Your opinions were valid 10 years ago, but not now. The United Steel Workers of America seem willing to adjust their work rules in order to have some jobs at $20/hour rather than none. Work rules have traditionally been the biggest cost problem, frequently requiring twice as many people on the production line as are needed. And that doesn’t include repair folks where there used to be 3 to 4 times as many as needed. Mittal and Severstal negotiated attractive contracts before they bought US steel mill assets. They would not have bought them otherwise. And many of the new auto plants are not unionized. They have young employees without restrictive work rules. These plants even export. The Honda plant builds cars for export to Japan (Acura equivalent Honda).
Give me a link. I’ll read it.
Perhaps. I’ve actually done proposals for federal grants, the most recent a $2.1M grant from the D.O.L.
Developing a proposal is a huge amount of work. It’s basically a full time job in and of itself.
I’d like to see a study. I’d like to see someone take a mixed fleet of, say, thirty commercial diesel trucks owned by a variety of firms and a mixed fleet of thirty privately owned sedans and coupes…
Such a study would be misleading to the extreme unless the figures were adjusted to reflect the actual ratio of trucks to sedans/coupes. There are a heck of a lot more of the latter.
You can either go to http://www.time.com/time/specials/packages/article/0,28804,1819594_1819592,00.html or you can find it at www.time.com/time/specials
There is plenty of non-union labor in this country, especially in the so-called “right to work” states where it is illegal to require workers to join unions.
Yeah, and you only need to hold 2 or 3 of those non-union jobs to make ends meet. But you still won’t have medical or other benefits, and can be fired at the drop of a hat. “Right to work”, my foot!
NYBo, you sound kind of hostile. Are your people being persecuted? Normally, you contribute a lot of insight to these discussions. Have you read the article?
Thanks for the link. I read it. I also read the entire “10 points why you should be happy even though the price of oil is bankrupting you (my words)”.
Ths high price of oil is not good. And it’s going to get worse. Home heating oil is projected to go to $6/gal this coming winter. Many of us here have no idea how we’re going to pay it. Many of us converting to other sources of heat. I’m getting a quote for conversion to natural gas (I have a supply line in my house already), others are buying pellet stoves.
The cost of clearing the roads next winter is expected to skyrocket as a result of the rising cost of fuel. Yup, you guessed it, taxes will go up…a big jump should be expected.
You may not have to worry about heating bills where you live, or about the tanking economy, or about large tax jumps, or dramatically rising grocery bills, but I do.
Sorry, but I can’t find reason to be happy about $4/gal and higher gas costs.
I’d be happy to see the numbers weighted for this. I also realize how statistically tiny my suggested sample size is. I have a hunch that my point would still be dramatically made. I have a feeling that the difference in emissions will still be too dramatic not to have made the point.
"I simply do not see U.S. manufacturing as having any long term future, send it off where it can be done better and cheaper and let domestic workers spend their time on higher value-added tasks. The U.S. does not want to compete with the developing world for low end work, it’s just an economic race to the bottom that we are sure to lose. Does anyone seriously think it’s a good idea to try to compete with china on price while paying U.S. wages, shipping costs will never get high enough to make that work for most products? "
There are only 3 ways to create wealth. You can grow it, (farmers) you can mine it (miners, rough-necks) or you can manufacture it…EVERYTHING else falls into the category of non-productive service jobs. Government/Military jobs are the most non-productive of all…
Ths high price of oil is not good.
That’s why the introduction reads
Pricey gas brings economic pain. But beyond the agony at the pump, life is getting a little better in ways we may not notice
I suppose some people will never notice. Nobody is claiming it is a good thing, but I think an article about the cloud’s silver lining is an interesting viewpoint. Besides, if jobs come back to the US, the amount of taxpayers will go up.
Where does intellectual property fall into your three ways to create wealth? Writing a book doesn’t involve farming, mining, or manufacturing, does it?
High transport prices do not affect exports as severely since the dollar is so depressed. Europeans and Asians can buy transportation much cheaper with their currencies than US importers can buy with their dollars. The reality is that, almost unbelievably (and for the first time in my life), conditions have reached a point where imports are being “on-shored” or “near shored” instead of “off shored” due to international costs being so high. Mexico will start booming again as much of the business lost to China comes back.
Perhaps, but it’s not realistic to compare solely gas prices without putting them in context with the entire economic systems. Gas is much more expensive in Europe, but their medical expenses, their housing costs, their no-gas taxes, their food costs, their retirement systems, and just about everything else is different from our system.
I guess someone forgot to tell microsoft that wealth building was limited to farming, mining, or manufacturing. IMO. I will bet on the company/nation that designs the processes, facilities, and tools to do those things better and more efficiently; maybe genetic engineering of crops/bio-fuels, next generation mining equipment and controls, automated manufacturing processes/facilities, next generation power generation and transportation systems, improved telecommunications systems, environmental remediating systems, next generation computers and data storage systems, pharmaceuticals, nano-engineering, next generation batteries, etc. Each of these high value added jobs will support a large number of service/support jobs; not everyone needs to be a researcher, but the nation as a whole needs to stay ahead of the “innovation curve” and let others implement the existing technologies.
I don’t want my kids and grandkids farming, mining, or manufacturing anything; I want them developing the next generation of these technologies and others that we haven’t thought of yet. If you want the U.S. to have a better than average standard of living that is what it will take for the foreseeable future. Would you rather have your grandkids working in a factory building stuff that was designed elsewhere (i.e., assembling hondas in indiana someplace)?
This is no different than what is required for an individual to be really successful. I could be the best widget builder in the world and I might make a comfortable living, until someone else comes along that can do it faster/better/cheaper. If I want to really succeed, I need to be the guy who develops the next generation of widgets or (better still) they guy who develops whatever will replace the widget. Remember the “buggy whip” story from the movie “wall street”? Welcome to the 21st century.
The Japanese seem to have this figured out better than we have. They spend enormous amounts of money and effort on Research & Development, then design the product, for worldwide use, in Japan, then decide whether to manufacture it at home, in a low wage developing country, or in higher wage country with import barriers, or any combination thereof.
In countries with almost no skills, but local content rules, they build “screwdriver plants”, pure assembly plants with all the ready made parts shipped from Japan. These plants make the local dictator proud, and ensures local jobs and a strong local presence. There is zero technololgy transfer here.
In the case of their cameras, the low end ones are made in China, Indonesia, Philippines, etc., while the high end ones, justifying a higher manufacturing cost, are made in Japan. None, of course are made in the US.
TVs used to be made all in Japan, then some were made in the US to get around import barriers, then the manufacture devolved to Singapore, Malaysia, Taiwan, and then to China.
All the while the R&D, design, quality control system and manufacturing technology stayed Japanese.
Japanese car companies in the US do some necessary local design, styling, and manufacturing in the US to not offend the unions and US congressmen. Remember when Nixon put extra import duties on cars, they decided to make them in the US and beat the unions and local manufacturers at their own game. Now the unions complain the Japanese are not buying enough US cars!!!
The key issue is not to lose control of the product design and manufacturing technology, spend heavily on R&D, as Craig points out, and manufacture wherever it makes the most sense.
In most mass-produced goods, the total marketing and transportation costs usually exceed the manufacturing costs. In the total value added chain, the manufacturing component is nearly always less than 50%. In the case of a car costing $20,000,the actual manufacturing cost may only be about $7000, including the raw materials. Health care costs (Blue Cross) usually exceeds the cost of the steel in a car.
I don’t get it, Craig. This thread contains two examples of where this is already happening (if you only count Mr. Knuckles’ examples as one). Is there anything that would convince you?..or does this new idea simply conflict with your perception of reality?
There is plenty of non-union labor in this country, especially in the so-called “right to work” states where it is illegal to require workers to join unions. Your experiences with union labor might not have been indicative of the new economy we could see in the future.
I’m sure there are at least two examples of individual industries/products that have recently decided to manufacture goods in the U.S., that isn’t exactly a trend. Manufacturing, as a percentage of the GNP, has be steadily decreasing for decades, and I have not seen any evidence that the overall trend is reversing. About ten years of domestic manufacturing growth would convince me that this trend has reversed, not just a couple of anecdotes.
Fortunately, the number/influence of U.S. labor unions has decreased, partially because they are no longer a real political force (the democrats don’t even bother to kiss their butts any more). I do hope that domestic companies can manage to control labor costs in the future, primarily to prevent the loss of more valuable jobs. IMHO, the manufacturing sector is already gone. If I’m wrong, someone can show me the numbers in about a decade.
Last time I looked, china was already outsourcing its labor to even cheaper markets (africa, for example). I can see the cost of transportation slowing down the rate of outsourcing from north america (probably temporarily), but I very much doubt there will be an overall reduction in outsourcing and certainly not a reversal of the trend.
Chrysler bought Simca in 1968, up till then it was an independent company. VW, Opal, Anglia and Vauxhall were still insignificant on total sales until the late 60’s. Vauxhall, Anglia and Simca never were significant sellers actually.
I can remember when a 2 year old Datsun or Toyota sold for more than it did new, and a two year old Cadillac or Lincoln sold for less than either of the imports.
My people? Not sure how to interpret that, but just yesterday, an acquaintance in one of those “Right To Work” states lost one job on false pretenses by the employer (“We’re downsizing.” But when he goes to pick up his last check, there’s a big sign advertising that they are hiring for the position he just lost), and has had his hours cut to almost nothing at his other job (the lower-paid high school kids are getting all the hours).
The pendulum is swinging way, way to the big business side.
Which article, Ron? This thread has become such a morass of mud-slinging (sorry if I’ve added any mud to it), I’m not sure to what article you’re referring.