All USA tool manufacturing going overseas?

[glenmore]

Not so fast!

http://www.businessinsider.com/bcg-report-usa-to-experience-manufacturing-renaissance-2011-5

 

[SMKS]

Link didn't work for me.

 

[JohnK007]

Backspace out the "bounce:" part and it'll load

http://www.businessinsider.com/bcg-report-usa-to-experience-manufacturing-renaissance-2011-5

 

[ZRX61]

Yup & I can garantee one thing:
Not ONE company will move to California to "make stuff"

 

[Daddy_Rabbit]

sorry, but manufacturing is NOT coming back to the U.S. in any shape, form or fashion that looked like it did before.

 

[route246]

I disagree with some of these assumptions.

"All over China, wages are climbing at 15 to 20 percent a year because of the supply-and-demand imbalance for skilled labor,” said Harold L. Sirkin, a BCG senior partner. “We expect net labor costs for manufacturing in China and the U.S. to converge by around 2015. As a result of the changing economics, you’re going to see a lot more products ‘Made in the USA’ in the next five years.”

There is a huge difference between skilled white collar labor and skilled blue collar labor. White collar labor requires a minimum of 4-years of university-level education past high school. Blue collar labor does not have this requirement and is usually handled through trade schools and internal corporate training. The growth in salaries is mostly confined to the skilled white collar labor force. There is a largely agrarian population pool that is still being lured to the manufacturing regions from the 3rd-world countryside. Those people work for very low wages and can be trained to operate modern manufacturing equipment.

The story makes the following statement: "After adjustments are made to account for American workers’ relatively higher productivity, wage rates in Chinese cities such as Shanghai and Tianjin are expected to be about only 30 percent cheaper than rates in low-cost U.S. states. And since wage rates account for 20 to 30 percent of a product’s total cost, manufacturing in China will be only 10 to 15 percent cheaper than in the U.S."

Shanghai and Tianjin are extremes, akin to manufacturing in NYC or SFO or Tokyo. You don't manufacture in NYC or SFO or Tokyo. This is extremely disingenuous to state salary comparisons this way.

 

[Shipfittin]

I think one of the things you have to remember is regulation. There is a lot less regulation in China on what companies can and can not do versus the United States or Canada. Which is exactly what ZRX61 was pointing out.

Lets say the article was right and Company X was only saving 10 - 15% on labor by producing in China or Taiwan versus the USA. If Company X moved back to the States then how much would it cost them when it comes to complying to regulations.

I think if companies do move out of China don't necessarily expect them to come to the United States. To me it would be more likely for them to move to another country where they could employee factory workers at real cheap prices. There is already a lot of manufacturing in other areas of Asia. I'd almost be curious to see if they tried moving a lot to African countries.

 

[route246]

As factories become more automated and computerized, skilled labor becomes less of an issue. Things that were previously done by hand can now be done by computerized machines and it only takes a relatively low skilled operator to make sure the machines do what they are supposed to do. Technicians are being replaced by operators. Huge investments in automation allow for this to happen, hence the huge jump in productivity of American workers. What they don't tell you is that this sort of productivity costs jobs.

 

[Wrenches of Death]

"All over China, wages are climbing at 15 to 20 percent a year because of the supply-and-demand imbalance for skilled labor,” said Harold L. Sirkin, a BCG senior partner. “We expect net labor costs for manufacturing in China and the U.S. to converge by around 2015. As a result of the changing economics, you’re going to see a lot more products ‘Made in the USA’ in the next five years.”

That's a pipe dream. There isn't a chance of that happening. Not with the EPA, unions, high health care costs, forced politically correct hirings, lawyers, taxes, the lazy uneducated stupid masses, and all of the other BS that is pretty much the norm to do almost anything in this country anymore.

The Chinese companies will simply cut their costs. And, the easiest way to do that is simply build plants in Vietnam, Kampuchea, Mongolia, Myanmar, Pakistan, and all of the other places in Asia where the per capita income is measured in hundreds of dollars a year.

In a generation or two when the costs there get too high, they'll more to Africa and open those new plants.

Why would anyone want to manufacture anything here today when they can do it elsewhere for pennies on our next to worthless dollar?

Ten years ago, who would have thought that GM and Chrysler would go **** up? Oh, look GM made a profit this quarter! Yeah, just wait until the Chinese start exporting cars over here for say 40% of the cost of a Jap or US made one.

It's all down hill from here bubba, it's only going to get worse. If you expect them to succeed, you need to start teaching your children and grandchildren how to kowtow their future Chinese overlords.

WoD

 

[diesel research]

It is called "back shoring" and is gaining in popularity.

To call the average factory worker "skilled labor" is akin to calling me a doctor....

 

[expatriated]

That's a pipe dream. There isn't a chance of that happening. Not with the EPA, unions, high health care costs, forced politically correct hirings, lawyers, taxes, the lazy uneducated stupid masses, and all of the other BS that is pretty much the norm to do almost anything in this country anymore.

I agree 100% with the above. To some "Atlas Shrugged" is a cautionary tale, to others it's a blueprint for how to run a government

 

[oilslick]

good one diesel presearch

 

[catfish]

Yup & I can garantee one thing:
Not ONE company will move to California to "make stuff"

Could move to SC mostly , i heard that was the cheapest place in the US to do manufacturing.Cheap land , electricity and wages.

 

[Sancho]

I agree 100% with the above. To some "Atlas Shrugged" is a cautionary tale, to others it's a blueprint for how to run a government

Its crazy hw true this statement is.

With that said shanghai has plenty of manufacturing, most of there auto and off-highway is HQ'd there last I checked.

As for the chinese importing vehicles, think agin at the earliest that is 5 years away and even then they are basket cases. In my carrer as a engineer Ive never seen something as screwed up as their auto industry. It is almost commical the ideas I have heard. Theyre 40years behind western OEMs, and reverse engineering will only get you to a point, they will have to think for themselvea in the future and that is not something the PRC is paticularily good at.

 

[route246]

The headquarters of companies are in the big cities but the factories are in the distant suburbs (as in Tokyo), if at all. You will not find factories anywhere near a major city center. The land is too valuable and gets developed into office or residential space. Factories can be anywhere. Offices and residential space cannot or it offers no value to a developer.

Its crazy hw true this statement is.

With that said shanghai has plenty of manufacturing, most of there auto and off-highway is HQ'd there last I checked.

As for the chinese importing vehicles, think agin at the earliest that is 5 years away and even then they are basket cases. In my carrer as a engineer Ive never seen something as screwed up as their auto industry. It is almost commical the ideas I have heard. Theyre 40years behind western OEMs, and reverse engineering will only get you to a point, they will have to think for themselvea in the future and that is not something the PRC is paticularily good at.

 

[Sancho]

The headquarters of companies are in the big cities but the factories are in the distant suburbs (as in Tokyo), if at all. You will not find factories anywhere near a major city center. The land is too valuable and gets developed into office or residential space. Factories can be anywhere. Offices and residential space cannot or it offers no value to a developer.

I know VW and continental buck this, but I do see your point. It is worth noting shanghai is huge. Akin to LA or Detroit perhaps in terms of sprawl

 

[Weps]

sadly, my fear is that the quality will not be significantly better even if it is made here. we've just managed to lower the standard of living enough here so that in some cases it is now possible to compete with overseas labor.

my feeling is that we have a much larger problem in that people are not demanding quality goods on a large scale...and until then, the cost of making them is so high it's nearly impossible to be profitable. so they churn out a downward spiral of **** trying to compete.

made in usa. made in china. will you be able to tell the difference?

unless it's high quality boutique manufacturing, we're still screwed.

 

[tk06]

That's a pipe dream. There isn't a chance of that happening. Not with the EPA, unions, high health care costs, forced politically correct hirings, lawyers, taxes, the lazy uneducated stupid masses, and all of the other BS that is pretty much the norm to do almost anything in this country anymore.

The Chinese companies will simply cut their costs.

Ten years ago, who would have thought that GM and Chrysler would go **** up? Oh, look GM made a profit this quarter! Yeah, just wait until the Chinese start exporting cars over here for say 40% of the cost of a Jap or US made one.

It's all down hill from here bubba, it's only going to get worse. If you expect them to succeed, you need to start teaching your children and grandchildren how to kowtow their future Chinese overlords.

WoD

GM profits are up because of the bailout , the bailout and the ridiculous cash for clunker program, there are only so many times the people of the U.S. will be able to bailout companies like GM again.

the international monetary foundation has publicly stated
China will surpass the U.S. economy by 2016, we will no long be number one

" BOSTON (MarketWatch) — The International Monetary Fund has just dropped a bombshell, and nobody noticed.

For the first time, the international organization has set a date for the moment when the “Age of America” will end and the U.S. economy will be overtaken by that of China.
IMF sees China topping U.S. in 2016

According to the latest IMF official forecasts, China's economy will surpass that of America in real terms in 2016 —"

 

[Roots]

There is a huge difference between skilled white collar labor and skilled blue collar labor. White collar labor requires a minimum of 4-years of university-level education past high school. Blue collar labor does not have this requirement and is usually handled through trade schools and internal corporate training. The growth in salaries is mostly confined to the skilled white collar labor force. There is a largely agrarian population pool that is still being lured to the manufacturing regions from the 3rd-world countryside. Those people work for very low wages and can be trained to operate modern manufacturing equipment.

Strange, I know many "white collar labor" individuals without "a minimum of 4-years of university-level education".

You're correct that "blue collar labor" does not have that requirement. In fact Department of Labor accreditation often only requires 2-years of university-level education. In conjunction with upwards of 8,000 hours of on the job training (OJT).

I know what you mean though about the ability to recruit nearly illiterate peasants from the countryside. On my last trip over seas I was impressed with the Chinese way of recruiting. Just throwing hats into the countryside with the names like Nuclear Reactor Operator, Instrument and Controls Tech, Robotics Tech, Registered Nurse, Electrical Maintenance, Machinists, Turbine and Pressure Vessel Welders, etc. I know that the GE Executive Development training program states that all of those jobs are mere button pushers. With no job being considered skilled, unless it calls for an MBA or Doctorate from an Ivy League school. It's sickening that those peasants feel they can earn more than minimum wage, no? Where's Rush?

 

[route246]

I said skilled white collar labor. There are plenty of clerks, secretaries, receptionists and other low level white collar workers. Those are unskilled positions that do not require any sort of 4-year university degree. There are plenty of blue-collar professional people with 4-year degrees but that is rarely, if ever, a requirement for their position.

Strange, I know many "white collar labor" individuals without "a minimum of 4-years of university-level education".

You're correct that "blue collar labor" does not have that requirement. In fact Department of Labor accreditation often only requires 2-years of university-level education. In conjunction with upwards of 8,000 hours of on the job training (OJT).

I know what you mean though about the ability to recruit nearly illiterate peasants from the countryside. On my last trip over seas I was impressed with the Chinese way of recruiting. Just throwing hats into the countryside with the names like Nuclear Reactor Operator, Instrument and Controls Tech, Robotics Tech, Registered Nurse, Electrical Maintenance, Machinists, Turbine and Pressure Vessel Welders, etc. I know that the GE Executive Development training program states that all of those jobs are mere button pushers. With no job being considered skilled, unless it calls for an MBA or Doctorate from an Ivy League school. It's sickening that those peasants feel they can earn more than minimum wage, no? Where's Rush?

 

[Roots]

I said skilled white collar labor. There are plenty of clerks, secretaries, receptionists and other low level white collar workers. Those are unskilled positions that do not require any sort of 4-year university degree. There are plenty of blue-collar professional people with 4-year degrees but that is rarely, if ever, a requirement for their position.

No. In fact, I carefully quoted your remarks, reread them. After your introductory statement where you mentioned skilled white collar and blue collar labor, you proceeded to reference "white collar" workers. It continued on, with your comparison to button pushers, or "...can be trained to operate modern manufacturing equipment".

 

[Givl Reggin]

When China becomes too expensive, production will move to India, Pakistan, or some other chithole county... it's not coming back to to US soil.

 

[Daddy_Rabbit]

As for the chinese importing vehicles, think agin at the earliest that is 5 years away and even then they are basket cases. In my carrer as a engineer Ive never seen something as screwed up as their auto industry. It is almost commical the ideas I have heard. Theyre 40years behind western OEMs, and reverse engineering will only get you to a point, they will have to think for themselvea in the future and that is not something the PRC is paticularily good at.

the same sort of things were said of the Japanese auto and electronic industries in the 50's & 60's.

we continue to ignore history and we continue repeating it.

 

[Monte]

Volvo already belongs to the chinese, Saab probably will follow so the technology transfer will be much faster and in a few years you will find chinese cars in good quality all around the world.

 

[catfish]

Chinese cars are flooding the market here , i see them all the time.Like i mentioned before the tradeins offered are insane , in order to grow the initial market.13,000 trade in on a 10 year old mitsubishi pick up so you only need to cough up another 4,000 for the Chinese pick up.

Most of the important parts for the Chinese pickups still come from Japan , the engine is an old mitsubishi model.As for the small cars they started selling those only 2-3 months ago , the price isn't really much cheaper than the South Korean models , maybe 1-2k cheaper.13,000 for SK model 11-12,000 for China model.

Anyone see the story about the new New York taxi cabs? They are more like minivans and will be made in Mexico.

 

[bamackc]

That's a pipe dream. There isn't a chance of that happening. Not with the EPA, unions, high health care costs, forced politically correct hirings, lawyers, taxes, the lazy uneducated stupid masses, and all of the other BS that is pretty much the norm to do almost anything in this country anymore.

WOW!!!!

one more time



























































































WOW!!!!

 

[Gregg33]

I do think that the wage gap between China and the U.S. (and Canada as well) will continue to decrease, especially as North American workers are more desparate for jobs and willing to work for lower wages and as the Chinese workforce becomes more skilled. However, I think the amount of manufacturing returning to the U.S. or Canada will only be noticeable statistically, maybe a couple % at best, because of the reasons mentioned by others in this thread (overall cost of doing business is higher in the U.S., other cheap labor countries will step up to the plate etc.). However the noticeable difference maybe in the remaining North American manufacturing......those factories are less likely to be shut down.

 

[american lockpicker]

That's a pipe dream. There isn't a chance of that happening. Not with the EPA, unions, high health care costs, forced politically correct hirings, lawyers, taxes, the lazy uneducated stupid masses, and all of the other BS that is pretty much the norm to do almost anything in this country anymore.

The Chinese companies will simply cut their costs. And, the easiest way to do that is simply build plants in Vietnam, Kampuchea, Mongolia, Myanmar, Pakistan, and all of the other places in Asia where the per capita income is measured in hundreds of dollars a year.

In a generation or two when the costs there get too high, they'll more to Africa and open those new plants.

Why would anyone want to manufacture anything here today when they can do it elsewhere for pennies on our next to worthless dollar?

Ten years ago, who would have thought that GM and Chrysler would go **** up? Oh, look GM made a profit this quarter! Yeah, just wait until the Chinese start exporting cars over here for say 40% of the cost of a Jap or US made one.

It's all down hill from here bubba, it's only going to get worse. If you expect them to succeed, you need to start teaching your children and grandchildren how to kowtow their future Chinese overlords.

WoD

This is why we should tax the **** out of cheap imports.

 

[Wrenches of Death]

Its crazy hw true this statement is.

Theyre 40years behind western OEMs, and reverse engineering will only get you to a point, they will have to think for themselvea in the future and that is not something the PRC is paticularily good at.

It wasn't all that long ago, that the very same was said about the ****. They underestimated them, too.

I remember their first cars. When my mother finally learned to drive, she bought new 1968 Toyota Corona. Everyone poked fun at it. Remember the little Honda motorcycles of the 1960's? It didn't take them long in that market either.

I don't think that the Chinese will need as much time because the technology has pretty much matured. It's a lot easier if you have the existing knowledge resources available to build on.

WoD

 

[catfish]

Well from what i have been hearing Obummer seems to have a vendetta against coal power plants , he wants to close them down because CO2 is apparently a pollutant now.I guess when we exhale we are committing an environmental sin , or something.

Well with fewer coal plants electricity becomes more expensive.Sorry but i don't see much manufacturing returning to the USA because any gains made in labor costs will be overshadowed by the increasing cost of electricity over there in comparison to China who just keeps building the coal plants , with no need for scrubbers - naturally.

 

[Wrenches of Death]

This is why we should tax the **** out of cheap imports.

And yet our elected officials and the globalists keep pushing for "free trade". After all, it's a "global economy"...

At one time, most all of the taxes collected by the US Govt were from import tariffs. Those days are long over.

The wealth transfer continues. Instead of new factories, roads, cities, and infrastructure improvements being build here, they are being built in China because that's where the earnings of the US worker are going.

Even Ray Charles could see that this is unsustainable.

WoD

 

[catfish]

free trade would work better if there was no payroll tax or income tax , you can't really put tariffs on goods in the internet age it doesn't make economic sense (more expensive to collate and collect than it would bring in)

main problem = government & big corporations too big & powerful , taxes too high & uninformed/ignorant consumers

 

[oldtools]

Chinese auto company BYD started out as battery maker (they make battery for Iphone, Ipod, etc). They went into the auto business some 9 years ago. They introduce the first plug-in hybrid (F3DM) in 2010 beating the GM volt to market. BYD will bring it to the US market in 2012. Warren Buffet see enough potential in BYD to invest $230 millions.

http://en.wikipedia.org/wiki/BYD_F3DM

Here is a very long and but very interesting article.

http://money.cnn.com/2009/04/13/technology/gunther_electric.fortune/

 

[Wrenches of Death]

http://en.wikipedia.org/wiki/BYD_F3DM

Here is a very long and but very interesting article.

http://money.cnn.com/2009/04/13/technology/gunther_electric.fortune/

Fascinating success story. A couple of generations ago, it could have easily been an American sucess story.

Can you imagine someone trying to resurrect a dead car company here and start new production? It'd take years just to line up the permits. No telling what just the probably dozen or more required "studies" would cost.

WoD

 

[Jononon]

Fascinating success story. A couple of generations ago, it could have easily been an American sucess story.

Can you imagine someone trying to resurrect a dead car company here and start new production? It'd take years just to line up the permits. No telling what just the probably dozen or more required "studies" would cost.

Tesla Motors took a defunct platform and a closed NUMMI factory, in California, and, as well as having an, admittedly small run, car in production, has since sold both physical product and IP licensing to Daimler and Toyota.

BYD, meanwhile, has lost 2/3 of its share value in a year with its e6 project running two years late.

 

[catfish]

Chinese auto company BYD started out as battery maker (they make battery for Iphone, Ipod, etc). They went into the auto business some 9 years ago. They introduce the first plug-in hybrid (F3DM) in 2010 beating the GM volt to market. BYD will bring it to the US market in 2012. Warren Buffet see enough potential in BYD to invest $230 millions.

http://en.wikipedia.org/wiki/BYD_F3DM

Here is a very long and but very interesting article.

http://money.cnn.com/2009/04/13/technology/gunther_electric.fortune/

It's more to do with corruption of US governments/big oil than any lack of 'need' in the US for an electric car.Still videos of GM EV-1 electric vehicle on youtube from the mid 90s if you want to go search for them.

 

[Lomotil]

When China becomes too expensive, production will move to India, Pakistan, or some other chithole county... it's not coming back to to US soil.

 

[Monte]

This is why we should tax the **** out of cheap imports.

you tax the imports, they tax the imports.

 

[diesel research]

http://en.wikipedia.org/wiki/Protectionism

Interesting excerpt:

Free trade in America is the policy of economics developed by American slave holding states and protectionism is a northern, manufacturing issue.[citation needed] Although not as animating an issue as slavery, differences in trade between the two regions contributed to the Civil War and remain a point of national difference even today.[citation needed]

Historically, southern slave holding states, because of their low cost manual labor, had little perceived need for mechanization, and supported having the right to purchase manufactured goods from any nation. Thus they called themselves free traders.

Northern states, on the other hand, sought to develop a manufacturing capacity, and successfully raised tariffs to allow nascent Northern manufacturers to compete with British competitors. Beginning with 1st U.S. Secretary of the Treasury Alexander Hamilton's "Report on Manufactures", in which he advocated tariffs to help protect infant industries, including bounties (subsidies) derived in part from those tariffs, the United States was the leading nation opposed to "free trade" theory.

 

[Sancho]

the same sort of things were said of the Japanese auto and electronic industries in the 50's & 60's.

we continue to ignore history and we continue repeating it.

The difference is the Japanese were building their own products from their own ideas, the chinese are not willing to do the same. They would rather copy another design outright because you save that R&D cost. Only time will tell if this is sustainable, but it certainly makes exporting cars difficult when you dont own the IP's your utilizing.

The country to be worried about with regards to vehicles is India, Tata and Mahindra are definently a threat.