So. How do you all feel about EVERYTHING you install now, being Made in China?

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I own an American factory and can provide considerable insight here. When this thread first popped up I wrote a 500 word response but it was full of political anger so I did not post it.

As everything becomes more and more automated, unit labor costs approach zero (although they will never reach zero because someone has to feed the robots). We manufacture electronic controls. You can see them here www.gpslightlock.com. Our unit labor cost is pennies.

Costs which factories in the USA have which factories in other countries do not have are taxes. Taxes, taxes and more taxes. In the USA they tax the machinery, the shelving, the broom and dustpan and the clock on the wall. And they re-tax you every year on all that. They call that Tangible Tax. Then there's property tax, sales tax, use tax, etc... High taxes can only be a function of bad government and around here there's plenty of that.

So if I remove my "Made in USA" label one day, it won't be because of unit labor costs. It will be because of high taxes.

As to those receptacles being made in China, their unit labor cost is probably a penny over there, and here it would be close to the same. Go ahead and double it and it's still moot. But put that factory anywhere in America and pay a half a million dollars or more to support bad government every year.

When I looked at contract manufacturing in China, it would have cost me $8 per unit in "import inspection fees" (not a tariff?) to take my components into their country. That's before anything gets assembled and they would not even perform a functional test. Some people tried to convince me that there's a way around the "import inspection fees" but I wasn't about to play hide and seek with a communist regime.

The cheapest contract manufacturing cost I could find onshore was $12 per unit.

I decided to set up my own shop where we have 100% control of all processes. I had the manufacturing experience so risk was not an issue.

So here we are and I write big checks to bad government every year so billionaire owners of professional sports teams worth hundreds of millions of dollars each can have full scale stadiums to play spring training for a few weeks per year all on my dime.

Although labor is cheaper offshore, it's not the biggest reason. The biggest reason is TAXES.
 
Having worked for a mfr who went to China for off shore mfrg, I can address the profit issue a little. As setup, we were making MV controllers that needed enclosures and we bought those for years from a supplier in Michigan for $1,500. One day they announced a price increase to $2,500 over night. The owner of our company found a supplier in China willing to copy it and sell it to us for $300 each, INCLUDING freight to LA (yes, it was that dramatic). Half of those that arrived had issues causing us to reject them, but that only cost us the inspection costs, they ate the rejects. The Michigan supplier closed their facility a few years later. Does that make that owner a communist because he went to China? No, in fact it makes him a raging Capitalist!

It's not really about "corporate greed" so much as it is about INVESTOR needs. Let's say Leviton goes first and sets up a mfr plant in China. Their cost of making a wiring device goes from $3.00 to $.50. At the same time the MARKET price for that device stays at $10.00. The next year when the annual report to stockholders goes out, Leviton investors, including the many mutual funds, all get a nice fat dividend check because of the added profit. But at the same time, Hubbel investors do not, so Hubbell's stock price drops as a result of "poor performance". The Hubbel board and execs either get tossed out, or before that happens they look at what Leviton did and say "change or perish", so they too find a partner in China, maybe even the SAME partner that Leviton is using. The next year, it's Cooper's board on the hot seat and THEY see the handwriting on the wall, making them follow suit.

So what's the answer?

#1, REFUSE to accept poor quality, send stuff back, complain to suppliers, speak up! It might take time, but if everyone who feels that quality is poor were to voice those complaints, eventually that too starts to affect the stock price of a company and there has to be a response.

#2, If you buy from anonymous Internet suppliers with zero skin in the game, this is what you get; no accountability. If you buy from local wholesalers who need your local business, TELL them when you have a legitimate issue with crappy products. They generally have a local connection to the mfr who is accountable for their sales. Not so with big box stores and Internet suppliers. When I worked for Siemens, I knew the one guy in the country responsible for Home Depot sales. He never heard anything about quality issues,even when we had known issues with breakers and were recalling them from distributors. Why? Because there was nobody at HD assigned to that task until AFTER there was an actual government enforced recall. So even though we stopped shipping recalled product to them until the issue was corrected, they kept right on selling stuff in their inventory regardless of what Siemens wanted them to do. The only reason we knew there was a problem was because it came up though distribution, selling to contractors who complained.

#3, Make sure that before you start whining about poor quality, that you ACTUALLY HAVE poor quality! Nobody wants to listen to xenophobic rants about where things are made, get over that. The reason why things can be made elsewhere for less is because unskilled labor is something that can be found anywhere in the world. So if people in this country have been expecting to be ENTITLED to high wages for these jobs, they have been deluding themselves by not understanding basic economics. Do someting that someone will pay you for, but understand that the lower skilled that is, the more likely it is that someone somewhere else is willing and able to do it for far far less.

So are "we" coming back? Absolutely, but the low skilled jobs are NEVER going to come back as long as there are people starving somewhere in the world and willing to sit at a bench assembling little parts for a bowl of rice per day. In fact, THOSE are the people most at risk for having their jobs automated and eliminated altogether.
 
I've been installing "Made in China" stuff for awhile now. I have had ZERO customers call me back to replace something that I installed.
 
mgookin said:
I own an American factory and can provide considerable insight here. When this thread first popped up I wrote a 500 word response but it was full of political anger so I did not post it.

As everything becomes more and more automated, unit labor costs approach zero (although they will never reach zero because someone has to feed the robots).
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And that is another problem. As manufacturing processes become more and more automated they put more and more people out of work. In the end, what was once an opportunity for many people to share in the rewards of having a successful business turns into a narrow revenue stream for the owner of the robots.
 
mike 7330, thank you for that charlie rose link.
mgookin, very interesting and i have heard that before, it is true that is is our own govt that is to blame for this, not so much Raging Capitalists, which i feel are more evil than commies. for example, i can't blame Milwaukee for outsourcing, because the US govt allowed China to just buy them outright! same with rigid. absolutely amazing! what does that do for national security if we do something like Japan did, if you watched 60 minutes last night concerning rare earth magnets, the nippons arrested a fishing capt for ramming their destroyer, then the chinese refused to sell japan rare earth for one month. that is the same thing, as the US sold china ALL our rare earth mfg about ten to twenty years ago so that they control the entire world market. you guys just have to watch that segment. it will make you cry how stupid our govt is.
Jreaf, i have just mailed 4 letters complaining. snail mail. much more effective, i believe, that email. one to Lowes ceo, HB ceo, Nascar's Brian France, and the pres of King heaters. i tried my best and think i only used one swear word. amazing for me!

as for made in us. yes King still is, but poor quality control led to one page of directions where words said Red to Line and diagram showed Red to Load, as well as grill screws snapped off.
I bought made in USA "Work USA" boots, and they were $100, not expensive, not cheap, KILLED my feet, weighed a TON, they took a year of almost never wearing them and finally quit hurting my feet for a little while, then again were terrible. Whirlpool, all stuff was made in US ten years ago: my fridge blew in five years, micro in 6, dishwasher parts broken in 6 too. So QC is one thing at home as well.

i guess it just boils down to the fact that i can understand why corps go bye bye, but i just resent the fact that our govt is A: driving them away, and B: allowing EVERYTHING we need here to build a fighter or an aircraft carrier, be imported from a potential enemy with terrible human rights issues, virtual dictatorship, imports tiger parts, bear gall bladders, ivory, builds a coal plant a week, etc etc etc. i do not want to have to go to work with chinese drills, and tools and have to install chinese lights, devices, etc etc. our govt bites the big one and we keep re electing the whole lot of them every time. the only good thing to be said is you have to be a master electrician anymore to put up a $20 light fixture, so joe homeowner is NEVER going to be able to do it and have to call me. yea, more work. frustrating work that he can complain about how come i took two hours to install one stupid light fixture.

apparently the 60 minutes report was a little off according to Forbes, here is a link to the review of last night's show: http://www.forbes.com/sites/timwors...inutes-got-wrong-about-rare-earths-and-china/
 
Jraef said:
... So if people in this country have been expecting to be ENTITLED to high wages for these jobs, they have been deluding themselves by not understanding basic economics...
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You make many good points, but in my opinion, this one is problematic. Entitlement is not an accurate word here. Anyone who is working in production is thinking more of how to survive and at that point, if they need to earn $350/week take home pay versus $15/week in a third world country to exist, entitlement is not part of that equation. If the guy making $15 dollars a week decides that he's worth $350/week in his third world country because his American counterpart earns that much for the same job, that would be an example of him feeling "entitled."

These are cost-of-living realities in different parts of the world, not entitlements. We here in the US just happen to be stuck in the middle between Europeans who earn more than we do for the same jobs, and losing jobs to Asian markets where they earn vastly less and American workers are at the mercy of forces that are beyond their control.

The dangerous aspect of what Americans face is the fact that we are living in a hybrid economy (my description...) where we have salaries adjusted to certain costs of living that are based on trade with third world economies rather than being a part of a US based one. Some products are extremely inexpensive here compared to other countries, but don't accurately reflect our cost of living expenses. For example, to buy a US made hoodie will cost you about $100 - at least double what a name brand one made in Asia will, and up to five times as much as a cheap Asian made hoodie will cost. Many Americans now can only afford the $20 hoodie and can only dream of buying the $100 hoodie made by their neighbor. What's dangerous about this is that in order to continue to exist in this hybrid, or "global" economy, it's necessary to lower the standard of living for many, many Americans and our economy MUST continue to have access to super cheap products to accommodate the lowest earning groups in this country because there's no way they could afford to exist in a local, US production-based economy. This isn't a question of belt tightening - the discrepancies are too large at this point for anyone earning less than $15-$18/hour: It's the result of economic decisions being made for profits.
 
I didn't read the whole thread, but here's my two cents. My son bought me a new sheath knife, at a gun show, for Christmas. Nice Damascus steel and a beautiful burl wood handle, $45. I asked how. The guy says that he wasn't going to lie, he has them made in India and he said that when he finds someone here that will make one that he can sell for $45 then he'll have them make them.

It's all about the all mighty dollar my friends.
 
Made in USA? Like a Chevy? Compared to Toyota?

Situation may not be as horrible as it seems, we're discussing it on our own computers, maybe drinking bottled water because, since it costs more than tap water, it must be better.
 
mgookin

mgookin

kenpo, is not kempo.
my toyota was built in canada

Mgookin, you really pointed out the main reason, i think. Other than i know alot of corps get around the tax thing by getting huge breaks in land deals, local taxes, and income taxes by going offshore. those are all, as far as i know, big corps like Boeing.

So unless you are big enough to buy a Kongressman i guess you are stuck with these taxes. I would like to know specifically, if you ever return to this thread, what those taxes are because i would love to drop another 'love letter' to my Senators Cantwell and Murry, explaining in better detail what they can do to help keep jobs here. I know from my own non-mfg contracting biz, that the difference btwn moderate success and poverty is only 8.5%. I know this because if it weren't for having to pay back the State my Sales tax i collect on every sale, i would have enough money to pay all my bills every month. I am that close to going titts up. Of course i have to pay then and i don't resent it, but it is the marker i have that tells me how close i am to doing alright. The thing i can NOT do, is hire any employees! I had two for one month, one of those guys for 3 months on just one job. I kept 20% of wages on them, because that is how much my bosses, when i had one, took out of my check for income/ss. Well, come time to pay the IRS, they wanted 40%. I only had half of what i owed for them!!! This was in 2011, and i still owe the irs $1100!:slaphead:

but beyond that, i do not really know what the taxes are you are talking about, and i would love to know. Esp when we are a couple of month away from hearing the words "Job Creation" every single commercial break.
 
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bullheimer said:
kenpo, is not kempo.
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Both Japanese, although kempo (the OP said kenpo) is known for embracing the Chinese Shaolin techniques.

In all practicality, especially here in the US, kenpo and kempo are synonymous for a Japanese style with Chinese roots.

Sorry to distract from the thread, but it just so happens that I am doing a bit of an informal history of martial arts and I noticed the mention of kenpo.

PM me if you want to carry this on. You may have information I don't. I would welcome it.

Now, back to our original program.....already in progress.
 
bullheimer said:
...I kept 20% of wages on them, because that is how much my bosses, when i had one, took out of my check for income/ss. Well, come time to pay the IRS, they wanted 40%. I only had half of what i owed for them!!! This was in 2011, and i still owe the irs $1100!:slaphead:
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I apologize for stating the obvious, but before you enter into any dealings with the IRS, it behooves one to get tax advice from a CPA. You decided how much withholding you needed to do on an assumption rather than on the actual requirements. A short discussion with a CPA would have prevented this.
 
readydave8 said:
That's bad, I can understand your frustration.

I am curious about the 40%, though. I thought I remembered withholding 7.5%? And I would match it? For a total payment to IRS of around 15%.
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Off topic for this thread, but do not confuse Social Security, where you withhold some from employee and add an almost matching amount yourself, with income tax.
For income tax you need to get a signed W-4 from the employee to calculate what to withhold.
If you do not withhold enough, good luck in trying to get the money back from the employee.
Worst case, if you had to pay more than you withheld, they may be able to get YOUR money as a refund if their actual tax bill was lower. :(
 
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