Blunnies.

I was going to comment on Blundstone manufacturing leaving these shores, especially after I praised them many posts ago, but I didn’t.

Now I’m going to, because they soaked up 100’s of 1000’s of dollars before it moved, and will be applying for more.

$345,000 to be precise, from a scheme to aid an industry struggling against cheap imports – the government claims it wouldn’t have paid, had they known.

They’ve received $10 million in the 16 years since 1991 and they produce 1.4 million boots a year, 200,000 would still be made in Hobart, with almost 250 job losses.

Let’s do a little math on that.
250 people make 1.2 million boots a year.
Each manufacturing employee makes 4,800 boots a year, or 13 boots a day.
The prices retail from around $80 to $125, with kids around $65.
Let’s say they get a decent wage, around $20 an hour, or $160 a day.
$160 to make 13 boots is about $12 in labour costs per boot.

But wait, they get money from the government, should factor that in.
$345k from 1.2 million is about 28c off that, so $11.72.

Of course, $10 million over 16 years means they usually get twice that - 60c, $11.30 per boot.

Let’s say retailers have a whopping great 100% markup, and for every manufacturing dollar spent, there is one for sales/marketing, and another for management.

So a $100 shoe is $50 wholesale, $11.30 + ($12 x 2) to make, leaves $35.30. A profit margin of 29.4%. That margin increases to 48%, assuming the shipping and labour is free. Which it isn’t.

It’s not done because of necessity, it done:
* out of greed
* it’s a nice way to increase profit margins
* there is little penalty in outsourcing overseas (read: tariffs)

You cannot stop greed or a desire to increase profits, that’s communism.
You can reduce the feasibility of outsourcing overseas, that’s protectionism.

If you want any jobs, let alone real and diverse jobs (and true independence) in any given country, you have to pick one.

They have a marketing “Here are the facts” on their website now, which just lists the same information reported in the media, while just neglecting the negative facts.

Buying Blundstone is still plausible – just make sure to check the label. But I don't imagine they'll survive the boycotts from their greatest customers.