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Not really? The questin is, if South Korea stops all cooperation with the EU tomorrow, will that fab continue to be operational? If the answer is "no", then it
by usrnm 4mo ago
Not really? The questin is, if South Korea stops all cooperation with the EU tomorrow, will that fab continue to be operational? If the answer is "no", then it matters. It matters a lot
- toomuchtodo 4mo agoYou walk in, as the EU, and assume control of the facility, by force if needed. The value is that the capacity exists within the bounds of your nation state control. China knows this, developed countries that lost their manufacturing capacity are relearning this.
- to11mtm 4mo ago...errrr.... I think the EU performing such an action is outside the Overton window, at least for now... China does know that but they knew how to make the deal palatable enough for auto manufacturers (other companies too, but this one IMO is a big factor in the grand scheme[0]) to all sell out one way or another for a stake in the pie, be it cheaper manufacturing or accessing that market. Developed countries are re-learning it but are struggling with paying the piper. By that I mean, a lot of manufacturing, especially technology based, can be dirty as heck. Doing certain widgets results in environmental costs that have to be managed or externalized[1]. [0] - I posit, that Auto manufacturers probably keep a lot of documentation around, but also have a lot of history of 'good ideas' being killed by business politics one way or another. You can glean a -lot- of manufacturing tribal knowledge being able to access any existing or new incoming data on that set of signals. [1] - No, we should not externalize, to be clear.
- mjmas 4mo agoThe UK did just recently do that for a Chinese-owned steel mill.
- nomel 4mo agoThere are ~500 steel mills in Europe. 6 in the UK alone.
- anakaine 4mo agoThat doesnt make the action any less meaningful, and perhaps suggest it was done with caution, prudence and forethought.
- nomel 4mo agoI should have made my point more clear: There's an established base of steel mills in Europe. Take one over, and your local talent pool can probably keep it running. There's less risk.
- usrnm 4mo agoYou walk in and realize that there is nothing worthwile inside. The knowledge is gone or was never even there, all the inputs are gone, the process is in shambles, all you have is four walls and some bricked machinery. What now?
- toomuchtodo 4mo agoYou start with something instead of nothing.
- coldtea 4mo agoGot it backwards. You had something: production. Now you have nothing.
- Danox 4mo agoGreat Britain used to have something but now they have nothing industrial wise in comparison to the past and to get it back you have to completely change your current attitude at all levels, which will take decades for there is no shortcut and the same basically applies to America, which has been decommissioning industry and offloading it overseas since the early 1960s.
- coldtea 4mo agoLOL, EU and the Dutch tried to pull this shit with Nexperia, it failed miserably and they reversed course fast.
- NoLinkToMe 4mo agoThese aren't comparable situations. For one it's a peace-time situation where strong-arming interventions are met with consequences, in this case China can stop supply of critical products to punish the Dutch. In a wartime situation such supply would've been stopped anyway, so there is nothing further to lose and everything to gain from an intervention, but such an intervention is only possible if the factory is on your soil. Second, Nexperia is a legitimate Dutch company with Dutch expertise. The Chinese bought it. The Dutch don't need Chinese expertise to operate the local factory they built and sold to the Chinese. Third, China is a global hegemon, South Korea isn't by comparison, and South Korea is a neighbour of China, the Netherlands isn't. China could pressure a battery factory in South Korea during a military conflict by military force, but in Western Europe that's a different story.
- Danox 4mo agoA reversal can be done. It’s just that it takes long range planning capital and continued hard work.
- higginsniggins 4mo agoThe value is not in the literal buildings, the value is in the people, the managers,engineers,etc and the owners who know how to run it. The people who are hired and organized by the korean comapny. This is litterlly the logic that collapsed venezuela's oil industry after it was seized by the state.
- joe_mamba 4mo ago>The value is not in the literal buildings, the value is in the people, the managers,engineers,etc and the owners who know how to run it. Holy shit, finally someone who understands this, this comments needs to be to the top. Same thing happened in my ex-commie country when the communists kicked out the capitalists, shipped them to UK, US, Switzerland, and took over their factories. Over years and decades, those factories became inefficient and went bust under state control, while those capitalists who got kicked out flourished by making new business in their new homes that were business-friendly countries. Just because you seize factories doesn't mean anything if you don't know what to do, they're just commodity equipment anyone else can buy within walls and a roof. The people with the secret-sauce know-how and IP are just as if not more valuable. That's why US had operation Paperclip. If you go to a TSMC factory, you'll find the same ASML EUV machines every other country and and company on the planet (minus China) has access to buy, but yet only TSMC can extract the smallest nodes and highest yields because only they managed to perfect the entire process.
- JumpCrisscross 4mo ago> The value is not in the literal buildings, the value is in the people The people are physically in Europe, too. (Adding limits on remote management for national-security reasons might make sense.) If Korea and Europe get in a war, or, more likely, China pressures them to straight up ditch that capital investment, that lets the EU hold those folks until knowledge transfer can be conducted. Again, this is a strategically different place of leverage from those assets being overseas.
- alxhill 4mo agoHow will they ensure they continue working or train replacements if their parent company no longer employs or pays them? What's to stop them leaving the country?
- embedding-shape 4mo agoIf it does go both ways (say "EU stops all cooperation") and the effects are the same, and no one wants the factory to actually shut down, does something start to matter more/less then?
- mmooss 4mo ago> if South Korea stops all cooperation with the EU tomorrow That doesn't happen between democracies and hasn't for generations, except for one democracy recently. I don't know that it happens between any significant economies, outside of wars (when and where has it happened?), except one recently. Trade is reliable, despite the nationalist attempt to use FUD. That's how countries get access to the best products and sell their best products.
- holmesworcester 4mo agoIt does introduce a dependency on South Korea's ability to defend its democracy, though.
- mmooss 4mo agoThe plant will keep running regardless of events on the other side of Eurasia - during a war South Korea would want the revenue, especially from a locale safe from attack. If SK lost - an awful outcome - it wouldn't be sudden.
- throwaway85825 4mo agoIt was very funny watching the South Korean legislators holding off the Korean seals by barricading the doors with chairs.
- cycomanic 4mo agoBut by that argument the EU holds all the cards because nobody can do what ASML can do. So everyone is dependent on the EU.
- dnautics 4mo ago> "except one recently" russia and {ukraine, georgia, etc}?
- mmooss 4mo agoAssuming we're talking about all countries, not only democracies: I qualified it with, 'short of war', which excludes Russia. That leaves only one that I know of.
- twoodfin 4mo agoThis is fan fiction. The reason it matters is as a proof point that the farrago of EU regulation, labor markets, supply chains, trade policy, … is adequate to support battery production at scale.
- dindunuf 4mo agogreat many things from the past 10 years would've been fan fiction, conspiracy theories, and slippery slope fallacies 20 years ago. for better or worse, this boring dystopia is not yet the end of history.