Working Conditions in China...

[Jim Matthews]

There - I fixed that for you.

Sadly, I'm only half kidding. As long as people can get by on nanny state gimmes and free health care, they have no incentive to work.
Matter of fact, actually going out and working will cut into their Netflix and/or texting time.

You mean, Health care shouldn't be free? Entire modern countries (some next door) have cradle to grave health care coverage.
People still working in former industrial hubs are turning on each other instead of pressuring their leadership to lead the jobs back.

If you're driving on tires from Korea, you're illustrating the real problem.

[David Weaver]

Thanks for the heads up, Jim. I have a very good shoe guy near my office. I just have never been in position before to get him to resole or rework shoes, but it looks like the direction that I will probably be going as the mid-quality and mid-price shoes disappear.

Not opposed to sending shoes back to them to be reworked, either.

You are right about boots - it's difficult to find moderately-priced boots of any style made in the US. Last time I tried at a place other than a speciality retailer was about 5 years ago at a sportsman's store here. They had about 200 different boots, work and hunting, ... one pair at that time was made in the US. They were danner, I think. they went out of business - I wouldn't know where to look now.

It is a shame that manufacturers who have spent gobs of time and energy to figure out how to make a really high quality good for a moderate price and in volume are disappearing.

[Phil Thien]

Taken individually, it makes financial sense for manufacturers to off-shore production.

Taken as a whole, moving manufacturing off-shore will destroy the greatest consumer market the world has ever seen.

I do think businesses are beginning to feel resistance to Chinese-made products.

And that scares the you-know-what out of them.

I think I mentioned before when I was in a Home Depot and they have someone from a survey outfit asking a guy back in the electrical department why he selected a Klein tool. "Made in U.S.A." was one of the multiple choices, and he did pick that (among familiarity with the product).

So they are not immune.

It scares them almost as much as that happened with SOPA and PIPA.

I think it terrifies them that there could be a coordinated effort to stop buying Chinese, similar to the SOPA/PIPA effort. For some, even a seven of fourteen day boycott would be devastating.

[John Coloccia]

I personally am mourning over the fact that I can no longer go to the clark's outlet near home and find Bostonian shoes made in italy in the clearance racks.

I love my Bostonians. What a great shoe. I haven't worn one out yet.

[David Weaver]

I think it terrifies them that there could be a coordinated effort to stop buying Chinese, similar to the SOPA/PIPA effort. For some, even a seven of fourteen day boycott would be devastating.

I think what terrifies them the most is that they have gotten used to a model where the original goods they sold were priced at X and it cost 0.6X - 0.8X (or whatever) to acquire them, maybe most of that from the manufacturer. And with chinese goods, somewhere along the supply chain, they've been able to continue to charge X and the cost of manufacturing the items is more like 0.1X.

I think a lot of retailers have become totally drunk with the ability to have a huge inventory with little tied up in it, and they aren't looking to tie up capital with high value inventory when a lot of consumers don't know the difference.

Plus, they can screw around with all of these stupid coupons - 20% off of this or that, or buy one get one half off, because there is little in the cost of the item to begin with.

It is demoralizing a lot of the time if you want to get something decent quality without being an expert about the good and what makes it great vs. good vs. poor. Especially when great is something that someone who uses a good several hundred times needs, and good and poor are almost the same price, despite "good" being good enough for homeowner longevity and "poor" being equated with getting the good out of the closet in a year and finding that it no longer works despite little use.

[Ben Hatcher]

Did any of you actually read the articles cited here? There is a very important point regarding why things are made in China that has nothing to do with cost and that is flexibility and adaptability. There is no way that any plant in the US would be able to switch gears and ramp up product on the scale that is required for a global roll out of a new, high demand product. 400,000 workers at that Foxcomm plant, guys. 400,000 who are willing to work long hours for days on end because that is a better option than their alternatives. 400,000 people willing to be woken up at night and told "time to go to work, we've got to make more gadgets so you're working overtime." You could probably find pockets of folks here willing to do that, and we all certainly know farmers, ranchers, or small business owners who work 16 hour days for months on end. But to be able to assemble nearly half a million of that kind of worker in one place is something that can only be done in a country with a billion candidates who are willing to relocate. The logistics advantage and the reduced time to market that this kind of arrangement allows should not be underestimated. I don't understand why we all seem to lament the fact that making some things elsewhere just makes more sense. I don't do drywall anymore because other people can do it better and faster than me. I'm happy doing things that I am better at, that I enjoy more, and that are more profitable in the first place.

[Jim Matthews]

There are some services that can't be "farmed out".
Farming, for one.

Plumbing, for another. I forsee a resurgence in guilds, to challenge the primacy of capital.

[Dan Hintz]

There is a very important point regarding why things are made in China that has nothing to do with cost and that is flexibility and adaptability.

There is no way that any plant in the US would be able to switch gears and ramp up product on the scale that is required for a global roll out of a new, high demand product. 400,000 workers at that Foxcomm plant, guys. 400,000 who are willing to work long hours for days on end because that is a better option than their alternatives. 400,000 people willing to be woken up at night and told "time to go to work, we've got to make more gadgets so you're working overtime."

I split those two pieces of your quote up... on one hand, you say it has nothing to do with cost, yet on the other hand you say these companies have 400k workers ready to go at a moments notice.

Do you think those 400k workers could be recreated in the US at the same cost? Sure, flexibility is great, but it's a (albeit major) side benefit to having dirt cheap labor. If we had three times as many workers in the US, all willing to work a standard 8 hour workday, but willing to accept 1/3rd the pay of a Chinese worker, we could recreate the same flexible scenario.

[Bryan Morgan]

Apparently the working conditions aren't bad enough to stop them from lining up for any available jobs:

http://news.yahoo.com/many-chinese-w...190754170.html

[Bryan Morgan]

What does "Made in America" really mean?

Less and less it seems...

I just threw away a Made in USA bicycle pump that was a piece of junk. I replaced it with a superior and cheaper made in Taiwan pump.

[Brian Elfert]

Plus, they can screw around with all of these stupid coupons - 20% off of this or that, or buy one get one half off, because there is little in the cost of the item to begin with.

JC Penny is doing away with the constant sales and switching to consistent lower prices across the board effective today. Macy's tried this and they went back to a smaller number of sales after a period of time. I can only hope JC Penny is not cutting back on advertising.

[Moses Yoder]

http://blogs.hbr.org/haque/2009/07/a...t_would_i.html

Above is a simple article with a guesstimate of what a fair labor Ipod would cost. 23% more, or $58 more. I have to ask myself, if people are going 10 miles down the road to buy gas for a penny per gallon less, what would they do if an American made and Chinese made Ipod lay side by side? The American made Ipod is $58 more; which would they buy? I'm guessing over 80% would buy the chinese version, based on my wife's experience as a cashier in a department store.

That is only half the problem. As the original posted article states, there are no longer enough middle level workers in the US to produce the quantity of goods that are consumed. Everybody has a college degree and thinks they should earn $2 billion per month.

[David Weaver]

JC Penny is doing away with the constant sales and switching to consistent lower prices across the board effective today. Macy's tried this and they went back to a smaller number of sales after a period of time. I can only hope JC Penny is not cutting back on advertising.

I think the couponing works, if the person clipping the coupons doesn't do a time analysis and an analysis of what the real price of the item they're getting is (i.e., the price at a place that does not run sales).

I'd imagine that JC Penney will go back to the coupons after they find out what Macy's found out - that people will use coupons without thinking believing that they are getting a great deal, when the coupon makes the deal average or maybe a little better than average.

My wife and I talk about this fairly frequently because I don't have any interest in going to get a $30 pair of (cheap imported soon-to-be throwaway) pants from a place that prices them at $50 and claims you're getting 40% off from coupons to sell them to you for $30. Too much screwing around, and not enough quality goods to apply those coupons to.

[Kevin W Johnson]

Well, although I agree with the idea of rules, I have to disagree here. I have shrunk my business, and one of the biggest reasons is that it is harder and harder to make a profit playing by the rules.

The government makes absolutely stupid rules with no thought whatsoever to the concequences to business because they don't have to. They just go to the public well and take another dip if they need more funds. Much of the stuff coming down is nothing more than a money grab.

Take the regs passed down by the EPA on lead in old houses. The stupidity is amazing! What it adds to a job means that the jobs are just not going to get done by a legitimate contractor. but.....

The EPA made it so that every contractor, even all subs have to be licenced. So there is an estimated 1 million plus licences, and I don't remember for sure what it costs, but lets say $200. Thats 200 million dollars right off the top with the potential to harass working stiffs and fine them for another income stream.

Government is out of control and staffed with illogocal thinkers, and that is what is stopping business here. Choking it would be a better discription.

I agree with John C, and have been doing the same. I vote with my dollar. No Apples for me......

Larry

Notice I said ALL. I agree the lead thing is a sham. We certainly don't want to dump ALL the EPA regs. Clean air and water are nice, aren't they? China shutting down factories in an attempt to clear the air for the olympics ring a bell?

There's a lot that could and should go. But we still need some of it.

[Ben Hatcher]

I split those two pieces of your quote up... on one hand, you say it has nothing to do with cost, yet on the other hand you say these companies have 400k workers ready to go at a moments notice.

Do you think those 400k workers could be recreated in the US at the same cost? Sure, flexibility is great, but it's a (albeit major) side benefit to having dirt cheap labor. If we had three times as many workers in the US, all willing to work a standard 8 hour workday, but willing to accept 1/3rd the pay of a Chinese worker, we could recreate the same flexible scenario.

The nature of consumer products is high variability, a short lifecycle, and extremely volitile demand. Human workers are best suited to tackle this kind of thing, but the work is tedious and generally doesn't pay well. It takes a certain set of circumstances for a person to be willing and/or able to do it. To get enough of them, you need a big pool, or much higher wages, consessions, etc. which all limit flexibility. They have a big pool. A VERY big pool. And unless we start having 20+ kids per family, they'll continue to have a much bigger pool than we will for a very long time.