Made In America - Sold Out

[Brian Elfert]

If Delta decided to open a factory in the USA selling the same type of tools at the same quality level and price as Festool would they sell? I doubt it at this point as Festool has the brand name and reputation in that market. I still the folks who only buy Made in the USA might buy the Delta brand tools. I personally have a lot less problem buying German tools than I do buying Chinese tools.

Is there a market for a $1500 drill press? I bought a General drill press made in Canada about 7 or 8 years ago and I thought that was expensive at around $800. It would have to be a pretty fancy drill press to pry $1500 out of my wallet.

[David Weaver]

There's probably a small market for it. The trouble is, if the margin is the same as a $600 chinese drill press that you can sell 20 of, which one supports the current environment (where you buy magazine ad space and travel to trade shows) better?

I'd imagine if you built a $1500 drill press in the US and your volume was a tiny fraction of the importers, the only way you'd get into magazine reviews would be purchasing a lot of ad space.

If delta only ever made stuff the quality of festool and already had that reputation, they could probably sell at the same price. If the quality was the same, that is, and all other aspects were.

Most people who have picked up the hobby in the last 10 years have just about zero regard for their brand, though, me included. I've not used a single decent delta tool, though I have two ( a midi lathe and a fixed bed jointer).

There is an enormous gap in the story about getting delta parts, how many times the brand has changed hands, etc vs. festool, though.

If a brand like sioux tools decided to market woodworking tools, there might be more luck. You'd have trouble looking back and finding too much junk, but it's been an industrial brand.

[Brian Elfert]

Since Delta shipped all production overseas I would be unlikely to consider a Unisaw, or anything else they make. Delta still seems to charge a premium price for a product now made overseas like everyone else. A big reason I got a Unisaw was because they were made in the USA at the time. I think Jet at the time was every bit as good except maybe the fence for less money.

I got rid of my Unisaw when I converted my basement shop to a finished basement.

[Jim Matthews]

I'm no expert, but I did live in China for three years plus (1989-1992) and the growing concern then was for food sufficiency.

There's precious little arable land in China, and ever fewer willing to farm it.
There's significant pressure on the market to produce more food that is safe.

Enter Smithfield - a brand known for it's quality and (thanks to the USDA) safety.
The purchase of Smithfield is clearly an attempt to do three things:

Spend some of the dollars earned selling other things in the US.
Increase the supply of pork to a market that can't get enough at home.
Calm concerns about tainted products from recent events.

"Although this deal is clearly part of a broader strategy by corporate China to, er, beef up its global presence, the primary reason for acquiring Smithfield is domestic.
The Chinese love pork and as their incomes soar they want it more than ever.
A domestic herd of 476m pigs, around half of the global pig population, already seems insufficient;
China has been a net importer of pork since 2008."

- The Economist, 1st June, 2013

It's important to note that the Smithfield group was purchased for not just the $4.7 Billion US price, but also an additional $2.4 Billion in debt.

"... once they own the company they could decide to export 100% or double prices."
How is that any different than the current management? It's not as if Smithfield is the only producer of pork products.
Domestic consumption of pork has been flat for decades, even with a growing population.

I would submit that this is a rare deal; where we get repatriated dollars, shareholders can sell a debt-laden company at a premium price, and for once Americans sell something to the Chinese.

Before we cry foul (or in this case, pork) we should ask the principles involved - the farmers supplying Smithfield.
http://modernfarmer.com/2013/06/what...ithfield-deal/

[Mike Cutler]

(1) So why not just buy the PORK from Smithfield, why buy the entire COMPANY?

(2) What are the implications for what we (in the US) pay for pork, and other animal proteins?

Phil

I don't claim to understand it fully,but the general gist was that they were buying control of the production, and not competing for an import contract. If they were to import in the amounts they stated,they would end up driving the prices up on themselves over time.
Apparently they expect their domestic pork consumption to increase by billions of pounds in the next decade.They are the largest individual consumers of pork in the world.
Never having raised a pig, I can only assume that it was more financially advantageous to purchase an already established production stream,than start one from scratch in China?

[Phil Thien]

Phil

I don't claim to understand it fully,but the general gist was that they were buying control of the production, and not competing for an import contract. If they were to import in the amounts they stated,they would end up driving the prices up on themselves over time.
Apparently they expect their domestic pork consumption to increase by billions of pounds in the next decade.They are the largest individual consumers of pork in the world.
Never having raised a pig, I can only assume that it was more financially advantageous to purchase an already established production stream,than start one from scratch in China?

Exactly.

I think Ross Perot would say the new giant sucking sound we will hear will be all our pork going to China.

Next we can all expect to pay more for pork, and other animal proteins.

[Keith Outten]

Thirty years ago we bought Craftsman tools and machines because they were all we could afford. I remember wanting a 15" planer but the cost of a Delta or a Williams and Hussy put both of these companies in the commercial tool category. I never met one amateur woodworker that owned a 15" planner or a cabinet saw for that matter.

Then Grizzly started mailing their catalogs and all of a sudden a whole new world of machines became affordable. I ordered a 15" planner just days after I got my first Grizzly catalog and I still have the planner today. Its old and has literally hundreds and hundreds of running hours on it but it still does the job. One week after I received my new planer I ordered a Grizzly dust collector, it took me that long to admit that it would be impossible to use the planer without a dust collector. That dust collector is still in my shop and it must have thousands of hours on it now, some days it runs continuously when I am running my CNC Router or my laser engraver.

My point is I would never have purchased a Delta, PowerMatic or any of the American machines because of the price tag, those companies never lost a sale from me. Secondly they were not selling any machines to amateur woodworkers in those days, it was the gradual reduction in the industry over the years and very bad business decisions that caused them to lose their commercial customers.

Case in point.....look what Black and Decker has done to the companies they purchased. They have ruined what used to be some of the finest tools in this country.

Now lets get back to the topic of "FOOD", tools are not as important as this topic. When Greed starts to threaten our food and water supply we have serious problems. Electricity drives our business and what little manufacturing we have left so it is an industry that we need to protect by placing the Electrical Generating Companies back in the public utility category where they can be controlled by the State Corporation Commissions once again IMO.
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[John Coloccia]

It's one thing to export a product. It's quite another to export the means of production. I'm as conservative as it comes, and I believe in free markets and capitalism, however that is WITHIN my own country. I don't want foreign interests in charge of our means of production of anything...and especially not my food supply. Frankly, I don't care what China's problems are. Companies, the US, and US citizens particularly should have a bit more sense when it comes to turning over our soil to foreign interests, and especially to countries which are hostile to us, launch cyber attacks on us, and otherwise undermine out interests domestically and internationally, including playing games with their currency. Our policy towards China in particular is rather suicidal and is doing nothing but setting us up for an inevitable war...either economically or otherwise.

You don't give away the farm hoping that you'll have a teat to suck off of when you want it. It's stupid and it does nothing but set up an inevitable conflict when the foreign interest conflicts with your own. We can't possibly be this stupid. If they need pork, we can export all the pork they want. There's no reason to own it. They know what they're doing...we don't or we don't care.

Just my humble opinion.

[Keith Outten]

Asking farmers if they are in favor of a deal that would open up a market that represents one third of the world population is like asking a wolf if he wants to guard the sheep herd.

Several years ago China started buying concrete in mass. Not only did the price of concrete go through the roof it got to the point that it was a crap shoot as to whether we would get enough concrete for our projects. Even the largest General Contractors had problems ordering concrete and none were able to guarantee in writing that they could meet a schedule. The contract price of a building often had clauses with flexible pricing where concrete was concerned.

Today concrete is reasonably available but the price never came down.

The problem we must address is that Americans are spoiled rotten where food is concerned. Our supermarkets would be considered luxurious by most of the humans on this planet and we take them for granted. Our Farmers have always done a fabulous job of keeping the stores full of food at very reasonable prices and the shelves have been full since World War II. If you know anyone who was alive during WW2 ask them about the food supply and what it was like to be hungry.

I don't think it is wise to gamble with our food or water supply or let greed become part of the equation.
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[Greg Peterson]

Putting constraints on the free market is a slippery slope. Being that it is self-regulating, meddling in the affairs of the market is counter productive.

[David Weaver]

Asking farmers if they are in favor of a deal that would open up a market that represents one third of the world population is like asking a wolf if he wants to guard the sheep herd.
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Things like that got us the sugar lobby and 15% ethanol mandates, which aren't really good for consumers (and in the latter, which aren't good for consumers' cars). I agree with that. I come from a long line of farmers, and my parents are still landowners (as in, someone else farms our land). What's good for landowners and farmers isn't always good for consumers.

Separate and aside and as part of the spoiled theme, I wonder if anyone older than me (i'm shy of 40 a few years) has noticed just how much more meat we eat than we did 30 years ago. My family wasn't poor, my parents were the first college educated generation to leave the farm and we were comfortable growing up, but we didn't eat meat the way we do now, and back then there were still a lot of diversified farms out my way. There are still some, but most people have either gone all animal or all row crop, and the quality of food has suffered even though some of it does taste better when it's worse for you (corn finished beef sure does taste better than grass fed beef, which tastes like beef tasted when I was little and we picked the cow we wanted to get half of).

Anyway, until the ethanol issues and economic collapse (which made commodity speculation and holding more attractive), meat was cheaper as a percentage of income that I can ever remember. Corn was also about $1.75 a bushel, and a lot of farmers were barely getting by. I don't know what the people raising hogs or chickens think about the grain prices, it probably doesn't help them out, but meat still isn't too much more than it was back then and we've passed nearly a decade of inflation between. Long story short, I remember having meat at every meal except sometimes breakfast, BUT it was never in the gargantuan quantities like we eat meat now. It's not unusual to go to a restaurant and notice that the entree might have a pound of meat on it. I just don't remember that being the norm 30 years ago when I was little. I don't remember portion sizes being as big as they are now in general, either, but meat is part of the equation that costs a lot compared to just giving people more starches at restaurants.

We have gotten so good at making cheap meat that we are producing it more cheaply than third world countries. If the prices go up too much, I'll just eat less of it.

[Mel Fulks]

David,changes of the kind you mentioned change our perceptions about the products. When I was young chicken was not cheap and was widely considered mainly for "Sunday dinners". A few years back I saw a tv interview where a reporter ask a mom on welfare how they got by on such a small amount of money. Answer: "we eat a lot of chicken".

[David Weaver]

After I asked my question about meat consumption, I went out looking for a chart describing it. I found something from NPR that says beef consumption has actually dropped since 1980, but chicken and turkey have gone way up.

Imagine that a lot of that has to do with the changes in bird genetics and how they are raised and fed now.

The net effect of the chart was that meat consumption has gone up some, but it appears that the real increase happened from somewhere around 1950 to 1980 and my mother was just cheap with our meat portions in the 1970s and '80s! She does and always did like to save money, though.

[Keith Outten]

We have had publicly regulated utilities for probably a hundred years in America. While I am not suggesting that we interfere with general commerce I am in favor of regulating water, electricity and food products.

The deregulation of the power generation industry is a perfect example of a mistake we made. The industry is nothing like it was in the past when it was controlled by the State Governments. Privatizing the Power Companies made them less efficient and certainly less reliable. Building new power generation plants has almost come to a standstill and we aren't able to keep an excess of electricity on the grid like we use to years ago. The cost of building a power plant is easily borne by the public and extremely risky for a private business. Today we patch the T&D system rather then replace and upgrade. There is no debate necessary as to the condition of our national electrical grid.

We have been subsidizing the American Farmer for decades, in some cases we have paid farmers not to plant certain crops so this isn't anything new. It would just be an extended layer of protection that we need to make sure our food supply is not ravaged by foreign companies.
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[Pat Barry]

David, now I'm confused. Here I've been thinking you are much older than you just stated (shy of 40 a few years), mostly because your picture reminds me of the styles in fashion in the 70's. I thought that was your high school senior picture circa 1978 or so, therefore I was thinking you were probably my age. None the less, I do agree that the availability of meat products is so much more now than it was then. Our family, like yours, got by on a reduced meat diet (hamburger helper anyone?). Now it seems an excess driven by portion sizes, fast food restaurant proliferation, more selection diversity at the grocery stores, the relative price of meat dropping (it seems) compared to other foods, etc. I don't want my food coming from China. We have enough recall issues due to E Coli, salmonella, what not right here in the USA. God only knows how bad it would get if our pork came from China.