MercoPress. South Atlantic News Agency

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  GeoffWard

  Well!
  
  100 days ago our private lunchtime discussion group said that this would happen before Dilma´s first 100 days were up.
  There was no bet because it was a no-brainer.
  
  THIS is the great divide between state ownership and private ownership corporations that Forgetit and I have been debating in Mercopress postings.
  
  It heralds complete re-nationalisation of Vale, politicised management and Board, party-political manipulation of company direction and investment, and a retrenchment from the world-vision of Brasil´s leading company towards a parochial and insular path.
  
  Sad.

  Mar 25th, 2011 - 08:03 pm - Link - Report abuse 0
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  Forgetit87

  Happy. :)

  Mar 25th, 2011 - 09:48 pm - Link - Report abuse 0
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  Fido Dido

  This indeed good news for the Brazilians. When the bogus Free marketeers want A, you do B.

  Mar 25th, 2011 - 09:59 pm - Link - Report abuse 0
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  Forgetit87

  Agreed, Fido. One of the reasons Agnelli is so disliked is that he took the decision to build a fleet of ships in East Asian instead of Brazil due to cost reasons. As a private company, Vale has a right to choices such as that one --- but if it still wants to take loans with subsidized rates from Brazilian public banks, it better act for the Brazilian public good.

  Mar 25th, 2011 - 10:08 pm - Link - Report abuse 0
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  Think

  Cool :-)

  Mar 25th, 2011 - 10:29 pm - Link - Report abuse 0
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  GeoffWard

  Forgetit,
  you know Brasilian shipyards were run down to the point of dereliction.
  
  No CE in his right mind would chose the Brasilian production option of having to wait for the arrival of a new President (Dilma) to upgrade shipbuilding capability to world standards.
  
  Commercial activities in the developed world work at the speed of the developed world or they die. Vale is a WORLD company; PT can only impact Vale's Brasilian operations - Vale's option is to withdraw completely from Brasil - surely not in anybody's interest.
  
  Dilma's proposed shipbuilding upgrade is giving Brasil a second chance after the developmentally dead years of Lula.

  Mar 26th, 2011 - 10:29 am - Link - Report abuse 0
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  Forgetit87

  Agnelli's decision regarding the ships had nothing to do with Brazilian installations - I'll repeat: it had to do with costs. Agnelli would rather build them in China because that'd have been cheaper - perhaps Agnelli would have to pay less for Chinese workers in semi-slavery working conditions. As CEO of a private company, he can do that. But BNDES, as a public bank created to finance investment and development in Brazil, can also stop lending to Vale whilst it keeps insisting on investing in East Asia instead of Brazil. Also, cease bashing Lula when he doesn't deserve it. It was during his two terms as president that Brazil rebuilt its naval industry from the ashes - something that had everything to do with his insistence that projects in Brazil estimulate Brazilian, instead of US or Korean, production. During the 70s Brazilian naval industry was in world top 10 in output and number of employees. Today it employs fewer people than it did at that time, but far more people than in the neoliberal Collor and FHC years with their insistence on cosmopolitan financing of activities ABROAD.

  Mar 26th, 2011 - 07:13 pm - Link - Report abuse 0
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  GeoffWard

  Thanks, Forgetit,
  I was totally misled by people who said that Brasil didn't have the docks to build a fleet of 200,000 DWT bulk carriers -
  You tell me that Brasil could have done it if the price was right.
  Hmmm
  Vale's ore carrier fleet will be 10.4 million DWT (!) when the current build is commissioned.
  I would have LOVED for this to have been built in Brasil, but it is WAY beyond current capabilities.
  
  Perhaps if Brasil had have invested in dockyards, steelworks, and the right people and processes a few decades earlier, ship building might have gravitated to Brasil rather than the far east, but even Great Britain with its great ship-building tradition could not compete. This was the world's first taste of Globalisation.
  Winners and losers; Japan, South Korea and, latterly, China won on quality as well as cost.
  
  It's a bad pun, but both Brasil and the UK missed the boat.

  Mar 26th, 2011 - 10:55 pm - Link - Report abuse 0
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  Forgetit87

  I have no knowledge of what are Brazil's ship building capabilities. But yeah, you were probably misled by the people who told you that. I say this because I can't imagine the government would've been angered by Agnelli's decision to build the ships elsewhere if Brazil could haven't done it. Btw, the FT BeyondBRICs blog's post on Agnelli's feud against the government cited only cost reasons for that decision of Vale. See also the 1st link below, where Vale says that outsourcing production to China is a strategy to reduce costs. As I've already told you, Brazilian naval industry was very well-positioned in the world prior to the 90s. And it's because of investment in past decades - particularly during the military era - that took Lula so little time to boost output and employment in ship manufacturing. If you still think more should have been done in that area, thank your hero FHC for missing that opportunity. Unfortunately minimal state and laisser faire theories were popular in his time. He perhaps trusted market forces would by themselves keep investment in the heavy industries to a satisfactory level - but they didn't. Remember when I told you that the military built the Brazilian state but the civilians that succeded it did little but to destroy what had been done? Also, thank Mr Lula for commencing the naval industry's restoration process and for forcing companies such as Gerdau and Vale to invest in steel mills and other development projects, for if it depended on short-sighted market forces or CEOs more concerned about pleasing shareholders than spurring economic activity in their country, this wouldn't have happened.
  
  “both Brasil and the UK missed the boat.”
  I don't know about the UK, but the outlook for the Brazilian naval industry is moving to a better place (see 2nd link below). And the govt has a powerful weapon, public banks, to persuade private enterprises to keep investing locally.
  
  http://tinyurl.com/4kgj8be
  http://tinyurl.com/4kgj8be

  Mar 27th, 2011 - 02:10 am - Link - Report abuse 0
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  GeoffWard

  Thanks Forgetit.
  Much of Brasil is completely unaware of the good things that came out of the era of military dictatorship.
  As they say in the English language - “It's an ill wind that blows nobody any good”.
  Geoff.

  Mar 27th, 2011 - 11:42 am - Link - Report abuse 0
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  Fido Dido

  And the govt has a powerful weapon, public banks
  
  Control the money supply, control your own destiny.

  Mar 27th, 2011 - 07:45 pm - Link - Report abuse 0
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