Cloning...

[Ken Fitzgerald]

Jason,

I agree.

These issues we are facing are complex. As much as some people would think there is a simple answer, there isn't.

[hu lowery]

Bill....are you saying the Asian workers would be better off not working, not having the income?



Jason....I buy the best quality I can afford or justify. They also teach supply and demand in Economics 101. When the quality gets too bad the supply goes up because the demand is low. Care to spend an hour listening to my story about an American made Chevy Blazer, the absolute lack of attention to detail in assembly and the absolute lack of care on the part of customer service and management? It is an unwise personal financial decision to buy American just for the sake of buying American. It's been over 40 years since "Made In America" assured one of getting good quality.

You want my dollar? Earn it! Justify my spending my dollar for your product.

I considered investing in stock through a holding company years ago, or a mutual fund. Even if I went with an entirely US package of stocks I would still be investing probably fifteen percent in the far east due to the US companies' holdings and business model. Probably more like 25-33% now.

Things get mighty confusing. When we were annoyed with japan awhile back, a decade or two, about unfair marketing or some such a town canceled their Kubota order and ordered john deere instead. The Kubota equipment they canceled the order for was made in the US, the john deere equipment made in japan.

Do we support the US worker and ship the profits to japan or do we support the japanese worker and send the profits to the US? Even without considering where the investors for each company are located the answer to the problem is complicated. Someone I know well says support the US worker. I agree in the short term but I can't help thinking that this is ultimately a shortsighted viewpoint. When it comes down to this being the two choices I'm not very consistent, I'm genuinely confused what is best in terms of the big picture.

No manufacturer pays taxes. No big importer pays taxes. No business pays taxes. I have owned over a dozen businesses and never paid a dime of taxes on any of them. To survive I had to cover expenses and the cost of living. Those expenses include taxes and operating costs including wages, insurance, and safety related costs.

When you want the corporations including big oil and such to pay more taxes, remember you are adding taxes to yourself, the top end isn't going to pay the increased costs they are going to be passed on to the consumer, you and me!

I have wrestled with what is best for the US when I can't buy US made by a US owned company. The more I consider the problem the more confused I get. I believe in buying in circles. If possible I buy from my community. My fresh produce often comes from there. Next I buy from the nearest town, then from the nearest large city, my state, my country. Amazon nailed me on two orders recently. I didn't do my homework, both companies had US sounding names. Both orders shipped from mainland china! I was annoyed that I had directly supported china and annoyed about the wait for my shipments to come by slow boat and huge container from china. By the time the shipment got to me after being broken down into smaller and smaller units it was almost a month each. Funny thing, about another six weeks after my packages had arrived here I got an e-mail from one of the companies letting me know my package had shipped.

I like buying US made start to finish. I say that typing on a computer knowing that if I pull the cover off I will find components made in china and third world countries. That includes slave and virtual slave labor. Everyone reading this is sitting in front of a computer made with the same components.

When somebody buys my turnings they are buying one hundred percent American made! The tree was grown here and I turned the wood myself! Rah, Rah, support me! Ignore that much of my equipment is foreign made, much of the food I eat comes from foreign countries, much of my supplies from overseas sources, either raw materials or finished product.

I don't like it but we are truly a global society. My 'murican made truck is largely made in America! The major components were made in Canada and Mexico and assembled in the US. Even when we buy something with the "American Made" label we may be being mislead.

I say we should all, around the world, support our local economies and use my ring theory the most we can. It gets very confusing when we try to follow through on that idea though.

Hu

[Dwight Rutherford]

Hu,
Well said!

[Ryan Mooney]

Ryan, the fact they spent the amount of money to improve an group of existing plants in one general area tells me they won't be repeating the process too often. It's expensive to move manufacturing to outsourcing but it is also expensive to move it back.

In general, I wonder how long it will take for companies to move back. I think that is the long term question and answer.

Yeah, its an interesting question, I suspect a lot depends on the specifics of the industry. I've also noticed that a lot of the manufacturing moving back isn't translating into jobs the same way old manufacturing did. There are jobs, sure, but not nearly as many of them per product unit and they're generally higher end jobs. In at least some of these cases companies are finding that its cheaper to have robots than bodies and it makes just as much or more sense to have the robots domestic (once you count in all the other risk factors noted in this thread). So one could argue that in at least some of the cases the manufacturing moving back domestic is at least partially driven by changes in manufacturing practices (and robots are less likely to steal your processes).

I do still suspect in the long term (~20yr timeframe) we'll see some of the cycling back and forth. It would appear that at least some of the foreign manufacturing environments have built somewhat of a glut of capacity so that may drive some interesting short term behavior as well.


Back to the original story, here's a related tale of nefarious doings that is basically the same old story..

There were a line of knitting needles made from DymondWood by http://dyakcraft.com/ (dyakcraft no longer sells them unfortunately as they lost the source of their stock with the rutlands fire).
A major knitting craft supplier (http://www.knitpicks.com/) contracted with them to resell their needles, then promptly stole the design and started having it manufactured in India. They also tried to sue Dyakcraft about the use of the name "Harmony" for the needles (which dyakcraft had been using for several years prior to that) - fortunately KP lost that suit.
The manufacturer that KP was using in India shortly thereafter stole the design themselves and started selling them themselves as http://www.knitterspride.com/.
So KP ditched them and moved manufacturing to China and is selling yet-another knock off of the original DyakCraft as Caspian needles.
I'm not sure if the Chinese mfg has stolen the design yet, but I'd lay good odds on it..

Something about laying down with dogs and coming up with fleas.

Needless (needles .. heh) to say loml won't buy anything from knit picks or knitters pride either. She did get a set from DyakCraft when they were still making them.

[Art Mann]

Manufacturing will never return to the US until our work force is willing to compete with foreign labor on a world market.

[Ron Rutter]

WOW. Some pretty big ego's out there.
Funny I never seen any comment about the huge bucks CEO's make or the fact that Wall Street is a huge money machine that doesn't produce anything of real value, while many, many work for less than $10/hour!

[John Keeton]

As has been noted by Hu and others, it is a complex dilemma. The Toyota Camry is the most popular car in America and it and the engines are manufactured in KY. That said, I am sure there are many foreign made components. On the other hand, there are also many satellite parts companies in KY that have formed to provide many of the components. Buying a Camry supports American workers in a huge way, though the profits go to Japan. This and the reverse of this happens all the time.

According to U S News and World Report, our Honda CR-V is 60% made in America, while a Ford Expedition is only 50%. Our nephew, who has been employed by Honda for years appreciates the support.

With TPP, I suspect much of ones ability to buy "USA" will change - at least as regards those 12 participating countries. The "Rules of Origin" will most likely provide that products meeting the standards will simply say "made in a TPP participating country" or some such phrase.

[Dick Strauss]

I know that Alan Lacer's design ice cream scoop design was "cloned" AKA stolen. I don't remember the details but would suggest you either buy directly from him or contact him for where to buy the original. I think Rockler is his only authorized retailer though I could be wrong. Please check with him.

I've also had a woodworking tool design stolen by a person lacking their own moral compass and creative imagination.

Even though we like to pat ourselves on the back for buying US made, it isn't always so easy. As John K, Hu, and others mention, even when we buy a "US lathe", the lathe might be made with bearings from the US/China/Japan/Bulgaria/Italy/India, a Leeson motor made in US/Mexico/Canada or a Baldor motor made in US/Canada/Mexico/England/China. It is a global economy always accompanied by trade-offs.

[Art Mann]

WOW. Some pretty big ego's out there.
Funny I never seen any comment about the huge bucks CEO's make or the fact that Wall Street is a huge money machine that doesn't produce anything of real value, while many, many work for less than $10/hour!

If you have never seen comments about overpaid corporate officials, then you have been living in a foreign country. The news is all over the place and I don't disagree with it. Unfortunately, paying executives a lower salary would not fix the problem. There aren't enough of them to matter in the grand scheme of things. The other side of that issue is that highly skilled corporate managers are rare and hard to find. The corporate world is chock full of mid level managers who were unable or unwilling to do what it takes to make it to the top. I limited my own career because I valued family, friends, free time and where I live more than money. It is the law of supply and demand at work. If the supply is low for a valuable commodity (like top executive talent) then the price will be bid up. Steve Jobs was one of the highest paid people anywhere and yet hardly anyone who is in the know would say he wasn't worth it. He turned a dying computer company into one of the highest valued companies on earth. On the other hand, labor has become lower valued due to automation and the existence of foreign competition. That either reduces pay scales or causes companies to relocate manufacturing to other countries. I am not saying I like it but it is just the reality of the modern world economy.

[John Sanford]

WOW. Some pretty big ego's out there.
Funny I never seen any comment about the huge bucks CEO's make or the fact that Wall Street is a huge money machine that doesn't produce anything of real value, while many, many work for less than $10/hour!

Wall Street, with all it's shortcomings (and they are legion), absolutely DOES produce something of very, very real value. Wall Street matches resources (i.e. money) with need. Wall Street is essentially "Shark Tank" writ large. I invite you to offer up a solution for getting the money to develop and build the first Boeing 787 that doesn't involve Wall Street.

[Geoff Whaling]

By the way Europe, Australia, Japan, and much of the rest of the world is going through the same questions that we are asking ourselves.

Bill is correct, companies like Woodfast, a long standing Australian manufacturer based in South Australia, faced a dwindling sales order book for many complex reasons. They got into difficulties, they were no longer "competitive" but now their intellectual property (IP) is the basis for a successful product line that is sold under many brands in several countries. Would you have had access to a Rikon 70-500 or a Record Maxi lathe if that did not happen? I would think not because the original Woodfast could not compete internationally and went down. Other current manufacturers such as Vicmarc, Vermec, Oneway, Omega, ...... will all face the same fate if you the customer will not support them.

I would also add that in many cases it really does not matter if 1 or 2% (at best) of the population of a country actually support ethically sourced / manufactured products - that is not enough to ensure the survival of a locally manufactured product to the scale required to make it a viable manufacturing business. Talk is cheap, best intentions don't translate into orders.

The short of it, the designs and IP, casting molds etc for many of these struggling companies were legally acquired through a fire sale of assets by the liquidators. In other instances the IP has simply been ripped off, which is not illegal in the country of manufacture. It is a risk that CEO's must factor in when manufacturing off shore.

Go back a little in time in many western countries it was a treasonable offence to export products, technology or anything to do with IP to a communist country. Globalization is the enemy of local manufacturing and the economic welfare of workers in ANY economy, capitalist or communist. Profit trumps the welfare of workers, always will while there is human greed.

Even artists at SOFA etc are complaining of organized intellectual property theft and blatant breaches of copyright. In Australia artists represented by the successful "Artists in the Black" program have brought actions against large retailers for selling products which infringe on their copyright. It does work some times - if you have money or pro-bono support from a benefactor.

[Hilel Salomon]

I promised myself that I wouldn't get into this, but.... . First off I'm not only not a hater of China, Japan or India, but in fact taught Chinese and Japanese history and philosophy for over 30 years. Japan drove our steel industry out of business by using government sponsored Japanese industries to undersell and undercut America's. China learned from this. American industries cannot compete with foreign government sponsored industries which do not enforce health, safety or quality standards. I do not particularly blame China and India for this, but I do blame the American industries and businesses that are complicit in this. American executives, who are the highest paid in the world by far, have been flocking to China and India and reaching deals which they know will mean that patents will be duplicated and their own companies will suffer. They don't care, because their balloon clauses and stock options will be sold and cashed in well before this happens. While it is true that the stock market perse is not like our health insurance industry in that it actually does perform a service, hedge fund operators, and financial manipulators do not perform such a service. This isn't a republican vs. democrat issue as companies like GE which ship jobs overseas, own Washington, DC no matter who occupies the White House. In my opinion socialism doesn't work and certainly communism doesn't either. Capitalism run entirely by greed cannot work unless there are independent checks and balances which assure us that the little guys don't get run over by such greed. I don't think that there is anything wrong in trying to buy American made goods and dealing with locally owned stores.

[Art Mann]

I don't think that there is anything wrong in trying to buy American made goods and dealing with locally owned stores.

No, but I think there is a lot wrong with people trying to create guilt in buyers of foreign products. Neither do I approve of people lying about the quality of foreign made equipment which they have never owned or used.

[Ken Fitzgerald]

Hilel,

As a history professor, how much profit did you or your employer directly generate? Did you work for a private or state funded institution?

What is your experience in working in the corporate world?

[hu lowery]

I promised myself that I wouldn't get into this, but.... . First off I'm not only not a hater of China, Japan or India, but in fact taught Chinese and Japanese history and philosophy for over 30 years. Japan drove our steel industry out of business by using government sponsored Japanese industries to undersell and undercut America's. China learned from this. American industries cannot compete with foreign government sponsored industries which do not enforce health, safety or quality standards. I do not particularly blame China and India for this, but I do blame the American industries and businesses that are complicit in this. American executives, who are the highest paid in the world by far, have been flocking to China and India and reaching deals which they know will mean that patents will be duplicated and their own companies will suffer. They don't care, because their balloon clauses and stock options will be sold and cashed in well before this happens. While it is true that the stock market perse is not like our health insurance industry in that it actually does perform a service, hedge fund operators, and financial manipulators do not perform such a service. This isn't a republican vs. democrat issue as companies like GE which ship jobs overseas, own Washington, DC no matter who occupies the White House. In my opinion socialism doesn't work and certainly communism doesn't either. Capitalism run entirely by greed cannot work unless there are independent checks and balances which assure us that the little guys don't get run over by such greed. I don't think that there is anything wrong in trying to buy American made goods and dealing with locally owned stores.

Hilel,

I avoided going into this in detail partially because it is slightly off topic but you are 100% right as I'm sure you know. Japan didn't just target our steel industry, they targeted one area of our manufacturing after another with government subsidized manufacturers over there. As you say, china learned from them. One of the major reasons that japan was so successful attacking our steel industry is that after the war some of our finest minds in the steel industry went to japan and built the latest and greatest plants. The US plants were all roughly fifty years older and many improvements had been made since then, all incorporated into the mills they built for japan. "The Mouse that Roared" I believe was the title of a great little movie mocking this.


Geoff,

I was a high tech asset back in the nineties. There was a full page of countries I couldn't work in or export my knowledge to. Some of the countries on that list would surprise many people! There was a short list of countries I couldn't even visit or fly over. Long, long, time ago and I can barely turn on a computer these days.

Hu