Technology Review is currently running an excellent series of articles, the last one I mentioned, about shale gas, fired everyone up and subsequently, many readers missed the point, which was how it could help bring manufacturing back to the USA. The magazine is trickling these articles out day by day and the latest one goes into the “reshoring” initiative that’s really taking off.
One quote is very positive:
… the vast majority of what Americans consume isn’t high-tech at all. We need to efficiently make ladders and hammers and paper and lights. And we need to do it with the relatively unskilled workforce that we have. Since other countries are targeting high tech, we’ll never dominate it enough to balance the trade deficit.
In other words, many of the very people out of work are exactly the ones who can do what needs to be done.
Yes, Apple and GE get all of the press when they bring back some jobs by making things here again, but lots of little companies are joining the trend, Cleveland Cyclewerks, for instance, is one we’ve mentioned gradually moving operations back to the USA.
To me, the rationale for sending a few million jobs to other countries never made sense. Sure, wages were lower, for a while, but now wages in China are rapidly rising and the numbers no longer add up, if they ever did. All of those MBAs apparently thought no one in China would ever ask for a raise, oops!, and now they have to bring those factories back here. Export products, not jobs, even an MBA should be able to understand that.
Link: Technology Review
Link: The Atlantic
Racetrack Style says
Transportation costs from China is also a factor.
Technology Review is a good read
Paul Crowe says
Yep, transportation and wages are the measurable costs. Quality control is hard when the factory is half a world away, too. Plus the designers and engineers can’t walk out to the factory floor to see if the assembly process can be refined with a little redesign of the product, one of the first benefits GE found when they brought a water heater back to the US. They saw how it was being built in China and with the help of some guys on the line that would be building it, changed the design for easier and higher quality assembly and now the heater is better built, and amazingly enough, costs less, too.
Gene Sherman says
I’m doing my part by making sure that people have the opportunity to learn these hands-on skills. If we plan on bringing back manufacturing, we’d better start developing the “vocational” skill set that is necessary. Enough funneling EVERYONE into college, we need to give them another choice. I want to create that alternative choice.
Most school have killed off shop class, and I want to changed that. That’s why I’m starting a place where people can learn these skills AND have a place to practice them by making ANYTHING they want (including custom motorcycles!).
http://www.VOCADEMY.com
BTW. love Kneeslider!
Honyock says
Having worked in manufacturing for 30 years, I watched the wholesale abandonment of American manufacturing capability by treasonous bastards who sold our infrastructure and technology for short term profit and are now retired in some island paradise where they can hide their ill-gotten loot from the IRS.There are still a few of us who remember how to make parts who will probably have to work until we die because our retirement funds were stolen by the government to give to the bankers in 2008. But I’m not bitter…
The technology survives among the “Makers movement”, small groups of DIY fanatics and hackers of all descriptions. We can only hope that they can carry the torch until (if?) the schools start to teach real skills again.
Capitalist tool says
Sadly, the lesson of Henry Ford was either never taught or forgotten by modern MBAs running American industry.
Ford, wanting to introduce the automobile to the common man figured who better to sell his cars to then his employees, so he RAISED their pay to then princely sum of $5/day. These workers, now with disposable income, were able to buy cars. This created the upward spiral of more cars built, lowering of the price of Model T’s & all the economies of scale & increased employement throughout all related industries.
What the unintended consequence of the last 20+ years of the wholesale rush to “off-shore” production has created the opposite. Lingering unemployment, ultimately harming the industries that have fired their workers. GE’s business was hurting BECAUSE they sent their production to China. An unemployed person won’t be renovating his kitchen..Duh
Mean Monkey says
Capitalist Tool,
Yup, you got it. There’s no or very little thought given to the future of the overall American economy by these guys. The instant gratification of wealth to the CEO’s is the main cause of the offshore production. (yes, I’m pointing fingers at GE’s Jack Walsh and the Walmart CEO’s and board). Get the stuff made as cheaply as possible overseas and then, foist it onto the consumers at the same price as the US-made products. Whoops, sorry, I think I woke up a bit cranky today.
todd says
don’t forget the greediness of the unions and their power hungry, overstuffed bosses.
-todd
Mister X says
“many readers missed the point, which was how it could help bring manufacturing back to the USA.”
No, you’re missing the point, even if a small part of the USA becomes an uninhabitable industrial wasteland due to the obscene need for oil derived energy, than it’s not good at all.
Renewable energy is the only sustainable way forward.
Doug says
Imagine if solar technology becomes efficient enough that the majority of homes have aesthetic, integrated solar roofs that work intelligently with an updated grid in a networked way….. Solar would only be part of the equation, not the end all, but it (combined with wind & nukes) could drastically reduce coal-fired energy in billions of homes & businesses.
How many homes in the “Sunshine” State run the a/c 10-11 months of the year powered by natural gas or coal? Look at the Consumption By Source chart http://www.eia.gov/beta/state/?sid=FL
F the fracking
Herr MF says
FUD + fantasy = future.
But only for the subgenius set.
Papasan says
Remember you are more likely to buy and or keep what is made by your hands or the hands of people you trust and admire, like your fellow Americans…
Bring back JOBS for Americans and the rest won’t matter a whole lot at the end of the day…
Precision manufacturing and fabrication, once the hallmark of American industry are the very thing that pulled the USA out of the Great Depression. The mechanisms and infrastructure are still here, they currently lay dormant, but none the less are easily put back into workable action.
The USA has started “manufacturing” again, We as a Nation have begun the road back to where we were. The Middle Class of the USA is built and sustained by a strong working force with proper pay and benefits.
Skido says
In New Zealand we let everything go offshore in the eighties and we enjoyed cheap stereos etc for a couple of decades. Now China ships us products that are basically landfill in a couple of months.
This sorta thing is why the world is stuffed. There is no way in hell it can be sustainable and I am quite sure it’s adding to our woes.
There is a lot of talk about “free trade” which is essentially bollocks. What we need is equal trade eg: New Zealand and USA can trade as equals as our companies and citizens pay taxes which provide free education, health care and a welfare system etc…
Why should we let a nation trade with us that does not have to pay for these basics and therefore their price is dirt cheap and puts our tax paying businesses out of work? It’s nuts.
Time and time again companies move production to China, not because they aren’t making money but because they can make shedloads more money that way at the expense of workers. Greed vs Jobs.
Good on USA companies getting their mojo back! It’s about time the USA started being great again. And what the hell is wrong with your politicians? For crying out loud your country is this close to bankruptcy and they are in a pissing contest. FFS.
Nortley says
There are a lot of old rust belt machines and tools out there for decent prices. I just got one for my shop. Scrounge some materials and try to make something useful. Hey, it’s a start.
Kevin says
We can keep blaming it on greed of the company, but that is what got us into this mess. If it wasn’t for “greed” we wouldn’t have successful businesses.
http://www.youtube.com/watch?v=RWsx1X8PV_A
Instead of always blaming those successful, lets look at WHO caused them to go overseas. If policies here basically punish you for manufacturing in America, you will go overseas. A business is here to make money. If they need to go oversees to evade taxes, they will.
Quality control isn’t that hard to do in China, that isn’t the problem.
We should fix the government issue and bring back manufacturing and jobs naturally, not artificially and forcefully. Let’s not punish and blame those who have a successful business idea.
Paul Crowe says
In the case of the US, our government set the stage with high taxes on business, then many of those businesses made the problem worse by off-shoring so many jobs. One led to the other, both made matters more difficult, but is moving your business to China and operating under that government and in a very different business environment really a better solution? Besides the benefits of avoiding taxes and paying lower wages, did the decision makers in those companies consider the unintended consequences of their move? Do they now complain about stolen intellectual property and clones of their products showing up on the market at lower prices? How many food companies have found their products contaminated in those relocated plants?
If it was a good idea they’re proud of, why do so many of those companies make it very difficult to determine exactly where their products are made? Here in the US, items made here usually have a label that prominently declares “Made in the USA.” You don’t have to dig around and read the small print.
Countries all over the world make great products and if they meet your needs, buy them. They can export their manufactured goods to the US and we can send ours to them, let the products compete, but sending our manufacturing plants, our knowledge, our technology and our jobs elsewhere, makes no sense.
If these companies beginning to move back signal a reversal of that flow, it could be the beginning of a very good thing. But just think, if our taxes are still high on business and they’re moving back anyway, how bad must it now be over there?
Scott says
We can argue the details back and forth, but if we step back and look at the broad perspective in the particular industry all of us are interested in, the future of American Motorcycle manufacturing looks brighter than it’s been in 40 years.
By the time the 2012 numbers have been crunched, it’s very possible that we will have a new biggest US motorcycle manufacturer – Polaris/Victory/Indian. They have stealthily been catching up to Harley and based on teh 2012 third quarter reports from both companies, it looks like they’ve nearly caught them. And I think their brightest days are still to come.
Also, for the first time since the term “Superbike” was coined, we have an Amercian manufacturer of Superbikes in EBR.
Based on everything I’ve seen, I fully expect both Polaris and EBR to be much bigger and better 5 years from now than they are today.
We also have player such as Motus and Fischer. I’m a bit more skeptical about how either of them will fare over the coming years, but if either of them can simply survive to see 2018, they’ll have won the key battle and should be here to stay.
10 years ago, the products American motorcycle manufacturers were putting on the market were an embarrassment, but I truly believe we are seeing the beginning of the end of those dark days.
Racetrack Style says
Motus & Polaris would both make a smart move if they partnered in some way, be it acquisition or some type of manufacturing & dealership-share. They could relive one of Indian’s last major innovations: the longitudinal 841 twin that came before the Victoria Bergmeister & Moto Guzzi twins.
The American Sport Tourer segment seems like a bigger opportunity than the lack of an American Dirt bike or Adventure bike.
Racetrack Style says
“relive one of Indian’s last major innovations: the longitudinal 841 twin…”
Relive that innovation via the longitudinal-crank V4 that Motus built (it might even satisfy the in-line 4 Indian fans)
http://en.wikipedia.org/wiki/Indian_841
Paul Crowe says
That Motus V4 is just crying out to be used in applications beyond the sport touring segment and Polaris/Indian might offer good fit.
Another American engine that seems to have died on the vine is the MotoCzysz. When they went all in with electric race bikes, a promising narrow angle v4 disappeared. Wouldn’t it be nice to see that show up in an American bike?
RS says
The manufacturing costs of the Czysz motor seems like it could be higher than its competition, even the RSV4
Auz1237 says
Not to bring facts and figures into an emotional discussion but from the mid-70’s to now the US has “lost” between 2-3 million manufacturing jobs. During the same time period China has “lost” approximately 20-25 million manufacturing jobs. China has lost approximately 4 times the manufacturing jobs in the same time period then the US per capita, perhaps we should be having benefits for them…. Back to reality…. anyone who actually works in a manufacturing facility for a major company can attest to the level of automation on the manufacturing floor compared to 30-40 years ago. This is the real cause for less manufacturing jobs… unless of course you want to get emotional and blame Charles Babbage for inventing the computer….?
Paulinator says
I think we’ve all forgotten that when (North) America had ample manufacturing jobs we didn’t want ’em. Back in the Eighties, cinema routinely embraced opening shots of grinding sparks, welding flash and industrial amounts of steam. Those same movies featured a protagonist that was striving to climb out of his/her factory-town existence, where one’s future prospects were set at the time of conception (under the high school stadium bleachers).
We are now within reach of new technologies and processes that will redefine manufacturing at a fundamental level. I welcome the change for my kids’ (and grandchildren’s’?) sakes. Let’s hope that the manufacturing renaissance yields a lifestyle for the we the people that is free from both class tyranny AND unions (…AKA organized corruption).
B50 Jim says
Manufacturers are belatedly discovering that the American workforce is as good as any and better than most. Its productivity exceeds a lot of the others, which makes up for the added costs for labor, even when the American workforce is paid a decent living wage. Add to that the costs for shipping all over the world and tarnished reputations for substandard offshore workmanship; more and more it’s looking like “Made in the U.S.A.” is the way to go. It never should have gone, but I’m gratified to see a growing trend to bring it back home.
Just look at a Chinese-made motorcycle, the type sold in parts stores. From a distance of 20 feet it looks all right, but get up close, and the back-room quality becomes apparent. Sure, they’re inexpensive but you’ll make up the price difference the first time you have to rebuild the engine at 2,000 miles or put in a new gearbox.
My dad had business cards printed up for his meat market. On the back they said: “Quality is like buying oats. If you want nice, clean, fresh oats you have to pay a good price. However, if you can be satisfied with oats that have already been through the horse… That comes a lot cheaper!”
Kawistar says
I have worked many years, in management, in different companies that produced and sold products in the US and abroad, and the decision making process behind employee compensation, and shifting manufacturing across borders and oceans for decision makers has always been “how is this going to affect my bonus at the end of the year” . If a product can be made in the US at a healthy profit, or has to be because of the costs of moving production or risk, etc.., the company will position the product as US made and will charge a premium for it. If not, it will charge as much as it can for it to sell as many as it can of it, regardless of where it was produced… If you want more things to be produced in the US, buy American, pay more for it, support local labor and vote for the party that promotes and protects local manufacturing. What your perception of all these things are is up to you. My personal approach to understanding who’s who is to understand who is connected to whom and who is benefiting from legislation.