US Manufacturing's bright future...and some Myths

[CADsortaGUY]

Editor's Page -- A Celebration Of U.S. Manufacturing

CkG

 

[ReiAyanami]

"Myth 1: Production is too expensive in the U.S"

although workers here make several hundred percent wages that of other countries, transporatationof those items thousands of miles across the ocean doesn't make enviro sense. what i really never understood was how $100 sneakers (nike) are made by kids in southeast asia for a few bucks a pair, while making them over here would still be under $10, with a net gross margin of 90%, although 50% goes to the retailer, maybe the other 40% goes to michael jordan...

same goes for $20-$50 tommy hilfiger and designer shirts made for less than a dollar each and turned around and sold at 2000% mark-up, u'd think they could afford some american labor.

but as shown by levi strauss, apparently not.

nike should churn out better quality shoes than the crap they currently make, but i guess they know the faster they get worn out the sooner u replace them

 

[dpm]

Sure the big name/ high mark up brands could easily afford american labour. But they make more profit using overseas labour, so they do.

Its not quite that simple - Nike, etc don't own any factories themselves, but subcontract the 'messy' part of the business out, thus making it the contractors concern where to base plant.

This doesn't mean that US manufacturing is dead - far from it - there is still a lot going for it - a large pool of expertise, large stocks of raw materials, a large internal market leading to economies of distance, etc. But the sheer price difference compared to sourcing overseas will inevitably lead a large chunk of it offshore.

Take the Steel industry, since its in the news at the moment. The European Steel industry collapsed in the late 70s/80s, and had to be massively restructered, which is corporate speak for having almost all of it shipped abroad. The remaining euro industry is small and lean, and doing better.
The US was shielded from this then by the factors I mentioned above, but has come to the same point now. Really there's not much choice but to close a lot of it, but that's not exactly a wonderful thing to happen during your presidency, so George W was forced to use protectionist measures to prop it up.
Sadly, these measures do the American economy as a whole more bad than good, but the harm is spread out, and so not as visible as the closing of steelworks would have been. All this is just the way capitalism works.

Edit - oh, and isn't industryweek just another trade mag? Some might question whether its stance is *entirely* uninterested.

 

[rudder]

Originally posted by: dpm
Sure the big name/ high mark up brands could easily afford american labour. But they make more profit using overseas labour, so they do.

Thats exactly right. If the greedy mofo's can get an extra 50 cents per shoe profit by making it in China, the bean counters and stock holders love it and off go the jobs.