How good tool companies go under.

[HandyManny]

Well, we've heard it here before how Home Depot dropped brands like USA made Vaughan in favor of the newer Taiwanese made Estwing for striking tools. Similar things happening in other stores with certain quality USA made tools as well.

Here something else I can already see happening. Channellock watchout!! Knipex watchout!! I think you guys are about to get shunned by your bigger vendors.

Irwin's Gooseneck copy of the Channellock GripLok http://www.irwin.com/tools/pliers-adjustable-wrenches/groove-joint-pliers-gooseneck

Irwin's copy of the Knipex Alligator pliers http://www.irwin.com/tools/pliers-adjustable-wrenches/water-pump-pliers

Irwin's copy of Channellocks PVC/Oil filter plier http://www.irwin.com/tools/pliers-adjustable-wrenches/oil-filterpvc-pipe-pliers

I can't say that I dislike Irwin tools because I've used a great many and I actually like them, but these tools sell for less money and Irwin has plenty of foothold in the market an always has. That means it wouldn't be too difficult for them to convince retailers like Lowes or Home Depot to sell their pliers exclusively thereby causing these large outlets to shun Channellock and Knipex. The gooseneck pliers are already available online through Home Depot. Proof that HD is testing to see if they sell better than the Channellock GL12.

That's how good tool makers go under. Some other company copies a good existing tool, has it made offshore to the near equivelent quality level, offers it for less money and makes a deal with the larger vendors to sell their less expensive copy over the domestic made brand. If Lowes and HD dropped Channellock, it would hurt Channellock pretty bad financially. If Lowes and Sears dropped Knipex, it would pull the rug out from under Knipex since they are now working hard to become better known to the US consumer. Just some food for though, feel free to disagree.

 

[kc-steve]

I don't disagree. There will ALWAYS be a segment of the market that prefers quality USA made tools though. The size of that market is always changing and might even be coming back.

Just to expand on your thoughts, I think the reason, in general, most companies go out of business is due to a failure to adjust to newer market conditions.

Steve

 

[HandyManny]

Just to expand on your thoughts, I think the reason, in general, most companies go out of business is due to a failure to adjust to newer market conditions.

Steve

Lets hope that Channellock can, while still remaining mostly domestic.

I've seen where Knipex to get a better foot in the market introduced their pliers at an okay price at first, but now that price has increased pretty sharp recently. I think that will hurt them in the consumer market, heck even among some tradesman.

I want to emphisis that I have no problem with Irwin's tools or their hand tool quality. My beef is that they are mainly Chinese made and I'd rather support our own economy rather than China's.

 

[kc-steve]

Although it's not tool related, another example is where Boeing attempted to open (not necessarily move) it's operations to a "right to work" state and the NLRB put a stop to it citing potential lost jobs in Washington State. They finally back-tracked when it was proven there was no attempt to replace union labor with non-union labor. But Boeing was just attempting to compete in the global markets, adjusting for newer conditions.

Steve

 

[HandyManny]

You are correct Steve. It is failure to adjust to new market conditions that is the main reason good companies go under, but sometimes that adaption comes at loss of domestic jobs and loss of domestic production. Seem like the companies that offer both domestic and imported products always have their newer innovative product lines imported while keeping their traditional (same old song and dance) products as domestically produced products. Coleman Company is a good example. Makes me wonder why the newer innovative stuff can't be produced here cost affectively?

 

[byoungblood]

I want to emphisis that I have no problem with Irwin's tools or their hand tool quality. My beef is that they are mainly Chinese made and I'd rather support our own economy rather than China's.

And the bad part about Irwin is, that up until maybe 4-5 years ago, they were US made too.

 

[Danglerb]

Too many portions of the tool making cycle are kind of dirty, especially plating, with many shops only still running due to "grandfather" type arrangements. Try to open a new operation and it doesn't happen, or takes years.

If you have a great tool idea you have to consider who is going to buy it, who is going to sell it, then who do you have make it to make the first two work.

I have Knipex and the Irwin version, Knipex is better quality, Irwin is a better easier to use design because it will ratchet closed to the semi tight size. Could be what we are seeing are cross licensing agreements too.

 

[Roots]

Isn't Irwin the company that is running a patriotic themed American pride commercial... right after moving their American manufacturing to China?

I still can't get over that, and it's completely turned me off of the brand forever.

 

[kc-steve]

I'm a firm believer in free markets and that also means free to make mistakes.

In the case of Irwin, maybe the correct market adjustment would have been to have both a Chinese and USA models of their tools. That way they are more fluid to adjust to any new market condition that comes along.

Steve

 

[nw2571]

Makes me wonder why the newer innovative stuff can't be produced here cost affectively?

If I had to guess it's the difference between new tooling/equipment vs existing tooling/equipment. It's much easier to justify starting a new line of product overseas with brand new tooling and manufacturing equipment than it is to move existing equipment overseas. Even when existing tooling gets replaced due to wear, there's still a significant amount of work involved in retooling at a different location.

Another issue is environmental laws and particularly chrome plating. There's a decent overview (though somewhat dated) here:
http://www.newmoa.org/prevention/p2tech/TriChromeFinal.pdf
Even with trivalent chromium technology there are regulations which put domestic manufacturing at a disadvantage.

What about tax burdens and other regulations? US corporate tax rates are among the highest (if not THE highest) in the world.

It's popular around here to blame the greed of the manufacturer for outsourcing manufacturing, but certainly American workers have become more greedy (just compare wages of UAW and non-union autoworkers) and the regulatory environment in the US is responsible for some of this as well. Most people on here look at the issue as black or white, when it's really multiple parties responsible for the loss of US manufacturing.

 

[Jim85IROC]

You are correct Steve. It is failure to adjust to new market conditions that is the main reason good companies go under, but sometimes that adaption comes at loss of domestic jobs and loss of domestic production. Seem like the companies that offer both domestic and imported products always have their newer innovative product lines imported while keeping their traditional (same old song and dance) products as domestically produced products. Coleman Company is a good example. Makes me wonder why the newer innovative stuff can't be produced here cost affectively?

If I had to guess, I'd say it's likely because a new product is unproven. They don't know if they'll sell 10 or 10 million, and it's way cheaper to tool up a Chinese factory than an American one.

Then again, it may not even be an issue of being unproven. American made tools are the same old tools because the tooling and production is already here, so maintaining it is cheap. Any new production item requires new tooling and new space, so it immediately becomes cheaper to start it up overseas.

 

[kippieland]

:

If I had to guess it's the difference between new tooling/equipment vs existing tooling/equipment. It's much easier to justify starting a new line of product overseas with brand new tooling and manufacturing equipment than it is to move existing equipment overseas. Even when existing tooling gets replaced due to wear, there's still a significant amount of work involved in retooling at a different location.

Another issue is environmental laws and particularly chrome plating. There's a decent overview (though somewhat dated) here:
http://www.newmoa.org/prevention/p2tech/TriChromeFinal.pdf
Even with trivalent chromium technology there are regulations which put domestic manufacturing at a disadvantage.

What about tax burdens and other regulations? US corporate tax rates are among the highest (if not THE highest) in the world.


It's popular around here to blame the greed of the manufacturer for outsourcing manufacturing, but certainly American workers have become more greedy (just compare wages of UAW and non-union autoworkers) and the regulatory environment in the US is responsible for some of this as well. Most people on here look at the issue as black or white, when it's really multiple parties responsible for the loss of US manufacturing.

 

[larry_g]

If I had to guess it's the difference between new tooling/equipment vs existing tooling/equipment. It's much easier to justify starting a new line of product overseas with brand new tooling and manufacturing equipment than it is to move existing equipment overseas. Even when existing tooling gets replaced due to wear, there's still a significant amount of work involved in retooling at a different location.

Another issue is environmental laws and particularly chrome plating. There's a decent overview (though somewhat dated) here:
http://www.newmoa.org/prevention/p2tech/TriChromeFinal.pdf
Even with trivalent chromium technology there are regulations which put domestic manufacturing at a disadvantage.

What about tax burdens and other regulations? US corporate tax rates are among the highest (if not THE highest) in the world.

It's popular around here to blame the greed of the manufacturer for outsourcing manufacturing, but certainly American workers have become more greedy (just compare wages of UAW and non-union autoworkers) and the regulatory environment in the US is responsible for some of this as well. Most people on here look at the issue as black or white, when it's really multiple parties responsible for the loss of US manufacturing.

Very well said. 10 years ago I was working manufacturing. We were moving production off shore because of an ~$.90 per item tax on our product that we did not suffer on overseas production. Without that tax we produced a cheaper product here. When a production line is producing a million plus items per month that $.90 adds up real quick. The overseas production lines were built in America or Europe. The cost to move production to Asia was recovered in weeks so having a machine set here and not moving it to Asia is not a good argument.

lg
no neat sig line

 

[kc-steve]

Very well said. 10 years ago I was working manufacturing. We were moving production off shore because of an ~$.90 per item tax on our product that we did not suffer on overseas production. Without that tax we produced a cheaper product here. When a production line is producing a million plus items per month that $.90 adds up real quick. The overseas production lines were built in America or Europe. The cost to move production to Asia was recovered in weeks so having a machine set here and not moving it to Asia is not a good argument.

lg
no neat sig line

Yes, company managers need to weigh the opportunity costs before making decisions such as the one you mentioned. Your company has evidently decided that passing the tax charge on to consumers is not possible. That is why increasing taxes on companies is futile. It either sends the company elsewhere or they pass them on to the consumer. In a technical sense, companies don't pay taxes.

Steve

 

[pipsters]

What about tax burdens and other regulations? US corporate tax rates are among the highest (if not THE highest) in the world.

You are saying two different things. Tax burden is total tax collected, tax rate is just the rate.

Don't let the politicians fool you - the US is 4th from the bottom in tax burden. GE didn't even pay tax in 2010 despite raking in $14 billion in revenue. We have a very low tax burden because of all the loopholes in our tax language.

In fact, as far as burden goes, China actually is much higher than the US.

 

[kc-steve]

. . . and GE's CEO, Jeffery Immelt, also serves as the president's Chairperson of the Council on Jobs and Competitiveness.

Steve

 

[GrantCee]

GE didn't even pay tax in 2010 despite raking in $14 billion in revenue.

Uh, no. At least, not in the populist, class-envy way you're implying.

GE paid no *federal corporate income* taxes for 2010 (at least, not yet) largely because of operating losses in their financing arm. That's true.

The implication that they paid zero taxes at all is false. They most certainly DID pay tons of other taxes at the federal, state, and local level that aren't mitigated by any tax loopholes. That doesn't count administrative fees and other "not a tax" schemes that require payments to the various government entities involved.

In my experience with mid-sized companies, those add up to several times what the corporate income tax does.

(Before you lump me in with the corporate apologists, understand that I'm not a fan of multinational corporations nor their stranglehold on this nation. Read Douglas Rushkoff's "Life, Inc." to get an idea of my general point of view. However, I'm also not a fan of deliberate misinformation. The situation is bad enough without trying to generate spin that ultimately undermines your message.)

 

[Monte]

What about tax burdens and other regulations? US corporate tax rates are among the highest (if not THE highest) in the world.

The paradox of the United States tax code — high rates with a bounty of subsidies, shelters and special breaks — has made American multinationals “world leaders in tax avoidance,”

http://www.nytimes.com/2011/05/03/business/economy/03rates.html

It's popular around here to blame the greed of the manufacturer for outsourcing manufacturing, but certainly American workers have become more greedy (just compare wages of UAW and non-union autoworkers) and the regulatory environment in the US is responsible for some of this as well. Most people on here look at the issue as black or white, when it's really multiple parties responsible for the loss of US manufacturing.

So you say the wages should be on the chinese level ?

Or maybe it´s the comsumer who is greedy and guilty of excessive shopping, who wants 5 ratchets instead of one american made or 2 TV´s instead of one and ....everything....

 

[87handmedown]

If I had to guess it's the difference between new tooling/equipment vs existing tooling/equipment. It's much easier to justify starting a new line of product overseas with brand new tooling and manufacturing equipment than it is to move existing equipment overseas. Even when existing tooling gets replaced due to wear, there's still a significant amount of work involved in retooling at a different location.

Another issue is environmental laws and particularly chrome plating. There's a decent overview (though somewhat dated) here:
http://www.newmoa.org/prevention/p2tech/TriChromeFinal.pdf
Even with trivalent chromium technology there are regulations which put domestic manufacturing at a disadvantage.

What about tax burdens and other regulations? US corporate tax rates are among the highest (if not THE highest) in the world.

It's popular around here to blame the greed of the manufacturer for outsourcing manufacturing, but certainly American workers have become more greedy (just compare wages of UAW and non-union autoworkers) and the regulatory environment in the US is responsible for some of this as well. Most people on here look at the issue as black or white, when it's really multiple parties responsible for the loss of US manufacturing.

You take your cognitive reasoning and logical thought processes and get the hell out! Around these parts we say "Down with HF! Death to all those that support them. Snap-On is the only way to go. Down with anything made overseas or by and overseas company. The corporate man is selling out the blue collar worker. 'Merica, **** yeah!"

 

[HandyManny]

You take your cognitive reasoning and logical thought processes and get the hell out! Around these parts we say "Down with HF! Death to all those that support them. Snap-On is the only way to go. Down with anything made overseas or by and overseas company. The corporate man is selling out the blue collar worker. 'Merica, **** yeah!"

You do realize that many tools offered by Snap-On or made for Snap-On are imported, right? You do realize that?

 

[AndysMBgarage]

I think the reason, in general, most companies go out of business is due to a failure to adjust to newer market conditions.

Steve

Anyone say Kodak?????

 

[kippieland]

You are saying two different things. Tax burden is total tax collected, tax rate is just the rate.

Don't let the politicians fool you - the US is 4th from the bottom in tax burden. GE didn't even pay tax in 2010 despite raking in $14 billion in revenue. We have a very low tax burden because of all the loopholes in our tax language.

In fact, as far as burden goes, China actually is much higher than the US.

 

[87handmedown]

You do realize that many tools offered by Snap-On or made for Snap-On are imported, right? You do realize that?

sat·ire noun \ˈsa-ˌtī(-ə)r\ 1: a literary work holding up human vices and follies to ridicule or scorn 2: trenchant wit, irony, or sarcasm used to expose and discredit vice or folly

 

[kc-steve]

Anyone say Kodak?????

He-he, Kodak just announced their bankruptcy today! And oddly enough, the CEO of Kodak Antonio Perez, is also a member of President Obama’s Jobs and Competitiveness Council.

http://www.kodak.com/ek/US/en/About_Kodak_Top/News_Media/Executive_Biographies/Antonio_M_Perez.htm

Steve

 

[nw2571]

You are saying two different things. Tax burden is total tax collected, tax rate is just the rate.

Don't let the politicians fool you - the US is 4th from the bottom in tax burden. GE didn't even pay tax in 2010 despite raking in $14 billion in revenue. We have a very low tax burden because of all the loopholes in our tax language.

In fact, as far as burden goes, China actually is much higher than the US.

I'm not sure how you compare taxes between a Communist country and one that is supposedly Capatalist.

Anyway, it's not fair to base your argument entirely on GE's situation. When you claim net losses as a company, it's hard to expect the government to get a cut of that. But I will agree, they shouldn't be paying "negative" taxes.

So take a look at the following link:
http://money.cnn.com/galleries/2010/news/1004/gallery.top_5_tax_bills/index.html

Walmart paid an effective tax rate of 32.4%
ExxonMobil - 47%
Chevron - 43%

I don't think there is any single entity to blame for the decline of the US manufacturing base, that's my only point. The issue isn't black and white....

I guess we'll leave it at that. This is a tool forum after all.

 

[HandyManny]

sat·ire noun \ˈsa-ˌtī(-ə)r\ 1: a literary work holding up human vices and follies to ridicule or scorn 2: trenchant wit, irony, or sarcasm used to expose and discredit vice or folly

I'm just saying.

If I recall there was a discussion here about Snap-On's tap&die sets being made by Hansen (who is now under the IRWIN name).

 

[cundifc]

Where is Irwin being made? Sorry it this has already been asked I did a quick glance and did not see it.

 

[kc-steve]

Where is Irwin being made? Sorry it this has already been asked I did a quick glance and did not see it.

I think MOST if not all of Irwin's stuff is outsourced to Taiwan or China these days.

Steve

 

[jeffmoss26]

It's just sad.

 

[trboxman]

I think MOST if not all of Irwin's stuff is outsourced to Taiwan or China these days.

Steve

Their tap and die sets are still made in the US.

 

[tbobbo]

I get so sick of companies posting "losses" It's smoke and mirrors........bs bs bs. Just like farmers, when they come to buy tires from me, they say they aint made money in 30 years so I gotta give em a deal. Yet i load the tires in their new 60,000 truck. They all have nicer houses and vehicles than me and i make money. Same with ge.........they make money, they just use loopholes not to show it. The farmers that dont make it are the ones that dont cheat.........i grew up in a farming community and I come from a farming family so I dont have it out for farmers.

 

[geologist]

I get so sick of companies posting "losses" It's smoke and mirrors........bs bs bs. Just like farmers, when they come to buy tires from me, they say they aint made money in 30 years so I gotta give em a deal. Yet i load the tires in their new 60,000 truck. They all have nicer houses and vehicles than me and i make money. Same with ge.........they make money, they just use loopholes not to show it. The farmers that dont make it are the ones that dont cheat.........i grew up in a farming community and I come from a farming family so I dont have it out for farmers.

Don't get me started on farmers... and that's coming from a guy with a farming background. My accountant is both Jewish and from a farming background. Ari is a master of finance.

 

[HandyManny]

Where is Irwin being made? Sorry it this has already been asked I did a quick glance and did not see it.

Most are China and Taiwan. Irwin used to be mostly USA until about 5 to 7 years ago.

 

[HandyManny]

I get so sick of companies posting "losses" It's smoke and mirrors........bs bs bs. Just like farmers, when they come to buy tires from me, they say they aint made money in 30 years so I gotta give em a deal. Yet i load the tires in their new 60,000 truck. They all have nicer houses and vehicles than me and i make money. Same with ge.........they make money, they just use loopholes not to show it. The farmers that dont make it are the ones that dont cheat.........i grew up in a farming community and I come from a farming family so I dont have it out for farmers.

There's enough of that to go around for most Americans these day, not just farmers. People today have no clue what poverty really is. The average American today who is crying poverty still has a roof over their head, a cell phone, gets 3 meals a day, owns a large screen TV, take at least two vacations a year, and has at least one working vehicle. Sounds to me like they live pretty darn well.

 

[plumber84]

As far as imported tools go the quality espescialy Taiwans is getting steadily better, i own and use imported tools every day but if there was an American or European equivalent of equal or better quality i would buy that even it cost more. As far Irwin tools they are just the type of company i hate because buy out good domestic manufacturers such as vise grip and record then close the factory, move production to China then offer an inferior product all in the name of shareholders profits. for this reason i will never buy an irwin tool as long as i live as far as i am concerned they can choke on their profits.

 

[pipsters]

Uh, no. At least, not in the populist, class-envy way you're implying.

GE paid no *federal corporate income* taxes for 2010 (at least, not yet) largely because of operating losses in their financing arm. That's true.

The implication that they paid zero taxes at all is false. They most certainly DID pay tons of other taxes at the federal, state, and local level that aren't mitigated by any tax loopholes. That doesn't count administrative fees and other "not a tax" schemes that require payments to the various government entities involved.

In my experience with mid-sized companies, those add up to several times what the corporate income tax does.

(Before you lump me in with the corporate apologists, understand that I'm not a fan of multinational corporations nor their stranglehold on this nation. Read Douglas Rushkoff's "Life, Inc." to get an idea of my general point of view. However, I'm also not a fan of deliberate misinformation. The situation is bad enough without trying to generate spin that ultimately undermines your message.)

Go re-read what was actually talked about, the corporate tax rate was referred to. Which is why I wrote what I did.

China's local and personal tax rates are fairly high, on the same order as the US. However they have large loopholes, for example zero tariffs on imports used for manufactured materials that will be exported. China also gives large tax breaks to manufacturers that export.

http://en.wikipedia.org/wiki/Taxation_in_the_People's_Republic_of_China

 

[HandyManny]

As far as imported tools go the quality espescialy Taiwans is getting steadily better, i own and use imported tools every day but if there was an American or European equivalent of equal or better quality i would buy that even it cost more. As far Irwin tools they are just the type of company i hate because buy out good domestic manufacturers such as vise grip and record then close the factory, move production to China then offer an inferior product all in the name of shareholders profits. for this reason i will never buy an irwin tool as long as i live as far as i am concerned they can choke on their profits.

I've actually noticed that the quality of Taiwan made tools has been pretty high for the last 20 years or so. In fact in my ovservation many (not all, but many) Taiwanese made hand tools now exceed the quality levels that many common US manufacturers had prior to the 1970's. Over the last 10 years I've been watching Chinese made quality with imported good exceed what the US manufacturing quality is currently capable of these days.

As I've said before I have no problem or complaint with the quality of current Irwin tools, my only beef is that I'd rather support the few USA makers who are still offering good quality tools in an effort to support that.

 

[87handmedown]

I get so sick of companies posting "losses" It's smoke and mirrors........bs bs bs.

You're right. They close down factories, move machines, personnel, infastructure, ect. halfway around the world, just to piss you off.

 

[Boiler]

The point of this thread is spot on, and is also a small look into whats wrong with our economy. Even though many people wish they could have USA made products or would prefer them to Chinese ones, the first big player to switch to China production and sell at a big box store typically tends to be rewarded, while those that try to maintain their made in the USA status get clobbered. Thats why most everything in any of the stores mentioned are made in China.

So really its either a race to see who can do it the cheapest, or be happy to reduce your target market and sell high quality niche, USA made products. This is more my general opinion about all products, more than just tools. We've actually had more hold-outs in going foreign on tools than most other product types have.

As for Channellock, I personally think they are getting a little cheap anyway, made in the USA or not. They are very inexpensive I guess, so it makes sense...

 

[woody 73]

Today things are tough for the USA manufactures, I just got off the phone with a tool company (for USA Drill bits), the salesman was having a hard time finding USA made drill bits. Soon everything will come from overseas and we will be saying ; "DARN THE BEST STUFF COMES FROM CHINA AND THE TOOLS FROM INDIA ****'.

I guess it is a Dog -eat- Dog World...