I agree the quality of most of the chinese manufacture goods are very spotty quality. I'd wager most of it does not get returned and is just thrown away. As far as statistics of manufacturing. You never know how the numbers were calculated. You can find statistic that seem to prove anything. What I do know is electronics and computer equipment is the largest sector of manufacturing and it is almost all done in Asia. Also we have about an $800 billion trade deficit and a good part of it is with China. The vasy majority of goods and not just consumer goods is sourced from china.
Everything is made in China
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Originally Posted By: OVERK1LL
Originally Posted By: LT4 Vette
Originally Posted By: mechanicx
Inflation has been rising every year all the while products have been outsourced and imported from China and other low cost countries. Wages and benefits have been stagnate or dropping, unemployment rising, and job security is gone. There are a lot of hidden costs to the supposedly cheaper outsourced goods. Chinese products are generally low quality and the price is pretty much the same as the previous US made version.
Just wondering.... are you a Union memebr ?
Your first two sentences seem very Pro Union without saying it.
With the way things are going.... they last thing American folks want and need are goods made in the USA costing three times what they are currently paying for when they shop at Chinamart (Walmart).
And for the record I've owned stock in Walmart for the last 15 years.
You are right. They need the same goods produced here.... And sold at the same price.
We don't pay less for a product when its manufacture is sourced to China, Mexico or anywhere else. Sometimes we even end up paying more. What DOES happen is that it increases profit margins.... Many times at the cost of quality.
There is no "excuse" other than greed. It doesn't have to cost more to be manufactured here.
It's not just about increased or excess profits. Often it's the difference between making a profit and not. It's extremely difficult to compete when your costs are substantially higher than all your competitors.
Your choices are to differentiate your products in such a way that they will demand higher prices and cover your higher costs, or follow the manufacturing model that most everyone seems to have followed - move it off shore.
I don't agree with it and I think in the long term it's foolish. But that's what has happened.
Originally Posted By: LT4 Vette
Originally Posted By: mechanicx
Inflation has been rising every year all the while products have been outsourced and imported from China and other low cost countries. Wages and benefits have been stagnate or dropping, unemployment rising, and job security is gone. There are a lot of hidden costs to the supposedly cheaper outsourced goods. Chinese products are generally low quality and the price is pretty much the same as the previous US made version.
Just wondering.... are you a Union memebr ?
Your first two sentences seem very Pro Union without saying it.
With the way things are going.... they last thing American folks want and need are goods made in the USA costing three times what they are currently paying for when they shop at Chinamart (Walmart).
And for the record I've owned stock in Walmart for the last 15 years.
You are right. They need the same goods produced here.... And sold at the same price.
We don't pay less for a product when its manufacture is sourced to China, Mexico or anywhere else. Sometimes we even end up paying more. What DOES happen is that it increases profit margins.... Many times at the cost of quality.
There is no "excuse" other than greed. It doesn't have to cost more to be manufactured here.
It's not just about increased or excess profits. Often it's the difference between making a profit and not. It's extremely difficult to compete when your costs are substantially higher than all your competitors.
Your choices are to differentiate your products in such a way that they will demand higher prices and cover your higher costs, or follow the manufacturing model that most everyone seems to have followed - move it off shore.
I don't agree with it and I think in the long term it's foolish. But that's what has happened.
Originally Posted By: Loobed
Originally Posted By: casperfun
Originally Posted By: Pablo
How come no one is griping about Sweden?
IKEA
Because they are blond and blue-eyed!
With China there's more Xenophobia,
hence the bashing.
Would you rather drive a Volvo or a ChingBangDingSang?
LOL. It won't take the media long to convince enough people that instead of Kia/Hyundai ChingBangDingSang is the car to buy.
Originally Posted By: casperfun
Originally Posted By: Pablo
How come no one is griping about Sweden?
IKEA
Because they are blond and blue-eyed!
With China there's more Xenophobia,
hence the bashing.
Would you rather drive a Volvo or a ChingBangDingSang?
LOL. It won't take the media long to convince enough people that instead of Kia/Hyundai ChingBangDingSang is the car to buy.
Originally Posted By: Blaze
I noticed the Buck knife I got for X-mas was made in CHINA
I thought they were a USA made knife?
Are you sure it is a "Buck" ?
I bought a knife that is called "Buck Skinner" It is a "Skinner" knife that skins "Buck" ..Seriously.
I noticed the Buck knife I got for X-mas was made in CHINA
Are you sure it is a "Buck" ?
I bought a knife that is called "Buck Skinner" It is a "Skinner" knife that skins "Buck" ..Seriously.
Originally Posted By: mechanicx
I agree the quality of most of the chinese manufacture goods are very spotty quality. I'd wager most of it does not get returned and is just thrown away. As far as statistics of manufacturing. You never know how the numbers were calculated. You can find statistic that seem to prove anything. What I do know is electronics and computer equipment is the largest sector of manufacturing and it is almost all done in Asia. Also we have about an $800 billion trade deficit and a good part of it is with China. The vasy majority of goods and not just consumer goods is sourced from china.
You're welcome to believe that if you want, but I can't find any data anywhere that supports it. All the data I've found says China is less that 20% of world manufacturing output. Far from a majority.
Stop and think how many $50 cell phones or $10 coffee makers or $100 computer monitors need to be built to equal just one Boeing 767, or one Caterpillar bulldozer, or one John Deere combine.
What we don't build here are low added value, high labor cost as a percentage of total cost products. That and higher US productivity are why we've seen manufacturing employment fall even though manufacturing output has continued to increase.
I agree the quality of most of the chinese manufacture goods are very spotty quality. I'd wager most of it does not get returned and is just thrown away. As far as statistics of manufacturing. You never know how the numbers were calculated. You can find statistic that seem to prove anything. What I do know is electronics and computer equipment is the largest sector of manufacturing and it is almost all done in Asia. Also we have about an $800 billion trade deficit and a good part of it is with China. The vasy majority of goods and not just consumer goods is sourced from china.
You're welcome to believe that if you want, but I can't find any data anywhere that supports it. All the data I've found says China is less that 20% of world manufacturing output. Far from a majority.
Stop and think how many $50 cell phones or $10 coffee makers or $100 computer monitors need to be built to equal just one Boeing 767, or one Caterpillar bulldozer, or one John Deere combine.
What we don't build here are low added value, high labor cost as a percentage of total cost products. That and higher US productivity are why we've seen manufacturing employment fall even though manufacturing output has continued to increase.
Originally Posted By: Loobed
Would you rather drive a Volvo or a ChingBangDingSang?
Actually Warren Buffet who is considered the #1 businessman in the world is investing in a Chinese (electric) car company BYD. If that means anything.
I'm not saying a billionaire knows more than the average middle class person.
But he seems not to mind driving a ChingBandDingSang. (Are you sure that's not a XXX movie?)
Or investing in it for that matter.
Would you rather drive a Volvo or a ChingBangDingSang?
Actually Warren Buffet who is considered the #1 businessman in the world is investing in a Chinese (electric) car company BYD. If that means anything.
I'm not saying a billionaire knows more than the average middle class person.
But he seems not to mind driving a ChingBandDingSang. (Are you sure that's not a XXX movie?)
Or investing in it for that matter.
Originally Posted By: Pablo
How come no one is griping about Sweden?
IKEA
I just got done putting together my office re-do......took me hours to just put this killer file cabinet together...and they forgot to include the ENGLISH instructions for the combination lock!
huh. I put together an ENTIRE IKEA kitchen w/ my wife in a day; I think you're slipping Pablo!
seriously, IKEA has stuff sourced from all over, lots of Eastern Euro stuff, India, China, even the USA! all their stuff (well, lots of it) is well designed and goes together easily.
and they have what must be THE best returns and customer service dept! they are the ONLY company I have ever seen that has an entire wall of bins w/ small parts! all you have to do is ask, they'll hook you up w/ whatever you lost!
some things I don't like from IKEA; their lighting fixtures are pure chrap, BUT they sell some halogen bulbs (the ones w/ the 2 prongs on the bottom) for LOTS cheaper than lowes or HD has, and they last longer.
How come no one is griping about Sweden?
IKEA
I just got done putting together my office re-do......took me hours to just put this killer file cabinet together...and they forgot to include the ENGLISH instructions for the combination lock!
huh. I put together an ENTIRE IKEA kitchen w/ my wife in a day; I think you're slipping Pablo!
seriously, IKEA has stuff sourced from all over, lots of Eastern Euro stuff, India, China, even the USA! all their stuff (well, lots of it) is well designed and goes together easily.
and they have what must be THE best returns and customer service dept! they are the ONLY company I have ever seen that has an entire wall of bins w/ small parts! all you have to do is ask, they'll hook you up w/ whatever you lost!
some things I don't like from IKEA; their lighting fixtures are pure chrap, BUT they sell some halogen bulbs (the ones w/ the 2 prongs on the bottom) for LOTS cheaper than lowes or HD has, and they last longer.
Originally Posted By: Loobed
Would you rather drive a Volvo or a ChingBangDingSang?
Very soon your Volvo will be made on the same assembly line with ChingBangDingSang. Both will be identical, or ChingBangDingSang will be just a base or last year model Volvo.
So the question is, do you want to pay for a Volvo or a ChingBangDingSang.
Would you rather drive a Volvo or a ChingBangDingSang?
Very soon your Volvo will be made on the same assembly line with ChingBangDingSang. Both will be identical, or ChingBangDingSang will be just a base or last year model Volvo.
So the question is, do you want to pay for a Volvo or a ChingBangDingSang.
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I have mixed feelings about China-made items. the company I work for makes lasers for use in fiber optics; much of our business comes from China and Europe, mostly China. I'm glad they haven't figured out a way to reverse-engineer our stuff yet (it's very labor intensive; you'd have to clone our engineers as well!)
so, although I have a vested interest in domestic manufacturing, I realize you can't make everything here. I try to avoid "American" products made off shore that used to be made here (levi's, converse, heritage brands like that) because the price didn't go down when domestic mfg stopped.
for cast iron cookware, there are plenty of Chinese no-name versions for cheap, but I prefer USA made Lodge mfg. even in something as simple as cast iron, the Lodge is noticeably better quality.
for kitchen knives, I have some Chinese ones that are very good quality (the Chinese know how to make quality knives and some pretty chrappy ones as well)
so, I feel you can't have everything American made, but you don't have to buy everything China offers either.
so, although I have a vested interest in domestic manufacturing, I realize you can't make everything here. I try to avoid "American" products made off shore that used to be made here (levi's, converse, heritage brands like that) because the price didn't go down when domestic mfg stopped.
for cast iron cookware, there are plenty of Chinese no-name versions for cheap, but I prefer USA made Lodge mfg. even in something as simple as cast iron, the Lodge is noticeably better quality.
for kitchen knives, I have some Chinese ones that are very good quality (the Chinese know how to make quality knives and some pretty chrappy ones as well)
so, I feel you can't have everything American made, but you don't have to buy everything China offers either.
OVERKILL
$100 Site Donor 2021
Originally Posted By: jsharp
Stop and think how many $50 cell phones or $10 coffee makers or $100 computer monitors need to be built to equal just one Boeing 767, or one Caterpillar bulldozer, or one John Deere combine.
What we don't build here are low added value, high labor cost as a percentage of total cost products. That and higher US productivity are why we've seen manufacturing employment fall even though manufacturing output has continued to increase.
Comically, RIM produces Blackberries in Mexico, Canada and Europe. So even cell phones can be produced in places other than China.... And done so at a profit
Stop and think how many $50 cell phones or $10 coffee makers or $100 computer monitors need to be built to equal just one Boeing 767, or one Caterpillar bulldozer, or one John Deere combine.
What we don't build here are low added value, high labor cost as a percentage of total cost products. That and higher US productivity are why we've seen manufacturing employment fall even though manufacturing output has continued to increase.
Comically, RIM produces Blackberries in Mexico, Canada and Europe. So even cell phones can be produced in places other than China.... And done so at a profit
Originally Posted By: jsharp
Originally Posted By: mechanicx
I agree the quality of most of the chinese manufacture goods are very spotty quality. I'd wager most of it does not get returned and is just thrown away. As far as statistics of manufacturing. You never know how the numbers were calculated. You can find statistic that seem to prove anything. What I do know is electronics and computer equipment is the largest sector of manufacturing and it is almost all done in Asia. Also we have about an $800 billion trade deficit and a good part of it is with China. The vasy majority of goods and not just consumer goods is sourced from china.
You're welcome to believe that if you want, but I can't find any data anywhere that supports it. All the data I've found says China is less that 20% of world manufacturing output. Far from a majority.
Stop and think how many $50 cell phones or $10 coffee makers or $100 computer monitors need to be built to equal just one Boeing 767, or one Caterpillar bulldozer, or one John Deere combine.
What we don't build here are low added value, high labor cost as a percentage of total cost products. That and higher US productivity are why we've seen manufacturing employment fall even though manufacturing output has continued to increase.
That's the thing a Boeing, Catapillar or John Deere can have China sourced sub assemblies and with funny statistics one can claim the whole value is US manufactured. All those companies have foreign competitors selling here and that will increase from China. Electronics and computers dwarfs those sectors anyway. There's no way of getting around the fact that we have a huge trade deficit. If the US still has 20% or x% of world production, it doesn't mean a lot if we have say 40% of the consumption and over half of production is being supplied from foreign countries. It's not just productivity that has decreased manufacturing jobs there's also the down ward pressure of a lot of wage and benefits cuts. In the real world a lot of US manufacturing is now being done by non-union, low paying, no benefits and even temporary workers.
Originally Posted By: mechanicx
I agree the quality of most of the chinese manufacture goods are very spotty quality. I'd wager most of it does not get returned and is just thrown away. As far as statistics of manufacturing. You never know how the numbers were calculated. You can find statistic that seem to prove anything. What I do know is electronics and computer equipment is the largest sector of manufacturing and it is almost all done in Asia. Also we have about an $800 billion trade deficit and a good part of it is with China. The vasy majority of goods and not just consumer goods is sourced from china.
You're welcome to believe that if you want, but I can't find any data anywhere that supports it. All the data I've found says China is less that 20% of world manufacturing output. Far from a majority.
Stop and think how many $50 cell phones or $10 coffee makers or $100 computer monitors need to be built to equal just one Boeing 767, or one Caterpillar bulldozer, or one John Deere combine.
What we don't build here are low added value, high labor cost as a percentage of total cost products. That and higher US productivity are why we've seen manufacturing employment fall even though manufacturing output has continued to increase.
That's the thing a Boeing, Catapillar or John Deere can have China sourced sub assemblies and with funny statistics one can claim the whole value is US manufactured. All those companies have foreign competitors selling here and that will increase from China. Electronics and computers dwarfs those sectors anyway. There's no way of getting around the fact that we have a huge trade deficit. If the US still has 20% or x% of world production, it doesn't mean a lot if we have say 40% of the consumption and over half of production is being supplied from foreign countries. It's not just productivity that has decreased manufacturing jobs there's also the down ward pressure of a lot of wage and benefits cuts. In the real world a lot of US manufacturing is now being done by non-union, low paying, no benefits and even temporary workers.
Originally Posted By: Al
Originally Posted By: Blaze
I noticed the Buck knife I got for X-mas was made in CHINA
I thought they were a USA made knife?
Are you sure it is a "Buck" ?
I bought a knife that is called "Buck Skinner" It is a "Skinner" knife that skins "Buck" ..Seriously.
Did a search and Buck Knives did open a plant in China. I was shocked. I thought they were all made in Idaho near where I live. So it appears this is the plant where my knife came from. The blade does seem lower quality.
Buck Knives in China
Originally Posted By: Blaze
I noticed the Buck knife I got for X-mas was made in CHINA
Are you sure it is a "Buck" ?
I bought a knife that is called "Buck Skinner" It is a "Skinner" knife that skins "Buck" ..Seriously.
Did a search and Buck Knives did open a plant in China. I was shocked. I thought they were all made in Idaho near where I live. So it appears this is the plant where my knife came from. The blade does seem lower quality.
Buck Knives in China
LOOK at the cost for workers comp alone in California.
Yeah those greedy owners!!!!! Tax the rich - tax em more!!!
Yeah those greedy owners!!!!! Tax the rich - tax em more!!!
Originally Posted By: mechanicx
Originally Posted By: jsharp
Originally Posted By: mechanicx
I agree the quality of most of the chinese manufacture goods are very spotty quality. I'd wager most of it does not get returned and is just thrown away. As far as statistics of manufacturing. You never know how the numbers were calculated. You can find statistic that seem to prove anything. What I do know is electronics and computer equipment is the largest sector of manufacturing and it is almost all done in Asia. Also we have about an $800 billion trade deficit and a good part of it is with China. The vasy majority of goods and not just consumer goods is sourced from china.
You're welcome to believe that if you want, but I can't find any data anywhere that supports it. All the data I've found says China is less that 20% of world manufacturing output. Far from a majority.
Stop and think how many $50 cell phones or $10 coffee makers or $100 computer monitors need to be built to equal just one Boeing 767, or one Caterpillar bulldozer, or one John Deere combine.
What we don't build here are low added value, high labor cost as a percentage of total cost products. That and higher US productivity are why we've seen manufacturing employment fall even though manufacturing output has continued to increase.
That's the thing a Boeing, Catapillar or John Deere can have China sourced sub assemblies and with funny statistics one can claim the whole value is US manufactured. All those companies have foreign competitors selling here and that will increase from China. Electronics and computers dwarfs those sectors anyway. There's no way of getting around the fact that we have a huge trade deficit. If the US still has 20% or x% of world production, it doesn't mean a lot if we have say 40% of the consumption and over half of production is being supplied from foreign countries. It's not just productivity that has decreased manufacturing jobs there's also the down ward pressure of a lot of wage and benefits cuts. In the real world a lot of US manufacturing is now being done by non-union, low paying, no benefits and even temporary workers.
But the complete item is US manufactured. That's not playing with statistics. That's how manufacturing works. You take raw materials and parts and often software and assemble them in such a manner that you add value. That's how a few bucks worth of wood and varnish become an expensive piece of furniture. That's how the company I work for takes $100 worth of parts and assemblies and when it's complete we have a $1000 or $2000 product.
The value of the product is the price it commands finished, not the initial cost of goods. Looking at it any other way and something like a CPU is only 'worth' the amount of sand it takes to produce the wafer and the few assorted parts to put it in a package. A $200 Intel CPU might only be 'worth' $.01 figured in that manner. That's not realistic at all since it recognizes no value added by manufacturing.
I think you're overestimating the size of electronics manufacturing in the world and the amount produced in China. Foxconn for example the largest contract electronic assembler in the world. They make things like Apple products and their revenue is about $100B a year. Yes, that's about 2X what JD and Cat generate. But they're really the major player and not all their production is in China. It depends too on what you define as 'electronics'. If you include anything that has a wire in it you get a much larger number than just including the items people normally think of as electronic like a TV or a cell phone.
The downward value of a given unit of labor is global wage arbitrage thanks to cheap transportation. If you have a job that can readily be done elsewhere for substantially less $$ then it's at risk. Like water that thanks to gravity seeks the lowest level. Welcome to the global economy. As long as there are poorer nations in the wealth per capita sense, the only way we'll see that slow is if transportation costs become prohibitive or if other countries adopt environmental and worker regulations that are closer to ours.
We saw the former start to happen during the worst of the recession when oil was $145 a barrel and might cost $10K to ship a container from China to NY. Hard to cram enough $59 bicycles in one to make it very profitable. You and I will never live to see the latter. Too many poor nations that are so far beneath us in living conditions that they'll accept ways of doing things that we abandoned 50 or 100 years ago. Because to them, it will still be an improvement.
Keep in mind too that over 40% of our trade deficit is not from manufacturing but from oil. At least we run a small surplus of services. It's not much, but every little bit helps.
Originally Posted By: jsharp
Originally Posted By: mechanicx
I agree the quality of most of the chinese manufacture goods are very spotty quality. I'd wager most of it does not get returned and is just thrown away. As far as statistics of manufacturing. You never know how the numbers were calculated. You can find statistic that seem to prove anything. What I do know is electronics and computer equipment is the largest sector of manufacturing and it is almost all done in Asia. Also we have about an $800 billion trade deficit and a good part of it is with China. The vasy majority of goods and not just consumer goods is sourced from china.
You're welcome to believe that if you want, but I can't find any data anywhere that supports it. All the data I've found says China is less that 20% of world manufacturing output. Far from a majority.
Stop and think how many $50 cell phones or $10 coffee makers or $100 computer monitors need to be built to equal just one Boeing 767, or one Caterpillar bulldozer, or one John Deere combine.
What we don't build here are low added value, high labor cost as a percentage of total cost products. That and higher US productivity are why we've seen manufacturing employment fall even though manufacturing output has continued to increase.
That's the thing a Boeing, Catapillar or John Deere can have China sourced sub assemblies and with funny statistics one can claim the whole value is US manufactured. All those companies have foreign competitors selling here and that will increase from China. Electronics and computers dwarfs those sectors anyway. There's no way of getting around the fact that we have a huge trade deficit. If the US still has 20% or x% of world production, it doesn't mean a lot if we have say 40% of the consumption and over half of production is being supplied from foreign countries. It's not just productivity that has decreased manufacturing jobs there's also the down ward pressure of a lot of wage and benefits cuts. In the real world a lot of US manufacturing is now being done by non-union, low paying, no benefits and even temporary workers.
But the complete item is US manufactured. That's not playing with statistics. That's how manufacturing works. You take raw materials and parts and often software and assemble them in such a manner that you add value. That's how a few bucks worth of wood and varnish become an expensive piece of furniture. That's how the company I work for takes $100 worth of parts and assemblies and when it's complete we have a $1000 or $2000 product.
The value of the product is the price it commands finished, not the initial cost of goods. Looking at it any other way and something like a CPU is only 'worth' the amount of sand it takes to produce the wafer and the few assorted parts to put it in a package. A $200 Intel CPU might only be 'worth' $.01 figured in that manner. That's not realistic at all since it recognizes no value added by manufacturing.
I think you're overestimating the size of electronics manufacturing in the world and the amount produced in China. Foxconn for example the largest contract electronic assembler in the world. They make things like Apple products and their revenue is about $100B a year. Yes, that's about 2X what JD and Cat generate. But they're really the major player and not all their production is in China. It depends too on what you define as 'electronics'. If you include anything that has a wire in it you get a much larger number than just including the items people normally think of as electronic like a TV or a cell phone.
The downward value of a given unit of labor is global wage arbitrage thanks to cheap transportation. If you have a job that can readily be done elsewhere for substantially less $$ then it's at risk. Like water that thanks to gravity seeks the lowest level. Welcome to the global economy. As long as there are poorer nations in the wealth per capita sense, the only way we'll see that slow is if transportation costs become prohibitive or if other countries adopt environmental and worker regulations that are closer to ours.
We saw the former start to happen during the worst of the recession when oil was $145 a barrel and might cost $10K to ship a container from China to NY. Hard to cram enough $59 bicycles in one to make it very profitable. You and I will never live to see the latter. Too many poor nations that are so far beneath us in living conditions that they'll accept ways of doing things that we abandoned 50 or 100 years ago. Because to them, it will still be an improvement.
Keep in mind too that over 40% of our trade deficit is not from manufacturing but from oil. At least we run a small surplus of services. It's not much, but every little bit helps.
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Originally Posted By: Pablo
LOOK at the cost for workers comp alone in California.
Yeah those greedy owners!!!!! Tax the rich - tax em more!!!
Do they have *any* money left? If they do, then we didn't tax them enough...
/sarcasm
LOOK at the cost for workers comp alone in California.
Yeah those greedy owners!!!!! Tax the rich - tax em more!!!
Do they have *any* money left? If they do, then we didn't tax them enough...
Originally Posted By: casperfun
But he seems not to mind driving a ChingBandDingSang. (Are you sure that's not a XXX movie?)
If it was the last 2 words would not be spelled with an "ing" or an "ang" ending.
But he seems not to mind driving a ChingBandDingSang. (Are you sure that's not a XXX movie?)
If it was the last 2 words would not be spelled with an "ing" or an "ang" ending.
Originally Posted By: jsharp
But the complete item is US manufactured. That's not playing with statistics. That's how manufacturing works. You take raw materials and parts and often software and assemble them in such a manner that you add value. That's how a few bucks worth of wood and varnish become an expensive piece of furniture. That's how the company I work for takes $100 worth of parts and assemblies and when it's complete we have a $1000 or $2000 product.
Usually the "manufacturing" value is the value added (sales - parts/purchase from others). And yes, everything in the world if you look deep enough has its value from 1) profit of someone + 2) labor cost of someone (which is a profit of someone) + 3) energy cost of someone (which is also a profit of someone).
So yes, the $200 CPU you buy is only worth $1 of silicon + $30 of energy + $20 of labor (variable cost) + $49 of R&D + $50 of energy + $50 of profit. This also go for your boeing 747 and $20 Walmart toaster. This is also why when a company move its production to China they are only reducing their price by 10%, but their labor cost reduces by 50%. Labor isn't everything, there's a lot of cost in retailing and marketing, as well as transportation, overhead, increased lead time (cash flow cost), and (Surprise!!!) risk.
Even when something is made in China or Malaysia, a lot of its components are still from Japan, US, Taiwan, etc and a lot of the cost is still sent back to those places. When you buy a $200 made in Malaysia CPU it is probably 70% back in the US and only 10% in Malaysia, and 20% to Japan and Europe.
A smart phone selling for $500 may only cost $250 to make, with the BOM (bill of material) to be about $200 and labor to be $50. The $50 labor paid to Foxcon usually means foxcon is keeping 6-10% (going rate in the industry) when 90-94% is paid to the Chinese labor + Taiwanese / American / Singaporean / Japanese engineering.
But the complete item is US manufactured. That's not playing with statistics. That's how manufacturing works. You take raw materials and parts and often software and assemble them in such a manner that you add value. That's how a few bucks worth of wood and varnish become an expensive piece of furniture. That's how the company I work for takes $100 worth of parts and assemblies and when it's complete we have a $1000 or $2000 product.
Usually the "manufacturing" value is the value added (sales - parts/purchase from others). And yes, everything in the world if you look deep enough has its value from 1) profit of someone + 2) labor cost of someone (which is a profit of someone) + 3) energy cost of someone (which is also a profit of someone).
So yes, the $200 CPU you buy is only worth $1 of silicon + $30 of energy + $20 of labor (variable cost) + $49 of R&D + $50 of energy + $50 of profit. This also go for your boeing 747 and $20 Walmart toaster. This is also why when a company move its production to China they are only reducing their price by 10%, but their labor cost reduces by 50%. Labor isn't everything, there's a lot of cost in retailing and marketing, as well as transportation, overhead, increased lead time (cash flow cost), and (Surprise!!!) risk.
Even when something is made in China or Malaysia, a lot of its components are still from Japan, US, Taiwan, etc and a lot of the cost is still sent back to those places. When you buy a $200 made in Malaysia CPU it is probably 70% back in the US and only 10% in Malaysia, and 20% to Japan and Europe.
A smart phone selling for $500 may only cost $250 to make, with the BOM (bill of material) to be about $200 and labor to be $50. The $50 labor paid to Foxcon usually means foxcon is keeping 6-10% (going rate in the industry) when 90-94% is paid to the Chinese labor + Taiwanese / American / Singaporean / Japanese engineering.
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It's funny as heck down here.
Gerry Harvey (Harvey Norman, a country wide chain, that back in the 80s/90s wiped out the independent retailers, spouting "competition, get into it, or get out of it") is asking the Govt to impose taxes on all ebay transactions to stop the retailers going out of business against "unfair" competition from untaxed imports. (*) (**) (***)
Read a statement by one of his employees that on her wages, there was no way that she could afford to shop at Harvey Norman's, and that if everything he sold was from China anyway, why shouldn't she cut him out and buy direct ?
*Under our GST laws, online transactions less than a grand don't attract GST.
** Further, businesses earning less than $50k don't pay GST either.
(***) http://www.theage.com.au/national/retail...tml?from=age_sb
Gerry Harvey (Harvey Norman, a country wide chain, that back in the 80s/90s wiped out the independent retailers, spouting "competition, get into it, or get out of it") is asking the Govt to impose taxes on all ebay transactions to stop the retailers going out of business against "unfair" competition from untaxed imports. (*) (**) (***)
Read a statement by one of his employees that on her wages, there was no way that she could afford to shop at Harvey Norman's, and that if everything he sold was from China anyway, why shouldn't she cut him out and buy direct ?
*Under our GST laws, online transactions less than a grand don't attract GST.
** Further, businesses earning less than $50k don't pay GST either.
(***) http://www.theage.com.au/national/retail...tml?from=age_sb
Originally Posted By: jsharp
Over the last century we got used to things we bought working properly when we purchased them. I guess now some people have resigned themselves to that no longer being the case. I'm not now nor ever will be one of those people.
+1
It's amazing how many items I've bought in the last 5-10 years that didn't work right out of the box. Simple stuff, too. Or how many really little errors made during production that turned into larger problems later.
Over the last century we got used to things we bought working properly when we purchased them. I guess now some people have resigned themselves to that no longer being the case. I'm not now nor ever will be one of those people.
+1
It's amazing how many items I've bought in the last 5-10 years that didn't work right out of the box. Simple stuff, too. Or how many really little errors made during production that turned into larger problems later.
American companies are greedy.
China would sell the new camaro at a small profit and sell millions of them.
GM sells them as a rich mans car.
Is there really 10k of extras over the basic econobox?
It looks cooler to own a dealership with 1000 cars of inventory,then to actually sell them.
DOH!
China would sell the new camaro at a small profit and sell millions of them.
GM sells them as a rich mans car.
Is there really 10k of extras over the basic econobox?
It looks cooler to own a dealership with 1000 cars of inventory,then to actually sell them.
DOH!
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