Future of German tool manufacturing

[Hush 74 1985]

Having noticed certain tool companies moving manufacturing overseas towards Taiwan and China. Will it only be a matter of time before companies like Stahlwille and Hazet move manufacturing overseas in order to survive in an ever changing global environment.

Looking at Gedore, the fact they made tools in India during the 1960s. It has lead to some consumers questioning the quality of Gedore tools even through their tools are now made in German and else where (not India) as far as I know.

Craftsman tools having been made in the USA for many years. Has now moved manufacturing to China and Taiwan. And as a result many tool users have decided to fore go buying craftsman anymore as they are no longer made in the USA.






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[AceofSpad3s]

There will always be a market for high end stuff, if snap on starts selling chinese ratchets then it'd be time to start worrying, craftsman isn't very accurate to indicate the overall market.

 

[tube_guy]

The culture and values that exist in a country have a huge effect on what people in that country spend their money on and produce. Just because companies in one country have outsourced production to low wage countries doesn't necessarily mean that's the pathway companies in another country will take. Some evidence that this won't happen in Germany is exactly what you mentioned. As far as I know, Gedore stopped making tools in India, so obviously that approach wasn't very successful for them. However, the values of a country do tend to change over time, so just because something happened years ago, doesn't mean the same approach will yield the same results today. So, I guess you never know.

 

[zendriver]

The quality of tools made in China, have increase significantly, India, too. The 1960's, might as well have been the stone age, for tools from those areas.

Will they be as good as those made in Germany?

Probably not.

Will it matter?

Probably not.

 

[Hush 74 1985]

Do you guys believe that snap on may start producing ratchets completely in either Taiwan or China in the near future. My understanding is that some of the ratchet internals are made in Taiwan.


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[finn]

German manufacturers tend to move their manufacturing to the former Eastern Block companies, especially those with EUC membership.

Having said that, Bosch and VW have had factories in China for decades, and TTI, the manufacturer of Milwaukee, RYOBI, etc id German owned, incorporated in Hong Kong, and manufactured in China.

 

[Hush 74 1985]

Wera correct to my knowledge used to made in German and has now moved to the Czech Republic. Maybe just a matter of time before manufacturing moves towards the Eastern Block.

But then again I would rather buy something made in the Eastern Block than China or Taiwan.


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[Dave455]

Personally, I can’t see it!

Firstly, most German managers that I’ve met have a greater understanding of their products, and how they’re used, than most of their British or U.S. equivalents. They know that they need to produce at home in order to control the quality, and that their customers are discerning, and will pay the price.

Secondly, they have more of a work ethic. If their job is to make tools, then they make tools, they don’t think ‘It’s easier to buy that in’ because they understand that makes them an importer, not a manufacturer!

Thirdly, they are better at keeping control of their own companies. Many are still family owned, and those that are not are controlled by German corporations. You won’t find many traditional German firms being sold off for a short term gain just because someone waves a few dollars at them, because they understand that when that happens you have lost control, and some idiot will probably slap your name on some **** and trash it!

Fourthly, most German managers are patriotic. They believe their job is not only to make tools, but to make tools in Germany, providing jobs for Germans and trade revenue!

Finally, Germany is actually a good place to make things, and do business generally. The rates (local taxes in property) paid by German firms are a fraction of those in the U.K, where politicians who couldn’t make a washer punish their manufacturing with ever higher rates.

The Euro also suits German industry very well. If they still had the DM it would be a very strong currency and prices of German goods would be very high. As things are, they are very affordable. I can buy an entire set of Stahlwille wrenches for the price of one Snap On, and that’s why!

Now I know that some German firms have outsourced stuff, probably the two best known examples being Wiha Pliers and Wera Screwdrivers, but remember this - Wera screwdrivers were outsourced to the Czech Republic. That’s hardly China. The Czech’s can make decent stuff, and being only ‘just down the road’ quality is well controlled. Also remember that this happened a long time ago. I read people saying ‘Wera drivers are no longer produced in Germany’ but this happened probably 25 years ago.

Willi Hahn were basically a screwdriver manufacturer. Pliers were a relatively new line for them, and given the huge local competition they elected to do something different and produce them in Vietnam. As far as I can tell they may actually have done what everyone else claims to do but doesn’t, namely, having their own factory and keeping quality high but costs down!

 

[Git]

Why do people automatically assume that if something is made in China - it has to be junk/****/cheap/fill in the word....?

Where does Apple have the majority of it's I Phones made? answer -> Shenzen, China

China does not set the specs of the product, what type of steel or machining process is used. Whoever hired them did. I am sure that China can if fact build high-quality products, the problem is, people don't want to pay for them

 

[Dave455]

Why do people automatically assume that if something is made in China - it has to be junk/****/cheap/fill in the word....?

Because in the tool world it generally is!

Yes, in theory you can produce the same quality for less money in China, but in the best part of 40 years of hearing this, I havn’t seen it yet!

 

[dogdog]

Why do people automatically assume that if something is made in China - it has to be junk/****/cheap/fill in the word....?

Where does Apple have the majority of it's I Phones made? answer -> Shenzen, China

China does not set the specs of the product, what type of steel or machining process is used. Whoever hired them did. I am sure that China can if fact build high-quality products, the problem is, people don't want to pay for them

LOL you know the crowd....

 

[AceofSpad3s]

Why do people automatically assume that if something is made in China - it has to be junk/****/cheap/fill in the word....?

Where does Apple have the majority of it's I Phones made? answer -> Shenzen, China

China does not set the specs of the product, what type of steel or machining process is used. Whoever hired them did. I am sure that China can if fact build high-quality products, the problem is, people don't want to pay for them

Because the vast majority of stuff out of china is in fact, trash. Things are made there solely for labor and material costs, not because of quality.

It doesn't matter if they could hypothetically produce Snap on quality stuff if they got enough money thrown their way because it's just that, hypothetical.

 

[dogdog]

Because in the tool world it generally is!

Generalization is just a beast of stupidity....

 

[Musicinabottle]

You know where I stand on this.

 

[Wamsutta]

Having noticed certain tool companies moving manufacturing overseas towards Taiwan and China. Will it only be a matter of time before companies like Stahlwille and Hazet move manufacturing overseas in order to survive in an ever changing global environment.

Looking at Gedore, the fact they made tools in India during the 1960s. It has lead to some consumers questioning the quality of Gedore tools even through their tools are now made in German and else where (not India) as far as I know.

Craftsman tools having been made in the USA for many years. Has now moved manufacturing to China and Taiwan. And as a result many tool users have decided to fore go buying craftsman anymore as they are no longer made in the USA.

Two entirely different marketing segments. The Germans aren't trying to attract the penny pinching Craftsman customers.

 

[Fbmoose48]

Where does Apple have the majority of it's I Phones made? answer -> Shenzen, China

Production of consumer elctronics is hardly comparable to hardline tools. Also, there are plenty of non-fanboys who don't think Apple products are the pinnacle of quality - look at the Android market share.

 

[rossomania]

China has achieved tremendous manufacturing knowhow. However, like Ace implied above, tapping into China's most skilled and capable manufacturers IS NOT what's happening when it comes to China-made products that are being imported to the USA.

iPhones, ThinkPad laptops, Seagull watches... all beautifully made, top-tier, China-made products. But these excellent products are the exception to the rule.

I often look at Japan when I think about the whole buying domestic versus imported goods. Like the US and Europe, Japan has lots of outsourced, overseas production for all sorts of products. HOWEVER, unlike the US, many Japanese companies continue to produce "made in Japan" versions of their products exclusively for their domestic market. And the Japanese are very patriotic when it comes to buying Japan-made, even though the prices for these products is considerably higher. Sure we have companies like Kline and Channellock with extensive US manufacturing, but more often the pattern in the US is to do what Dewalt appears to be doing and that is offering a small number of token, US-made "boutique" products that gives them bragging rights for marketing purposes. If you look carefully at their catalog, you'll notice that most of their top-tier, professional grade products are still made in China. I'm a Dewalt fan and tool owner, and I'm not trying to single them out for something I think is an increasingly common marketing strategy here in the US among tool manufacturers. It's simply the frist example that came to my mind.

 

[Git]

It's called 'contract manufacturing'.

China manufactures poor-quality products because that is what they are paid to do. Its a 'race to the bottom'. You cut a couple of dollars (or whatever) off the price of something (ala Harbor Freight) most people are just going to buy the cheaper item.

China makes OEM parts for Boeing and Airbus. Do you really think those parts are "Chinese Junk"?

Probably the best known 'drone' is the DJI, which is made in China. I am not here to defend China or Chinese products, but you should at least realize what is going on

 

[PFSard]

IMO. Prediction of the future is a fool's game. The goods and services offered today are incredible. I doubt that many predicted 10 or 20 years ago what the world would be today. Who knows what tomorrow will bring? And from what country?

I've never encountered a study on the German tool industries. If anyone has, I'd be interested in reading about this. And any speculations on the future of tool production.

 

[Skin]

Bear in mind the biggest cost in tool manufacturing is the start-up costs. I very much doubt you'll see any existing manufacturing in Germany leave, especially from the companies that pride themselves in their heritage (Stahlwille, Hazet, Gedore). Even the Gedore India stuff I believe was exclusively sold to western markets and never sold domestically.

Now new product expansion to the far East? Has happened, will continue to happen. See Hazet and Stahwille ratcheting wrenches, pneumatic tools. Most of the Wera hand tool line (don't believe the CZ markings). New Wiha pliers etc.. Again that's because its far cheaper for them to start up a factory in a poor country or simply contract out production to an existing and well established manufacturer.

Personally i'd put Taiwan amongst the top 3 best tool manufacturers in the world so personally any time a company wants to produce there I don't care one bit unless they're doing so at a gross premium (truck brands).

Having said that, Bosch and VW have had factories in China for decades, and TTI, the manufacturer of Milwaukee, RYOBI, etc id German owned, incorporated in Hong Kong, and manufactured in China.

Bosch power tools for NA manufactures almost exclusively in Malaysia, not China. TTI was founded in and is based out of Hong Kong, not Germany. I don't know where that "TTI is German" rumor started but its false. The only German connection is that one of its two founders is German but he resides in China and a number of the controlling board members (including the other founder) are also Chinese so.... Regardless an outside company cannot wholly own manufacturing in China without a 50/50 split which basically forces IP sharing. In other words there is no such thing as a German company or American company operating independently in China. Just doesn't exist.

 

[dnschmidt]

German's aren't stupid as we Americans so often are. They comprehend the vital importance of maintaining a manufacturing base in their country and that manufacturing is the key to good paying middle class jobs. They are not about to go down the rabbit hole we Americans so willingly entered. Also, the German government has far more power over their industries than our government does over ours. German companies just can't unilaterally screw their workers and ship the tools of production and jobs overseas as is so routinely done in America. In my career in the semiconductor industry I worked for Motorola (typical treat the employees like **** American company) and STMicroelectronics (Our people are our greatest asset European company). I far better liked ST than Moto which frankly I hated. Intel, by the way is the worst of the worse. There you're not even a number but considered more like a unit.

 

[packet]

Production of consumer elctronics is hardly comparable to hardline tools. Also, there are plenty of non-fanboys who don't think Apple products are the pinnacle of quality - look at the Android market share.

You're right. Consumer electronics takes a hell of a lot more precision than tool manufacturing and has much tighter tolerances.

Where do you think all those Android phones are made? Mostly China. Some in Taiwan if the manufacturer feels like paying higher costs. It's where all the experienced companies are these days.

 

[Skin]

Most consumer electronics are manufactured by machines. Vast majority of assembly of components (most of which are shipped in) are wave soldered with only a limited number hand soldered and generally QC is strictly enforced for a company like Apple/Sony/Samsung/Panasonic etc...


Ironically a number of electronics are still junk. Smartphones are usually traded in within 2-3 years so they're never put under a longevity test or the screen/battery craps out. TVs rarely go 10+ years without something malfunctioning.

 

[Musicinabottle]

German's aren't stupid as we Americans so often are. They comprehend the vital importance of maintaining a manufacturing base in their country and that manufacturing is the key to good paying middle class jobs. They are not about to go down the rabbit hole we Americans so willingly entered. Also, the German government has far more power over their industries than our government does over ours. German companies just can't unilaterally screw their workers and ship the tools of production and jobs overseas as is so routinely done in America. In my career in the semiconductor industry I worked for Motorola (typical treat the employees like **** American company) and STMicroelectronics (Our people are our greatest asset European company). I far better liked ST than Moto which frankly I hated. Intel, by the way is the worst of the worse. There you're not even a number but considered more like a unit.

Yes indeed. Americans really don't give a **** about anything but filling their lives with lots of cheap stuff. The cheaper, the better. It's so nice to know that there are folks who really do weigh and consider the consequences of that behavior.

 

[dogdog]

..................


Bosch power tools for NA manufactures almost exclusively in Malaysia, not China. TTI was founded in and is based out of Hong Kong, not Germany. I don't know where that "TTI is German" rumor started but its false. The only German connection is that one of its two founders is German but he resides in China and a number of the controlling board members (including the other founder) are also Chinese so.... Regardless an outside company cannot wholly own manufacturing in China without a 50/50 split which basically forces IP sharing. In other words there is no such thing as a German company or American company operating independently in China. Just doesn't exist.

Pssstt... 1985 HK is still under British Rules, not Gyna.... There is no restriction on outside company manufacturing in HK
.... The Chinese Guy CO-Founder not because he is a British Citizen.., but probably have a lot of PHD Degrees in Science stuff ....... while the other guy is a Business man. Not sure where you learn that fact about outside company can not wholly own manufacturing in HK... In TTI's case. I think you are confused China with Malaysia, you have to 50/50 with a Malaysian citizen in order to operate a business there. Not HK.




http://commons.ln.edu.hk/cgi/viewcontent.cgi?article=1013&context=honorary_doctorates

In 1985, Mr. Horst Julius Pudwill and Prof Roy Chi Ping Chung BBS JP founded Techtronic Industries Company Limited with the clear vision of owning and building a portfolio of globally recognized brands. Today, their passion and commitment has resulted in products that have become household names in the commercial construction, home improvement, and industrial power tool markets as well as the home maintenance and commercial floor care markets.

Their steadfast dedication to unsurpassed quality and core strategies of driving continuous innovation, operational improvement and leadership development have propelled all of TTI’s brands, including Milwaukee Power Tool, a over 90-year-old company and now a billion dollar worldwide brand annually.

TTI is proud of the history we are creating with our portfolio, knowing that our devotion to excellence will continue to lead us to greater heights.

 

[Skin]

Pssstt... 1985 HK is still under British Rules, not Gyna.... There is no restriction on outside company manufacturing in HK
.... The Chinese Guy CO-Founder not because he is a British Citizen.., but probably have a lot of PHD Degrees in Science stuff ....... while the other guy is a Business man. Not sure where you learn that fact about outside company can not wholly own manufacturing in HK... In TTI's case. I think you are confused China with Malaysia, you have to 50/50 with a Malaysian citizen in order to operate a business there. No HK.




http://commons.ln.edu.hk/cgi/viewcontent.cgi?article=1013&context=honorary_doctorates

Pssst…. Techtronic doesn't manufacture in Hong Kong. They manufacture in the Guang Dong Province of China outside of Hong Kong. Hong Kong is not under the same rule however its besides the point so I don't know why you're acting like I said they manufacture in Hong Kong when I never did. All I said was that Techtronic was founded and is based in HK, China, which is true. To manufacture in China you must enter into a partnership with a Chinese company which means government oversite so no, im not confusing anything. Techtronic is a Chinese born and based company so it matters not here.

Professor Roy there was born in Macau (China) and later moved to HK when he was young before attending school in the UK. If hes a British citizen hes has dual citizenship but he's a native of China first ergo the company was founded by both German and a Chinese natives. Again, not wrong. Is it really that important to nitpick me to death?

 

[dogdog]

Pssst…. Techtronic doesn't manufacture in Hong Kong. They manufacture in the Guang Dong Province of China outside of Hong Kong. Hong Kong is not under the same rule however its besides the point so I don't know why you're acting like I said they manufacture in Hong Kong when I never did. To manufacture in China you must enter into a partnership with a Chinese company which means government oversite so no, im not confusing anything.

There is a differences in manufacturing facility partnership and a business Owner TTI when you speak of that German guy and that Chinese guy.... formed the company back in 1985 was not because that German guy required a 50/50 partnership with a British HK guy to manufacturing in China. just a little facts. Their Manufacturing in China might be partner with another company to make it happen and that gets gov over sight, sure. just don't want you to get confused with some fake news.


PSST..... lets say it requires a 50/50... hypothetically... "Prof Roy Chi Ping Chung" is a British HK Citizen, Not consider a Chinese guy to China especially back in 1985.... just the more you know... the more you don't know. So what 50/50?



China
Techtronic Industries
(Dongguan) Co. Ltd.

No.1, Chuang Ke Road
Hou Jie Town Industrial Park
Hou Jie Town, Dongguan City
Guang Dong Province 523945
T (86-769) 8272 8888

 

[Skin]

There seems to be confusion. I never indicated that a German had to partner with anyone. What I was pointing out is that Techtronic is a Chinese based company, not a German one. If you read the post I quoted its like people think a bunch of Germans are sitting in a boardroom in Berlin controlling Techtronic from afar which isn't the case at all.

 

[dogdog]

Pssst…. Techtronic doesn't manufacture in Hong Kong. They manufacture in the Guang Dong Province of China outside of Hong Kong. Hong Kong is not under the same rule however its besides the point so I don't know why you're acting like I said they manufacture in Hong Kong when I never did. All I said was that Techtronic was founded and is based in HK, China, which is true. To manufacture in China you must enter into a partnership with a Chinese company which means government oversite so no, im not confusing anything. Techtronic is a Chinese born and based company so it matters not here.

Professor Roy there was born in Macau (China) and later moved to HK when he was young before attending school in the UK. If hes a British citizen hes has dual citizenship but he's a native of China first ergo the company was founded by both German and a Chinese natives. Again, not wrong. Is it really that important to nitpick me to death?

Macau back in 1985 was under the control of Portugal... what Macau China are you speaking of...? There was no Macau China until 1999....

https://en.wikipedia.org/wiki/History_of_Macau

Psst... I am not nitpicking you to death. Just pointing out that is not true that it requires a 50/50 partnership to form a company in HK back in 1985... as in the case with TTI... and TTI is not 50/50 partnership (even though it is co-founded) last news tidbits I read. Pudwill family have the controlling stake of > 50% while that roy guy had only 30% and the rest is split between different conglomerate partners or something. There was an article last year or two ago.. Also HK was the manufacturing HUB back in 1980s, there was no China to compete.... it is partly because they were a port City.

Problem with facts is fakes.

 

[Tonyuk]

German tool manufacturers will be fine for years imo.

They might not be that common in the US but the tools they make are all over Europe. Stahwille, gedore, hazet etc.. probably sell better than snap on here due to the lower prices and easy avalibillity. I see more of it anyway.

 

[yeldogt]

Generalization is just a beast of stupidity....

It is the beginning of the cost chase ... once decided to move to offshore production. It's indicative of a mindset that a very hard to reverse.

it's not always survival . it's ofttimes margin growth.

 

[zendriver]

Yes indeed. Americans really don't give a **** about anything but filling their lives with lots of cheap stuff. The cheaper, the better. It's so nice to know that there are folks who really do weigh and consider the consequences of that behavior.

Is this something new?

Historically, Americans have purchased way more craftsman tools than they ever did Snap On.

Maybe there's a reason for it, that consumers look for value and don't necessarily have money to burn.




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[zendriver]

German's aren't stupid as we Americans so often are. They comprehend the vital importance of maintaining a manufacturing base in their country and that manufacturing is the key to good paying middle class jobs. They are not about to go down the rabbit hole we Americans so willingly entered. Also, the German government has far more power over their industries than our government does over ours. German companies just can't unilaterally screw their workers and ship the tools of production and jobs overseas as is so routinely done in America. In my career in the semiconductor industry I worked for Motorola (typical treat the employees like **** American company) and STMicroelectronics (Our people are our greatest asset European company). I far better liked ST than Moto which frankly I hated. Intel, by the way is the worst of the worse. There you're not even a number but considered more like a unit.

Interesting concepts, that American corporations, that have to compete globally, substantially increases their profits by outsourcing labors intensive manufacturing, are "stupid".

Personally, I'd really love having the government tell me how to run my business.




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[finn]

Many German companies have strong labor unions which have seats on the board of directors of the parent companies.

The labor unions have a vested interest in maintaining domestic production.

The union bathers here conveniently overlook this fact.

 

[zendriver]

Many German companies have strong labor unions which have seats on the board of directors of the parent companies.

The labor unions have a vested interest in maintaining domestic production.

The union bathers here conveniently overlook this fact.

America once had good unions, but for some reason including the desire to be competitive globally, we couldn't wait to bust them up.

Well, now they're busted up, so it looks like we are reaping what we have sown.


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[yeldogt]

The corporate culture of what's good for the USA has changed --- my family owns/controls a business that started in the 1890's ... so a long time. It uses a global supply chain -- driven many times by crazy trade policy. We employ fewer people today vs any time in it's history.

No open/ free country is going to be able to capture all levels of production -- but, when you must chase the cheapest for the highest profit we get what we have today. It's difficult to innovate w/o the production. German companies do what American companies always did years ago (contrary to what many think) -- they placed the country and workers higher up in the decision making ...... so did consumers.

 

[yeldogt]

America once had good unions, but for some reason including the desire to be competitive globally, we couldn't wait to bust them up.

Well, now they're busted up, so it looks like we are reaping what we have sown.


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Who is we ? IMO -- most of them shot themselves.

 

[AceofSpad3s]

Ironically a number of electronics are still junk. Smartphones are usually traded in within 2-3 years so they're never put under a longevity test or the screen/battery craps out.

Probably because technology companies make sure to never optimize anything and continue bloating up software so your phone 3 years ago that was perfectly fine to use is now painfully slow to use, forcing you to get a new one.

 

[zendriver]

Who is we ? IMO -- most of them shot themselves.

Very good point.

Many of the organized workers, bought into the corporate lobby and anti labor propaganda, to convince them if they supported "right to work" that they "could have their cake and eat it too!".

They are eating cake, for sure.






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[Musicinabottle]

Is this something new?

Historically, Americans have purchased way more craftsman tools than they ever did Snap On.

Maybe there's a reason for it, that consumers look for value and don't necessarily have money to burn.

Well, if you want to get technical, the whole planet is like that to a certain extent. It's just that Americans really are more about quantity than quality in many regards.