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  • Posted by rlewellen 11 years, 2 months ago in reply to this comment.
    No it's a story about selling something to a country at a higher profit because the people have historically earned more.
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  • Posted by barwick11 11 years, 2 months ago in reply to this comment.
    Why?

    Why would you pay MORE for something just so someone who lives in your proximity can "have a job"?

    You realize your mentality is the same mentality as minimum wage? Pay more for the same stuff just because. Which increases the price of everything, which means minimum wage will "need" to go up AGAIN so those "poor" people can afford the basics again because those basics are so expensive to produce because minimum wage is so high, etc...
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  • Posted by Argo 11 years, 2 months ago in reply to this comment.
    Labor costs are not the highest expense for manufacturing business'. Any financial statement will show about 60% of costs are material. While I agree the reduction in labor costs is easier, the real gains can come from a reduction in material costs because it is larger. A 10% reduction in material costs is far greater than a 10% reduction in labor costs. The mistake often made is the labor cost of one piece or product is greater than the material costs, but this ignores the 100's to thousands of pieces made. Eventually the material costs will exceed the labor cost as more parts or pieces are made. Wages of labor are based on the productivity of the worker. He can only be paid based on what he can produce in a given amount of time. If time is money, then taking nine hours to do a one hour job will not make you competitive and the business thinking like that will fail.
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  • Posted by rlewellen 11 years, 2 months ago in reply to this comment.
    It's just a wholesale crony capitalism. Ragnar and Fransisco would have sunk their ships.
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  • Posted by mccannon01 11 years, 2 months ago in reply to this comment.
    RobertFl: I pretty much agree with you here, but need to add something to the discussion. I've lived and worked in China for an American company in the past. Capitalism is alive and well on the Chinese street (so's the mini skirt) and is working for the people and the government doesn't want to mess this up. The standard of living is far above the old communist rule and the people want to keep it that way. IMHO, the biggest problem in trade between our countries is the artificial currency imbalance held in place by the Chinese government. Next is some tariff action going on. Example, why would a $16,000 Harley Davidson in the US cost $40,000 in Beijing? S & H? Nah.

    A spin off on one of your statements is I was disgusted by the fact US blood was shed to "liberate" Kuwait from Saddam Hussein and put a MONARCHY back on the throne! HELLO, WTF??? I thought it was a good idea to boot Saddam, but put in a constitutional republic at the very least!
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  • Posted by $ blarman 11 years, 2 months ago in reply to this comment.
    I'm going to present another take on things: this represents what Adam Smith would have deemed an opportunity for labor arbitrage. In a system with the free movement of labor and production (such as a global economy), it isn't so much about inevitability as it is relative wages and therefore production costs. There are definitely elements of efficiencies of scale to consider, but most especially in manufacturing, labor costs tend to be one of the highest input costs and they are variable costs. The quickest way to make a buck is to decrease your manufacturing costs by substituting variable costs for fixed costs.

    I would also point out that the corporate farms are the primary recipients of money from the annual Farm Bill, so the takeover of the family farm isn't nearly so much efficiency-related as it is subsidization-related.
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  • Posted by Robbie53024 11 years, 2 months ago in reply to this comment.
    To expand on rlewellen, while productivity is lower, the cost of labor is even lower still. I once was in charge of trying to introduce construction equipment into China. The value proposition just wasn't there, as it was much more cost effective to employ a hundred workers with shovels than to buy one backhoe.
    When I worked in Mexico, the machinery was more antiquated, but when you pay someone $3 per hour vs. $27 per hour you can take up to 9 times as long/more workers before you are just break-even. Of course, you've got to figure in shipping costs and other costs (like kh mentions).
    Don't get me started on the effect of labor. I designed parts that a supply chain guy got a big bonus over moving to Mexico, only to find that the way they were designed was specifically to take advantage of machine capabilities that were not available in Mexico. So the whole thing flopped and all the quality and manufacturability improvements were lost, for a product that had about 7% of the total product cost due to labor. But the moron still got his big bonus.
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  • Posted by Robbie53024 11 years, 2 months ago in reply to this comment.
    Might be picking at nits, but I would prefer a sanction not a tariff. If the nation is committing atrocities, then it should not be traded with at all.
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  • Posted by evlwhtguy 11 years, 2 months ago
    A slick video but given that Wal-mart is producing it it strikes me as being a bit hypocritical. However, Wal-mart is merely responding to customer demands in importing so much stuff from overseas. People want goods and services at the best price and that is difficult to achieve with the moocher class here in the US. If Wal-mart is finding US Suppliers at a competative price, that must mean that the Moocher class is on the rise in places like China. It is apprapo as the name of their country already has "The Peolpes Republic" in it!
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  • Posted by $ Thoritsu 11 years, 2 months ago
    Hypocritical? Walmart now speaking about US manufacture, when they have turned into a clearinghouse for Chinese goods over the last 20 years?
    Shake my head at people shopping at Walmart, buying cheap Chinese junk, with "Proud to be Union" shirts and bumper stickers.
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  • Posted by khalling 11 years, 2 months ago in reply to this comment.
    cost of compliance, regulations, corporate tax rates -especially for a mature industry, unions.
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  • Posted by Argo 11 years, 2 months ago in reply to this comment.
    What I have never been able to understand, nor have I ever heard an explanation regarding the move of manufacturing to lower cost labor areas. Is it not true that lower cost labor is a function of labor productivity? If so then moving to low cost labor countries only gets you low productivity. In addition, companies' costs are not led by labor but by materials. So it seems to me the only reason to move manufacturing would be to access lower cost materials. What am I missing?
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  • Posted by RobertFl 11 years, 2 months ago in reply to this comment.
    If China is adding Tariffs to US goods, or if the Chinese gov't is subsidizing their industry such that it creates an unfair advantage, then YES, we slap their goods with a tariff.
    I actually don't care about their human rights. If the people won't stand up for their own rights then who are we to do it for them. I feel the same about the US helping to liberate a people that won't liberate themselves first (aka Iraq, Afghanistan).
    You didn't see the French taking the lead in American Revolution.
    The only reason why we let the Chinese get away with this is because we need their money to fund the moochers in this country.
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  • Posted by squareone 11 years, 2 months ago in reply to this comment.
    There is a saying that goes,"If goods and services do not cross national boundaries, soldiers will." Another saying goes' "Walk softly and carry a big stick." (Theodore Roosevelt)
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  • Posted by $ WillH 11 years, 2 months ago in reply to this comment.
    I have no issue with tariffs on imports from China, but not for rlewellen's reasons. I favor trade sanctions and tariffs against China for their well documented human abuses. They are an aggressive communist nation well known for their cruelty to their own people. Free trade with them does nothing but bring us down to their level.
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  • Posted by Robbie53024 11 years, 2 months ago in reply to this comment.
    I'm with you. I'm surprised a person on this site would be advocating for tariffs. That would be antithetical to everything that AS was advocating.
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  • Posted by $ WillH 11 years, 2 months ago in reply to this comment.
    Do we? Or do we need to stop granting most favorite trading nation status to an aggressive communist nation?
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  • Posted by rlewellen 11 years, 2 months ago in reply to this comment.
    There was a company that made socks in Tennessee for Walmart. There is not alot of room for profit or competition in socks because 97% of the world's socks are made in China. We have free trade with a country that we can't compete with. We need socks I would happily pay and extra dollar for a pair of socks made In America. We need tarriffs.
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  • Posted by preimert1 11 years, 2 months ago
    I had the privilege of working on the line at the GM assembly plant in Doraville, GA the summer between my sophomore and junior years at Georgia Tech. I installed radios in every Buick, Oldsmobile and Pontiac for three hot months--one every minute and forty two seconds for 8.7 hrs a day. It took me about a week to get my body used to it, but pretty soon I had it down pat and made a few method improvements to where I could do it in less than a minute. It became like a game as the summer sped by and at $4.30/hr I made enough to buy my first used car.

    When I went back several years ago the plant stood empty--broken windows and pigeon crap over what few machines were left. Only ghosts of the noise and smells and fellow workers remained.
    So sad.
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  • Posted by $ stargeezer 11 years, 2 months ago
    I hope I put this in the right place. A very short 60sec video that has some very interesting photography. Right up to the last few seconds. WW has destroyed more family businesses than they will ever replace with minimum wage jobs.
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  • Posted by Robbie53024 11 years, 2 months ago in reply to this comment.
    I lament the demise of the family farm as well. But the reality is that "family businesses" are not efficient. It is a truism of life that the more efficient will displace the less efficient. If it were not Sam Walton, it would have been Joe Schmoe. Purchasing in bulk and massive distribution systems were going to happen, it was inevitable. As was the displacement of manufacturing to lower cost labor areas. Other efficiencies will cause this too to be overcome as labor becomes less a portion of production costs and shipping and material costs increase.
    It was not WM that caused the demise of the American factory, it was inevitability, as it is inevitable that manufacturing will return to America. But not necessarily the same level of employment.
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