I haven't posted for ages and I probably wouldn't have if I didn't lose my lunchbreak today. I don't really view this as a punishment as I can't sign in at home. So this and when we get laptops in class is really the only time I can do my work. I have to do a post from the expedition we did last term so I think I will just post my report I did for it and if Mrs Hogg says it's not enough I'll go into the boring details of my group standing next to our fridge. Long story. (Actually it's not but anyways...)
My amazing report on Fonterra
Imagine losing your job, and the money that sustains your family. Your food and water. Your tv. Even your house! This and much more happened to 523 staff at Fonterra during the fall of milk prices. Fonterra had fired many workers to save money that they would normally be spending on worker wages. This totals more than 60 million dollars a year. But think about this, was it worth it? What Fonterra did to over 500 families? And did they even look at other options?
Fonterra is a New Zealand based company that supplies milk and dairy products to supermarkets and other businesses. Recently, the prices for these products have dropped miserably, and Fonterra risks going bankrupt for not getting enough profit from their products. Let's say Fonterra has to pay 2000 dollars a month for the workers wages, gst, tax, and all the other nonsense the company goes through. Now let's say Fonterra earns 2500 for their products each month. After a year, Fonterra will have made a profit of 6000 dollars. This year however, Fonterra is only earning 1800 dollars for their products. This means Fonterra loses 200 dollars each month, and that’s where we are now. In order to make profit, Fonterra has to cut back on costs. The easiest way to do this is to fire off some staff. So let's say after firing some staff, Fonterra pays only 1500 dollars on worker wages, therefore having a profit of 300 dollars a month and NOT going bankrupt. This is exactly what the real Fonterra is doing. But with bigger numbers like instead of losing 200 dollars a month, they were in danger of losing millions! If this is to complicated to understand, It’s basically saying Fonterra is spending more than they have, so they have to spend less. Like on worker wages.
The problem with milk prices affect Fonterra even after the firing of staff. Fonterra goes on protest in the local supermarkets, usually accompanied with their fellow cows. They fill lots of shopping trolleys up to the brim with the milk they supply then attempt to buy the lot. The idea is that since supermarket prices have not changed, but the price that Fonterra gets for the milk has definitely changed a lot. This is the main reason milk prices has dropped, so in theory, If Fonterra buys the milk they sold, then added it to the rest they are selling to the supermarkets, they get twice as much money because of extra milk. Even though they are buying it again. This means that supermarkets have to heighten their prices and Fonterra will have no more milk and dairy price problems. Of course this is a gradual change so Fonterra still had to make quick money. So the workers that Fonterra fired may get their jobs back within the next few years. But by then they will probably have new jobs. And security usually stop Fonterra workers from taking all the milk to re-sell. But who wouldn’t want to lose money through buying your own milk back?
A Possible Future
A business is a hard thing to run and avoid going bankrupt. More than 4000 companies in the world were forced into liquidation over the past three months, an increase of 0.5 per cent. While it may not seem like much, at this rate an extra 80 companies will go bankrupt each year. This Along with the 4000 others, and still the stats increase. Fonterra is on the verge of near bankruptcy and becoming one of 4080 is not a fun future. While 523 staff is a lot, losing over 2000 and Fonterra itself will damage supermarkets and the entire of NZ economy. Resulting in the NZ dollar going down, and meaning that tax can rise along with gst and pretty soon, what you earn each week could drop from 680 dollars down to a measly 473. That's 207 dollars you just lost. And it’s very possible for any big companies in New Zealand that supply to other parts of the world. So what do you think? Was what Fonterra did appropriate for the situation? Or was there something else they could do? And was what they did at local supermarkets good? Or bad? Thank you for your time.
All for now! Except that my dad ordered a monopoly set with "The walking dead" as the theme. Can't wait to play it!