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The "Hard-Landing" Has Arrived: Chinese Coal Company Fires 100,000
The global commodity collapse is finally starting to take its toll on what China truly cares about: the employment of the tens of millions of currently employed and soon to be unemployed workers.
On Friday, in a move that would make even Hewlett-Packard's Meg Whitman blush, Harbin-based Heilongjiang Longmay Mining Holding Group, or Longmay Group, the biggest met coal miner in northeast China which has been struggling to reduce massive losses in recent months as a result of the commodity collapse, just confirmed China's "hard-landing" has arrived when it announced on its website it would cut 100,000 jobs or 40% of its entire 240,000-strong labor force.
Impacted by the slump in coal prices, the group saw its loss over January-August surged more than 1.1 billion yuan ($17.2 million) from the year before. In the first half of 2015, the group closed eight coking coal mines most of which had approached the end of their mining lives, due to poor production margins amid bleak sales.
Chaiman of the group Wang Zhikui said the job losses were a way of helping the company "stop bleeding." The heavily-indebted company also plans to sell its non-coal related businesses to help pay off its debts, said Wang. The State-owned mining group has subsidiaries in Jixi, Hegang, Shuangyashan and Qitaihe in Heilongjiang province, which account for about half the region's coal production.
According to China Daily, last year, Longmay launched a management restructuring and cut thousands of jobs to stay profitable, amid the overall industry decline. However, the company still reported around 5 billion yuan ($815 million) in losses.
It has been a dramatic fall from grace for the company, which in 2011 reported 800 million yuan in profit with annual production exceeding 50 million metric tons.
Experts said staff costs remain a major reason for the company's continued heavy losses. That, and the ongoing collapse in met coal prices of course.
Last year its coal production stood at 49 million tons, just 10 percent that of Shenhua Group Corp Ltd, China's biggest coal producer. But Longmay's workforce remains well above that of Shenhua's 214,000 in total.
The announcement came in the midst of Chinese president Xi Jinping's ongoing tour to the United States, where he assured politicians and businessmen that China's economy will achieve the targeted 7% growth in gross domestic product.
It gets worse, especially in a worst case scenario: Longmay also has 180,000 pensioners to take care of, with life-long payments covering pensions and medical insurance, which are also considered a huge financial burden. As China Daily notes, "Personnel is probably its largest cost," said Deng Shun, an analyst at Shanghai-based energy consultancy ICIS C1 Energy.
"Actually many traditional State-owned coal enterprises are facing the same kind of problem. It has become more severe as the industry remains on a downward trend."
Deng also cautioned on the social problems that massive layoffs may cause, suggesting a reduction in welfare or salaries might be a better way to cut back on costs.
The shocking move is a harbinger of more pain for not only the local government-backed and heavily indebted company, with an eventual bankruptcy looking increasingly probable unless met coal prices don't stage a miraculous rebound, but China's entire coal sector, which in recent years has been a source of millions of jobs to China's unskilled labor force.
And as China's commodity bubble bursts, and the fixed-investment surge mean reverts, the coal industry is set to become a source of millions of job losses.
Incidentally, far more than the Chinese stock bubble burst, or even the credit and housing bubble, the implications from mass defaults of coal companies are precisely what is keeping Beijing up at night.
As the WSJ reported in a piece earlier this week, "for decades, an army of migrant workers drove China’s boom times, flocking to its cities to sew T-shirts, assemble iPhones, or build apartment blocks and Olympic stadiums. The arrangement helped millions of poor, rural Chinese join a new consumer class, though many also paid a heavy price.
The paper of record adds:
now, many migrant workers struggle to find their footing in a downshifting economy. As factories run out of money and construction projects turn idle across China, there has been a rise in the last thing Beijing wants to see: unrest."
Because if there is one thing China's politburo simply can not afford right now, is to layer public unrest and civil violence on top of an economy which is already in "hard-landing" move. Forget black - this would be the bloody swan that nobody could "possibly have seen coming."
As for the future of China's unskilled labor industries, the Fifth Element's Jean-Baptiste Emanuel Zorg has a good idea of what's coming.
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Proportionally its not that much.
The Recovery is spreading
Layoff List: http://www.dailyjobcuts.com
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Frankly I don't see great long term central planning that is going to cause the Chinese to teach the west a lesson in the upcoming monetary shift. Sure they can make what appears to be some smart moves at times, but so too did the soviets. Central planning is central planning, their rise has been from communism to a form of fascism that has just enough capitalism to be successful. Its not hard to have spectacular growth when you start with the basket case that was china in the 40's- 60's.
Very good, debtcrash! Now that leads to the next question. Who financed all of this, why and under what terms?
The Chinese leadership is just a new dynasty and will behave like one. they are working under the imperial assumption of "if I say it,it must be true" and they'll play it to the bitter end......
How does everyone reading this get hot water every day?
You have an in house heater than warms up the water
When I lived in Moscow and later in Kiev I had a hard time getting my head around how Soviet central planners did that simple task, everybody had two water pipes, one cold and one hot from a central town unit!!
In China we have instant-on hot water heaters powered by coal- fired electrical power plants.
Do all those currently " underutilized" condos have tie ins to functional electric, water and wastewater?
If so, how do these plants operate at say 5-10% load. No plants work that way. NONE.
If not, WTF. They are useless. No electric, water or wastewater, it's not livable.
Nobody seems to be able to answer this very simple, direct question.
It's one, or the other. And it can't be either one. The only correct answer is, there are full capacity plants, sitting idle. And this stuff goes bad, idle.
Or it doesn't exist.
Sirry round eye! Ancient Chinese secret!
Actually here im the states, when they "turned-off" the big factories in the early 90's, like the old GM plant in Tarrytown, NY, they had a small crew of guys keeping the lights on checking wiring, pipes, showing activity so no kids got in an damaged the place (braking windows and such), and keeping the place just warm enough to prevent damage to buildings and pipes. They did this in some cases for YEARS until the building / factory was sold or completely demolished.
I am sure that each of those huge "Ghost City" buildings has a small crew doing the same, and there are street lights and public building and such up and running as well. If the bulidings in China are minimumily heated and humidity-comtrolled to prevent damage, there will always be activity and some load on the grid.
They have ghost maintenance crews.
"No electric, water or wastewater, it's not livable."
We kind of managed it 150 years ago, Faraday, Newton and Julius Caesar seemed to do OK.
The West is also running on central planning now.
I knew this day was coming when the offshoring of jobs began. I told everyone that would listen, all 3 of them, that the day was coming that we in the west would be:
1: tapped out and and tired of collecting cheap chink plastic/junk
2: being the workers producing the cheap chink junk don't make enough to purchase said cheap chink junk, that after we are @ peak junk the joke we call a consumerist based eCONomoney is/willbe/ toast and all those peasants that left the farm to make it big working for foxcon are going to starve and possibly start putting leaders heads on pikes.
O'Barry is importing over 100,000 refugees so that should hlep our situation, right.
@Shocker,
Medical, Defence, Tech, caught my eye.
This is a knee slappin good guffaw...
http://www.nytimes.com/2015/09/21/nyregion/new-york-military-academys-sudden-closing-after-126-years.html?_r=0
Edit: DBK closing their banks in Russia. Interesting.
My local Radio Skack shut its doors suddenly last week. I have pondered for years how that zombie store could swing it with a couple of iPod cables sold per day plus maybe a phone sold to some retard who doesn't know any better. Yet across the street someone is building a whole new shopping center full of stupid fucking chains stores--JoAnns Fabrics and Hobby Lobby---WTF. Anyway Radio Shak is the canary in the mine to me.
What the hell is going to happen to all these unused brand new retail areas?
Retirement homes.
Rebel Command Centers
Zombie strongholds
Roller derby is making a huge comeback.
FEMA camps.
They already have the cops running around on Segways....
It's the tail end of the bubble. The banks, commercial loan providers are looking for assets. They are desperate. If you can make it look good on paper, they are in.
I build this shit when they can get financing. And it's ALL borrowed.
Apt houses are all the rage. The banks are fighting for them.
Meanwhile..... We have class A space we can't give away.
"My local Radio Skack shut its doors suddenly last week."
Oh my, where will you get the parts to build a crystal radio or tubes to repair your television set?
http://www.ramseyelectronics.com/
I used RS to build a power supply for my sons model RR set. The little unit it came with wans't big enough for what we were building. I also bought several 300 in electronic kits that come with plans and parts for all sorts of crap. My kids now can read a resistor and know its resistance, they understand how to read schematics and have a basic understanding of electronics. Last year my son put together his first computer. He is starting to understand the protocols for the internet but unfortunately his computer is soley for gaming :(
Radio Shack wasn't so bad,
Those skills will come in handy. If you want to get him to cut back on the video games, perhaps you could push him toward making and piloting his own drone/radio controlled vehicle? Doesn't have to be air-born either.
"My kids now can read a resistor and know its resistance, they understand how to read schematics and have a basic understanding of electronics."
If he rebuilds a digital clock, tell him it's a very bad idea to bring it to school.
Those were the days.
You could trouble-shoot the set yourself, and buy what you hoped was the correct replacement tube, or just go whole-hog and call a Televison Repairman.
And our old LaSalle ran great, too!
"....brand new retail areas.?"
We can keep our weed in them.
FEMA re-education centers.
Was just in a Radio shack store last week. it was just sad.
not much in the way of electronic components/wire.
just plain sad. :(
Groupon letting go of 1,100? I'm shocked. I thought my great grandchildren would be benefiting from that company and it's rock solid business plan.
"Proportionally its not that much."
This is the canary in the coal mine.. almost literally. You can bet that plenty of other companies are doing the same .Its just that we havent heard of it.
LOL, yeah only 40%.
Many of them are just on the payroll because they are friends/relatives of the managers.
compared to 750,000 layoffs a month in 2008/2009 in the US with 1/4 the population, it is nothing
Compared to a massive global financial crisis, right. So are you betting this is the only coal company in trouble?
Take the jobs back to USA, per trump. What a joke, these jobs pay 1/10 of US wages w no benefits or safety considerations.
You have no job. It's necessary for the good of the country and our earth. It's good. Move along now.
Just ONE MORE REASON the FED can't / won't raise rates....
Chinese economy and their employment picture is now in the baliwick of the United States Federal Reserve...
Which now is not just concerned with the United States, to add to the absurdity that it has no RESERVES or that it isnt FEDERAL
"On Friday, in a move that would make even Hewlett-Packard's Meg Whitman blush, Harbin-based Heilongjiang Longmay Mining Holding Group, or Longmay Group, the biggest met coal miner in northeast China which has been struggling to reduce massive losses in recent months as a result of the commodity collapse, just confirmed China's "hard-landing" has arrived when it announced on its website it would cut 100,000 jobs or 40% of its entire 240,000-strong labor force."
Arrest all those rumor mongers that are destroying the Chinese stawk market!...lmao!
Nothing to worry.
US financials are stronger. Up over 100% since 2008.
So, they will rescue the world.
I have total confidence on that.
They, and the other global players, will OWN the world; or the world will slip the yoke--no in-betweens.
What did Lawrence Welk say..."Start the Bubble Machine"...or was that Ben Bernanke?
I can just hear all the "geniuses"....According to the theories, we did the right thing.
And, may we ask, Whose Theories?
"Wunnerful, wunnerful!"
Whwn he was starting out, Lawence Welk couldn't read music, and kept getting fired by other bands, so he had to start his own. There's a lesson in there somewhere.
I never cared much for his musical style, but Mr. Welk was a very sharp and funny guy - he did some great interviews.....
Turn in your hard hat and report to organ harvesting at once!
Soy-lent green for the rest of the non usable parts.
Just wondering whether the company is going to bring in some job counseling services and help these folks apply for unemployment benefits.
Yes,:
"walk a hundred miles that way and squat in that field. Next? "
China has issues but is'nt going anywhere. Just full press psychops by a crumbling insecure western world being left behind in hopes of slowing down the train and to draw attention away from their own massive incompetence.
Europe has signed its own death warrant, same as the last time and will not make it to the next century in its present form by not remembering its own past.
Once you let the Goths across the Danube because they are running from the Huns and because you will treat them like shit you now have a separate tribe with completely different culture and values behind your own borders that will eventually revolt,form their own tribal communities (check) then mini states within. Next the civil wars then once its obvious how weak you really are Goth King Alaric sacks your modern day Rome. What more do you need to be reminded of before its to late you morons. Better pull your heads out of your collective asses and put out those Mideast fires quick or your done.
Timeline of events? year 376 to yr 410, so I give it about 25yrs
Very nice analogy.
Take a moment to observe life in a Chinese coal town.
That's porn for khazars.
Reminds me of English coal mines at the beginning of the Industrial Revolution.
China is a major source of rare earth metals. As bad as those pictures look, I believe the mining of rare earth metals exposes workers to chemicals far more toxic than coal dust.
That is hardly a valid comparison.
Mines are generally a disaster waiting to happen no matter the contents.
http://sputniknews.com/latam/20150925/1027497033.html
Great photos. My first time to see where all of our winter smog comes from.
Reminds me of American cities like Pittsburg, PA and Carbondale, PA in the 1950's. The owners of the coal companies and mayors of these small town are wealthy beyong belief while these coal workers die an early death i smy understanding. Ominous diseases like "Miners Lung" and "Black Lung" usually kill them before they reach 40. Many coal mining cities in the UK like Wigan also used to be pretty bleak.
Yup: https://www.google.com/search?q=pittsburgh+pollution&espv=2&biw=1280&bih...
Bethlehem Steel...
http://wnyheritagepress.org/photos_week_2008/bethlehem_steel_1923/bethle...
How green is my valley.
Beth Steel. Ahhh, the good old days.
When a guy, black or white, could drop out of high school, go work hard, and raise a family on one salary.
Where will the Chinese move it too? India? Africa?
Back to us, when we are all decimated. Will work for slave wages.
Hey, didn't we tell the Southern plantation owners "depending on slave labor is not a viable excuse"
But now, that excuse is mainstream with the illegal invaders.
http://www.buccibaileyjavins.com/Articles/Surge-of-black-lung-disease-hi...
Have you read George Orwell's 1937 classic, The Road to Wigan Pier
When I was in the UK back in the 1980s I lived outside of Wigan. Used to go into town to pub and met some of the local gals there. Very nice young ladies but their local accent was extremely hard to understand their local dialect. In fact, my friend/roommate from Birmingham, UK also could not understand them. I don't know what it's like now but it was a hard-working place back then but the people, most of them were what they call "the working class," were very very friendly and would always treat others to a round or two.
Great people. Brings back wonderful memories. I'll have to read the book you mention above.
And, "How Green Was My Valley"...oh boy, a real classic with my sweetheart Maureen O'Hara and superb acting you don't see much of anymore.
https://www.youtube.com/watch?v=e-kE3CC2uDc
even the 60's and very early 70's when I was little flying into Pittsburgh one time, I thought we'd bounce off the smog comiing in for a landing.
I lived in a town with a papermill for about a month one time during the DaZe. When the wind blew in your direction life was ripe. Those people thought that smell was the smell of money.
Lewiston, Idaho smells like that 24/7 365. Total shithole ole stinkytown and clarkston wa. is. in a valley and the smell/smog cant escape. pumping pollutuion into the clearwater/snake river all for magical digits in a data base. when one looks at what we humans are doing to this planet for digits in the data base, it could well be considered one hunderd precent infvkinsane.
I worked at a gold mine in Alaska.. one time we went into the mine after they had lit off some explosives. One of the other miners said smell that...it smells like money. I thought no, actually it smells like death...
The guy on that train should really stop smoking.
You don't get it. That's what he uses to scrub his lungs out.
As China Daily notes, "Personnel is probably its largest cost," said Deng Shun, an analyst at Shanghai-based energy consultancy ICIS C1 Energy...
Probably? Well, I can see why Deng Shun gets paid well judging by his production of high quality guesswork like that. /s
The announcement came in the midst of Chinese president Xi Jinping's ongoing tour to the United States, where he assured politicians and businessmen that China's economy will achieve the targeted 7% growth in gross domestic product.
When a politician makes a promise, expect the opposite.
It warms my heart that American politicians are so concerned about China's rate of economic growth while they ignore their own nation's woes.
Mission accomplished. We have destroyed the economies and cultures of the west and polluted the entire planet with the madness we invented in China. Now, as the global economy plunges, world war is the solution. Our agents are fast at work getting the blame spread around so that when the call to arms is sounded, the masses of the unemployed will readily deploy. And we will sit like lords and eat and profit.
- The Elders of Zion
"Come here, I will show you the judgment of the great harlot who sits on many waters, with whom the kings of the earth committed acts of immorality, and those who dwell on the earth were made drunk with the wine of her immorality."
on her forehead a name is written, a mystery, "BABYLON THE GREAT, THE MOTHER OF HARLOTS AND OF THE ABOMINATIONS OF THE EARTH"
And I saw the woman drunk with the blood of the saints, and with the blood of the witnesses of Jesus.
Fallen, fallen is Babylon the great! She has become a dwelling place of demons and a prison of every unclean spirit, and a prison of every unclean and hateful bird. For all the nations have drunk of the wine of the passion of her immorality, and the kings of the earth have committed acts of immorality with her, and the merchants of the earth have become rich by the wealth of her sensuality.
Come out of her, my people, so that you will not participate in her sins and receive of her plagues
Come, assemble for the great supper of God, so that you may eat the flesh of kings and the flesh of commanders and the flesh of mighty men and the flesh of horses and of those who sit on them and the flesh of all men, both free men and slaves, and small and great.
Fear the hateful birds.
Shovel-ready joba are coming in 3 -2-1 ... ha ha ha
You remember shovel-ready jobs? They "saved the day" :-)
Because Kondratieff winter.
Yes, Kondratieff winter approaches
It already started in 2008 or even 2000.
Winter is coming. The white walkers are gonna shove that shovel up our ass. Please help us Khaleesi!
Bullshit is always shovel-ready.
not really, you have to let it dry for a bit or you get the flung poo phenomenon
Real shit has value as compost, or can be dried and burned as fuel.
If you want real bullshit you have get into FIRE, which they have been gobbling down by the fist fulls. They will outdo us I think. They will not win because none of us is going to win.
On a long enough timeline...
Depends on what you consider "winning".
What I tell you in the darkness, speak in the light; and what you hear whispered in your ear, proclaim upon the housetops. Do not fear those who kill the body but are unable to kill the soul; but rather fear Him who is able to destroy both soul and body in hell.
The Economist estimates China's labor force is currently 1,4 billion...Listen it sucks to be laid off. but ZH never praises anything on the scaleof humanity..it gets old
Mexicans got any shovel ready jobs. That's the joke.
Once you go nuclear, you don't go black.
I guess the Chinese could always look to establishing a whole lot of bases all over the world like the Americans to take up some of the slack. Come to think of it I think they just offered to send some troops to Syria.....
Yes, they are sending 100,000 coal miners to Syria to join the great escape to Euroland.
Foxx Conjob is hiring?
Chinese are going to flock to Africa by the tens of millions and turn it into a yellow continent!
That would be a very great improvement.
China and Chinese have been HUGE in Africa the past decade and increasing rapidly. You simply don't hear about it.
I hear about it, and most of what I hear is that the Chiense better be pretty good at playing Rorke's Drift in the near future.
Nike's are for playin' and chillin' when you're not at work. Dress shoes and steel toed boots are for working. How are those type of sales doing?
BTW: Please don't use forced child labor sweat shop manufacturers as a bright point in the economy.
Better a child work than starve or be sold into slavery or prostitution. I appreciated my job as a child.
Over the past two decades or so America and China have participated in the Great Leap Into Chaos and the Cultural Devolution.
It will soon be time for United States, China, etc to start rounding up it's intellectual class and middle call and sending them off to the fields and FEMA Camps to be "Re-educated." The method seems to be very successful.
http://www.abc.net.au/pm/content/2010/s3020355.htm
Getting amusing.
PBS/Nova just had a program on the internment camps.
Funny, Zhivago was on last night.
Remember this obama cunt?
https://www.youtube.com/watch?v=Fi1zg2NOCn8
Forget black - this would be the bloody swan that nobody could "possibly have seen coming."
Or...
"Between me and the moonlight flitted a great bat, comeing and going in great, whirling circles."
- Bram Stoker, Chapter 8, Dracula
Malinvestment in manifest.
The good news is the companies making pink slip paper are hiring.
Every year China has 8M+ new university graduates entering the workforce. That's the same as the total population of Sweden. And that's after implementng the the one child per family rule. Yet the chinese government says they are concerned that they won't have enough young people in the future to fill their job vacancies. You can witness that same dumb logic in every country in the world.
They have >25 million more men than women ages 18-26 in China due to the one child policy. That's a lot of guys that will never have a wife or a family.
Frustrated Incorporated
What to do, what to do.........
If it was a western country you'd expect an outbreak of violence but chinese people don't seem to be like that. I spent a couple of years there and I was in bars every night and I never saw a single fight. Contrast that with the US or UK and you need to keep your wits about you if you're in a bar. But a breaking point will come in the not too distant future and a lack of jobs may be more important to them than getting laid.
millennia of eating rice with chop sticks may make you docile. tearing into red meat with knives and forks on the other hand...
miljev,
<< Contrast that with the US ... where every thug carries a 9mm Glock.
But only as a backup to my Colt .45 ACP.
9mm meh, when you really want to stop that roid raged charging linebacker lookalike from da hood with one shot, make mine a 45. Why waste ammo? Use a 45.
They'd wear out their shoes before they could walk to my house, so I save even more ammo.
But yes, 1911 is the name of the game.
12 ga. pump, unplugged, 18.25" (wink, wink), modified choke, 000, 000, slug, slug, 000, 000, slug, slug. Aiming sucks under pressure.
Oh, stop it with the baseless as-seen-on-TV assertions.
My experience with Asians, and Indians too, has been the same in the USSA. They are more polite and friendly than what I'm used to. And they don't get involved with politics either.
All the young girls come to the big cities to work, there is no shortage of girls in the cities, which is why I will never leave this place.
What to do, what to do.........
Masturbate a lot.
that is going to be a HUGE problem going forward.
If those were 8 million STEM graduates, that would be one thing. But 8 million compliant little bureaucrats-in-training is another thing.
Just for the record, however, it is not the same as the total population of Sweden.
TB I didn't check. I read in another article earlier that sweden had 9M.
True. Any future co. needing workers could hire temps from other countries like Saudi Arabia does or professionals from developed countries. But no, they need half a million "refugees" a year !
I wonder what a Chinese coal mine looks like. They probably pump H2S into the mine just to make it more dangerous.
Just extend them our unemployment benefits and print up some EBT cards. There are plenty of Walmarts in China.
I'm so smart it hurts.
Money has already been siphoned off by State Coal Mafia. Now some scapegoat to be found to quell worker's rebellion.
Pigs will fly before this is all over. We will call it a black swine event. We saw it coming all right, we just couldn't believe it enough to act on it. Black swine event, you read it here first.
We are all stupid and greedy. There are some stupider and greedier that are making things worse (governments and oligarchs). We are all going down the tubes together.
Nothing special here.
Move along.
Black swine event, you read it here first.
Now that was a good chuckle.
So true!
We restructured some folks.
All in the name of them CEOs & upper management to get them bonus's, million dollar paychecks.
this is not a macroenconomic hard landing, this is chinese people being unable to breath anymore coupled with cheap russian natgas alternatives
The winters are brutal in Harbin and the people are tough. A mix of chinese, korean and russian in their blood. Not the kind of place you want to be down on your luck.
But the girls of Harbin are the prettiest girls in the world.
http://en.people.cn/90782/8399785.html
Shows what motivation can do for a young lady.
Sum Ting Wong
Should you ever happen to find yourself in need of a job, I'd suggest steering clear of those which require or emphasize originality.
Maybe a position at the Fed., but He No Ju?
I thought he was Korean.
KOL is making multi month low
Get ready, folks. I give us two years maximum before World War III is in full swing.
More likely is an extraterrestrial false flag attack where world powers will join together to battle
these alien terrorists, solidifying the new world order, and giving said order power over all earthlings,
for the sake of mankinds survival.
"X is being done to you in the name of world security."
We are almost there.
I hope we have two more years. I need a few months to wrap everything up in the City before I move permanently to my land in a remote part of Oregon.
Freed .... not fired .... dangerous work in a worker's paradise !
Why work when real estate is up 100%?
This.
Deng also cautioned on the social problems that massive layoffs may cause, suggesting a reduction in welfare or salaries might be a better way to cut back on costs.
That's desperate.
I could'nt imagine that being vocalized in the U.S.
The true commodity and industrial collapse is in that statement.
unions face this choice frequently in the us
Ask the two and three tier wage earners of American unions...