Central/Eastern European here. Our labor costs are comparable or even lower than China today. And the manufacturing is still struggling. So it's not only that.
That, and you have to ensure your energy costs (power) are low and you have a secure source of raw materials. I'm not an expert, but from what I've heard, the economic region over there has been doing a poor job on both those fronts. Furthermore, you have to talk about regulation vs safety. The EU has regulation. Maybe too much.
There are also network effects. Your plant that is energy intensive is closing? Now other manufactures must increase their cost as transportation is increased and local contracts harder to get. Your chemical plant, which has operated within good bounds for a decade can't get a permit to expand, or is protested? Your intake products now either go up in price or become unable to attain them at all.
There's also that large scale effort ongoing to make those energy costs higher and take those raw materials away.
And even still - there's a lot of manufacturing in Easter Europe. Go to IKEA or an appliance or auto store. You might be surprised to find where things are made these days. Often they'll say "made in EU" instead of the actual country name though.
In Central/Eastern Europe, the problem is increasingly one of demographics. You can sometimes find somewhat cheap labour due to shitty (geo)politics, stagnant economies and poorly trained workers, but big-picture-like, the age of labour abundance is over. These economies have nowhere to go but down, down, down, starved of talent due to the twin cancers of bad demographics and emigration. Some countries are better, some worse, but the overall trend is the same all over the region. Going gentle into that good night.
(China's predicament is not much better, with the added wrinkle that there's absolutely nothing whatsoever they can do about bad demographics due to their size, whereas Central/Eastern Europe can import people once we collectively get over ourselves and let go of uppity xenophobia).
kardianos|4 days ago
There are also network effects. Your plant that is energy intensive is closing? Now other manufactures must increase their cost as transportation is increased and local contracts harder to get. Your chemical plant, which has operated within good bounds for a decade can't get a permit to expand, or is protested? Your intake products now either go up in price or become unable to attain them at all.
temp8830|2 days ago
And even still - there's a lot of manufacturing in Easter Europe. Go to IKEA or an appliance or auto store. You might be surprised to find where things are made these days. Often they'll say "made in EU" instead of the actual country name though.
kspacewalk2|4 days ago
(China's predicament is not much better, with the added wrinkle that there's absolutely nothing whatsoever they can do about bad demographics due to their size, whereas Central/Eastern Europe can import people once we collectively get over ourselves and let go of uppity xenophobia).
joe_mamba|4 days ago
There IS labour over abundance. Unemployment in most EU countries is at record highs. And it shows no sign of slowing down.
The problem is it's mostly white collar labor overabundance. And those college educated people aren't gonna want to make sneakers in sweatshops.
baybal2|4 days ago
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