October 24, 2012 Harold Tor

Closure of Ford in Genk and the Post-Industrial Era

It really bothers me having to endure the tiresome discourse over the closure of the Ford factory here in Genk, Belgium. Politicians, economists, trade-unionists bask in the limelight on-site and in TV interviews to talk about the “human drama” that ensues. Reporters gasp breathlessly over the number of people who are going to lose their jobs and the future (ex-)factory workers decries the injustice they suffer after decades of dedication to the factory.

Everyone has themselves to blame and, while I personally understand the insecurity of not having a job, I must state that the closure of the Ford factory is part of the continuous process of post-industrialisation.

Post-industrialisation is the de-industralisation of heavy industries like mining, metal, chemical production where large number of blue-collar workers are needed to perform the tasks. Car manufacturing is the last of a whole range of production processes that are moving out of industralised countries to industrialising countries.

Naturally, it has to do with cost-efficiency. If a company is able to produce a car at half the price in China than in Belgium because of high labour costs, then it definitely wants to do so and will eventually.

The circus now seems to revolve around whose fault it is. Everyone points their finger at the factory owners but like any business, cost-saving is the only way to survive and make profit.

For a company to consider operating somewhere, costs are a major consideration, among others such as:

  • low-cost, knowledgeable, skilled, efficient workforce
  • extremely reliable infrastructure, such as electricity, water, health services, transport
  • cheap and easy connections to the other places by land, water and sea
  • peaceful, stable government and low corporate taxation

In industralised countries such as Belgium, the post-industralising process has begun fifty years ago with the decline of coal and steel production. This process is coupled with the rise of the middle class, who became thus through the benefits reaped from the industralisation. People became middle class, their salary expectations increased, their wants and their needs also increased, hence work shifted from heavy to light and service. The latter became the cornerstone of the economy simply because companies cannot sustain to employ large number of workers (normally the case in heavy industries) with middle class salary expectations.

What the governments in the past decade should have done, was to have prepared for the population for such a transition through education and training. But it is kind of an oxymoron, because politicians do not make long-term plans because they get elected every five years. Short term plans with immediately visible results are the only safe option to ensure their re-elections.

To make matters worse, consecutive left and centre-left governments in Belgium have not made it easy for small and medium enterprises (SME). Local businesses fail and fall, because of the heavy taxation imposed on them, whilst multinationals take over through the economy of scale. When a multinational leaves, such as in this case and in the case of DHL a few years ago, politicians did not point the finger at themselves but at the multinationals by going moralistic about them leaving and thus ‘creating’ that ‘human drama’.

The demonisation of SME has been perpetuated for decades, such as I do not see how people can find employment again without engaging in a strengthened local and regional economies. The self-employed are seriously undermined in this country and people automatically think of a business owner as a ‘bloodsucker’.

If this current government provides subsidies to Ford so that they can stay in Belgium, then it is like how the previous governments had employed millions of public servants to absorb the jobless after the decline of the mining and steel industries – SUICIDAL.

What the Belgian economy and society need right now is:

  • Discover what the value-addedness is of its economy in the context of the world economy
  • Long-term planning through education and training, and investment in infrastructure
  • Value and strengthen local businesses through less taxation
  • Slimming down of bureaucracy (cut down on the form filling) but strengthen areas like education, transport, water and electricity, telecommunications

Are there any politicians or political parties here with that long-term vision? So far, I have not seen any.

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