[Vision2020] Buying US Products? John D

[Phil Nisbet]

John

>From my experiance, the third world lacks infrastructure and also is plagued 
with lack of technical expertise and with a poor basis in technical culture.

I can give you the example of Chilean copper mines as a great examplefor 
comparing and contrsting.

Though Chile has a more advanceed technical culture than the average thrid 
world country and has environmental regulations similar to those you wil 
find here in the US, the grade required for productin in Chile is twice that 
for minng a copper ore body here in the US.  That operatinal advantage we 
have in America happens even though the average worler in a Chilean mine get 
about a thrid of the pay of an American worker.

A very good friend of mine is currently running the clean up at the El Indio 
Gold minng complex in the high Andes.  Bert says that the standars he is 
using there for reclaiming the site are directly comparable to those used 
here in the US.  The major difference he has in the clean up there is having 
to use three to four times the wor force to get the job done.  But even 
though the base cost of his clean up there is hogher than in the US, overall 
the administrative delays in the US end up costing more to carry out a 
comparable clean up of a mine site.  That and he notes that at sites in the 
US the lawyers from EPA and State regulators and environemntal groups end up 
adding costs in delay that also break the bank on the US operations.

American workers are extremely productive.  If you look at the cost of 
putting on one US worker and then look at the income he generates for a 
company, its no contest where you want your plant to be.  But no business 
can deal with long permit and other delays.  The time cost of money is what 
is killing us.

Some think that the reason for shifting to the third world is based on a 
lower environmental standard.  I am sure that there are some companies who 
would assume so, but they would find that generally any place with an 
extremely low environmental standard is going to be a place where your 
capital costs will go through the roof.  Sure its possible to have a lower 
standard in some place like Ghana, but they will lack the roads, power 
lines, rails and the rest that will have to be added to the base cost of 
putting in the plant.  Add to that political corruption and political risk 
and you find that few companies head for the real pest holes that do not 
have good environmental regulations.

Where they do head are countries with quick permit time.

Take the experiance for Boise Locomotive.  Its an Idaho firm, but where do 
they have their biggest shops?  In San Luis Potosi Mexico.  SLP got the 
business because expansion in Boise was simply going to take too darn long 
and the permit process in Mexico was a quick 6 months.  That was a loss to 
Idaho of 500 jobs building mass transit locomotives.  Mexico gained 1500 
jobs, because it literally takes three Mexican workers to get the same job 
an American would do done.  (And I caution that that is not that the Mexican 
worker does not work hard, they are people who put in hard long hours and 
more of them a week than an American does, just that culturally, the 
American gets more done in less time because he is technically culturally 
attuned to modern jobs.)

Sonebody recently pointed out that even though Idaho was handing out huge 
incentives, Micron chose not to put a plant expansion here.  There is a 
reason for it.  TMDLs for the Boise River are at maximum and permits take to 
darn long as a consequence.  Nicron and HP were trying to sue the Sugar beet 
plant to get their discharges lowered to bring the river into compliace to 
reduce the permit delays, but the court time to get that done was also time 
consuming.  It was not the discharge standards that were the problem, Micron 
was wiling to put in a water plant to do that.  But permitting that plant 
would take years.

Phil Nisbet

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