Are the US Woodworking Machinery Companies going the way of the US Auto Industry?

[Alfred Clem]

Rob: Companies such as Ford, General Motors, and Chrysler have an older labor force and many, many retirees drawing benefits they earned while employed. Toyota has a younger labor force in its American plants and does not have nearly as many retirees -- yet. In time, this will change. As a retiree of a large American company, I have seen my retirement benefits sliced and diced over the past two decades. This cost-cutting, in my experience, did not extend to upper levels of management.

[Rod Sheridan]

One of these days, China will call in all the outstanding debt it holds for the US. It won't be pretty from an economic perspective.

I think that we are just hoping that the "musical chairs" process of importing more and more inexpensive goods will end after our lifetime.

I think that it is short sighted to continue to want to pay less and less for consumables, and pay less to people who work to make or distribute those goods.

Yes it's nice to save 10 cents on a can of tuna, however if your next door neighbour is unemployed because of it, you are in trouble.

Why would you be in trouble? Simple, your neighbour either cannot contribute to society through productivity or taxes, or simply can only find a subsistence level job. They cannot send their kids to university, and this accellerates the downward spiral of society.

In North America, we are not the highest taxed, the most productive, or the best educated in the world. Those three things all tie together to make a country the best in the world. We could be the best educated, most productive, highest taxed group, however that requires long term planning and committment, not a "me first" consumer philosophy.


Regards, Rod.

[James Carmichael]

You threw me there, Alfred. John is my brother:-)

I suppose it will all level-out, eventually, but I'm convinced the U.S. is headed for some tough times.

[James Carmichael]

In North America, we are not the highest taxed, the most productive, or the best educated in the world. Those three things all tie together to make a country the best in the world.

Um, economically, yes, we are THE most productive nation in the world. Our economy is more service and information-oriented. We don't produce the hard, tangible goods like China and Mexico, and there's absolutely nothing wrong with that. That part of the equation is win/win, we get less-expensive goods, they get desperately-needed jobs. The problem is, we have been running trade-deficits for many years and have an enormous national debt. The latter issue can be partly resolved by government staying within a budget (don't want to get into a political debate), but both problems ultimately require the U.S. as a whole to quite consuming more than we produce.

I'm a bit confused as to how paying the highest tax rates makes a nation the best.

[Bryan Read]

... Toyota brags about thier US facilities but I wonder how thier retiree benefits list compares to a company like Ford's?

Rob

Here's an article pretty much dealing with Toyota and that subject. Very insightful reading...

http://www.fastcompany.com/magazine/...isfaction.html

[Wilbur Pan]

The country of origin really has little to do with the quality of the machine being produced. It all has to do with how much you are willing to pay for that quality.

My brother deals with factories in China and other Asian countries a lot as part of his job, so we talk about this every so often. The ironic thing about moving operations to China for manufacturing is that Chinese factories can turn out tools, power or otherwise, every bit as well built and precise as when they were made in the U.S. in "the good old days". You just have to be willing to pay extra for the improved components, the refinements in the manufacturing process and the quality control measures needed.

And guess what -- once you factor in those costs, the Chinese-made tools will pretty much cost just as much as if they were made in the U.S.

In other words, you could get a copy of a made-in-the-US Northfield 8" jointer coming from the same factory in China that makes the 8" Grizzly jointer, with the same level of quality, fit, and finish as Northfield has. And it will cost you about $9000, same as it costs to get one from Northfield directly.

[Nate Rogers]

I think this is such a interesting thread, it really sums up the single biggest problem our country faces. Free trade is good in the short run, but over the long haul this will bite us in the behind. If tomorrow all consumers demanded US made goods, within months factories would be popping up all over the country. But as long as we say that price is the most important factor in buying goods, this will continue to drag us down. I work for a manufacturing facility, and we are making money hand over fist...However that is not good enough for the stock holders, we need to make more and more and more and more. So business can survive in the US and thrive, we as consumers and investors have to put more value on the big picture, not just every single cent.

[Greg Cole]

"If you want a traditional made in North America piece of equipment, purchase a General.

Made in Drummondville Quebec, still familly owned.

Regards, Rod."


Not sure about that one, as my General 50-185TS was in waxy brown cardboard and said made in Taiwan all over it........
Final assembly in Drummondville no doubt.. but I am sure the cast iron was done in Taiwan as well as the machining.

[John Gornall]

Greg,

Your saw is imported by "General International" which are made for General across the water.

If you want North American made, including the Castings, you will have to buy a "General"

Go to their website, www.general.ca and the Canadian made equipment has a big red Canadian Flag on it and there is a red Maple Leaf beside the listing.

Here's a nice 16 inch piece of Canadian made iron: http://www.general.ca/pagemach/machi...eral/880a.html

[Jerry Olexa]

First, we are in a global economy (witness the stock market activity the past few days). Secondly, we are ,in general, a "price sensitive" consumer group (Walmart-largest retailer in the world strictly driven by price). Basically, price rules. So to deliver price, compromise in quality is made by mfrs and a profitable but attractive price point is reached. Another way to attain this is a different source of manufacture (very few companies manufacture their tools in US) which is usually cheaper. We are our own worse enemy and quality generally suffers. As Jim said, I'm afraid this trend is here to stay but at least, we have choices and the intelligence/discernment to choose wisely. Just MHO...

[Mark Pruitt]

Interesting discussion.

The only thing I'll add is anecdotal. When my new PM lathe recently came, I received that silly little "85th Anniversary 18 Wheeler" model truck with it. What's interesting is not the truck itself but the "History of Powermatic" story printed on the back of the box. That "history" makes absolutely no mention whatsoever of the company's decision to move production overseas a few years ago. Further, the packaging for the lathe and accessories says "Made in Taiwan to Powermatic Specifications" (or "...Standards"--can't remember). Clearly, PM senses the uneasiness felt by their customers and is working to alleviate its effects. Are they succeeding? Time will tell.

[Rich Konopka]

First, we are in a global economy (witness the stock market activity the past few days). Secondly, we are ,in general, a "price sensitive" consumer group (Walmart-largest retailer in the world strictly driven by price). Basically, price rules. So to deliver price, compromise in quality is made by mfrs and a profitable but attractive price point is reached. Another way to attain this is a different source of manufacture (very few companies manufacture their tools in US) which is usually cheaper. We are our own worse enemy and quality generally suffers. As Jim said, I'm afraid this trend is here to stay but at least, we have choices and the intelligence/discernment to choose wisely. Just MHO...

Yes, maybe it is here to stay. But, there is only so much money to be made using the "Walmart Model". They have slowed down and are now refocusing their efforts on attracting a different consumer. Check this interesting article out about Walmarts marketing research. What time of customer are you?

If we compare the automakers where the Americans Industry is struggling and the Japaneese automakers are kicking butt. Why? Their prices are typcially lower than the Japaneese autos? One exception to this is Cadillac whose sales are up and ranks higher in quality.

If you look at Tools. Why would someone pay $4000 for a Sawstop if Price Rules? Why is Festool commanding $400 for a Circ Saw?

It is really interesting how the "American Woodworking Tool" companies are not adapting by offering "High End" quality, higher margin, and innovative tools like Sawstop or Festool.

My 2 cents.

[James Carmichael]

Great observations there, Rich.

If my years with a Fortune 500 Company back in the 80s are any indication, it is that American tool companies, along with the big auto makers, are either clueless, or are so big they are logistically bound to an obsolete business model and can't implement changes fast enough to compete (dinosaurs).

OK, removing the kid gloves, I worked for Xerox and was young and brash and lucky I didn't get fired and land in jail when an Executive officer arrived for a communications meeting two weeks after appearing on "Meet the Press" and bemoaning that U.S. tech companies couldn't compete because they could hire the caliber of technically-skilled workers available overseas. This is from the company that invented Ethernet, the PC, the mouse, the Graphical User Interface, and more or less GAVE it all away, because they were still wed to a concept of proprietary technology (like the photocopier). The concept of customers having choices and their having to compete was totally foreign. I'm sure there's old brass at Delta who are the same way, scratching their heads at their lagging sales and say "but we invented the Unisaw".

[Luis Oliveira]

With all the respect to everyone, I don't think we should blame ourselves, I certainly don't blame myself. The truth is probably right in the middle "where it always is". When companies used to have such incredible margins, you didn't see any company saying lets pass some savings to our customers, no they kept on charging as high as possible.
Even today, you see it, you see parts being made in brazil, assemble in Mexico and being sold for say 40K dollars here in the US, that same car in Mexico is close to 80K dollars, but the most interesting part is that you hear VP's taking private flights every week because they made a deal, they just don't want to live in say Detroit like every normal worker, no they want to live in Florida and the company needs to eat the cost of travel from Detroit to Florida ... sorry the customer needs to eat the cost.
Now take Delta for example (not to pick on Delta per say, I could have use woodcraft, or even Festool), they use the same grade steal, and for most purposes the same components, so why that grizzly is cheaper. I think because Delta no longer cares for its customers and for the longest time the customer eat their propaganda. Now enter the internet, now anyone can compare products side by side, choose from an array of products for different vendors. No longer the Deltas of the world can just put a product and expect everyone to bend over and take it.
Sorry if I am rumbling but I look around my house and I know how much I have worked to get the little I have, and I for one will never be sorry of the deltas of the world, and their so call management team that just decided to build their big fortunes and now are in big trouble to balance gains and greed.
But I know how they balance it, they lay-off a bunch of workers and vp's get bonuses.
I think everyone of us should expect better products, safer products and reasonable prices.

The new mantra should be win a little, give a little.
I am convinced that once you do that customers will comeback.
Pricing everyone out of a hobby is no way to create business.

So never feel like a victim, as you probably been one all your life, expect the best because others expect the best from you too.

Hence why we have forums like this to share ideas, accomplishments an to console our forum friends when something goes wrong with their precious projects.

Last I would like to personally thank and say I admire people in this forum, that obviously have woodworking as a professional trade however they feel no treat for anyone and instead go our of they way to share their projects and wisdom.

Keep them coming!

[Clint Gauthier]

Price rules, but at what cost? I think the cost is our children's future. An economy cannot sustain itself for long if we don't add value by physical labor or intellectual content. Simply reselling cheap goods produced by someone else does not add value. I find it very hard to understand why we expect others to work for nothing by demanding very inexpensive products, but at the same time we demand a premium for our own work.

Just a few short years ago, it was said that the US should not worry about the "low" end jobs because they will be replaced by "higher" end white collar jobs. But we know this has not occurred. Many engineering and computer programming jobs have also gone overseas, and we should not expect all of our displaced workers to go back to school for a white collar job. We need a well rounded workforce with people having diverse skills and training, if we want a balanced, secure economy for ourselves and, more importantly, our children.