Business

That 70s Show: Inflation is back.

Phillip Nones Business, Economics, Social Commentary , , , ,

The rise in lumber prices has received a certain degree of coverage in the news in recent weeks and months.  For anyone who used the “pandemic period” to engage in home remodeling or renovation projects – perhaps moving away from “open concept everything” to reintroduce the designated spaces of yesteryear – the eye-popping price of lumber has come as something of a shock.

As for explaining the sharp increase, it’s logical to think that prices are directly correlated to the increased demand for the product.  But this explanation is incomplete; the steep price rise in a wide range of commodities well beyond just lumber tells us that inflation isn’t relegated to just a few high-demand product categories.  It’s the closest thing to “across the board” that we’ve seen in over 40 years — and the issue seemed to come out of nowhere.

Price inflation has been such a non-factor for so many decades, most consumers don’t even have personal memories of it.  But those of us “of a certain age” remember well how difficult it was to navigate an “inflation-everywhere” environment where annual salary increases could never keep pace with rising prices. 

It was difficult on people with fixed incomes, of course, but perhaps worse for young consumers who found that struggling to save for a down payment on a house purchase was a losing proposition as the gap widened rather than narrowed year over year.  Living like a monk while scrimping and saving for a house gets old when you realize that your efforts aren’t getting you anywhere near where you’re attempting to go … 

As for the situation now, the inflation warning signs are all around us if we dare to look. According to a report published in the May 21, 2021 issue of The Wall Street Journal, lumber may exhibit the most visible spike in prices, but consider what futures prices are showing for a whole range of commodities when compared to just one year ago:

  • Gold:  +7%
  • Platinum:  +29%
  • Wheat:  +31%
  • Cotton:  +40%
  • Coffee:  +42%
  • Sugar:  +52%
  • Silver:  +56%
  • Natural gas:  +65%
  • Soybeans:  +81%
  • Crude oil:  +85%
  • Cooper:  +86%
  • Gasoline:  +96%
  • Corn:  +108%
  • Lumber:  +278%

It doesn’t take a degree in economics to know that these sorts of trends are pretty alarming.  Whenever it has an opportunity to take hold, inflation is one of the most insidious of economic problems – and one that’s extremely difficult to reverse.  Inflation is also very debilitating for the personal budgets of the large majority of consumers, and it causes the most harm to those on the lower rungs of the economic ladder.

The next few months will tell us if this particular inflation is going to be a temporary phenomenon or not.  How much of the commodity price increases are attributable to transitory events that will ease as the world’s economies move further from lockdown?

But if this inflation turns out to be something more structural or more directly correlated to the massive increase in government spending paid for by the expanded money supply, expect the economic (and political) climate to begin to look vastly different in the coming months. 

Inflation will be uncharted territory for most people.  But a few of us veterans will be around to provide context and counsel — and perhaps engage in a bit of “Sister Toldja” commentary while we’re at it …

The consequences of COVID on office space leasing.

Phillip Nones Business, Economics, Employment, Social Commentary , , , , ,

One of the many ripple-effects of the COVID-19 pandemic is the effect it’s had on the demand for commercial office space. 

In a word, it’s been pretty devastating. 

The numbers are stark.  According to an estimate published by Dallas-based commercial real estate services and investment firm CBRE Group, Inc., as of the end of 2020, nearly 140 million sq. ft. of office space was available for sublease across America. 

That’s a 40% jump from the previous year.  Not only that, it’s the highest sublease availability figure since 2003, which means the situation is worse than even during the Great Recession of 2008.

Of course, it isn’t surprising to expect that more sublet space would become available during periods of economic downturn, when many businesses naturally look for ways to cut costs.  But those dynamics typically reverse when the economy picks up again.  This time around, it’s very possible – even probable – that the changes are permanent.

The reason?  Many companies that reduced their office space footprint in 2020 didn’t doing so because they we’re suffering financially.  It was because of government-mandated lockdowns.  And now they’re expecting many of those employees to continue working from home, either part-time or full-time, after the pandemic subsides. 

Employee surveys have shown that many workers prefer to work from home where they can avoid the hassle and expense of daily commuting.  It’s understandable that they don’t want that to change back again.  In many business sectors which don’t actually need their workforce be onsite to produce revenue, companies are simply ratifying a reality that’s already happened.  Accordingly, they’ve changed their expectations about employee attendance at the office going forward.

Commercial landlords are now feeling the long-term effects of this shift in thinking.  Rents for prime office space fell an average of 13% across the United States over the past year.  In places like New York and San Francisco the drop has been even steeper — as much as a 20% contraction.

For many of the lessees, it’s less onerous to sublease space to others rather than attempt to undertake the messy business of renegotiating long-term lease contracts with landlords.  Still, there’s pain involved; sublease space historically comes with a significant discount — around 25% — but with the amount of sublet space that’s been coming onstream, those discounts may well go even deeper due to the lack of demand.

The cumulative effect of these leasing dynamics is to put even more downward pressure on broader rental rates, as the deeply discounted space that’s available to sublet puts more pressure on the price of “regular” office space.  It’s a classic downward spiral.

Is there a natural bottom?  Most likely, yes.  But we haven’t reached it yet, and it’ll be interesting to see when — and at what level — things finally even out.  In the meantime, it isn’t a very pretty picture.

What are you witnessing with regards to office space dynamics within your own firm, or other companies in your business community?  Please share your thoughts below.

Tesla gets taken to task by Consumer Reports.

Phillip Nones Branding, Business, Manufacturing, Marketing Research, Sales , , , ,
The Tesla Model Y SUV

Getting decent ratings from Consumer Reports is an important achievement for any product – particularly high ticket-items such as large home appliances and motor vehicles.

Many consumers consider CR to be the Holy Grail when it comes to its product evaluations. Indeed, weak comparative ratings is why so many American car makers have suffered greatly when attempting to compete with their Asian and some European counterparts.

And then we have Tesla.  This American car (and solar panel technology) company is different in that the Tesla product line doesn’t include any traditional gasoline-fueled vehicles.  The company has suffered for that in Consumer Reports’ reliability rankings, as its electric car technology isn’t fully mature – and hence subject to some rather gnarly quality control issues.

Actually, the company had been making some pretty steady progress on the product quality front – until the new Model Y mid-size SUV model hit the market earlier this year. Some of the common complaints about that new Tesla model have been eyebrow-raising to say the least – including some very basic and distinctly lo-tech problems like misaligned body panels and mismatched paint colors. 

As it turns out, the knocks on the Model Y have sent Tesla’s brand reputation plummeting in the CR reliability ratings.  The company now ranks an abysmal 25th out of 26 auto brands.  Ouch!

The Model Y has garnered Consumer Reports’ embarrassing designation “much worse than average.”  But Tesla’s more established vehicle models aren’t perceived to be that much better, actually.  CR rates both the Model S sedan and the Model X SUV as “worse than average,” meaning that only Tesla’s Model 3 is currently holding an “average” rating and the commensurate “recommended” status from CR.

Clearly, this company has substantial work left to do to convince a skeptical public of the quality of its automotive lineup.  Considering how quickly electric cars are being adopted now, it looks like the company will need to clean up its act within the next 24 to 36 months, or risk becoming one of those early pioneers that flamed out — just like happened to many of the early entrant motorcar companies a century ago.

What are your own thoughts about the promise – and pitfalls — of Tesla and its products?  Please share your perspectives with other readers here.

The COVID pandemic and the race to raise digital skills.

Phillip Nones Economics, Education, Employment, Human Resources , , , ,

The Coronavirus pandemic has certainly made its mark on many markets and industries – some more than others, of course. But one consequence of the events of 2020 appears to cross all industry lines. 

Because of the rapid adjustments organizations have been required to make in the way jobs are performed – borne out of necessity because of health fears, not to mention government edicts – workers have been forced to come up the digital learning curve in a big hurry in order to do their jobs properly.

This “digital upskilling” dynamic isn’t affecting only office workers.  It’s happening across the board – in the private and public sector alike. 

Simply put, digital upskilling isn’t a matter of choice.  If workers want to remain relevant — and to keep their jobs — they’re having to ramp up their digital skill-sets without delay.

Moreover, the new skills aren’t limited to the efficient use of mobile devices, digital meeting/presentation functions, cloud applications and the like.  According to LinkedIn’s recruitment data, highly in-demand skills over the past few months encompass wide-ranging and comprehensive knowledge sets such as data science, data storage, and tech support.

Not so long ago, there were “tech jobs” and “non-tech jobs.”  Now there are just “jobs” – and nearly every one of them require the people doing them to possess a high comfort level with technology.

Will things revert back to older norms with the anticipated arrival of coronavirus vaccines in 2021?  I think the chances of that are “less than zero.”  But what are your thoughts?  Please share your perspectives with other readers.

Virtual Meetings: Will the COVID-19 virus accelerate a trend?

Phillip Nones Business, Human Resources, Marketing, Marketing Communications, Media, Sales, Social Commentary, Social Media , , , , , , , ,

One of the big repercussions of the Coronavirus scare has been to shift most companies into a world where significant numbers of their employees are working from home. Whereas working remotely might have been an occasional thing for many of these workers in the past, now it’s the daily reality.

What’s more, personal visits to customers and attendance at meetings or events have been severely curtailed.

This “new reality” may well be with us for the coming months – not merely weeks as some reporting has indicated. But more fundamentally, what does it mean for the long-term?

I think it’s very possible that we’re entering a new era of how companies work and interact with their customers that’s permanent more than it is temporary. The move towards working remotely had been advancing (slowly) over the years, but COVID-19 is the catalyst that will accelerate the trend.

Over the coming weeks, companies are going to become pretty adept at figuring out how to work successfully without the routine of in-person meetings. Moving even small meetings to virtual-only events is the short-term reality that’s going to turn into a long-term one.

When it comes to client service strategies, these new approaches will gain a secure foothold not just because they’re necessary in the current crisis, but because they’ll prove themselves to work well and to be more cost-efficient than the old ways of doing business. Along the same lines, professional conferences in every sector are being postponed or cancelled – or rolled into online-only events.  This means that “big news” about product launches, market trends and data reporting are going to be communicated in ways that don’t involve a “big meeting.”

Social media and paid media will likely play larger roles in broadcasting the major announcements that are usually reserved for the year’s biggest meeting events. Harnessing techniques like animation, infographics and recorded presentations will happen much more than in the past, in order to turn information that used to be shared “in real life” into compelling and engaging web content.

The same dynamics are in play for formerly in-person sales visits. The “forced isolation” of social distancing will necessitate presentations and product demos being done via online meetings during the coming weeks and months. Once the COVID-19 pandemic subsides, in-person sales meetings at the customer’s place of business will return – but can we realistically expect that they will go back to the levels that they were before?

Likely not, as companies begin to realize that “we can do this” when it comes to conducting business effectively while communicating remotely. What may be lost in in-person meeting dynamics is more than made up for in the convenience and cost savings that “virtual” sales meetings can provide.

What do you think? Looking back, will we recognize the Coronavirus threat as the catalyst that changed the “business as usual” of how we conduct business meetings?  Or will today’s “new normal” have returned to the “old normal” of life before the pandemic?  Please share your thoughts with other readers here.

The “bystander effect” and how it affects our workplaces.

Phillip Nones Business, Employment, Human Resources , , , , , , , ,

Here’s an interesting view into human nature: Experience tells us that far more people will pass a disabled motorist on a busy highway without bothering to stop, compared to stopping for a person stranded on a lonely country road.

This phenomenon creeps into the business world, too — and particularly in a situation which some of us have probably experienced at least a few times during our careers: There’s someone at work who is clearly deficient in their job. Worse yet, the deficiencies aren’t due to incompetence, but to undesirable character traits like sloth, a sour attitude, deficient interpersonal skills — or even questionable ethics.

Moreover, the behavior of the individual falls in the “everyone knows” category.

The question is, what happens about it? Too often, the answer is “nothing.”

Social scientists have a name for this: the “bystander effect.”   It means that “what’s everybody’s business is nobody’s business.”

In mid-2019, several researchers at the University of Maryland studied the topic by fielding several pieces of research. In a first one, nearly 140 employees and their managers working at a Fortune 500 electronics company were surveyed.  That survey found that employees were less apt to speak up about problems they perceived to be “open secrets.”

Two other components of the field research – one a survey of 160+ undergraduate students and the other a study involving behavioral experimentation with nearly 450 working adults – found essentially the same dynamics at work.

According to the University of Maryland research study leaders, Subra Tangirala and Insiya Hussain:

“In all three studies our results held even when we statistically controlled for several other factors, such as whether participants felt it was safe to speak, and whether they thought speaking up would make a difference.”

The inevitable conclusion? Tangirala and Hussain reported:

“Our research shows that when multiple individuals know about an issue, each of them experiences a diffusion of responsibility — or the sense that they need not personally take on any costs or burden associated with speaking up.

They feel that others are equally knowledgeable and, hence, capable of raising the issue with top management. As issues become more common knowledge among frontline employees, the willingness of any individual employee to bring those issues to the attention of top management decreases.”

Sadly, the University of Maryland research shows that the “bystander effect” is the perfect recipe for companies to keep loping along without making HR changes — and not realizing their full potential as a result.

There’s another downside as well:  If left unaddressed, festering issues involving “problem” employees can engender feelings of frustration on the part of the other employees — along with the sense that an underlying degree of fairness has been violated because of the efforts the other workers are making to be productive employees. Unfortunately even then, no one wants to be the person to blow the whistle.

More detailed findings from the University of Maryland research can be accessed here.

What about your experiences? Have you ever encountered a similar dynamic in your place of work? Please share your insights with other readers.

LinkedIn’s Weak Link

Phillip Nones Business, Employment, Human Resources, Social Media , , , , , , , , ,

On balance, most people would agree that the LinkedIn social media platform has been a positive development in the field of business. Until LinkedIn came along, often it was quite challenging to make and nurture connections with like-minded industry or professional colleagues, or to find relevant contacts deep within corporations or other organizations.

I’m old enough to remember the “bad old days” of fruitless searches through the Corporate Yellow Book, Hoover’s and Dun & Bradstreet mercantile listings to try to find good company contacts. Often the information was far too “upper-level,” out-of-date, or simply wrong.  Industry, state and regional directory listings were even worse.

Invariably, any data ferreted out needed to be vetted through phone calls made to beleaguered front-office receptionists who were understandably disinclined to spend much time being helpful.

Of course, as with Wikipedia all LinkedIn “data” is submitted information, and subject to varying degrees of accuracy. As well, the data are comprehensive and accurate only to the degree that each LinkedIn member keeps his or her employment and related information current and complete.

But as a crowd-sourcing database of information – and often with “deep-dive” data on members available to view – LinkedIn is miles ahead of where we were before.

That being said, there is one negative aspect about LinkedIn that seems to have become more pronounced over time — and that’s the burgeoning volume of LinkedIn connection requests that are happening.

Speaking for myself, I’ve spent an entire career nurturing my business relationships. That this has resulted in being one of the LinkedIn members who are in the “500+ connections” club speaks to a lifetime of establishing “real” connections with “real” people – not mindlessly sending out connection solicitations to just anyone.

But that’s what’s happening with many of the incoming requests-to-connect on LinkedIn. These days, I’m receiving requests daily from people I do not know personally and have never even heard of before.

These are the folks who take advantage of LinkedIn’s higher cost”premium membership” programs to gain access to the more detailed information contained in member profiles that is normally off-limits to all except first-degree connections.

In what ways are these people actually interested in connecting with me?  Are they simply sending out a rash of “spray-and-pray” requests in the hopes of getting a nibble … or perhaps making an effort to build their own network and look more like an “authority” in their line of work?

When I click through to view the profiles of those people requesting to connect, it turns out that most them are in fields that relate to my line of work, however tangentially. Likely they’ve identified my name based on shared professional organizations and vocational interests.

But their reasons for requesting to connect — if they even bother to give one — are so generic (or so lame) as to be laughable.

Early on, I did a bit of “empirical” research to see how a few of these connections might actually evolve after I accepted their request to connect. Big mistake, that was.  Recently, freelance copywriter extraordinaire Ed Gandia described something very similar about his own personal LinkedIn experience, characterizing the typical follow-up communiqué from a new LinkedIn connection as “the business equivalent of a marriage proposal” – to wit:

“I’d like to get on the phone with you about [marrying me/having kids/opening a joint bank account]. Here are three times I’m available to talk.  I’m so excited to hear what you can offer me as [my new husband].”

If ever we needed reminding about how not to engage in business development solicitations, these sorry LinkedIn communications are it.

The bright promise of LinkedIn is the ability to identify people with whom we can potentially work or collaborate.  In that regard, the platform can be very valuable.  It’s just too bad that so many people are now using it for ill-conceived (or perhaps desperate?) shotgun attempts to sell themselves, their products or their services.

It won’t work. Communications technology may have evolved but some fundamental things never change.  At the top of the list:  No one wants to be pestered by unsolicited pitches for products, consulting services, employment opportunities and the like.  Not then, not now, not ever.

Hopefully, LinkedIn can calibrate its business practices to ensure that the benefits of interacting with the social platform always outweigh the detriments. We all recognize that this is one way LinkedIn can monetize the data that’s valuable housed on its platform.  But LinkedIn needs to get this just right, lest they turn off their most consequential members – or worse, drive them away.

Cookie-blocking is having a big impact on ad revenues … now what?

Phillip Nones Advertising, Business, Government, Marketing, Marketing Communications, Marketing Research, Media, Media Consumption, Publishing, Sales, Security , , , , , , , ,

When Google feels the need to go public about the state of the current ad revenue ecosystem, you know something’s up.

And “what’s up” is actually “what’s down.” According to a new study by Google, digital publishers are losing more than half of their potential ad revenue, on average, when readers set their web browser preferences to block cookies – those data files used to track the online activity of Internet users.

The impact of cookie-blocking is even bigger on news publishers, which are foregoing ad revenues of around 62%, according to the Google study.

The way Google conducted its investigation was to run a 4-month test among ~500 global publishers (May to August 2019). Google disabled cookies on a randomly selected part of each publisher’s traffic, which enabled it to compare results with and without the cookie-blocking functionality employed.

It’s only natural that Google would be keen to understand the revenue impact of cookie-blocking. Despite its best efforts to diversify its business, Alphabet, Google’s parent company, continues to rely heavily on ad revenues – to the tune of more than 85% of its entire business volume.

While that percent is down a little from the 90%+ figures of 5 or 10 years ago, in spite of diversifying into cloud computing and hardware such as mobile phones, the dizzyingly high percentage of Google revenues coming from ad sales hasn’t budged at all in more recent times.

And yet … even with all the cookie-blocking activity that’s now going on, it’s likely that this isn’t the biggest threat to Google’s business model. That distinction would go to governmental regulatory agencies and lawmakers – the people who are cracking down on the sharing of consumer data that underpins the rationale of media sales.

The regulatory pressures are biggest in Europe, but consumer privacy concerns are driving similar efforts in North America as well.

Figuring that a multipronged effort makes sense in order to counteract these trends, this week Google aired a proposal to give online users more control over how their data is being used in digital advertising, and seeking comments and feedback from interest parties.

On a parallel track, it has also initiated a project dubbed “Privacy Sandbox” to give publishers, advertisers, technology firms and web developers a vehicle to share proposals that will, in the words of Google, “protect consumer privacy while supporting the digital ad marketplace.”

Well, readers – what do you think? Do these initiatives have the potential to change the ecosystem to something more positive and actually achieve their objectives?  Or is this just another “fool’s errand” where attractive-sounding platitudes sufficiently (or insufficiently) mask a dimmer reality?

What’s the “long-game” in the U.S.-China trade conflict?

Phillip Nones Business, Economics, Government, Manufacturing , , , , , ,

The efforts to craft a new trade agreement with the People’s Republic of China have run into some pretty major roadblocks in recent weeks and months.

Things came to another inflection point this week when President Trump announced that new tariffs would be imposed on more Chinese goods imported into the United States. As of September 1, pretty much all categories of Chinese imports will now be subject to tariffs.

If we look at the impact the protracted impasse has had on markets, the repercussions are plain to see. One result we’ve seen is that China has dipped from making up the largest portion of trade with the United States to being in third place now, behind Mexico and Canada:

But what’s the long-term prognosis for a trade deal with China? Recent world (and USA) statistics point to softening of the economy, which could have negative consequences across the board.

When it comes to perspectives on economic and business matters involving China and the Pacific Rim, I like to check in with my brother, Nelson Nones, who has lived and worked in the Far East for more than 20 years.  He has first-hand experience working in the Chinese market and is keenly aware of the issues of intellectual property protection, which is a major bone of contention between the United States and China and is one of the factors in the trade negotiations.  (Nelson runs a software company which has chosen to forego the Chinese market because of regulations requiring software firms that set up a joint ventures with Chinese companies to disclose their source code — something his firm will never do.)

I asked Nelson to share his thoughts about what he sees happening in the coming months.  Here are his observations:

Chinese President Xi has a lot on his plate right now. It isn’t just the U.S. trade war but also the Hong Kong disturbances, U.S. arms sales to Taiwan, the U.S. sending warships through the Taiwan Strait and the South China Sea, and China’s domestic banking sector weakness, to name just some. Trump has also put President Xi in a tight spot by demanding (or getting) Xi’s assurances that China will buy more U.S. agricultural products and will enact legislation protecting foreign intellectual property.  

In spite of his very substantial power, I predict that Xi will have a very tough time ramming Trump’s conditions down the throats of his countrymen. 

I should mention that the biggest issue here is intellectual property protection. The draft agreement that China “almost” signed had assurances that IP protection laws will be enacted, but Xi apparently nixed that draft whereupon the Chinese government stated that no government can promise, when negotiating a treaty with a foreign country, to change its domestic laws.

Technically, they’re right. For example, President Trump can’t commit to changing U.S. laws because only the Congress can do that under the constitutional separation of powers. Similarly, on paper, only China’s National People’s Congress (the national legislature) can change Chinese laws, and President Xi is not a member of the National People’s Congress. (Of course, this explanation conveniently overlooks the fact that both the Presidency and the National People’s Congress are subservient to the Communist Party of China, and that Xi is the General Secretary of the Communist Party, but still it’s technically correct.)

In view of all this, the natural Chinese instinct is to wait … and in this case, wait until the 2020 U.S. election and see what happens. If Trump is defeated for re-election, then perhaps many of Xi’s problems will disappear magically. On the other hand, if Trump stays in office maybe the pain that Trump’s China trade policy is inflicting on U.S. businesses and consumers will force Trump to lighten up a bit.  

In other words, President Xi has much to gain and relatively little to lose by playing the waiting game for a while. 

As for U.S. tariffs, those are causing Chinese businesses to adapt their supply chains by routing them through other East and Southeast Asian countries which are not subject to the tariffs. For instance, instead of sending products straight to the U.S., Chinese manufacturers are sending products to Vietnam or Thailand where a tiny bit of additional work is done – just enough to qualify for a “Made in Vietnam” or “Made in Thailand” label. (This adaptation partially explains Thailand’s large trade surplus which has made the Thai Baht one of the world’s best-performing currencies this year.)  

These maneuvers actually provide a safety valve for both Xi and Trump. For Xi, it cushions the reduction in demand for Chinese exports. At the same time it puts some additional pressure on Trump because this type of safety valve does not really exist for U.S. exporters trying to evade reciprocal Chinese tariffs.  But on the plus side for Trump, it tends to dampen the impact of higher tariffs pushing up U.S. producer and consumer prices.

If you ask me to bottom-line this, the trade problems look more like a protracted siege than an episode of brinksmanship.

How the siege is resolved depends on how strong Trump’s position will be after the 2020 election. If the Democrats continue with their leftward lurch, then Xi will eventually have to cave because Trump’s position will be strong (I’d say a 65% probability of re-election). But if the Democrats come to their senses and Trump continues shooting himself in the foot, then he’s in real danger of losing the election and Xi will come up the big winner (I’d give this a 35% probability as of today). 

So there you have it: the prognosis from someone who is “on the ground” in East Asia.  What are your thoughts?  Are you in broad agreement or do you see things differently?  Please share your observations with other readers here.

Evidently, America isn’t in IKEA’s manufacturing future …

Phillip Nones Business, Economics, Employment, Human Resources, Manufacturing , , , , , , ,

Going, going, gone …

Over the past several years, the political mantra has been that jobs are now coming back to the United States – particularly manufacturing ones.

That may well be. But this past week we’ve learned that IKEA plans to close its last remaining U.S. production facility.  The iconic home furnishings company has announced that it will be closing its manufacturing plant in Danville, Virginia by the end of the year.

The Danville plant makes wood-based furniture and furnishings for IKEA’s retail store outlets in the United States and Canada.

The reason for the plant closure, as it turns out, is a bit ironic. According to IKEA, high raw materials costs in North America are triggering the move, because those costs are actually significantly lower in Europe than they are here.  Even accounting for other input costs like labor that are higher in Europe, shifting production to Europe will keep product prices lower for U.S. retailers, IKEA claims.

So much for the notion that imports from Europe are overpriced compared to domestically produced ones!

The Danville plant isn’t even that old, either. Far from being some multi-story inefficient dinosaur left over from a half-century ago, the manufacturing facility opened only in 2008, making it only about a decade old.  At its peak the plant employed around 400 people.

IKEA made staff cuts or around 20% earlier in the year, before following up with this latest announcement that will wipe out 300 more jobs in a community that can scarcely withstand such large economic shocks.

With the closure of Danville, IKEA will still have more than 40 production plants operating around the world. It employs around 20,000 workers in those plants (out of a total workforce of ~160,000, most of which are employed in the company’s vast retail and distribution business activities).

So, it doesn’t appear that IKEA will be exiting the manufacturing sector anytime soon.  It’s just that … those manufacturing activities no longer include the United States.

As a certain well-known U.S. political leader might say, “Sad!”