CDZ America is 7th cheapest place in the world to manufacture

[Dekster]

According to Bloomberg, their study revealed that America is the 7th cheapest place in the world to manufacture, and the manufacturing costs in China run about 96 cent on the dollar. China vs. the U.S.: It's Just as Cheap to Make Goods in the USA

The more interesting part to me is this: "As Chinese labor costs rise, American productivity improves, and U.S. energy expenses fall, the difference in manufacturing costs between China and the U.S. has narrowed to such a degree that it’s almost negligible. For every dollar required to manufacture in the U.S., it now costs 96¢ to manufacture in China, before considering the cost of transportation to the U.S. and other factors. For many companies, that’s hardly worth it when product quality, intellectual property rights, and long-distance supply chain issues are added to the equation."

So, here are some questions that might lead to some interesting discussion:

1) Is Donald Trump's economic premise flawed in that bringing jobs home really would not result in much even if fully carried out?

2) Is Hillary Clinton's desire to push for more expensive alternative energy plans a pathway to undermine any gains that would be seen as a result of her other economic plans as it would cost more jobs by incentivizing more job exports?

3). Does this really show something that no American politician is willing to admit--that the reason jobs are going to Asia simply to shorten the supply chain to the only marketplace with growth potential because the US economy cannot be grown regardless of US policy, left or right, in terms of real dollars?

My answer to all three questions is yes.

 

[Moonglow]

Of course they go over seas to produce closer to markets, just like foreign companies come here to produce products..

 

[Dekster]

Of course they go over seas to produce closer to markets, just like foreign companies come here to produce products..

So they see no new profit potential left in the US?

 

[Moonglow]

Of course they go over seas to produce closer to markets, just like foreign companies come here to produce products..

So they see no new profit potential left in the US?

There is profit in the US, they are exploiting new markets via trade deals..If there was no profit in the US it would not be getting large investments by foreign nations and companies...

 

[Dekster]

Of course they go over seas to produce closer to markets, just like foreign companies come here to produce products..

So they see no new profit potential left in the US?

There is profit in the US, they are exploiting new markets via trade deals..

They wouldn't need trade deals if they were manufacturing in China for Chinese consumption.

 

[Moonglow]

Of course they go over seas to produce closer to markets, just like foreign companies come here to produce products..

So they see no new profit potential left in the US?

There is profit in the US, they are exploiting new markets via trade deals..

They wouldn't need trade deals if they were manufacturing in China for Chinese consumption.

I am sure they produce for more than just China...

 

[Shrimpbox]

Would like to believe the article, which is two years old, but I don't think so. Highest tax rate, most regulation, one of the highest labor costs, most stringent environmental rules, anti business climate. Lower energy costs yes. If the article is really true, why are carrier and others moving out of country. So I don't think Donald's plan is bogus or u realistic.

I don't understand point two.

Point three. You are never the boss in China. China is and will be our greatest antagonist in the world. Should a Cold War break out between our countries it will not go well for those based in China. And if we erased our trade deficit with China, how much will that help our economy. You don't think we could grow by exporting energy? Or creating another Apple. Or my favorite, encouraging the growth of small business. I am all in with America first, especially. With the economy.

 

[Dekster]

Would like to believe the article, which is two years old, but I don't think so. Highest tax rate, most regulation, one of the highest labor costs, most stringent environmental rules, anti business climate. Lower energy costs yes. If the article is really true, why are carrier and others moving out of country. So I don't think Donald's plan is bogus or u realistic.

I don't understand point two.

Point three. You are never the boss in China. China is and will be our greatest antagonist in the world. Should a Cold War break out between our countries it will not go well for those based in China. And if we erased our trade deficit with China, how much will that help our economy. You don't think we could grow by exporting energy? Or creating another Apple. Or my favorite, encouraging the growth of small business. I am all in with America first, especially. With the economy.

The low cost of energy in the US offsets the low cost of labor in China. If we drive up the cost of energy, we are pricing ourselves out of the market.

 

[Shrimpbox]

Ok, I get that. But we continually hear that renewables are just as cost efficient as fossil fuels and getting more so, so I think that is a wash. Trumps complaints about the manipulation of currency are extremely valid and have to b taken into account when talking about trade.

In the international shrimp business, many countries sell shrimp below cost and subsidized just to get American dollars. This makes the simplistic Bloomberg article very unsophisticated about trade. good night dek

 

[320 Years of History]

The 2015 version of the study referenced in the OP is here: The Shifting Economics of Global Manufacturing

The historic trends are interesting. I happen to think that looking at the future is more useful for folks who are concerned about policy making. To that end, I suggest, after reading the BCG document, one also read McKinsey's "Manufacturing the Future."

According to Bloomberg, their study revealed that America is the 7th cheapest place in the world to manufacture, and the manufacturing costs in China run about 96 cent on the dollar. China vs. the U.S.: It's Just as Cheap to Make Goods in the USA

Minor note:
The study is Boston Consulting Group's, not Bloomberg's. The article's author is not a Bloomberg employee.

Red:
True enough, and that is why the U.S. and China are no longer the "first and obvious choices" for outsourcing manufacturing operations. China is beginning to see manufacturing firms leave just as the U.S. has.

• Thinking strategically about the what, where and how of migrating costs. (Apologies for providing a document that along with its good information also is a bit of a sales tool for Bain.)
  
• Manufacturers step up search for low cost alternative to China

Looking forward (aka "reading the writing on the wall):

It'll take time, but eventually there won't be any more relatively low cost places to which makers can outsource production. When that happens, outsourcing decisions will be based not on labor costs but on whatever at that time comprises the next highest manageable cost, be it energy, materials, logistics/distribution, etc. It may well turn out that highly decentralized production based becomes the new standard, particularly as production efficiency vastly increases from what it is now.

The reality is that the business/economic cycle is what it is. Given that the world currently has hundreds of political boundaries, the cycle (in the context under discussion here -- manufacturing growth --> decline --> growth -- in terms of the abundance of low-skill manufacturing jobs) repeats itself discretely in each of them as each has its "day in the sun." When technology advances and lowers costs and boosts efficiency to the point that no place is materially more or less expensive, the cycle will occur concurrently in all countries that also engage in free trade because that's what keeps prices low (lower than they would be absent free trade) for consumers. (If a nation isn't in the "boom" phase of the cycle, keeping prices low is what they should do to minimize the impact of not being in the "boom.")

You don't think we could grow by exporting energy? Or creating another Apple. Or my favorite, encouraging the growth of small business.

There's no question that adding new profitable business of any size will result in growth. Growth in what is the question. Looking at where Apple produces its goods, were another innovator to create a manufacturing company that rivals Apple, be it in the same market space or in a different market space, a lot of wealth growth would occur. Would a huge boost in U.S. manufacturing job growth occur? I suspect not, at least not in terms of lowly skilled or unskilled manufacturing jobs.

• What Apple components are made in the U.S? (Using iPhone 6 as a model)
  • Accelerometer: Bosch in Germany. Invensense in the United States.
  • Radio Frequency Module Components: Win Semiconductors in Taiwan buys the component parts it assembles from Avago technologies and TriQuint Semiconductor in the United States. Qualcomm in the United States for LTE connectivity.
    
  • Screen and Glass (for the display): Corning (Gorilla Glass) in the United States.
    
  • Semiconductors: Texas Instruments, Fairchild and Maxim Integrated in the United States.
    
  • The design, development and marketing work, not to mention the creation of the software, are all done in-house by Apple in the United States.
• The reason Apple sticks "Made in China" on its devices is because the majority of the parts tend to be sourced from China, but they are frequently made elsewhere (in Taiwan, for example). The assembly of Apple's devices is for the most part done in China - which is why we will continue to see "Made in China" despite a lot of these companies, including Apple, creating their designs in countries like the United States.
  
  Looking more closely at the Chinese assembly line, it's also made people question why Apple has chosen to outsource and even assemble its devices outside its domestic territory and choose China as its primary location. The simple answer is: China allows greater flexibility and even has the natural resources to cope with high-demand manufacturing.

FWIW, here's a good high level case study of Apple's supply chain. Also worth reading for a discussion about Apple's (or a company like it) role in the U.S. economy:

• Is Apple the tail that wags the U.S. economy?
• Apple Is 0.5% Of US GDP, 0.15% Of Global GDP
  
• Why America Needs Apple

The low cost of energy in the US offsets the low cost of labor in China. If we drive up the cost of energy, we are pricing ourselves out of the market.

??? By what stretch of imagination do you think that is both plausible and possible, at least for now? Did you look at slide seven in the presentation that underpins the remarks in the Bloomberg article you cited in your OP? Even looking elsewhere one will observe that energy is (for now and the foreseeable future) a miniscule share of the cost of producing pretty much anything.

• America Versus China: The New Reality Of Global Energy
  
• The American Energy Boom Won't Do Much For The Manufacturing Renaissance

(Click the image to access the source article)
​

FWIW, here's an interesting high level look at the cost of various types of energy.

 

[Dekster]

The low cost of energy in the US offsets the low cost of labor in China. If we drive up the cost of energy, we are pricing ourselves out of the market.

??? By what stretch of imagination do you think that is both plausible and possible, at least for now? Did you look at slide seven in the presentation that underpins the remarks in the Bloomberg article you cited in your OP? Even looking elsewhere one will observe that energy is (for now and the foreseeable future) a miniscule share of the cost of producing pretty much anything.

• America Versus China: The New Reality Of Global Energy
  
• The American Energy Boom Won't Do Much For The Manufacturing Renaissance

(Click the image to access the source article)
​

FWIW, here's an interesting high level look at the cost of various types of energy.

Energy is not just electricity. It includes the other incidental costs to production, including transportation. It will become a growing factor in China simply because its water issues will require lots of energy to get sorted out--be that desalination or pumping the water from one part of the country to another. It is one of the quirks about China--most of its population lives in the part of the country that has the least amount of its water (taking out, of course, its desert).

 

[Correll]

According to Bloomberg, their study revealed that America is the 7th cheapest place in the world to manufacture, and the manufacturing costs in China run about 96 cent on the dollar. China vs. the U.S.: It's Just as Cheap to Make Goods in the USA

The more interesting part to me is this: "As Chinese labor costs rise, American productivity improves, and U.S. energy expenses fall, the difference in manufacturing costs between China and the U.S. has narrowed to such a degree that it’s almost negligible. For every dollar required to manufacture in the U.S., it now costs 96¢ to manufacture in China, before considering the cost of transportation to the U.S. and other factors. For many companies, that’s hardly worth it when product quality, intellectual property rights, and long-distance supply chain issues are added to the equation."

So, here are some questions that might lead to some interesting discussion:

1) Is Donald Trump's economic premise flawed in that bringing jobs home really would not result in much even if fully carried out?

2) Is Hillary Clinton's desire to push for more expensive alternative energy plans a pathway to undermine any gains that would be seen as a result of her other economic plans as it would cost more jobs by incentivizing more job exports?

3). Does this really show something that no American politician is willing to admit--that the reason jobs are going to Asia simply to shorten the supply chain to the only marketplace with growth potential because the US economy cannot be grown regardless of US policy, left or right, in terms of real dollars?

My answer to all three questions is yes.

How would bringing manufacturing jobs back to the US not result in much?

 

[Dekster]

According to Bloomberg, their study revealed that America is the 7th cheapest place in the world to manufacture, and the manufacturing costs in China run about 96 cent on the dollar. China vs. the U.S.: It's Just as Cheap to Make Goods in the USA

The more interesting part to me is this: "As Chinese labor costs rise, American productivity improves, and U.S. energy expenses fall, the difference in manufacturing costs between China and the U.S. has narrowed to such a degree that it’s almost negligible. For every dollar required to manufacture in the U.S., it now costs 96¢ to manufacture in China, before considering the cost of transportation to the U.S. and other factors. For many companies, that’s hardly worth it when product quality, intellectual property rights, and long-distance supply chain issues are added to the equation."

So, here are some questions that might lead to some interesting discussion:

1) Is Donald Trump's economic premise flawed in that bringing jobs home really would not result in much even if fully carried out?

2) Is Hillary Clinton's desire to push for more expensive alternative energy plans a pathway to undermine any gains that would be seen as a result of her other economic plans as it would cost more jobs by incentivizing more job exports?

3). Does this really show something that no American politician is willing to admit--that the reason jobs are going to Asia simply to shorten the supply chain to the only marketplace with growth potential because the US economy cannot be grown regardless of US policy, left or right, in terms of real dollars?

My answer to all three questions is yes.

How would bringing manufacturing jobs back to the US not result in much?

Unless the businesses themselves see additional revenue they are not going to be creating a bunch of new jobs that raise wages.

 

[Syriusly]

According to Bloomberg, their study revealed that America is the 7th cheapest place in the world to manufacture, and the manufacturing costs in China run about 96 cent on the dollar. China vs. the U.S.: It's Just as Cheap to Make Goods in the USA

The more interesting part to me is this: "As Chinese labor costs rise, American productivity improves, and U.S. energy expenses fall, the difference in manufacturing costs between China and the U.S. has narrowed to such a degree that it’s almost negligible. For every dollar required to manufacture in the U.S., it now costs 96¢ to manufacture in China, before considering the cost of transportation to the U.S. and other factors. For many companies, that’s hardly worth it when product quality, intellectual property rights, and long-distance supply chain issues are added to the equation."

So, here are some questions that might lead to some interesting discussion:

1) Is Donald Trump's economic premise flawed in that bringing jobs home really would not result in much even if fully carried out?

2) Is Hillary Clinton's desire to push for more expensive alternative energy plans a pathway to undermine any gains that would be seen as a result of her other economic plans as it would cost more jobs by incentivizing more job exports?

3). Does this really show something that no American politician is willing to admit--that the reason jobs are going to Asia simply to shorten the supply chain to the only marketplace with growth potential because the US economy cannot be grown regardless of US policy, left or right, in terms of real dollars?

My answer to all three questions is yes.

How would bringing manufacturing jobs back to the US not result in much?

Part of the reason why American manufacturing is much more competitive now is because of automation.

New manufacturing plants in the United States hire fewer workers- and most of them tend to be higher tech- to service the robots.

Frankly at this point in the time- the manufacturing jobs we are losing in the United States is due more to automation than to foreign competition.

 

[Correll]

According to Bloomberg, their study revealed that America is the 7th cheapest place in the world to manufacture, and the manufacturing costs in China run about 96 cent on the dollar. China vs. the U.S.: It's Just as Cheap to Make Goods in the USA

The more interesting part to me is this: "As Chinese labor costs rise, American productivity improves, and U.S. energy expenses fall, the difference in manufacturing costs between China and the U.S. has narrowed to such a degree that it’s almost negligible. For every dollar required to manufacture in the U.S., it now costs 96¢ to manufacture in China, before considering the cost of transportation to the U.S. and other factors. For many companies, that’s hardly worth it when product quality, intellectual property rights, and long-distance supply chain issues are added to the equation."

So, here are some questions that might lead to some interesting discussion:

1) Is Donald Trump's economic premise flawed in that bringing jobs home really would not result in much even if fully carried out?

2) Is Hillary Clinton's desire to push for more expensive alternative energy plans a pathway to undermine any gains that would be seen as a result of her other economic plans as it would cost more jobs by incentivizing more job exports?

3). Does this really show something that no American politician is willing to admit--that the reason jobs are going to Asia simply to shorten the supply chain to the only marketplace with growth potential because the US economy cannot be grown regardless of US policy, left or right, in terms of real dollars?

My answer to all three questions is yes.

How would bringing manufacturing jobs back to the US not result in much?

Unless the businesses themselves see additional revenue they are not going to be creating a bunch of new jobs that raise wages.

No additional revenue.

ADD a huge cost to the price of manufacturing overseas.

They can LOSE their current revenue or change their behavior.

 

[Correll]

According to Bloomberg, their study revealed that America is the 7th cheapest place in the world to manufacture, and the manufacturing costs in China run about 96 cent on the dollar. China vs. the U.S.: It's Just as Cheap to Make Goods in the USA

The more interesting part to me is this: "As Chinese labor costs rise, American productivity improves, and U.S. energy expenses fall, the difference in manufacturing costs between China and the U.S. has narrowed to such a degree that it’s almost negligible. For every dollar required to manufacture in the U.S., it now costs 96¢ to manufacture in China, before considering the cost of transportation to the U.S. and other factors. For many companies, that’s hardly worth it when product quality, intellectual property rights, and long-distance supply chain issues are added to the equation."

So, here are some questions that might lead to some interesting discussion:

1) Is Donald Trump's economic premise flawed in that bringing jobs home really would not result in much even if fully carried out?

2) Is Hillary Clinton's desire to push for more expensive alternative energy plans a pathway to undermine any gains that would be seen as a result of her other economic plans as it would cost more jobs by incentivizing more job exports?

3). Does this really show something that no American politician is willing to admit--that the reason jobs are going to Asia simply to shorten the supply chain to the only marketplace with growth potential because the US economy cannot be grown regardless of US policy, left or right, in terms of real dollars?

My answer to all three questions is yes.

How would bringing manufacturing jobs back to the US not result in much?

Part of the reason why American manufacturing is much more competitive now is because of automation.

New manufacturing plants in the United States hire fewer workers- and most of them tend to be higher tech- to service the robots.

Frankly at this point in the time- the manufacturing jobs we are losing in the United States is due more to automation than to foreign competition.

Germany has high wages, automation and TWICE the rate of manufacturing employment we have.

 

[Wyatt earp]

According to Bloomberg, their study revealed that America is the 7th cheapest place in the world to manufacture, and the manufacturing costs in China run about 96 cent on the dollar. China vs. the U.S.: It's Just as Cheap to Make Goods in the USA

The more interesting part to me is this: "As Chinese labor costs rise, American productivity improves, and U.S. energy expenses fall, the difference in manufacturing costs between China and the U.S. has narrowed to such a degree that it’s almost negligible. For every dollar required to manufacture in the U.S., it now costs 96¢ to manufacture in China, before considering the cost of transportation to the U.S. and other factors. For many companies, that’s hardly worth it when product quality, intellectual property rights, and long-distance supply chain issues are added to the equation."

So, here are some questions that might lead to some interesting discussion:

1) Is Donald Trump's economic premise flawed in that bringing jobs home really would not result in much even if fully carried out?

2) Is Hillary Clinton's desire to push for more expensive alternative energy plans a pathway to undermine any gains that would be seen as a result of her other economic plans as it would cost more jobs by incentivizing more job exports?

3). Does this really show something that no American politician is willing to admit--that the reason jobs are going to Asia simply to shorten the supply chain to the only marketplace with growth potential because the US economy cannot be grown regardless of US policy, left or right, in terms of real dollars?

My answer to all three questions is yes.

How would bringing manufacturing jobs back to the US not result in much?

Part of the reason why American manufacturing is much more competitive now is because of automation.

New manufacturing plants in the United States hire fewer workers- and most of them tend to be higher tech- to service the robots.

Frankly at this point in the time- the manufacturing jobs we are losing in the United States is due more to automation than to foreign competition.

Germany has high wages, automation and TWICE the rate of manufacturing employment we have.

They build BMWs , Mercedes-Benz. Audi and Porsche.

Meanwhile we build Ford's.

 

[Correll]

According to Bloomberg, their study revealed that America is the 7th cheapest place in the world to manufacture, and the manufacturing costs in China run about 96 cent on the dollar. China vs. the U.S.: It's Just as Cheap to Make Goods in the USA

The more interesting part to me is this: "As Chinese labor costs rise, American productivity improves, and U.S. energy expenses fall, the difference in manufacturing costs between China and the U.S. has narrowed to such a degree that it’s almost negligible. For every dollar required to manufacture in the U.S., it now costs 96¢ to manufacture in China, before considering the cost of transportation to the U.S. and other factors. For many companies, that’s hardly worth it when product quality, intellectual property rights, and long-distance supply chain issues are added to the equation."

So, here are some questions that might lead to some interesting discussion:

1) Is Donald Trump's economic premise flawed in that bringing jobs home really would not result in much even if fully carried out?

2) Is Hillary Clinton's desire to push for more expensive alternative energy plans a pathway to undermine any gains that would be seen as a result of her other economic plans as it would cost more jobs by incentivizing more job exports?

3). Does this really show something that no American politician is willing to admit--that the reason jobs are going to Asia simply to shorten the supply chain to the only marketplace with growth potential because the US economy cannot be grown regardless of US policy, left or right, in terms of real dollars?

My answer to all three questions is yes.

How would bringing manufacturing jobs back to the US not result in much?

Part of the reason why American manufacturing is much more competitive now is because of automation.

New manufacturing plants in the United States hire fewer workers- and most of them tend to be higher tech- to service the robots.

Frankly at this point in the time- the manufacturing jobs we are losing in the United States is due more to automation than to foreign competition.

Germany has high wages, automation and TWICE the rate of manufacturing employment we have.

They build BMWs , Mercedes-Benz. Audi and Porsche.

Meanwhile we build Ford's.

That is not enough to explain a manufacturing employment rate of HALF.


We can do better than that, if we try.

 

[Wyatt earp]

According to Bloomberg, their study revealed that America is the 7th cheapest place in the world to manufacture, and the manufacturing costs in China run about 96 cent on the dollar. China vs. the U.S.: It's Just as Cheap to Make Goods in the USA

The more interesting part to me is this: "As Chinese labor costs rise, American productivity improves, and U.S. energy expenses fall, the difference in manufacturing costs between China and the U.S. has narrowed to such a degree that it’s almost negligible. For every dollar required to manufacture in the U.S., it now costs 96¢ to manufacture in China, before considering the cost of transportation to the U.S. and other factors. For many companies, that’s hardly worth it when product quality, intellectual property rights, and long-distance supply chain issues are added to the equation."

So, here are some questions that might lead to some interesting discussion:

1) Is Donald Trump's economic premise flawed in that bringing jobs home really would not result in much even if fully carried out?

2) Is Hillary Clinton's desire to push for more expensive alternative energy plans a pathway to undermine any gains that would be seen as a result of her other economic plans as it would cost more jobs by incentivizing more job exports?

3). Does this really show something that no American politician is willing to admit--that the reason jobs are going to Asia simply to shorten the supply chain to the only marketplace with growth potential because the US economy cannot be grown regardless of US policy, left or right, in terms of real dollars?

My answer to all three questions is yes.

How would bringing manufacturing jobs back to the US not result in much?

Part of the reason why American manufacturing is much more competitive now is because of automation.

New manufacturing plants in the United States hire fewer workers- and most of them tend to be higher tech- to service the robots.

Frankly at this point in the time- the manufacturing jobs we are losing in the United States is due more to automation than to foreign competition.

Germany has high wages, automation and TWICE the rate of manufacturing employment we have.

They build BMWs , Mercedes-Benz. Audi and Porsche.

Meanwhile we build Ford's.

That is not enough to explain a manufacturing employment rate of HALF.


We can do better than that, if we try.

That's the best explanation I can give Someone who don't have much of a clue between german society /manufacturing and U.S.A./Society/manufacturing.


Germans produce high tech, tight tolerance machinery and parts.


Edit:
We produce for the most part junk.

 

[Correll]

How would bringing manufacturing jobs back to the US not result in much?

Part of the reason why American manufacturing is much more competitive now is because of automation.

New manufacturing plants in the United States hire fewer workers- and most of them tend to be higher tech- to service the robots.

Frankly at this point in the time- the manufacturing jobs we are losing in the United States is due more to automation than to foreign competition.

Germany has high wages, automation and TWICE the rate of manufacturing employment we have.

They build BMWs , Mercedes-Benz. Audi and Porsche.

Meanwhile we build Ford's.

That is not enough to explain a manufacturing employment rate of HALF.


We can do better than that, if we try.

That's the best explanation I can give Someone who don't have much of a clue between german society /manufacturing and U.S.A./Society/manufacturing.


Germans produce high tech, tight tolerance machinery and parts.

We produce junk.

We lose on Trade to EVERYONE, not just the Germans.


I don't buy that we are the world's incompetent morons.


We have bad trade policy.


And you know what?

It doesn't matter.


What matters is that we are the World's Bitch when it comes to Trade that that needs to stop.

I want at least some of those jobs for Americans.