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(ASQ)   Companies who send their manufacturing jobs overseas come to a major discovery: "The problem is that you can see now in looking back, once you move your manufacturing offshore, you're training your supplier to become your competitor"   (asq.org) divider line 89
    More: Obvious, killer  
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3530 clicks; posted to Business » on 22 Sep 2012 at 7:40 PM (2 years ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2012-09-22 06:14:00 PM  
Unintended consequences are a biatch.
 
2012-09-22 06:16:14 PM  
automaker Toyota Motor Corp.'s Toyota Production System (TPS)

I hope they remembered the new cover sheet.
 
2012-09-22 06:30:43 PM  
*GASP*
 
2012-09-22 06:42:27 PM  
No no, like Baskin Robbins, these companies are selling you the "experience" not the actual product you are paying for... The outsource producers can't duplicate that.
 
2012-09-22 06:47:07 PM  
Most of the people who moved the manufacturing didn't care about the long term consequences. They've cashed out and they live on their private islands.
 
2012-09-22 06:58:18 PM  
Ain't that a shame.
 
2012-09-22 07:21:01 PM  
Just lay off more people
 
2012-09-22 07:49:27 PM  
gee what do you know, real life is more complicated than simple profit/cost black/white analysis would lead a simpleton to believe.
 
2012-09-22 07:52:35 PM  
So many business decisions seem to be made only with short-term gains in mind, rather than long-term sustainable profitability - a negative consequence of the bonus culture?
 
2012-09-22 07:53:13 PM  
Major discovery? This happened to the U.S. consumer electronics industry decades ago. "Let's make some TV's over in Asia, don't worry it's just to get access to their market."

These examples of Chinese success stories like GM and Caterpillar being held out as how globalization benefits US firms, it won't be much longer before China is selling cars and heavy equipment in the US and the rest of the world.
 
2012-09-22 07:55:20 PM  

Wyalt Derp: So many business decisions seem to be made only with short-term gains in mind, rather than long-term sustainable profitability - a negative consequence of the bonus culture?


That and fickle shareholders... What have you done for me today?
 
2012-09-22 08:01:45 PM  

DrewCurtisJr: Major discovery? This happened to the U.S. consumer electronics industry decades ago. "Let's make some TV's over in Asia, don't worry it's just to get access to their market."

These examples of Chinese success stories like GM and Caterpillar being held out as how globalization benefits US firms, it won't be much longer before China is selling cars and heavy equipment in the US and the rest of the world.


My company moved manufacturing of products for use in China to China, mainly to supply larger manufacturers like GM and CAT. We only build simple, low tech equipment over there for fear of someone stealing our tech and selling it in our market. What we are building there they can't sell here competitively because of costs, and our newer tech is 30 years past what we are building there.

There are tariffs in place to protect our local market from foreign finished goods but there is not much protecting sub-assemblies. The tariffs and shipping costs on a finished car or heavy equipment is enough to keep that stuff from coming here.
 
2012-09-22 08:13:52 PM  
i640.photobucket.com
 
2012-09-22 08:28:54 PM  
The hell you say!
 
2012-09-22 08:30:43 PM  
Short sighted asswipes. Didn't these morans realize that as the third and second world countries rose to first world status (like South Korea) they would want to make the sh*t they needed not only for themselves but for the rest of the world... and that by outsourcing american manufacturing you were giving them the keys to the truck that was about to run over your ass?
More manufacturers, call centers, and other businesses are finding this out as well... the MBA morans who pushed these ideas so hard in the 80s and 90s should be lined up against the wall and shot. They have done more to destroy the middle class and long term economic health of this nation for short term profit than any recession of the past 50 years.
 
2012-09-22 08:47:09 PM  
This required hindsight?
 
2012-09-22 08:52:26 PM  
this happened to Schwinn Bicycles, twice.

as for automotive, China's policy of forcing foreign automakers to link up with local companies is not working as intended so far. the market share of domestics are plummeting. china's car market isn't growing much right now, but the German and American brands have been making big gains in sales at the expense of domestics (and now, the Japanese).

there are two Chinese car brands for rest of the world to fret about: Geely (via Volvo) and SAIC (via MG Rover).
 
2012-09-22 08:56:40 PM  
Much like you had us training our subordinates to be our replacements
 
2012-09-22 09:00:05 PM  
It took them how long to figure this out?

Corporations are idiots
 
2012-09-22 09:05:58 PM  

kertus: It took them how long to figure this out?

Corporations are idiots


They have absolutely no foresight beyond the current quarter, if it is even that long. It's all about "fiduciary duty to the shareholders" who a lot of corporate apologists will tell you could be SUED by the shareholders if they don't maximize profits by offshoring production (which, BTW, I have never heard of one of these suits being brought, but you'd swear reading Fark that they happen every single day).

The MBAs that do this and the programs that teach it deserve what is coming to them in the not so distant future.
 
2012-09-22 09:11:47 PM  

dumbobruni: there are two Chinese car brands for rest of the world to fret about: Geely (via Volvo) and SAIC (via MG Rover).


I only looked into Volvo and while manufacturing remains mainly in Canada and Sweden (for the American market), profits do end up going to Geely. This isn't quite the same thing this article is talking about.
 
2012-09-22 09:22:44 PM  

rewind2846: Short sighted asswipes. Didn't these morans realize that as the third and second world countries rose to first world status (like South Korea) they would want to make the sh*t they needed not only for themselves but for the rest of the world... and that by outsourcing american manufacturing you were giving them the keys to the truck that was about to run over your ass?
More manufacturers, call centers, and other businesses are finding this out as well... the MBA morans who pushed these ideas so hard in the 80s and 90s should be lined up against the wall and shot. They have done more to destroy the middle class and long term economic health of this nation for short term profit than any recession of the past 50 years.


Not just MBAs...Michael Dell moved from using Asus as a parts supplier to a system integrator. Now Asus under cuts Dell on computers and laptops.
 
2012-09-22 09:33:02 PM  

Wyalt Derp: So many business decisions seem to be made only with short-term gains in mind, rather than long-term sustainable profitability - a negative consequence of the bonus culture?


My friend, who got out of the finance game long ago, called it "Next Quarter Syndrome" or "NQS".
 
2012-09-22 09:33:53 PM  

sno man: Wyalt Derp: So many business decisions seem to be made only with short-term gains in mind, rather than long-term sustainable profitability - a negative consequence of the bonus culture?

That and fickle shareholders... What have you done for me today?


With the rise of High Frequency Trading at sub-millisecond speeds, this excuse is becoming moot. These investor don't give a crap about a company's fiscal performance so long as they can churn the market and make pennies from jitter.

It is also become a even more of a moneyed players game where those without high speed links and sophisticated computer algorithms conducting "traditional investing" cannot complete since the markets no longer follows perceivable logic.
 
2012-09-22 09:33:57 PM  
Huh. How about that.

The next logical step is just to move yourself and your big pile of money over to China and live in luxury. SO LONG, SUCKERS! I mean, "America!"
 
2012-09-22 09:56:18 PM  
As luck would have it, I am in the market for a washer and dryer. GE baby.
 
2012-09-22 09:59:04 PM  

Wyalt Derp: So many business decisions seem to be made only with short-term gains in mind, rather than long-term sustainable profitability - a negative consequence of the bonus culture?


I've always wondered if it was a shift from dividends to retained earnings. With a dividend, you can get money back from your investment in the company while still holding onto the stock. When profits are reinvested in the company and no dividend is issued, the only way for an investor to make money is to sell the stock at a high price. This requires constant growth. So if you are not growing the company and the stock price, you are are a failure as an investment. So instead of focusing on profitability, you focus instead on stock price.

Yes, stock price should reflect profits, but it does not have to. You can pump that up in other ways that is not always good for the long term health of the organization.
 
2012-09-22 10:11:44 PM  

wingnut396: Wyalt Derp: So many business decisions seem to be made only with short-term gains in mind, rather than long-term sustainable profitability - a negative consequence of the bonus culture?

I've always wondered if it was a shift from dividends to retained earnings. With a dividend, you can get money back from your investment in the company while still holding onto the stock. When profits are reinvested in the company and no dividend is issued, the only way for an investor to make money is to sell the stock at a high price. This requires constant growth. So if you are not growing the company and the stock price, you are are a failure as an investment. So instead of focusing on profitability, you focus instead on stock price.

Yes, stock price should reflect profits, but it does not have to. You can pump that up in other ways that is not always good for the long term health of the organization.


The story of "Chainsaw Al" Dunlap is a cautionary tale indeed.
 
2012-09-22 10:16:43 PM  
But, but, we saved the brand!

No. Not really. You kept the name and ruined the quality.
 
2012-09-22 10:29:26 PM  
Good, lower cost stuff for me!
 
2012-09-22 10:33:47 PM  
Business school arsehatz all over still have the it's a service/information economy thing
 
2012-09-22 10:43:58 PM  

rewind2846: Short sighted asswipes. Didn't these morans realize that as the third and second world countries rose to first world status (like South Korea) they would want to make the sh*t they needed not only for themselves but for the rest of the world... and that by outsourcing american manufacturing you were giving them the keys to the truck that was about to run over your ass?
More manufacturers, call centers, and other businesses are finding this out as well... the MBA morans who pushed these ideas so hard in the 80s and 90s should be lined up against the wall and shot. They have done more to destroy the middle class and long term economic health of this nation for short term profit than any recession of the past 50 years.


These are probably the people that believe in "American Exceptionalism" to a destructive degree.
"Those will never figure this out, or by the time they do, we'll already be years ahead of them."
 
2012-09-22 10:50:28 PM  

dumbobruni: this happened to Schwinn Bicycles, twice.



Sadly. Every time one of my friends wants advice from me on what brand bike to buy, they open up with "Schwinn's are still the best, right?"


Sigh.
 
2012-09-22 10:57:59 PM  
I worked for a personal computer company. We outsourced production to a Taiwanese vendor ... which promptly began selling knockoffs in Europe. Copyright protection? What copyright protection?
 
2012-09-22 11:12:04 PM  
Apple and Samsung anybody?

And patent law aside, you can't pay people a tiny percentage of your business to do most of the work and expect it to last forever.

But I was assured corporate persons were good were above average citizens at the least as are their ceos and such. So I'm sure the wealthy will stay loyal to country if we ever cease to be the biggest buyers of their goods.
Right?
 
2012-09-22 11:20:12 PM  
And as far as that goes, I hold no loyalty to the rich who threw us away for outsourcing.

If it is now time for them to be thrown away in the free market search for cheaper goods, then I guess that's the way it goes.

They'll still land better than we do.

Is there any way we could increase our debt to bail them out?
 
2012-09-22 11:55:01 PM  

dumbobruni: this happened to Schwinn Bicycles, twice.

as for automotive, China's policy of forcing foreign automakers to link up with local companies is not working as intended so far. the market share of domestics are plummeting. china's car market isn't growing much right now, but the German and American brands have been making big gains in sales at the expense of domestics (and now, the Japanese).

there are two Chinese car brands for rest of the world to fret about: Geely (via Volvo) and SAIC (via MG Rover).


Maybe you should check out the Top Gear episode about this. What is important here is to note the rate of change. And to a certain extent the general approach to intellectual property.
 
2012-09-23 12:00:05 AM  
 
2012-09-23 12:02:49 AM  

rewind2846: the MBA morans who pushed these ideas so hard in the 80s and 90s should be lined up against the wall and shot.


I don't think they were morans. They got rich AND made America poor, so their dollars are worth a lot more now.

They should be shot, but they're not morans.
 
2012-09-23 12:17:55 AM  
Not the sharpest knives in the drawer, are they?

Not only that, all of your factories are now in a foreign country.
 
2012-09-23 12:30:43 AM  

Wyalt Derp: So many business decisions seem to be made only with short-term gains in mind, rather than long-term sustainable profitability - a negative consequence of the bonus culture?


A negative consequence of our current flavor of capitalism.

Stock prices ("faith" in the company to make higher profits next quarter) matter more than what the company actually produces. Quarterly statements matter more than long term goals.

It's a stupid system.
 
2012-09-23 12:33:05 AM  

sendtodave: It's a stupid system.


Oh. Sorry, I should have read more, to see that 8 other people have already said this.
 
2012-09-23 12:35:22 AM  

Lando Lincoln: The next logical step is just to move yourself and your big pile of money over to China and live in luxury


I moved myself, and my small pile of money to China.

I'm living pretty luxuriously, I guess.

Nice beaches, at least.

i10.photobucket.com
 
2012-09-23 12:38:04 AM  

Omnivorous: I worked for a personal computer company. We outsourced production to a Taiwanese vendor ... which promptly began selling knockoffs in Europe. Copyright protection? What copyright protection?


It's not rocket surgery. Our industrialization was nothing but copying from others (the British, etc.). That's what a lower level country does.
 
2012-09-23 12:44:24 AM  
Har har har.
 
2012-09-23 12:50:17 AM  
CSB:

One of my off-shored jobs was in the corporate IT shop of a Fortune 50 retailer. They began swelling their software development ranks with contractors (including Yours Truly) until the IT department had a ratio of about 2 to 1, contractors to employees. The contractors were highly skilled and actually did the work. The employees supervised the contractors and filled the copious paper pushing jobs that their little corporate IT empire scheme had proliferated over the years. Unbeknownst (at least for a while) to the contractors, the employees started having employee-only meetings with IT management to plan the off-shoring of all of the contractor jobs. This process took about 18 months, and the contractors were kept in the dark until the last possible moment -- and coincidentally right about the same time that the economy was tanking and jobs were becoming scarce.

Long story short, the company laid off hundreds of US domestic IT workers, replacing them with some H-1Bs on-shore and sending the bulk of the work off-shore.

A couple of years later, the same company fired its CIO, the one who had championed this whole scheme. He didn't "resign to pursue other opportunities." They FIRED him. Then they turned around and fired the VP who had been put in charge of the off-shoring.

A former manager friend of mine told me that after they had swept all of their US contractors out the door, it soon became obvious that they had also swept all of their institutional technical knowledge out the door with them. To this day, they're still trying to salvage the situation. The damage that this caused in wasted time and money, not to mention the hundreds of lives it disrupted and the damage it caused to this company's reputation in the IT ranks, is hard to pin down. So far, I haven't heard of anyone they screwed over going back to work for them. Nobody -- including me -- trusts them. What's to stop them from doing it again?

</CSB>
 
2012-09-23 12:56:05 AM  

Fark Me To Tears: CSB:

One of my off-shored jobs was in the corporate IT shop of a Fortune 50 retailer. They began swelling their software development ranks with contractors (including Yours Truly) until the IT department had a ratio of about 2 to 1, contractors to employees. The contractors were highly skilled and actually did the work. The employees supervised the contractors and filled the copious paper pushing jobs that their little corporate IT empire scheme had proliferated over the years. Unbeknownst (at least for a while) to the contractors, the employees started having employee-only meetings with IT management to plan the off-shoring of all of the contractor jobs. This process took about 18 months, and the contractors were kept in the dark until the last possible moment -- and coincidentally right about the same time that the economy was tanking and jobs were becoming scarce.

Long story short, the company laid off hundreds of US domestic IT workers, replacing them with some H-1Bs on-shore and sending the bulk of the work off-shore.

A couple of years later, the same company fired its CIO, the one who had championed this whole scheme. He didn't "resign to pursue other opportunities." They FIRED him. Then they turned around and fired the VP who had been put in charge of the off-shoring.

A former manager friend of mine told me that after they had swept all of their US contractors out the door, it soon became obvious that they had also swept all of their institutional technical knowledge out the door with them. To this day, they're still trying to salvage the situation. The damage that this caused in wasted time and money, not to mention the hundreds of lives it disrupted and the damage it caused to this company's reputation in the IT ranks, is hard to pin down. So far, I haven't heard of anyone they screwed over going back to work for them. Nobody -- including me -- trusts them. What's to stop them from doing it again?

</CSB>


I'm sorry you went through what you did but thanks for telling the story. It gives me hope that someday lots of corporate officers will be fired. Amen.
 
2012-09-23 12:56:28 AM  

Fark Me To Tears: What's to stop them from doing it again?


Fear of being sacked?
 
2012-09-23 01:03:05 AM  

Fark Me To Tears: Fortune 50 retailer


Hmm. I know that you don't want to divulge the company, but...

Wal-Mart Stores
Nordstrom
Target
Costco Wholesale
Best Buy
Lowe's

One of these? Hot or cold?
 
2012-09-23 01:25:20 AM  
Just an interesting FYI to go along with that story is that all of NBC's servers around the country are also managed out of that same plant in Louisville. I live about five minutes away from there and interviewed a few years back but turned them down because I was getting out of IT at the time. They aren't actually managed by NBC but by some outside company that also does server work for a few other people who takes part of their payment from GE as free rent in one of their office buildings.
 
2012-09-23 01:26:50 AM  
That's what no compete clauses are for

/Wait that doesn't work in a capitalist economy ?
 
2012-09-23 01:58:47 AM  
antidisestablishmentarianism

My company moved manufacturing of products for use in China to China, mainly to supply larger manufacturers like GM and CAT. We only build simple, low tech equipment over there for fear of someone stealing our tech and selling it in our market. What we are building there they can't sell here competitively because of costs, and our newer tech is 30 years past what we are building there.

There are tariffs in place to protect our local market from foreign finished goods but there is not much protecting sub-assemblies. The tariffs and shipping costs on a finished car or heavy equipment is enough to keep that stuff from coming here.


Your basic plan of moving only the low-tech stuff over there is reasonable on its surface, but there's more to it than that. If your more advanced stuff is at all interesting to them, they've already gotten into your systems and taken the details as well as the info for whatever the next stuff you're working on.

I don't mean that facetiously, and I'm not speaking in generalities. I mean it is extremely likely based on what you've said that they have literally already done this, and they're probably still in your network right now.

They might not be able to sell what they build with this information here competitively based on what you're saying about tariffs (although government subsidizing might make it more possible than you think), but regardless they can sell to many other places in the world.

Moreover, they certainly won't need to buy it from you anymore.
 
2012-09-23 02:28:11 AM  

WayToBlue: they've already gotten into your systems and taken the details as well as the info for whatever the next stuff you're working on


No, there is a barrier in our information system that keeps them from access. Also they would have over 100 years of documents to sort through and whoever organized them did it so terribly that even those of us with access to everything have a hard time finding drawings.
 
2012-09-23 04:34:11 AM  
I saw this in the fishing industry with a startup I worked for. Company blew up, took Bass Pro Shop's advice to expand production in China. It was AC/DC's Who Made Who in less than a year. And that was with less than 1/10 of the product lines in China, I fought hard for Mexico on the rest, but what was placed in China were the "up and comer" lines, new lines, lines BPS pushed for the company to get into.

BPS is evil.

China is evil.

Corporatism is evil.
 
2012-09-23 04:48:37 AM  

WayToBlue: antidisestablishmentarianism

My company moved manufacturing of products for use in China to China, mainly to supply larger manufacturers like GM and CAT. We only build simple, low tech equipment over there for fear of someone stealing our tech and selling it in our market. What we are building there they can't sell here competitively because of costs, and our newer tech is 30 years past what we are building there.

There are tariffs in place to protect our local market from foreign finished goods but there is not much protecting sub-assemblies. The tariffs and shipping costs on a finished car or heavy equipment is enough to keep that stuff from coming here.

Your basic plan of moving only the low-tech stuff over there is reasonable on its surface, but there's more to it than that. If your more advanced stuff is at all interesting to them, they've already gotten into your systems and taken the details as well as the info for whatever the next stuff you're working on.

I don't mean that facetiously, and I'm not speaking in generalities. I mean it is extremely likely based on what you've said that they have literally already done this, and they're probably still in your network right now.

They might not be able to sell what they build with this information here competitively based on what you're saying about tariffs (although government subsidizing might make it more possible than you think), but regardless they can sell to many other places in the world.

Moreover, they certainly won't need to buy it from you anymore.



The Chicom monkey couldn't build anything innovative or new if his life depended on it. Programmed from birth by Mother State, their collective mindset allows them only to copy and steal.
 
2012-09-23 04:50:56 AM  

RoyBatty: i.imgur.com


Boeing has a history of spreading their design and manufacturing work far and wide in order to protect themselves and to butter up future clients. On the domestic side, it makes Congress-critters less likely to vote against defense contracts that might negatively impact Boeing because chances are that Boeing is doing some of that work in their state. On the international side, it puts pressure on each contributing country to get their national or private airliners to go Boeing.

The problem is that it gets very inefficient (read: expensive) to build an aircraft that way.
 
2012-09-23 05:21:43 AM  
Farkin DUH!, Dipshiat!!
And they will undercut you every time!! Instant gratification for your bottom line may have a downside!!
 
2012-09-23 08:18:41 AM  

nmemkha: sno man: Wyalt Derp: So many business decisions seem to be made only with short-term gains in mind, rather than long-term sustainable profitability - a negative consequence of the bonus culture?

That and fickle shareholders... What have you done for me today?

With the rise of High Frequency Trading at sub-millisecond speeds, this excuse is becoming moot. These investor don't give a crap about a company's fiscal performance so long as they can churn the market and make pennies from jitter.

It is also become a even more of a moneyed players game where those without high speed links and sophisticated computer algorithms conducting "traditional investing" cannot complete since the markets no longer follows perceivable logic.




Guess who reads Wired on the toilet.
 
2012-09-23 09:56:51 AM  
The antidote to offshoring is education, of course. . . if you're making stuff that's so cutting edge someone has yet to run process improvements on it, the third-world countries are really only getting leftovers.

You know all those stories (mostly veiled editorials really) about California constantly collapsing, with anecdotes from "business owners" who keep whining that California is hostile to big business? It's a non-stop narrative of confusing the forest for the trees. California has a non-stop boom-bust cycle by design. It starts by being home to many of the best universities in the world, which goes hand-in-hand with being a liberal state. This glut of brain power drives the U.S. economy. It's where a lot of the "Next Big Things" are born, many of which are household names. After a few years these innovations are moved to red states for cheaper enhancements and production, then China, and after a bust Silicon Valley moves on to the Next Big Thing. The Republicans have been predicting the Great Fall of California for decades, and they keep missing the point -- when a company leaves California it's not a sign the state's imploding; the red states are fed a non-stop diet of California's leftovers because that's their role in American industry. I worked in industry and the pattern was always research & innovation in California (or Japan or Europe), development & first-gen production in the Bible Belt, commoditization and consumer-level mass production in China or some other de facto third-world nation. Lather, rinse, repeat. The smart companies don't trust their MBAs to offshore stuff to China until competition is already driving down costs. What keeps you employed isn't asking the government to keep the jobs here; it's being the #1 center of innovation in the world constantly churning out high-skill jobs. China can't rip off the Next Big Thing until someone's been paid to break it down into digestible chunks using time-tested industrial methods. The industrial job you want isn't the mindless assembly job that someone in China can do for 1/10th the pay; it's the job that requires knowledge your factory line bloke can't understand.

But good news, folks; the anti-intellectual movement is finally decapitating this cycle. Other nations are passing America in terms of being hospitable to scientists and we're running out of people educated enough to take on those frontier industrial jobs. Can't invent the Next Big Thing if no one's smarter than the last generation. I figure we've got another 10 years, 20 years tops before the headless body that is America finally collapses. The Baby Boomers will still be very much alive then, so the implosion will be epic.
 
2012-09-23 10:11:14 AM  

dragonchild: The antidote to offshoring is education, of course. . . if you're making stuff that's so cutting edge someone has yet to run process improvements on it, the third-world countries are really only getting leftovers.

You know all those stories (mostly veiled editorials really) about California constantly collapsing, with anecdotes from "business owners" who keep whining that California is hostile to big business? It's a non-stop narrative of confusing the forest for the trees. California has a non-stop boom-bust cycle by design. It starts by being home to many of the best universities in the world, which goes hand-in-hand with being a liberal state. This glut of brain power drives the U.S. economy. It's where a lot of the "Next Big Things" are born, many of which are household names. After a few years these innovations are moved to red states for cheaper enhancements and production, then China, and after a bust Silicon Valley moves on to the Next Big Thing. The Republicans have been predicting the Great Fall of California for decades, and they keep missing the point -- when a company leaves California it's not a sign the state's imploding; the red states are fed a non-stop diet of California's leftovers because that's their role in American industry. I worked in industry and the pattern was always research & innovation in California (or Japan or Europe), development & first-gen production in the Bible Belt, commoditization and consumer-level mass production in China or some other de facto third-world nation. Lather, rinse, repeat. The smart companies don't trust their MBAs to offshore stuff to China until competition is already driving down costs. What keeps you employed isn't asking the government to keep the jobs here; it's being the #1 center of innovation in the world constantly churning out high-skill jobs. China can't rip off the Next Big Thing until someone's been paid to break it down into digestible chunks using time-tested industrial methods. Th ...


You're overlooking that we've got an enormous number of people who really are best suited for an assembly-line job, and always have. We've been diverting some of the oversupply into the prison system, but that strategy is about at its limit. As a society, we'd be better off if we'd kept the manufacturing jobs here.
 
2012-09-23 10:31:33 AM  

kertus: It took them how long to figure this out?

Corporations are idiots


Very much so, yes.

I had the lovely fortune of sitting near from two "business men" at a restaurant this week, and they did nothing for 90 minutes other than eat and spew right wing talking points all night.

One of the asshats, in back to back sentences said "Obama isn't creating jobs, where are the jobs? Business men, like me and you, we are the job creators. we will have to do it ourselves" and then immediately following that said "look, the reason we send jobs overseas is because if we keep them here, it will cost us four million dollars a year, and you can't ask us to take that hit"

Look, have your opinion, but at least be farking consistent.
 
2012-09-23 10:58:12 AM  

forgotmydamnusername: You're overlooking that we've got an enormous number of people who really are best suited for an assembly-line job, and always have.


I'm not overlooking it; nor am I unsympathetic -- at least in principle. I just don't know if we can do a whole lot for them besides provide a safety net via entitlement programs. If someone out there can do the same job for a lot less, companies will always try to reduce costs. That these workers are also the same consumers who happily shop at big box stores without a hint of irony, flock to political narratives about bootstrappiness and push for anti-intellectual agendas against their own interests doesn't help. It'd be nice to enact policies that could provide for them, but how far are we willing to go here when the people who need this the most are fighting it tooth and nail?

Seriously, if we take away all the partisan talking points, what people really want are protectionism and socialism. Unfortunately for them, they're not going to buy their own products or vote for socialists. At least I offered education and innovation as an alternative to "godless" economic policies but they're not biting on that either. So our country really has nowhere left to go but down.
 
2012-09-23 11:37:07 AM  
Ampeg invented the VCR in America. Who are they now after all the competing Asian companies made millions of knock offs reverse engineered from the original idea in the U.S.
NSU was the largest motorcycle manufacturer in the world in 1955. In the late 50's Sociro Honda toured the NSU factory and started making bikes 4 years later. Which company
survived?
 
2012-09-23 12:17:40 PM  
So, how do you do that again?
I want to get better at it so I can be a better employee...
 
2012-09-23 01:00:45 PM  
Production goes to where it can be done most efficiently. Always has, ever since people started producing things. Always will. Get used to it.
 
2012-09-23 01:01:15 PM  

Pumpernickel bread: As luck would have it, I am in the market for a washer and dryer. GE baby.


Careful. GE is in the credit card business more than the appliance business
 
2012-09-23 01:03:00 PM  

DrPainMD: Production goes to where it can be done most efficiently.


Aside from being almost entirely wrong, you're. . . well, actually, you're entirely wrong.
 
2012-09-23 01:33:45 PM  

dragonchild: It'd be nice to enact policies that could provide for them, but how far are we willing to go here when the people who need this the most are fighting it tooth and nail?


And who would these people be exactly?
 
2012-09-23 01:56:56 PM  

DrewCurtisJr: And who would these people be exactly?


Working-class Americans in flyover America. I worked the industry world in twenty states. I don't miss the lunch-n'-greets that always, somehow, got political. Employees at defense contractors complaining about big government without a hint of irony, for example.
 
2012-09-23 03:34:13 PM  
no shiat Sherlock, it's also equipping the "counterfeit" products as the offshore shop who manufactures your crap just runs off a few more on the machines you paid for.
 
2012-09-23 04:15:34 PM  
Yay clinton
 
2012-09-23 06:20:54 PM  

Cretony38: Ampeg invented the VCR in America. Who are they now after all the competing Asian companies made millions of knock offs reverse engineered from the original idea in the U.S.


Didn't they sell the concept to Japanese companies since no American companies wanted to give the idea the time of day?

NSU was the largest motorcycle manufacturer in the world in 1955. In the late 50's Sociro Honda toured the NSU factory and started making bikes 4 years later. Which company
survived?


NSU ventured into cars, put a lot of money into Wankel engines, and the Ro80 ended up being problematic enough that it destroyed them as a company. Something about trying to shore up sales by having a long warranty period when they knew that the engines wouldn't last that long. That and being bought by VWAG, which discontinued all NSU product lines in ~1977. Allegedly the company does exist as a single office, in order to continue collecting royalties on various patents held by NSU-Wankel. (Mazda was free of the patents in the 80s, having produced Wankel-engined cars continuously for over 25 years, a stipulation of the Wankel consortium)
 
2012-09-23 07:31:42 PM  

antidisestablishmentarianism:
No, there is a barrier in our information system that keeps them from access. .


I think you underestimate the extent and sophistication of the Chinese industrial espionage network.
 
2012-09-23 09:35:01 PM  

Nemo's Brother: Yay clinton


Clinton may have been the guy that put the key in the lock, but W opened the box.
 
2012-09-24 12:07:37 AM  

dragonchild: DrPainMD: Production goes to where it can be done most efficiently.

Aside from being almost entirely wrong, you're. . . well, actually, you're entirely wrong.


Go on...
 
kab
2012-09-24 01:26:55 AM  
Looking back? Uhh yeah, you knew that exactly that would happen, but hey, short term profits, so who gives a fark, right?

No real damage control needed though, as you're dealing with a consumer base that has even less of a conscious than you, with the attention span and memory of a gnat.

/makes me laugh anytime anyone is deluded enough to believe that globalization is anything other than a cost cutting measure.
 
2012-09-24 05:26:38 AM  

kab: you're dealing with a [voting] base that has even less of a conscious than you, with the attention span and memory of a gnat


This is why Democracy will ultimately fail. We are far too lazy and collectively stupid to rule ourselves.
 
2012-09-24 06:57:25 AM  

DrPainMD: Aside from being almost entirely wrong, you're. . . well, actually, you're entirely wrong.

Go on...


Production location generally weighs labor cost vs. labor quality, with some consideration for input & capital costs. Efficiency (if measured by per-worker productivity or units of input per unit of output) is not a concern. For low-volume customized stuff, the shops usually charge an NRE and the orders don't come in quickly so they're not worried about efficiency at all. It's actually in their interest to keep their workers -- however slow -- close to their engineers because the design side of the situation is so dynamic. Why train 1000 workers in Zhengzhou to zip along at lightning speed when the customer's ordering 20 units a month and the next batch might involve a re-design? If you need high-skill labor, you generally avoid uneducated areas. . . which is precisely why so much money is invested in dumbing down tasks. If you can lower the minimum required IQ to assemble your widget from 120 to 75, you can finally move your factory to South Carolina and save a ton on labor even if they're not as fast. Efficiency hasn't entered the picture yet.

Thing is, what the redneck can do, the Chinese rednecks can do cheaper, so once a task's been dumbed down it's on the fast track to get offshored. The sole consideration is cost. Efficiency hasn't entered the picture yet.

As for inputs, well, if Zhengzhou (which has lots of coal) hungrily consumes even five times the amount of coal as a modern power plant in Pennsylvania but the energy's sold at one-tenth the price, then the factory couldn't give a rat's ass about efficiency. In fact, the factory could be as much as half as efficient (use twice the energy) and still save money (if only on labor).

This isn't to say efficiency doesn't matter; it's just handled with process improvement. It's a cross between an art, science and religion in industry. The thing about it is that it can be applied anywhere. The Japanese were pioneers of process improvement, and they applied it wherever they set up shop -- including America and China. Moral of the story is, factories don't get moved to third-world areas because it's somehow more efficient there. It may be less efficient. A line in Japan may move twice as fast as one in China, but it's bleeding money if the labor costs five times as much. They do it to save cost. But wherever you set up shop, factories apply their process controls to move the efficiency to the location, not the other way around. Because I mean, shucks, if you can get that Chinese line from half as fast to even 80% as fast as the Japanese one and still charge them 1/5th the salary (and they'll do that because manufacturers are dicks), you're saving piles of money. (In reality, these sorts of savings are only realized in the commoditization process; there's very little savings left to squeeze out of consumer goods.)

It's essentially the same mindset adopted by fast food chains. McDonald's can set up a joint in anywhere from Indiana to Madagascar; they have their processes and systems set up such that any retard can put on the uniform and do the job at an acceptable speed.
 
2012-09-24 11:31:59 AM  
you're training your supplier to become your competitor

Jeezus H Christ!!! I've been saying this for 10 years and they're just figuring this out now? Give that CEO another bazillion dollar bonus.
 
2012-09-24 11:50:04 AM  

dragonchild: It's essentially the same mindset adopted by fast food chains. McDonald's can set up a joint in anywhere from Indiana to Madagascar; they have their processes and systems set up such that any retard can put on the uniform and do the job at an acceptable speed.


So what then is the endgame? I know you're advocating education and innovation to stay at the front end of that curve, but not everyone can be at the front.

People in general fall within a normal IQ distribution, meaning (if you make the assumption that having smart people leads to innovation) that there is only a small proportion of the population that will stay on the front end of the curve. Everyone else will be 'left behind'. Plus, even if all the smart or well educated move to a innovation mecca like California, the state can only support so many people unless we start getting into Japan-levels of population density.

If the system works truly as you describe, this leads me to believe that wealth inequality will continue to increase as a natural function of the system - dependent on whether you can either identify and solve a new problem or innovate some new way of solving existing problems.

The only endgame I see here is a new feudalism. 

/Neil Stephenson, I will kick your ass if the world ends up working like The Diamond Age. Seriously.
 
2012-09-24 12:28:42 PM  

dragonchild: forgotmydamnusername: You're overlooking that we've got an enormous number of people who really are best suited for an assembly-line job, and always have.

I'm not overlooking it; nor am I unsympathetic -- at least in principle. I just don't know if we can do a whole lot for them besides provide a safety net via entitlement programs. If someone out there can do the same job for a lot less, companies will always try to reduce costs. That these workers are also the same consumers who happily shop at big box stores without a hint of irony, flock to political narratives about bootstrappiness and push for anti-intellectual agendas against their own interests doesn't help. It'd be nice to enact policies that could provide for them, but how far are we willing to go here when the people who need this the most are fighting it tooth and nail?

Seriously, if we take away all the partisan talking points, what people really want are protectionism and socialism. Unfortunately for them, they're not going to buy their own products or vote for socialists. At least I offered education and innovation as an alternative to "godless" economic policies but they're not biting on that either. So our country really has nowhere left to go but down.


We can let them die. It's immoral, but morality isn't the topic at hand. Economics is. Get rid of the safety net and let Darwin have his shot.
 
2012-09-24 12:31:51 PM  

imashark: dragonchild: It's essentially the same mindset adopted by fast food chains. McDonald's can set up a joint in anywhere from Indiana to Madagascar; they have their processes and systems set up such that any retard can put on the uniform and do the job at an acceptable speed.

So what then is the endgame? I know you're advocating education and innovation to stay at the front end of that curve, but not everyone can be at the front.

People in general fall within a normal IQ distribution, meaning (if you make the assumption that having smart people leads to innovation) that there is only a small proportion of the population that will stay on the front end of the curve. Everyone else will be 'left behind'. Plus, even if all the smart or well educated move to a innovation mecca like California, the state can only support so many people unless we start getting into Japan-levels of population density.

If the system works truly as you describe, this leads me to believe that wealth inequality will continue to increase as a natural function of the system - dependent on whether you can either identify and solve a new problem or innovate some new way of solving existing problems.

The only endgame I see here is a new feudalism. 

/Neil Stephenson, I will kick your ass if the world ends up working like The Diamond Age. Seriously.


I've been saying this for a while now, and nobody seems to like it. Probably because most people are in the S2 92% average or below group, and don't want to go back to being serfs.
 
2012-09-24 02:07:28 PM  

imashark: So what then is the endgame? I know you're advocating education and innovation to stay at the front end of that curve, but not everyone can be at the front.


I'm not saying the bottom 80% of the bell curve need to become intellectual elites. I'm saying the push of the tech curve creates jobs. It's inefficient in a sense as compared to most of history we really don't have serious problems to tackle right now, but turning over our infrastructure is a process that will always remain intensely domestic. You can have materials and parts shipped in but a local install is a local job. As for goods, frontier tech is by definition tech that hasn't yet been commoditized, which means the processes are both very dynamic and labor-intensive. It should also force infrastructure changes that can't be offshored. That, in turn, requires a support economy that the bottom 80% can fill. The part that people don't get is that this is NOT driven by private sector. The iPhone5 is NOT frontier tech; it's a goddamn toy. It's been commoditized from the word go. As Neil deGrasse Tyson argues, the government's the only entity that can throw billions of dollars into frontier scientific research or massive infrastructure projects and then let the private sector find ways to make money off all this innovation. And it's very much the wealthy that should fund this because they also make the most profits from it (especially with the government soaking up the risk). That we're letting our infrastructure deteriorate and talking about cutting NASA off at the knees while our economy is hollowing into a shell is what makes me lose sympathy for the plight of the American worker. They are literally endangering their jobs for a goddamn tax break.

By the way, I don't prescribe to the notion that we need full employment anyway. We reached a level of productivity that made that unnecessary even 5-6 decades ago. But in a global economy the push to commoditize products and offshore skilled labor won't go away, so as long as people are opposed to social programs in principle then pushing the tech curve is about all we've got. A bunch of flippers selling houses to each other isn't an economy.
 
2012-09-24 02:26:38 PM  

dragonchild: the government's the only entity that can throw billions of dollars into frontier scientific research or massive infrastructure projects and then let the private sector find ways to make money off all this innovation. And it's very much the wealthy that should fund this because they also make the most profits from it (especially with the government soaking up the risk). That we're letting our infrastructure deteriorate and talking about cutting NASA off at the knees while our economy is hollowing into a shell is what makes me lose sympathy for the plight of the American worker. They are literally endangering their jobs for a goddamn tax break.


While I agree with you, I find it difficult find a way to describe what you're saying to the others in a political context. 

The people I discuss politics with usually break down into fits about 'tax breaks' and 'everyone having skin in the game' and 'Obmabo socialisty socialist bad for country.'

It's infuriating.
 
2012-09-24 02:46:33 PM  

imashark: I find it difficult find a way to describe what you're saying to the others in a political context.


That's because politics is the art of twisting the context itself. When both question and answers are designed to fit a narrative, there's no progress to be had.

I don't like to categorize solutions into ideologically purified boxes labeled "capitalism" or "socialism" or "liberal" or "conservative", though I do use those terms the way most people do for lack of choice. I'm an engineer. I see policy as a set of conceptual tools that can be used in any combination to achieve an objective. That's ANY combination. If socialism is the answer to a problem, so be it. If it's capitalism, that's fine too. I just want to go with what works best overall, but that starts with a clearly defined strategy. The only thing ideology has to contribute to a strategy is a disincentive to clearly define it. The details are what count because ANY ideology looks good on paper before human nature is taken into account.
 
2012-09-24 07:58:12 PM  
I worked for a printing company that did this to one of their major customers. They were the big name company, but they figured that it was easier money to just sell the "brand" and outsource more printing to other companies to do the investment and hard work in improving performance.

So, they'd take a small cut of the job for very little work, and just hand it on. What they didn't see was that our production was getting better and better while their's was standing still. The management built things like web-based approval systems to improve the workflow, jobs that would run as soon as a file arrived. And once you went through the effort of setting that up, you could keep using it, so we more and more automation, lowering the cost of every job we bid for.

And the thing is that however hard a company tries to hide the 3rd party supplier, people eventually find out and bypass them for a saving.

It's like Sony. There's a company that once made some of the best consumer electronics around. Then one day they thought their shiat didn't stink and started getting other companies to sell them cheap stuff which they stuck their name on and made money. Eventually, the public cottoned on and either paid the same money for real premium products, or just worked out which cheap companies were making their stuff.
 
2012-09-25 01:09:25 AM  
antidisestablishmentarianism

WayToBlue: they've already gotten into your systems and taken the details as well as the info for whatever the next stuff you're working on

No, there is a barrier in our information system that keeps them from access.


If you can reach the internet or receive email from any device that can access that data it's over. Unless that barrier is that your work network is completely cut off from the internet then it is likely meaningless. Even if it is cutoff it's just less likely, not a guarantee. Any large company you can think of has already been breached, most several times; do you think they don't have "barriers" ?

Also they would have over 100 years of documents to sort through and whoever organized them did it so terribly that even those of us with access to everything have a hard time finding drawings.

That can actually help you a bit in this circumstance, but I wouldn't rely on it, timestamps on files are a great way to sort the wheat from chaff.
 
2012-09-25 01:15:29 AM  
Insatiable Jesus

WayToBlue: antidisestablishmentarianism

My company moved manufacturing of products for use in China to China, mainly to supply larger manufacturers like GM and CAT. We only build simple, low tech equipment over there for fear of someone stealing our tech and selling it in our market. What we are building there they can't sell here competitively because of costs, and our newer tech is 30 years past what we are building there.

There are tariffs in place to protect our local market from foreign finished goods but there is not much protecting sub-assemblies. The tariffs and shipping costs on a finished car or heavy equipment is enough to keep that stuff from coming here.

Your basic plan of moving only the low-tech stuff over there is reasonable on its surface, but there's more to it than that. If your more advanced stuff is at all interesting to them, they've already gotten into your systems and taken the details as well as the info for whatever the next stuff you're working on.

I don't mean that facetiously, and I'm not speaking in generalities. I mean it is extremely likely based on what you've said that they have literally already done this, and they're probably still in your network right now.

They might not be able to sell what they build with this information here competitively based on what you're saying about tariffs (although government subsidizing might make it more possible than you think), but regardless they can sell to many other places in the world.

Moreover, they certainly won't need to buy it from you anymore.

The Chicom monkey couldn't build anything innovative or new if his life depended on it. Programmed from birth by Mother State, their collective mindset allows them only to copy and steal.


I don't know that I entirely but that but regardless, that's all they have to do for now. Let the rest of the world spend their time & money on innovating and r&d, they can just steal the result and make their own.
 
2012-09-25 03:29:35 PM  

olddeegee: Most of the people who moved the manufacturing didn't care about the long term consequences. They've cashed out and they live on their private islands.


images.businessweek.com

http://images.businessweek.com/cms/2012-08-09/0809_romney_630x420.jpg
 
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