Can US Manufacturing Survive?

[B. Kidd]

There has been another recent trend to maintain manufacturing in the far east, in this economic downturn. Recent idle factories are now operating, making even cheaper 'knock-offs', down to 'Angel Soft' toilet paper.
Found this article interesting: Another sign of a rough economy: Even cheaper knockoffs | Manila Bulletin

 

[Douger]

Eetza murkin thang.

 

[Mr Natural]

It's a sad day when a company can't turn a profit on a $200 pair of sneakers.

 

[Flopper]

US Manufacturing used to be 28% of the US economy, and now its about 12% and dropping. Manuacturing creates wealth, the "service economy" is a hoax created by Wall Street to justify moving jobs overseas. I also blame unions in addition to Wall Street for killing industries like the automotive industry. Its a tough problem, but if we're ever going to get the unemploymemnt rate down, the unwashed masses need jobs, and I don't think that picking produce will pay the bills.

Manufacturing continues to shrink as a percentage of U.S. economic activity. | North America > United States from AllBusiness.com

So the poll question is "can US manufacturing survive & how?"

You are linking to a 2006 article. At that time manufacturing was shrinking. However, that is not the case today. Foreign orders are up. Manufacturing jobs have had 9 months of consecutive increases. Many believe that manufacturing exports will lead the country out of recession. However, I don't believe the long term outlook for manufactures is particular good. I suppose if Republicans could get rid of minimum wage and they could really break the back of the unions, then we might get very low wages in some manufacturing sectors. Then manufacturing could compete worldwide. However, that might be a hell of a price to pay.


US manufacturing export orders hit 20-year high - CSMonitor.com

Manufacturing jobs increase for the ninth consecutive month - Job.com

 

[uscitizen]

Ohh yes we could better compete in the world with lower wages.
You want to be the first one to volunteer for a wage cut?

Textile workers in Bangladesh get around $45 per month.

This is why I say we have seen our golden age. The best we can do for the next decade is to slow the fall.

 

[Big Fitz]

Of course labor rates about 10% of those in the USA have nothing to do with manufacturing moving offshore?

Labor rates cost US manufacturing far more than taxes do.

True, true. Labor costs remain #1 with taxes/regulations being the #2 incentive for offshore manufacturing.
What looms oninous, is that offshore manufacturing labor costs are projected to remain relatively low/or not exceedingly increase for the next 20 years; therefore, remains an incentive.

Yep, the reason we will see no real recovery. We can only hope we do not drop too far.

Until we protect ourselves from nations who are unfairly competing, we will continue to decline. Of course, we must encourage similar level free trade instead of bootstrapping developing nations.

 

[uscitizen]

True, true. Labor costs remain #1 with taxes/regulations being the #2 incentive for offshore manufacturing.
What looms oninous, is that offshore manufacturing labor costs are projected to remain relatively low/or not exceedingly increase for the next 20 years; therefore, remains an incentive.

Yep, the reason we will see no real recovery. We can only hope we do not drop too far.

Until we protect ourselves from nations who are unfairly competing, we will continue to decline. Of course, we must encourage similar level free trade instead of bootstrapping developing nations.

We lose when fairly competing with any nation whose average income is maybe 10% of what ours is.

 

[Gadawg73]

No, it cannot.

Every single manufacturing job in the US can be moved to China, and China would still have serious unemployment problems. We are completely outclassed by Asia's and Africa's low labor costs.

If you cannot find a way to make a living that cannot be performed by poor Asian or African workers, you will be as poor as an Asian or African worker.

Exactly.
Technology and innovation has led the American market since we fought to get away from the horse and buggy manufacturers.
They used the same argument.

 

[uscitizen]

Unfortunately as soon as we develop a new technology we outsource it to china to be produced.

 

[Gadawg73]

If you invested $500K in the technology and wereabout to manufacture it what would you do?
Build your plant here and maybe,as over 50% of new startups fail, make a profit at an average of $50+ an hour to produce your product or have employees that make an average of $20-25 an hour make your product?
Which scenario gets more $ for R&R HERE in America? Would you put up 500K knowing that it might be gone because of overpaid workers?

 

[uscitizen]

Naw build it in another country where it might be nationized or otherwise be disrupted.

Be a greedy bastard and not give anything back to the country that "gave" you the money to invest.

 

[rdean]

Ohh yes we could better compete in the world with lower wages.
You want to be the first one to volunteer for a wage cut?

Textile workers in Bangladesh get around $45 per month.

This is why I say we have seen our golden age. The best we can do for the next decade is to slow the fall.

And now investors are "freaking out". Due to strikes, wages at a plant with 300,000 people were "doubled" to $293 a MONTH! Working conditions were so bad, people were killing themselves left and right. Couldn't ya just die?

-----------------

Hon Hai Precision Industry Co, the maker of Apple iPhones, dropped the most in a year in Taipei trading after the company agreed to more than double wages at its Shenzhen factories following a spate of suicides.

“The question is whether they can pass it on,” said Allen Pu, who rates the stock ‘add’ at Fubon Financial in Taipei. “We don’t know if clients like Apple will accept” Foxconn raising prices, he said.

The median of 17 analyst estimates compiled by Bloomberg is for Hon Hai to post earnings of NT$12 a share. The salary increase could cut that value by 36 per cent, Citigroup wrote in a report today.

Hon Hai falls on plan to double wages at China plants

 

[rdean]

Naw build it in another country where it might be nationized or otherwise be disrupted.

Be a greedy bastard and not give anything back to the country that "gave" you the money to invest.

You know that most Republicans don't know what it means when you suggest China could "nationalize" US companies based there. If you explain it, they will call you a "stupid, dipshit liar". I've been down that path.

Or about banks, protected by the big, bad US government, lending to the people who buy politicians so they can get their taxes cut and move jobs overseas.

 

[Big Fitz]

Yep, the reason we will see no real recovery. We can only hope we do not drop too far.

Until we protect ourselves from nations who are unfairly competing, we will continue to decline. Of course, we must encourage similar level free trade instead of bootstrapping developing nations.

We lose when fairly competing with any nation whose average income is maybe 10% of what ours is.

right. it's not our job to 'uplift' other nations at our own expense.

 

[rdean]

Until we protect ourselves from nations who are unfairly competing, we will continue to decline. Of course, we must encourage similar level free trade instead of bootstrapping developing nations.

We lose when fairly competing with any nation whose average income is maybe 10% of what ours is.

right. it's not our job to 'uplift' other nations at our own expense.

You're right, it's not.

Which is why corporations should not be allowed to bring those products into this country without a "fair" cost.

Democrats feel it's the governments job to protect the people.

Republicans feel it's the governments job to protect corporations. Then that protection will "trickle down" and they will protect the people.

We need to cut the middleman.

 

[editec]

US Manufacturing used to be 28% of the US economy, and now its about 12% and dropping. Manuacturing creates wealth, the "service economy" is a hoax created by Wall Street to justify moving jobs overseas. I also blame unions in addition to Wall Street for killing industries like the automotive industry. Its a tough problem, but if we're ever going to get the unemploymemnt rate down, the unwashed masses need jobs, and I don't think that picking produce will pay the bills.

Manufacturing continues to shrink as a percentage of U.S. economic activity. | North America > United States from AllBusiness.com

So the poll question is "can US manufacturing survive & how?"

It can not only suvive it can THRIVE.

Just as soon as we change from an unthinking FREE TRADE policy to a well thought out FAIR trade policy.


Our so called FREE trade partners mostly have fair trade policies in place to protect their industries

Why don't we?

 

[rdean]

Industries with some of the largest increases in GDP over the last 10 years made the gains primarily due to price increases. "Mining value added increased 188 percent from 1995 to 2005 as a result of a 250 percent increase in prices and an 18 percent decline in quantity," notes MAPI. Construction prices increased by 75 percent while output increased by only 18 percent; and education prices were up 73 percent while output was up 17 percent.

Manufacturing continues to shrink as a percentage of U.S. economic activity. | North America > United States from AllBusiness.com

With the US now ranked 12th in college education, it will be a long hard climb back.

 

[Big Fitz]

Democrats feel it's the governments job to protect the people.

Republicans feel it's the governments job to protect corporations. Then that protection will "trickle down" and they will protect the people.

We need to cut the middleman.

It is the constitutionally appointed job of the government to defend our people from threats foreign and domestic to our freedom. If it won't do that, it is violating it's basic reason for existance.

I am for free trade with pretty much any nation that has an equivalent social cost to the US or greater social cost. That would put most of europe and the Anglosphere in that bracket with some other countries like Japan as wel.

But, government sponsored monopolies and GSE's that unfairly protect or compete due to taxpayer monies from foreign nations should have some form of duty put on them AFTER a thoughtful analysis is done of our own industry to find out were costs can be cut to do the job more efficiently. This helps protect citizens from prices raised by the greed of labor and opportunism of shareholders.

It's odd in a way. We cause our own inflation on both ends as a society. We demand better wages and investments but then gripe about the rising prices require to make both happen. Huh.. what an odd revelation. That explains the big government desire to control wages and profits. It fails miserably, but I now see the desire for the impossible.

Liberalism demands, for political reason, that 'trickle down' doesn't work. It is an utter lie, that it doesn't. Or they are even more disingenuous and state flatly that only the costs trickle down while the profits are caught and pulled out before they get to poor people. This is not true for what it does is abstracts the players and activities at convenient points. One must keep in mind that corporations are not just a few rich fat cats in the modern society, that sit and top like robber barons of old. A few may exist and be nearly ubiquitous in certain areas like Warren Buffet or Bill Gates. These men, though akin to great white sharks of the financial world, are attended by hundreds and thousands of remorae living off the scraps of their actions.

But bigger than men like these, are hedge funds composed of millions of investors that are not wealthy but looking to maximize their frugal savings and climb higher away from poverty. BP has millions of British Pensioners being taken to the cleaners because their retirements are invested in that company heavily. Obama taking them to the cleaners harms them more than any Warren Buffet or George Soros (Now THERE'S a Robber Baron and deliberate market maniuplator)

But trickle down works very simply in this manner. I will use the best example I have from real life: Sturgeon Bay, WI which is the home of one of the few remaining American ship manufacturers. They subsist almost completely off of building massive freighters who ply the great lakes.

An American Steel company (yes there are a few left) is in need to expand. They have an opportunity to gain market share and become more stable. To do that, they need a new taconite carrier. Unfortunately, they do not have the capital on their own to buy the ship, so they must look to a bank for loans. The bank then looks at the plan the Steel Company offers on how to get the ship, and minimize costs to them by supplying much of the steel themselves. The bank decides this is a good investment for THEIR shareholders and members (which is composed of a few rich people and tens of thousands of poor/middle class) and if successful will expand their holdings. So they agree to give the Steel Company the loan.

Now notice. Although the benefit will be the heaviest to the few rich in that bank, you are also enriching the lives of the workers at the Steel Company by allowing them to make more work in which to supply the steel for that ship. Trickle down of a loan to the company from the bank, composed of a few rich and many middle class/poor people who will recieve a share of the profit in the future by returned payments. There is step one of how Trickle Down works.

Next, The steel company signs the contract with Sturgeon Bay Ship Manufacturing to build a bulk freighter. The Ship Co. goes into action to start manufacturing the freighter. Money begins coming into the local economy. If workers are laid off, they're hired back, the Ship company profits which helps their shareholders and investors.

Here is step TWO of Trickle down. Not only now do you see money flowing into the Ship builder, you have money ending up in the hands of hundreds of workers on both ends of this deal. These people, now are able to buy the needs of their lifes and support secondary non manufacturing businesses like gas stations, grocery stores and whatever else they are involved with and can now afford because they are working. Those supported local businesses can now go out and pay their employees as well as suppliers and then their investors as well. One steel contract has now profited millions of people in accordance to their proximity to the deal.

Then there is the Third step of this. All those other companies get to count the money spent on them from the steel deal in their coffers, increase their profit margin and thereby give a greater return to their financiers as well, be they individual investors or captains of industry.

What dishonest brokers in this conversation artificially assume is that somehow, only the wealthiest investors profit and ignore the vast memberships of investing groups and individuals who have less than 1000 shares and the like because they do not see a "SUBSTANTIAL" profit when in reality they profit at the same level commiserate with their involvement. Sure the average CD holder does not gain much from the deal off a 12 month 1000 dollar CD as compared to a rich investor who owns 20% of the bank's funds. This is not unfair. They both profit in accordance to the size of their involvement.

Nor does the profit pool in the hands of the management of the companies. They are paid in accordance of their contract for managing to be directly involved of making a good deal happen. There is nothing unfair with this. These people are effectively contractors hired to guide the company to profit and grow. If they succeed, they recieve bonuses, if they fail, often they are ousted and find it very hard to compete at such a high level again. Case in point... what's Michael Eisner running nowadays? I doubt it's a company as powerful as Disney. These are the apex of the pyramid and are due their profit. Anything you may feel about this is your own hang up, not economics and to go out of your way to harm this natural flow does nothing but harm the overall health of the economic deal. Deliberate impoverishment of these people only serves to drive them away from your control, and often stops the most talented from risking their fortunes on you. Now THERE's a trickle down cost no liberal wants to admit happens as well.

Corporations are made up of people. You cannot protect the people from them or the corporations from the people without harming both parties ultimately. You must protect both and enforce ethical rules of cooperation. Anti Fraud, weights and measures, consumer protection, labor protection, trade protection. All these things are the perview of government. The question is just like the Laffer curve states, finding the balance point for maximum freedom versus minimum government involvement for societal cost. Corporations/Labor/Government/Investment/Culture all factor in to this and what is healthiest for one, may be deleterious to others. So you tweak and pull, and find the most reasonable balance between the bunch. But biasing for one at the deference of the others hurts all ultimately and sooner or later, causes it's collapse.

I'm not going to get into the international aspects of the above deal at this time, right now I think it'd make it too complex for most to consider. Maybe in another post.

 

[uscitizen]

US Manufacturing used to be 28% of the US economy, and now its about 12% and dropping. Manuacturing creates wealth, the "service economy" is a hoax created by Wall Street to justify moving jobs overseas. I also blame unions in addition to Wall Street for killing industries like the automotive industry. Its a tough problem, but if we're ever going to get the unemploymemnt rate down, the unwashed masses need jobs, and I don't think that picking produce will pay the bills.

Manufacturing continues to shrink as a percentage of U.S. economic activity. | North America > United States from AllBusiness.com

So the poll question is "can US manufacturing survive & how?"

It can not only suvive it can THRIVE.

Just as soon as we change from an unthinking FREE TRADE policy to a well thought out FAIR trade policy.


Our so called FREE trade partners mostly have fair trade policies in place to protect their industries

Why don't we?

NFTA, CAFTA, SHAFTA, etc
And of course industrial lobbyisys.
And republicans yelling for free trade.

 

[Shogun]

Sadly, there was a time in America when we gave a shit that our shoes were made by the dirt class of third world nations making pennies a day. Clearly, capitalistas have had their way and not only are they creating a bubble based on cheap labor but they have all but gutted America by hemorrhaging opportunity to the lowest third world bidder. This is clearly an unsustainable pattern which normalizes the American standard of living to the with the poverty stricken from third world nations. Without an America that can purchase cheap goods there is no consumer base to substitute since these sweatshop nations are not investing in their own middle class while maintaining cheap labor. Indeed, what asshole capitalistas will never admit is that, like agriculture and manufacturing, every other method of employment can be outsourced just as well. Hell, look at the tech industry and communications. The only thing left to replace good union jobs that allowed a good standard of living are wage slave wal mart check out jobs set at minimum wage (another concept that the same capitalistas HATE).

but, this is how it's always been with capitalism. Why the fuck would we stop to wonder why we are impervious to the same treatment that capitalistas have given to banana growers and sugar cane farmers from decades past. If you are not a cheap commodity then you are an overpriced liability ripe for the fucking.

But, I have to say, it's funny watching those of you shrugging your shoulders at modern agriculture totally forget the plight and disaster revolving around farmers' lives during the last 20 years. I guess it takes a REAL brain to sit and give bullshit econ opinions from the comfort of a desk while turning your back on Americans who fed your fat ass all these years, made shit that you take for granted, and who you expect to miraculously buy cheap shit from china after their farm forclosed.

Willie Nelson thinks you are all assholes.