Manufacturing in China

Discussion in 'Getting Started' started by RobertInOntario, Oct 25, 2007.

  1. nkp174

    nkp174 Active Member

    If it's made by Chuck Norris, then it is quality. If you don't buy it, it'll jump off the shelf and kick you teeth out.

    I'm off to BW3's to watch my Bears game...for some reason we walked home from church first...instead of straight there.
  2. MadHatter

    MadHatter Charging at full tilt.

    Maybe it's not a good idea to go to a football game in church clothing?
  3. Renovo PPR

    Renovo PPR Just a Farmer

    I wasn't thinking about Southern England :) I was thinking about some of the real African Countries. :) There are enough poor countries where .50 an hour would be a large increase in their standard of living.

    In any event it is my guess for the next or future move of cheap manufacturing,
  4. MadHatter

    MadHatter Charging at full tilt.

    We won't know until it happens. But it will be good.
  5. doctorwayne

    doctorwayne Active Member

    It'll not likely happen without political stability, and there are a lot of big-time players operating within most African nations to ensure that this won't occur anytime soon. Multi-national corporations are unlikely to be attracted where the risk factors are currently so high.

  6. nkp174

    nkp174 Active Member

    That is true. It is very sad to hear about how rampant corruption is around the world.

    MadHatter: I swapped out my sweater for a football jersey, but left my dress shoes & pants on. Most people going to my church wear t-shirts I was overdressed :mrgreen: I live in a campus area.
  7. MadHatter

    MadHatter Charging at full tilt.

    Aha, we don't dress in a formal way at our church either, the pastor preaches in jeans and a casual- formal shirt.
  8. lester perry

    lester perry Active Member

    its not just china and it is all about profit. did the price of Atlas track go down a few years ago when they moved to china? No it went up. I work at an auto plant, a few years ago they started building the same car in Mexico the Mexicans were making around 2.00 dollars a day if memory serves correct. would you believe the company said labor was the most expensive part of vehicle. Theft charged the same amount for the Mexican built one as the U.S. built ones.
  9. nkp174

    nkp174 Active Member

    Lester, I think that some times that is the case, but not always. The auto industry is something Detroit has struggled in recent years by running far into the red...and hence a cost saving maneuver doesn't related in a savings to the customer...but rather the survival of the company. I recall that GM, in 2001, made $200 per small opposed to Honda making $2000. It's tough to keep up in R&D when you have to sell 10x as many cars as your competitors.

    In the case of production in places like China, it suddenly has to be shipped half way around the world, pay tariffs, and deal with some of the nightmares I've heard with QA/QC when shifting stuff to China. You also don't really have great initially savings to pass on, as you have huge capital costs to recover...while training a new work force and losing money in interest. save in not having to raise your prices.

    I used to be active in the Cincinnati Railroad Club, and I can clearly remember a discussion over printing in Hong Kong/Southern China. There were some cost savings...but they weren't passed on to the consumer in lower prices...they were passed on in not having to raise the price (or raise it as much).

    Companies normally can't squeeze excessive profit out of anything as their competitors would make a play to pick up their market share. They'd be squeezed out of the business entirely. Atlas can't compete with Micro Engineering/Shinohara/Peco on they have to be significantly cheaper. If they aren't, no one would by their products. So they've got to balance out price to maximize their profits. This is good for us because they'll have more R&D dollars to improve their products...investing in equaling Shinohara in quality at a lower price.

    Btw, I'm all for american made products. I purchased a Toyoda Corolla over a Yaris as it as 80% of the parts were made in the US/Canada (assembled in Ontario) as opposed to the 100% Japanese Yaris...or some made in Mexico car. I don't care about buying union...just US/Canadian. I want the profits being invested in the US/Canadian economy (which I view as closely linked). I also try to avoid supporting third world/banana republic dictators as much as possible. I only like plastic when I'm building model trains.
  10. SeriousSam

    SeriousSam Member

    eh, NKP, most stuff is like Intermountain's locomotives..."made in the USA...But assembled in china"
  11. nkp174

    nkp174 Active Member

    I know. I don't buy much of anything that has been I don't buy much that comes from China (hobby wise). The only Chinese (model railroading) product I've purchased in the past 6 months has been a Galloping Goose...unless A-line lead weights are made in China. Otherwise, I've purchased styrene, music wire, brass sheets, and one brass made in Japan locomotive (from 1977)...The only kits that are remotely relevant to me are those from Grandt Line, Trout Creek engineering, and Cimarron can also make a case for GME...which I know nothing about. I only have stuff from Grandt.

    But I know I am certainly an exception since I still live in the model railroading dark ages :mrgreen: I know that state of the art model railroading involves operating layouts filled with those RTR locomotives which make me drool every time I'm at the hobby shop. But...since I follow a strict: it must be directly related to my hobby goals (1884 DSP&P or 1948 NKP)...or I won't think twice unless it is too good to be true. I don't think that what I do is anyway better than what most people do...just that it is what I like to do. My brother would prefer a fleet of poorly detailed and mis-lettered IHC pacifics, consolidations, hudsons, and mikados...which is fine. He things that my stuff is a waste of time...which is fine by me!

    The cheap Chinese labor is the reason that much of the highly detailed RTR stuff exists is cost prohibitive to assemble stuff like that here...but not cost prohibitive to do so in China. I'd rather have made in China than not at all. Besides...we all know that the REALLY good trains come from Korea and cost $4000 RTR. And I never plan to ever add one to my collection.
  12. Pitchwife

    Pitchwife Dreamer

    Ah, where to start?
    First off I think that most everyone agrees that the bottom line is the all powerful dollar, yen, euro, yuan, rupee, dinar etc. After all, that is what is driving the global marketplace. Trouble is, that there are dramatic differences in the standard of living in different parts of the world. A worker in China today can have a comparatively higher standard of living making the equivalent of $3 a day than an American can who is making $30 a day. That's not to say that he can go out and buy a plasma TV or a Mercedes Benz, but he doesn't NEED all of that stuff. He CAN provide his family with adequate food, shelter clothing and an education and have some left over for some creature comforts.
    So who's to blame for this? I'm afraid that a large part rests squarely on the unions. When they were first formed they were justified because industry was taking advantage of it's work force. It was able to dictate to their workers what wages and working conditions they had to endure because if the worker didn't like it there were plenty of other people who would tolerate it just to have a job. Now with OSHA and minimum wage and all of the other regulations the government has in place, the only thing the unions can do to justify themselves is to obtain higher wages for their members and ensure that those members cannot be replaced.
    My brother-in-law used to work for McDonald Douglas. He told a story about how the company wanted to test the reliability of a push button switch so they set up a stand in the cafeteria and anyone who wanted could push the button which turned on a light and registered on a counter. The joke was that it was the only button in the entire plant an engineer could push without violating union rules. :cry:
    My question is this; since it seems that we (the United States, et al) have become nations of consumers instead of producers, how soon will it be that there will be no jobs here to provide the funds for us to consume any more? How can you buy a Cadillac for $5000 when you don't have $5000 to spend? Put it on plastic? Well of Course! We, all of us, are heading for a huge meltdown that will make Enron look like the corner Mom & Pop store going out of business.
    I once had an argument with someone who said that he would only buy American made goods. I said that I wouldn't, that by buying foreign goods it would force American companies to produce better products. Now I see how shortsighted I was. They didn't make better products, they just went where they could make the same crap cheaper. :curse: :curse:
    As was stated earlier in this thread, empires rise and they fall, and I'm afraid that we are seeing the end of the American Empire.

    OK, I'm getting down from my soap box which, by the way was American made "cause I made it myself. Of course the wood came from Japan, who bought the raw lumber from the U.S. and the hammer and nails probably came from China wall1 :cry: (sigh)
  13. Printer

    Printer Member

    I grew up in a Union home and have been a member of a few myself. I don't think that the blame can or should be placed on the union workers. All we wanted was a wage large enough to be able to buy the things we were making. When you see the boss riding in a Limo and you have a hard time scraping up bus fare to get to the job that makes him so rich you get upset.
    A fair wage and benifits were all we wanted. I'm slaving in unbearable conditions so he can eat steak why should I have to settle for ketchup and crackers.
    Did he need 3 homes and two summer cottages while I was unable to afford one apartment?

    "Then go get another job!"
    Why should I have to work 2 or 3 jobs to have simple means?

    No, I don't blame the worker. I fault the greed of the business owners and directors. They want to have it all and give nothing.

    Before you jump on me (again). I've run my own business for 27 years now and have taken myriads of business courses in various locales. i.e.-U-Mich Dearborn campus business classes. SBA seminars. etc.
    And they teach the "Hire 'Em Cheap - Use 'Em Up - Throw 'Em Out" policy in all business management classes. Even the State Of Florida gives me the "Nod & Wink" when it comes to how many hours I can "Push" my workers.

  14. nkp174

    nkp174 Active Member

    Printer, I don't know if I was the one whom jumped on you before, sorry if I did, but when I think of union issues...I think of the union leadership as much or more than the rank and files. Both sides are wearing white collars when the union leadership meets with the business management.

    It's sad to hear about the teaching of "meat grinder" management in your business classes. I suspect that's part of the reason that most Fortune 500 companies are not run by people with business degrees. I'm at the opposite end of the spectrum, having worked for a consulting engineering firm in which the company was primarily concerned with retaining works.
  15. Pitchwife

    Pitchwife Dreamer

    Scoot, I agree with nkp174. When I was talking about unions I was referring to the leadership and I don't mean the shop stewards who work alongside of their fellows.
    There is definitely something flawed in the business sector when a company can hire a CEO for millions of dollars and then pay him more millions when they fire him for doing a poor job.
    The only thing that makes me madder is when congress decides to give itself a raise. :curse: :curse: :curse: Don't you wish you could do that?
  16. Art Decko

    Art Decko Member

    The unions? I'm having a hard time seeing that. Union membership and influence in the US has been declining for over 50 years.

    Even in the 1940s union membership in the US was only about 35% of all workers. By the beginning of the period you are talking about (roughly the last 25 years), union membership had already fallen to 20%. Now it's only 12%. If you take out gov't workers, unions actually represent only 7.4% of private sector workers.

    Since 1968, the minimum wage, after adjusting for inflation, has actually fallen over 40%.

    As for those "higher wages", non-managerial American workers' wages have been stagnating since the late 1970s, although over the same period, American productivity rose something like 70%. It seems rather unfair to blame unions for high wages when wages haven't changed very much in a generation, especially considering that workers now typically pay a larger share of their health coverage. If unions are a major factor as you say, there seems to be little evidence of their influence.

    So who is responsible for the loss of American jobs? I'd say a good place to start is to "follow the money" and try to determine who has benefited from it:

    * Since 1970 American CEO pay went from an average of less than 30 times average hourly worker pay, to 279 times average hourly worker pay.

    * 80% of all publicly traded stocks in the US are owned by the 10% wealthiest Americans.

    * 90% of all American business assets are owned by the 10% wealthiest Americans

    (all figures are for 2005, the latest year for which statistics are available from the Fed and the US Dept of Labor)

    Globalization and outsourcing are complex phenomena caused by a number of factors, including changes in tarrif and trade laws, laws governing the mobility of capital, the internet and telecommunications revolution, cheaper & faster travel, and the standardization of shipping through containerization. I can't see how unions can be much to blame in comparison to, say, the affects of WTO and NAFTA. Those treaties are products of corporate America, not its labor unions.

    If "a large part" of the blame truly does lie with unions, then I would think that outsourcing should have affected other western economies much more than ours, since workers in most other developed western nations have higher union memberships, stronger unions and more gov't protections than American workers. Yet, despite lacking these "handicaps", the American economy has still lost something like 30 million jobs to outsourcing of labor since the early '80s.
  17. Gary S.

    Gary S. Senior Member

    Thank you Art Deco! I'm staying out of this thread, but I appreciate you setting the record straight.
  18. Printer

    Printer Member

    I sure do. and to be able to deficit spend to keep my business afloat and the books looking balanced too.:thumb:

    Art Decko has it though. If you want to find the reason for ANY problems in America... Follow the Money Trail.:curse:

    In the words of Randy Newman, singer:
    "It's Money that matters
    In the USA":twisted:

    That's sort of the reason I became a member of a Third Party political group. Serving as County Chair here in 2004.:yep:

    I suppose we should let this subject rest. I know I'm gonna ease off. Just remember to get out and vote. AND that America is NOT a two party system. It's a MULTI party system and if the two running things now don't work, it's time to look at third or even fourth partys to elect.

    Now back to our regularly scheduled railroading.
  19. nkp174

    nkp174 Active Member

    This is my final post in this it is now become politics (and I'm partially to blame :(

    The statistics you're quoting do not tell the full story...or anything close to it.

    30mil jobs gone? so you're saying that we're at 10%+ inflation? No. That is exactly the sort of thing that can be mistakenly drawn from misinterpreting statistics. Last year the unemployment rate was under 5%...approx 7mil people unemployed...and some of them are people changing jobs etc...

    I'm certain that 30mil jobs have gone...but more than 30mil new jobs have been created...the unemployment rate is lower now than it was throughout most of the 80's!

    When you are talking about the people at the top & bottom...don't forget to take into account social programs with redistribute the wealth. My neighbor abuses it like crazy as we pay for his housing...and he drives a Cadillac Escalade...that's sad...because he's in the cycle of poverty...he makes very poor decisions.

    Now...the top of society has gotten richer...the middle has gotten slightly increase of between $5k and $10k per household adjusted to 2003 dollars...and the bottom has gone up by about a $1-2k. Btw, my neighbor is in that bottom...and the people at the bottom get a boast upwards once you include social programs.

    I agree that globalization is quite complex, but it is impacted by the unions. Unions are synonymous with manufacturing...the very area we are discussing in why model trains are coming from China instead of Philly or something...and one of the aspects has been how the unions dealt with the companies. The fall of GM certainly started with poor management decisions...but when the going got became almost a joke to see the picket lines in Dayton on strike! I think it is sad because I feel that far more union GM workers would be employed today if they'd been able to function better together.

    As far as NAFTA and such...I recall the words of my favorite econ professor...NAFTA is basically a treaty which is good for us and bad for them...tariffs exist to protect an economy as it develops...and by getting Mexico to remove its helps us and hurts them. Now I can see both sides of that...and just because he has a PhD in the subject doesn't mean that he's correct...I've read a number of technical journal articles in which one group of scientists calls the others idiots...and then the go back and forth. But, my point here is that NAFTA...something pushed by Republicans & Democrats...isn't necessarily bad for everyone in the US...although I do agree that it can be painful to some.

    If you look up the'll find that the average American is wealthier than the average european, south korean, or japanese person. This does vary some with currency exchange the US is at $48,000 right now...with the UK $8000 behind. The last time I checked...the UK was slightly ahead of Germany, France, and Italy. The Swiss were...and are...ahead of us.

    Now why is Europe lower?
    "hen I would think that outsourcing should have affected other western economies much more than ours, since workers in most other developed western nations have higher union memberships, stronger unions and more gov't protections than American workers."

    Because they are socialists. France requires that every public bathroom be staffed by an attendant to provide income. I've been there and seen it. They have horrible problems with getting companies to open up new factories because the labor unions have so much sway on their gov't. Socialism isn't about growing the is about attempting to even it up...and the long term side effects are that politicians (typically lawyers) end up running the economy and they have a shortage of jobs.

    I personally feel that a little socialism is a good thing...although I personally don't care for the Feds to run it...I prefer for the States/local gov'ts to do that. What socialism I have...I want it to be safety nets...I want a capitalist culture. I have a German friend whom finds our "minimum wage" to be such a joke. She proudly points out that they don't have one in Germany and that they don't need it, as the market wage is higher than our minimum wage. She is right (to a degree), as the market wage is higher here as well...but that is something else.

    Things are going well in America for most Americans. Unfortunately, they aren't going great for everyone, such as my neighbor, but they are going better than many people realize. People like to remember the best times from the past, while forgetting the bad times...and then do the exact opposite with the present. We glorify the past...even though it wasn't as great as we think. The 1950's is certainly one of those time periods...yet many African-Americans experienced awful things then. If I'd been born then, I would have died due to a couple medical problems I had as a little things are getting better.

    As for the medical costs...if I don't know what it costs...I'm probably going to cost myself more than I'm willing to pay. This happens with insurance and it happens with the gov't running the show. In part, medical costs are higher now than ever before...because there are more medications available and more people living longer than ever before. We don't die of waterborne diseases in the US...we actually wear our bodies out! (heart disease is wearing out your cardiovascular system, cancer is wearing out your DNA) The result is more being spent on medicine (and research to provide fountains of youth such as a cure for cancer). I'm fine with that. But I suspect that the more directly I see the costs of visiting a doctor...the more likely I am to only go when I need to do so. I'm really scared at the idea of "free" health care as that just means more taxes...and I don't want George W. Bush, Hillary Clinton, Ralph Nader, or some other politician to be in charge of my health care.

    I'm now going to bow out of this thread and not post again. I couldn't resist the statistics as I am a research scientist/engineer...I love analyzing data/statistics.

    I'm done in here because this isn't related as to why I'm on this forum. I'm here because I love trains.

    Next time there is a thread like this...I'm going to stay with Gary S. on the sideline. You are wise my friend.
  20. Pitchwife

    Pitchwife Dreamer

    Art Deco, I will concede your figures. I guess that I was thinking of a time 30 or 40 years ago when unions held more clout and could sway elections more-so than they do today. Still 7.4% of an electoral voting block is nothing to sneeze at.

    But then where DO we look for answers? The loudest current and future political voice is the now aging baby boomers. They (we) will shoot down anyone who even hints at cuts in Social Security and Medicare, even if almost all economists agree that in less than 20 years both of those will be bankrupt.

    What about pork-barrel politics, where political terms in the House and Senate span numerous Presidential terms and those officeholders have become so powerful that they effectively have a blank check when it comes to sending money for their pet projects home to their districts.
    And then there is the electoral system where candidates have to spend many 10's of millions of dollars to get elected. And despite campaign reform laws, most of that money comes from big business, who then expect their candidates to look their way when large government contracts are handed out. Not to mention the PACs, lobbyists etc. Big business + big government = bad news.

    You are right Art Deco. It was unfair to lay all of the blame on the unions. There are plenty of shoulders here to bear that burden.

    NKP, there is one group that you are failing to include in your unemployment statistics, the people who have quit looking for work. If you are in your 40's and are Downsized you are in a real bind. Companies who are potential employers won't hire you because with your experience they would have to pay you more. Seems like they would rather hire someone younger and inexperienced, pay them less and train them than to hire someone with experience and pay them more. I know several people in this situation. Either they change professions or take low-paying jobs that they are overqualified for (if they can find them.)

    Printer, I admire you and your Third Party stand. If there were more people who saw things differently there might be a change in the wind. Unfortunately, the typical voter stance today is "what have you done for me lately?"and "Me first!" Third party nominees currently seem to be at best "spoilers" Ala Ross Perot who many people think prevented a second (first) Bush administration. Maybe the next generation will rise up and effect a change. I'm afraid that this one won't.

    Like NKP174 says, 'nuff politics, more trains. :thumb:

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