often voluntarily outpace inflation (ie inflation adjustment + normal yearly raises). The John Deere offer to labor for example was very mediocre. Deere can do a lot better, they're doing quite well right now, their operating income has climbed from $2.7b in 2017 to $7b in the last four quarters (and heading toward $9b). That kind of stinginess toward your unionized workers while the company is prospering will get you a strike.

Societal turmoil (worker, consumer, business) is one of the many not fun consequences from higher rates of inflation.

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What's the point of striking in the globalization era? The number of hungry would be workers that would gladly take 1/10th the meager salary of a Western worker is in the billions.

What's to keep John Deere from uplifting the whole plant and shipping it to, for example, SouthEast Asia? Note that this is a long term lose-lose proposition for both workers and capital, see ARM China debacle for a textbook example. Alas I see no medium term disincentive on the horizon.

What was the point of striking a century ago in factories in the northeast US when workers in the Midwest and South would work for less? What kept factory owners from shipping factories to the Midwest and South?

Factories could move, but not at the snap of a finger. Union workers made good salaries, and jobs did not disappear from the northeast.

More interesting is Midwest and Southern factories. Midwest factories unionized, North Carolina textile mills did not. Midwest union workers like Larry Page's grandfather, who walked around his factory during a sit-down strike with a hammer to bash scabs and cops - they sent their sons to college with the wages they had, and their grandchildren prospered. North Carolina factory workers did not unionize, made low wages generationally, and the factories moved any way.

> Larry Page's grandfather, who walked around his factory during a sit-down strike with a hammer to bash scabs and cops

People who violently assault others for taking jobs are unspeakably evil, and I have only contempt for those who admire or defend them.

>What's to keep John Deere from uplifting the whole plant and shipping it to, for example, SouthEast Asia?

That word you use, "globalization" - I do not think it means what you think it means.

2/3rds of their 70 factories are already outside the US and Canada. So without knowing anything specific, I would be pretty confident that there is something to keep them from moving a given plant, otherwise they would've already done it.

They have factories in these countries, according to official filings:

  Argentina
  Brazil
  Canada
  China
  Finland
  France
  Germany
  India
  Israel
  Italy
  Mexico
  New Zealand
  the Netherlands
  Russia
  Spain

If John Deere employs no blue collar workers, it's going to be awfully hard to get their congress person/senator to vote for lower import taxes on farm equipment.

Not so long as there are still farmers and the Iowa caucus is first.

> What's to keep John Deere from uplifting the whole plant and shipping it to, for example, SouthEast Asia?

They already would have decades ago if the labor cost arbitrage was worth it.

Striking is increasing the labor cost, possibly tipping the balance.

Possibly, but I would be willing to bet the difference in labor prices abroad and in the US were greater in previous decades, and that labor prices abroad have been increasing quicker than US labor prices.

I know that with telecommunications, there are a bunch of companies here in Australia that are bringing call centres back on shore just because non-native speakers make so many mistakes with their data entry that it's not worth the cost of fixing it.

Offshoring has existed for decades but picking up and moving on a whim is not something companies do overnight. Things like access to raw inputs and availability of skilled labor are major viability factors.

Also, global transportation is a mess right now. Container shipping rates are high and ports are backed up. It doesn't do a company a lot of good if it can't get its goods from the factory to the market they're sold in efficiently and at reasonable cost.

> What's to keep John Deere from uplifting the whole plant and shipping it to, for example, SouthEast Asia

If they ever want to sell another tractor here, tariffs would be a good start. Why do you think in 2020, anyone is still making cars in America? It's not out of some misplaced sense of patriotism, or because Ford likes dealing with the UAW.

But for anything that's not heavy industry, that ship has sailed decades ago. Most people in the kind of jobs that need unions these days do work that is by nature local. Your grocer can't close it's Main Street branch, and re-open in Bangkok.

Shipping large equipment isn't easy, it doesn't fit in a standard shipping container, and there isn't enough demand to make custom ships (cars get custom ships )

Among other things, it wouldn't surprise me if the international transportation costs of a mostly built tractor are prohibitively expensive.

There are many factors to factory location, labor cost being only one of them. As context, we would have to know what portion of their expenses are labor; it could be materials or machine tools or something else.

Good luck getting your tools to Vietnam and your tractors back.

My current job just gave me a double digit raise out of the blue recently. To be fair 2 of the 5 engineers on my time had quit recently. But still, the smart companies are giving raises before people strike or quit.

Deer goes through waves of big profits then loss. Looking at the last 4 quarters doesn’t give you the full picture.

https://www.macrotrends.net/stocks/charts/DE/deere/revenue

> Deer goes through waves of big profits then loss.

No they don't. There's no magical set cycle of outsized profits and losses waves for Deere. Globalization and the world adding 80 million new people per year has created a potent demand for their product, which is why their sales have done well over the last ~5 years ($26b to $42b) - there's another 400 million mouths to feed in that time and another billion more on the way. And those people have more money to spend on calories than past generations. It adds up to the world needing a lot more farm output and a lot more farm equipment.

> Looking at the last 4 quarters doesn’t give you the full picture.

I wasn't only looking at their last four quarters.

Their last five fiscal years have been stellar in fact and getting better by the year. Covid only barely slowed them down. This past decade has been the best, by a dramatic margin, in the history of Deere.

Look at the link. -30% growth in 2008, then 2015, then 2020.

What do you mean “no they dont”?

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