Made in America,Why NOT?

fast_eddie_72 wrote: mguar, do you own a car? There's some really interesting stuff on this site about cars. I'm going to go read some of it now.

Lordy, don't get him started on XJS Jags. You will be on Craigslist almost instantly.

mguar wrote:

ThePhranc wrote:

fast_eddie_72 wrote:

mguar wrote: Most assume the reason for that is people in China/Mexico/India/ Bangladesh etc.. will work for 9 cents a day. or a whole lot less than rich Americans.. Well that's not the case and even if people were willing to work for 9 cents a day that's not the prime reason things are made elsewhere..

Oh, well, if you say so. It's hard to argue with the compelling case you make. Especially since you don't make it. China has a huge work force that will work for low wages. And, sorry, but that is a very enormous part of why they make so much stuff.

China also has a revolving work force. Every year they lose about 1/2 of their factory workers. Turn over is very high but always fresh faces to fill spots. Wages are kept low because so few stick around to advance. Right now factories in China are seeing that once a year culling. Supply dips slightly as new workers are being brought in and trained. This can only last so long. At some point you will see a union pop up demanding the fair wage and safety. Like the American unions were once needed for.

Please explain why the average income of the Chinese has doubled every 3-5 years? Why China is #2 in buying new cars and #1 in buying new homes?

Why exactly do you want me to do that?

mguar wrote:

fasted58 wrote:

Richard Nixon is an interesting President.. He did some good things and some horrible things.. Unfortunately history will be harsh on him.. We Americans don't want our Presidents to be human they need to be perfect or we will turn on them like a pack of dogs.. Look at what we did to Poor President Clinton!!

In reply to mguar:

As I despise politics I have no intent of turning this into a political exchange

I'm just havin' fun w/ da hotlinks

mguar wrote: In reply to ThePhranc: Why? Well you have been stating that the work force in China is so much cheaper than American work force.. (I believe that's the thrust of your statements) that we will continue to buy Chinese made stuff. I'm trying to show you without a ton of research why your assumptions are no longer as valid as they once were. It's the penny doubled a day theory. A penny isn't much money but if it's doubled every day pretty soon it's a lot of money.. Wages in China at one time were the lowest in the world.. No longer.. Things change.. IF American wages kept pace with Chinese wages the average American would be earning 1.3 million dollars a year (and that was nearly a decade ago) It used to be cheap to ship from, China now it's getting expensive and as shipping demand increases with the recovery and very few new boats being built prices will increase dramatically..

As valid as they once were? Labour is cheaper so price is cheaper. My statement is valid. Until it isn't cheaper my point stays valid. There is no variation of validity.

ThePhranc wrote: As valid as they once were? Labour is cheaper so price is cheaper. My statement is valid. Until it isn't cheaper my point stays valid. There is no variation of validity.

How silly is this thread? ThePhranc and I are in 100% agreement. How often has that happened? It does make you wonder if we have a troll among us.

fast_eddie_72 wrote:

ThePhranc wrote: As valid as they once were? Labour is cheaper so price is cheaper. My statement is valid. Until it isn't cheaper my point stays valid. There is no variation of validity.

How silly is this thread? ThePhranc and I are in 100% agreement. How often has that happened? It does make you wonder if we have a troll among us.

You're a poopyhead!

lol, Whew! Everything is right with the world again.

There is another side (which everyone seems to be missing).

I work for a company that uses a lot of Chinese imports (plus others). We do it because it is cheaper. However, the reliability of the supply stream is extremely questionable.

As labor prices have risen in China the benefit is diminishing. Add to that the business ethics are questionable (we find vendors lie to us all the time about delivery schedules), quality control is dismal, delivery infrastructure is questionable, and customs is getting more unpredictable.

Bottom line is that we often find we have a difficult time delivering a quality product to our customers in a reliable timeframe. This makes the benefit negligible. If we can't deliver product to our customers, it really doesn't matter WHAT the reduced cost is. They won't buy.

Regarding the earlier Apple example: It's not the labor difference that makes manufacturing IPads in China profitable. Its the environmental impact of the battery and touch screen technology which is prohibitive to do in the US because of EPA regulations.

In my opinion, it would be very costly right now to relocate a plant that had formerly moved to China back to the US, but the benefits of initiating a move to China may be very minimal. I think the whole process is near the tipping point.

I think it opens a GREAT opportunity for small US manufacturing. Call it "rural sourcing". If businesses could set up in the US (where transport and regulatory issues are predictable and reliable) in rural areas (where labor costs are lower than metropolitan areas), they could supply reliable product at a price that could be afforded.

It's the model the company I work for is built on, and it works GREAT. We have doubled in size every year for the last 8 years.

ThePhranc wrote: You're a poopyhead!

I has expanded my vocabulary TY TY

SVreX wrote: I think it opens a GREAT opportunity for small US manufacturing. Call it "rural sourcing". If businesses could set up in the US (where transport and regulatory issues are predictable and reliable) in rural areas (where labor costs are lower than metropolitan areas), they could supply reliable product at a price that could be afforded. It's the model the company I work for is built on, and it works GREAT. We have doubled in size every year for the last 8 years.

Rural sourcing has worked great for japan (until the earthquake and tsunami)

sadly, that is the case with a LOT of management anymore. They are so concerned with short term profit.. they never look beyond it

mguar wrote: With modern electronics the human element is almost no longer part of production.. Pieces and parts are loaded onto backing plates not by hand but by automation..

But the NYTImes says: "Another critical advantage for Apple was that China provided engineers at a scale the United States could not match. Apple’s executives had estimated that about 8,700 industrial engineers were needed to oversee and guide the 200,000 assembly-line workers eventually involved in manufacturing iPhones."

Source: http://www.nytimes.com/2012/01/22/business/apple-america-and-a-squeezed-middle-class.html?pagewanted=4&recp=9&src=rec

Yeah, the human element is non-existent there. I don't know how the labor costs of 200,000+ workers could possibly affect the cost of an Ipad. But the oil used to ship a container full of 20,000 ipads is going to cause the price to triple.

mguar wrote: Please explain why the average income of the Chinese has doubled every 3-5 years? Why China is #2 in buying new cars and #1 in buying new homes?

I'll take a shot at why the average income has doubled or tripled every 3-5 years, but first why don't we use some actual numbers instead of percentages.

"China Income: Trends in Per Capita Levels

In 1990, China’s average per capita national income was around $350. Within a decade, there was a threefold increase, taking the figure to $1,000. At the end of 2008, the figure tripled yet again and China’s average per capita national income reached another high of $3,000. If China’s average national income continues to rise at an annual rate of 8%, the country’s per capita income will reach $8,500 by 2020 and will touch the $20,000 mark by 2030. Hence, China’s average per capita income will exceed the current income of Taiwan and Korea and the country will qualify for an OECD membership."

Source: http://www.economywatch.com/world_economy/china/income.html

So it hasn't 'doubled or tripled every 3-5 years', it's tripled every 10 years. That's still darn impressive, but the average income is still less than $5000 per year! Now why is it rising at such a spectacular rate? My guess would be that so many young people have left their small hometown villages where they had ridiculously low wages (if any) working on their parent's farm and have moved to the cities seeking modern, high paying jobs. Any paying job is suddenly a huge pay jump over what they were making in their home village.

As for why China was #2 in buying new cars and #1 in buying new houses, could it be because they have the largest population in the world and the shift of that population from rural villages to large cities is driving a lot of home sales? With wages jumping so massively, don't you think they'll buy things?

Bob

mguar, Clark also had another problem. First: I worked in the forklift business back in the '70's and '80's with both Clark and Caterpillar so I am somewhat familiar with what was going on.

That problem is the same one the car manufacturers faced: cheaper imported machines that were better quality. Toyota and Nissan both had them, there was also TCM who were more of a niche player. About the only segment of the market which Clark and Cat were ahead in was electrics, Cat in particular.

The big problem was the IC trucks were all using 1930's technology such as Continental flatheads and multi stage hydraulic packings which required fairly constant adjustment to keep them from leaking. That's a big deal for a plant manager who needs to keep the floors dry and clean for various reasons. At the time both Clark and Cat were phasing in newer one piece hydraulic seals which did not require adjustment, but were still using the old flatheads with updraft Zenith carburetors which were not very fuel efficient. That was a problem because the Datsuns in particular were using passenger car engines (the 2.0 block from a forklift is a direct bolt in replacement for the 1600 SPL311 roadster engine) and could go longer on the same amount of fuel.

The really big diesel machines (10,000 pounds and above) was another Clark/Cat strong point. But for the small and mid sized gasoline/propane units, man the Japanese were eating our lunch, it was only a matter of time.

I recall one senior manager for a large textile company here in SC who refused to allow the company to buy Datsuns because of his experiences in WWII, about ten seconds after he retired they ordered a bunch of Datsun lift trucks and sold all their Clarks.

Curmudgeon wrote: mguar, Clark also had another problem. First: I worked in the forklift business back in the '70's and '80's with both Clark and Caterpillar so I am somewhat familiar with what was going on. That problem is the same one the car manufacturers faced: cheaper imported machines that were better quality. Toyota and Nissan both had them, there was also TCM who were more of a niche player. About the only segment of the market which Clark and Cat were ahead in was electrics, Cat in particular. The big problem was the IC trucks were all using 1930's technology such as Continental flatheads and multi stage hydraulic packings which required fairly constant adjustment to keep them from leaking. That's a big deal for a plant manager who needs to keep the floors dry and clean for various reasons. At the time both Clark and Cat were phasing in newer one piece hydraulic seals which did not require adjustment, but were still using the old flatheads with updraft Zenith carburetors which were not very fuel efficient. That was a problem because the Datsuns in particular were using passenger car engines (the 2.0 block from a forklift is a direct bolt in replacement for the 1600 SPL311 roadster engine) and could go longer on the same amount of fuel. The really big diesel machines (10,000 pounds and above) was another Clark/Cat strong point. But for the small and mid sized gasoline/propane units, man the Japanese were eating our lunch, it was only a matter of time. I recall one senior manager for a large textile company here in SC who refused to allow the company to buy Datsuns because of his experiences in WWII, about ten seconds after he retired they ordered a bunch of Datsun lift trucks and sold all their Clarks.

Damn. Thanks Mike. I can say I learned something today!

SVreX wrote: I think it opens a GREAT opportunity for small US manufacturing. Call it "rural sourcing". If businesses could set up in the US (where transport and regulatory issues are predictable and reliable) in rural areas (where labor costs are lower than metropolitan areas), they could supply reliable product at a price that could be afforded. It's the model the company I work for is built on, and it works GREAT. We have doubled in size every year for the last 8 years.

Back when I worked for Amada, I usually helped the sales team with product data, but sometimes I would work with our team of traveling mechanics to help them get new equipment designs up and running. Amada's southeast hub is itself in a rural industrial park, but sometimes it surprised me just where some of our customers had set up shop. One shop was in a medium sized prefab steel building that was literally in the middle of a cow pasture. If it weren't for the number of cars in the parking lot, you'd think it was some sort of barn. They had close to a million dollars' worth of industrial lasers in it, and probably about twice that money spent on other CNC machines. Not much reason these days to put a factory in a big city unless you need a huge labor force to run it.

Curmudgeon wrote: That was a problem because the Datsuns in particular were using passenger car engines (the 2.0 block from a forklift is a direct bolt in replacement for the 1600 SPL311 roadster engine) and could go longer on the same amount of fuel.

I recall once seeing a big Komatsu forklift with a Nissan inline six under the hood. I wonder if it was related to the L-series motors in the Z cars, or possibly some sort of single cam RB.

mguar wrote: If you go to Harvard you will study this example. Management became so focused on the near term they lost the great profit they had and become just a footnote..

If you go to Harvard will they also let you study the flip side?

mad_machine wrote: sadly, that is the case with a LOT of management anymore. They are so concerned with short term profit.. they never look beyond it

In my experience, with publicly traded companies, it has little to do with management. Those companies are driven by stock prices and stock prices work quarter to quarter. You can't go to the street with a missed number and explain that you made good decisions for the future. You may be right, but the guy who replaces you will be the one who benefits from your wisdom 'cause you'll be out on your ear with nothing but a $10M severance package to save you.

that is very true, Eddie. I have been on the receiving end of it

fast_eddie_72 wrote:

mad_machine wrote: sadly, that is the case with a LOT of management anymore. They are so concerned with short term profit.. they never look beyond it

In my experience, with publicly traded companies, it has little to do with management. Those companies are driven by stock prices and stock prices work quarter to quarter. You can't go to the street with a missed number and explain that you made good decisions for the future. You may be right, but the guy who replaces you will be the one who benefits from your wisdom 'cause you'll be out on your ear with nothing but a $10M severance package to save you.

Where do I sign?

mad_machine wrote: that is very true, Eddie. I have been on the receiving end of it

I'm guessing you don't mean the $10M severance package end...

Curmudgeon wrote: Where do I sign?

Soon as I figure it out I'll have my man let you know.

I wish I was on the 10m severance package end.. I was on the chopping block end so the CEO didn't get ousted

MadScientistMatt wrote:

Curmudgeon wrote: That was a problem because the Datsuns in particular were using passenger car engines (the 2.0 block from a forklift is a direct bolt in replacement for the 1600 SPL311 roadster engine) and could go longer on the same amount of fuel.

I recall once seeing a big Komatsu forklift with a Nissan inline six under the hood. I wonder if it was related to the L-series motors in the Z cars, or possibly some sort of single cam RB.

The Cat dealer I worked for had a Komatsu dealer right next door and at the time the sales guys used to laugh about them. Not any more. In fact, Komatsu now builds equipment in Newberry SC, just outside of Columbia.

MadScientistMatt wrote:

Curmudgeon wrote: That was a problem because the Datsuns in particular were using passenger car engines (the 2.0 block from a forklift is a direct bolt in replacement for the 1600 SPL311 roadster engine) and could go longer on the same amount of fuel.

I recall once seeing a big Komatsu forklift with a Nissan inline six under the hood. I wonder if it was related to the L-series motors in the Z cars, or possibly some sort of single cam RB.

We had a medium sized older Datsun forklift at work a while back that had a 6cyl that looked exactly like an L series. I'm guessing the mill in the Komatsu was probably the same.