Why the US is losing the manufacturing battle to China. (Recent personal experience)

[Guest TankerHC]

I collect watches. There are watch collectors Forums. In the last several months I have been reading posts from Professional Jewelers claiming that many of the big name manufacturers, especially Swiss Manufacturers, have been buying Chinese knockoffs in bulk and disassembling them for gears and other internal components. The reason being that the knockoffs gears are cut so precise and made out of the exact same materials that it costs more for them to manufacture a single gear than an entire knockoff and they are already cut as close as they can be. 

 

You go to Best Buy or somewhere like that today for Electronics, (Which are just about all made in China) and they ask up to $40-$50 for a Monster cable like an HDMI. Anyone that knows, knows thats a gimmick. There is not enough signal loss in 6 feet of cable or even 10 feet of cable to make any noticeable difference (Im a former Broadband Engineer, I have dealt with signal loss from headends to the tap a lot). Go to Ebay, or Tiger Direct or Newegg or amazon and buy a $1-$3 Cable and its the exact same thing. You dont need "gold" shielding on a 6 foot cable. Your not even going to lose .1 db on six feet of cable. So the Chinese sell direct, for a buck or two, cabling that American stores are selling for $12 (Walmart) up to $50 (Best Buy). Most Electronics that you would buy 4 or 5 years ago and beyond on Ebay or something like that were junk, poor soldering points, bad cables, even MSi and ASUS had a problem with OOTB fails on motherboards a couple of years ago. No longer, the quality coming out of China is far improved, and improving even more, rapidly. Used to be those motherboards were some low quality hardware, Today when they boot, the BIOS shows "Military Grade Hardware" and it is.

 

Then last month I was in a truck stop and saw those dashcams the truckers use. Wasnt too impressed, at least not 100 bucks impressed. Just basically a cheap digital video camera that ran off a utility outlet.. So a couple of weeks ago I looked for something along those lines on Amazon. Came across this camera that had some pretty big claims for the price. So I ordered it to see if it would do what I wanted. So it arrived 4 or 5 days ago and I hooked it up. All I can say is, if the Chinese keep this up, American manufacturing doesnt stand a chance of ever recovering. This camera is about 4-5 inches wide. It has a 3.5 inch TFT screen, and two cameras, one on each side It has sensors that measure vehicle angle and a built in GPS that links through my cell phone wifi hotspot to google maps. It has an IR lens with built in LED's that actually works. Its called a Car Black Box DVR. On my 8 GB card it records for quite some time and when the card is full you can either change it or let it go and recording simply rolls over. If the car/truck reaches an abnormal angle the box locks in the data, including speed, vehicle angle and it continues recording but also takes a snapshot of the moment the vehicle reaches the abnormal angle. If there is an accident, it does the exact same thing. The cameras rotate 270 degrees, so you can record outside and inside or just outside if you want and it has a built in mic. It records in 1080p so you have to buy a Class 6 SD card at least 8 GB or higher. This thing works perfectly, and the hardware is solid, the mount is really solid and pretty intricate for movement. Its better than the $25 mounts I bought at Best Buy for my GPS and cell. Cost for the whole thing? 70 bucks.

 

While in Virginia a few months ago I stopped in at a couple of Bike shops. Honda, Ducati, Yamaha dealers. Now importing Hyosung Motorcycles from South Korea. I took a close look at some of these bikes, these arent the cheapo (Only in price) Chinese bikes and scooters you find around for 500 and 1800 bucks, these are some nice bikes and looks like they did their research. I just took a look and there are 6 dealers here in TN. I read a bike article a couple of months ago that said while the major manufacturers are just improving on models they already have or have had for years, the South Koreans are quietly closing the gap. One dealer I went in had some damn nice bikes from Hyosung, V-Twins. I asked one dealer what he thought about them and he told me that he is still out on them, but frojm the testing they have done so far and based on maintenance requirements on sold units, looks like they are going to give everyone a run for their money.

 

Then you have GM building a plant (After the bailout) that is going to manufacture the engines for their Hybrids, in China.

 

The list is a mile long, but Cell Phones, invented in the US, Computers, Invented in the US, Televisions, invented in the US, We dont manufacture any. You have American auto manufacturers it seems like doing constant major recalls, and then you have Asian companies like Kia giving 6-60 bumper to bumper and 100,000 mile drivetrain warranties. Coming back from Atlanta last week I see a sign hanging on a dealership that stated if you purchased then, you get a lifetime warranty...how the heck do they do that!?

 

When you have Unions that would rather a Company go banrupt than take a short term paycut with a guaranteed raise after recovery plus stock options (Hostess) then manufacturing in this country will never recover. You cant make a product if you cant make a profit on it.

 

This administration and previous administrations have all talked about recovery in the manufacturing sector. It's not going to happen. Ever.

Edited July 2, 2013 by TankerHC

[Guest 6.8 AR]

Back when they only had labor cost, they used to(and still do) reverse engineer everything before they

attracted enough manufacturing business. Now it is only the cheap labor and the manufacturing processes

they got from everyone else. We are our own worst enemy.

 

Still a lot of trinkets come from China with standards way below what we used to procure from within our own

shores.

[peejman]

They're learning because we're teaching them and investing in them.  We're moving manufacturing overseas and teaching them how to manufacture products.  The overseas companies are then taking the profits and reinvesting in better equipment and technology.  They're fast learners.  The total lack of environmental oversight and intellectual property rights makes the whole process go faster.

 

[tnguy]

What was the make/model of that dashcam? I've been thinking of getting one.

[Guest TankerHC]

Its called the Vehicle Black Box DVR. with Double Camera Synchronous Recording. Just noticed that the instruction manual says IR, but the box doesnt. It does record crystal clear at night. I think its because of the headlights + LED's.

 

Specs:

2 CMOS Sensors

2.7 TFT LCD Panel

Audio Sytem Record Playback Support

1280x480 dual channel video or 640x480 single channel. 30 FPS

G Sensor

GPS Module with google maps integration

Built in rechargeable lithium batteries, also runs directly off utility outlet.

4/8/16/32GB SDHC Class 6 or above required

Dual rotating cameras (270 degrees)

Privacy button

 

Comes with Black Box Manager and GPS Tracker software (Download from their website)

Recording file software manager

Main Screen Image Swap (in/Out)

GPS Map Support

G Sensor Graph

 

File locking and voice switch activation.

 

Might want to get one if you want it, already gone up $10 since I got mine last week. The photos dont even show everything. That little box on the cable is the GPS which attaches right to the mount.

 

http://www.amazon.com/gp/product/B008GAMNBK/ref=oh_details_o03_s00_i00?ie=UTF8&psc=1

Edited July 2, 2013 by TankerHC

[runco]

Let me give you some first hand experience on China Manufacturing.  Years ago, I use to be a direct material buyer in the automotive industry.  I was tasked to reduce cost like all buyers are.  I was directed by my manager to look at Chinese manufacturing for my particular commodity.  China's capability is great, but the cost model is what most people do not understand.  Unlike other countries, China is a communist country.  Very little enterprise is owned by individuals, but rather the government itself.  Anyway, the sales person I was working with shared with me the cost model.  Instead of preparing a quotation, he simply asked me what the purchase price needed to be, should it be 20% less, 30% less, 60% less than what I was currently paying in the States.  I asked why, he said it was customary for the government to discount the selling price for some period of time.  I took this as basically a government subsidized cost reduction.  This would hook you into their price, eroded or eliminate the former manufacturer in the States, and gradually increase your price over a course of 4-5 years.   So how can our suppliers in the states compete against this?

 

This taught me enough to keep working with my U.S. suppliers to find ways to lower cost.  However, this tactic will work providing my company's competitors never go to China.  Of course they will.   So will we.  It is very sad!

 

FYI - I call this the Apple Computer method.  The U.S. manufacturing model is to develop the item in the states, and then outsource the manufacturing to China.  As China grows into a manufacturing mecca (they are actually there already), the U.S. manufacturing is eroded and is falling behind, and never will be what it once was.  All we can do now is keep our development skills, and as long as we are a capitalist regime, the dream of becoming rich will always be there, thus driving innovation.  This innovation concept is not available in the Communist regime, very few people make it to the rich status.  No incentive, no development.

Edited July 3, 2013 by Runco

[Garufa]

The US is not losing any manufacturing  battle with China.  We already have lost and the only people to blame are ourselves. 

[frankmako]

unions and taxes are the biggest problem here.  correct both and you will have jobs at home.  

[peejman]

Let me give you some first hand experience on China Manufacturing.  Years ago, I use to be a direct material buyer in the automotive industry.  I was tasked to reduce cost like all buyers are.  I was directed by my manager to look at Chinese manufacturing for my particular commodity.  China's capability is great, but the cost model is what most people do not understand.  Unlike other countries, China is a communist country.  Very little enterprise is owned by individuals, but rather the government itself.  Anyway, the sales person I was working with shared with me the cost model.  Instead of preparing a quotation, he simply asked me what the purchase price needed to be, should it be 20% less, 30% less, 60% less than what I was currently paying in the States.  I asked why, he said it was customary for the government to discount the selling price for some period of time.  I took this as basically a government subsidized cost reduction.  This would hook you into their price, eroded or eliminate the former manufacturer in the States, and gradually increase your price over a course of 4-5 years.   So how can our suppliers in the states compete against this?

 

This taught me enough to keep working with my U.S. suppliers to find ways to lower cost.  However, this tactic will work providing my company's competitors never go to China.  Of course they will.   So will we.  It is very sad!

 

FYI - I call this the Apple Computer method.  The U.S. manufacturing model is to develop the item in the states, and then outsource the manufacturing to China.  As China grows into a manufacturing mecca (they are actually there already), the U.S. manufacturing is eroded and is falling behind, and never will be what it once was.  All we can do now is keep our development skills, and as long as we are a capitalist regime, the dream of becoming rich will always be there, thus driving innovation.  This innovation concept is not available in the Communist regime, very few people make it to the rich status.  No incentive, no development.

 

 

The classic Asian business tactic.  I learned it well during my automotive years dealing with Korean, Chinese, and also Indian suppliers.  They effectively "buy" the business.  They quote you a low price such that they're losing money.  Then their government subsidies kick and and they slowly ratchet the price up until it's profitable for them. 

Edited July 3, 2013 by peejman

[Dolomite_supafly]

I have a relative that worked for GM for 37 years. He was/is a die hard union guy. We were talking about actual costs to manufacture cars. When we talked the average Suburban was right around $40K at the dealer. He said actual cost in parts and labor was under $6K. He said the higher selling costs were needed to keep the union benefits up. Unions are good if they are used to ensure workers are not abused but in most cases the unions are used to inflate salaries and benefits far beyond what they should be.

 

The workers salaries, even though they are pretty high, are not what adds cost to vehicles. It is the benefits and bonuses that are paid to every single worker. The union pays it members substantial bonuses which GM and us, the consumer, ultimately pays for. I was reading some of their union material and they guarantee each union worker a $5,000 if they vote to agree to the new contract for 2012-2015. There are all kinds of bonuses and benefits each union member gets.  For 2012 each member was estimated to $12,500 in bonuses on top of their inflated salaries. And with profitsharing for each billion in profits reported by GM each union worker is to receive $1,000. Doesn't sound like a lot except in 2012 GM had a profit of $4.9B so each union member is getting another bonus of $4,900. So for 2012 each union member is receiving $20,000 in bonuses alone. There are also tons of other benefits that we pay for as well. They are given up to $30,000 for relocation expenses if they CHOOSE to work at another plant. On top of regular unemployment benefits the union pays the worker up to $962 a week in additional money for up to 52 weeks. And the benefits do not stop there. Refusing to buy a GM vehicle isn't going to make a difference because the government, and our taxes, subsidize GM and the union's high cost.

 

This is why companies are going overseas. And when they go overseas it gives those foreign countries the designs and innovation we have worked so hard to develop. They get the designs after all our hard work have been done and we are giving it to them. Then they use our own designs to compete with us but the labor costs are much less because of the lack of unions.

 

This is what is going to kill our economy as more and more workers become unionized. I see or read about it all the time where it seems like every area of manufacturing is becoming unionized. And it is the AFL-CIO that is doing most of it. AFL-CIO which is the same union that runs the GM unions.

 

Imagine how much our cell phones, or service, are going to cost in a few years now that the communication industry workers have become unionized.

[partypilot1]

Union costs

[Guest PapaB]

unions and taxes are the biggest problem here.  correct both and you will have jobs at home.  

 

That and the cost of complying with gov't regulations.

[ted]

In 3 min why http://www.youtube.com/watch?feature=related&v=NOzR3UAyXao

[ted]

Remember this one some one posted on TGO along time ago http://www.youtube.com/watch?v=Lvl5Gan69Wo

[ted]

people need to wake up,every time you went to the store to buy some thing did ya take the time to see where it came from no you didn't did ya ? every time you bought some thing it jest gave china more foot on American soil over a period of time Thay have more wealth than the US and we let it happen with our own money , then when the economy got bad where did the US go to borrow money ? china . and now their wanting to collect . the real reason why do you think the government wants to take your guns ? , so the government is letting china buy up land and fuel and resources , because the US can't pay it back because all the industry went over seas , we have nothing to trade. some thing I remember more than any thing from my father retired US NAVY E8 INTELLIGENCE SPECIALIST
and passed over 10 years ago and before he left this world and passed away that he said to me was the one thing that stuck in my head forever was he said to me lissin very very closely and never ever let this happen ,never ever give up your guns you may need them to keep America , and your freedom . that in the future the biggest enemy will be sliding under the radar to own our country . in our own back door. I see what he was saying now and why he said it . http://www.youtube.com/watch?v=9SIaGhiZs3A Edited July 3, 2013 by ted

[tnguy]

Its called the Vehicle Black Box DVR. with Double Camera Synchronous Recording. Just noticed that the instruction manual says IR, but the box doesnt. It does record crystal clear at night. I think its because of the headlights + LED's.

 

...

 

Might want to get one if you want it, already gone up $10 since I got mine last week. The photos dont even show everything. That little box on the cable is the GPS which attaches right to the mount.

 

http://www.amazon.com/gp/product/B008GAMNBK/ref=oh_details_o03_s00_i00?ie=UTF8&psc=1

 

It's a little big and heavy. I was actually hoping for something a little more discrete. Interesting that it has the gps maps. I assumed when you said GPS it was going to be just for recording location.

Edited July 3, 2013 by tnguy

[LagerHead]

unions and taxes are the biggest problem here.  correct both and you will have jobs at home.  

 

This is only half the problem.

 

That and the cost of complying with gov't regulations.

 

And this is the other half. Even non-union jobs are being shipped overseas because in order to compete we need to reduce the cost of manufacturing which means taking it where government regulation doesn't kill the ability to make the product in the first place. 

[tnguy]

Unfortunately all the "Buy American" push had an unfortunate side-effect. It allowed taxes to rise and unions to grab to unsustainable levels. It couldn't hold and it didn't. Competition, not protectionism is the only sane way.

[Guest Lester Weevils]

This is only half the problem.

 

 

And this is the other half. Even non-union jobs are being shipped overseas because in order to compete we need to reduce the cost of manufacturing which means taking it where government regulation doesn't kill the ability to make the product in the first place. 

 

There is at least a "third half" to the problem-- USA captains of industry and finance have to be less retarded than Chinese captains of industry and finance, or they would screw it up even if we gave em near free domestic labor, no gov regulation and zero taxes.

 

Expecting management to be "smart" is most likely asking too much, on average, though there occasionally is non-brain-dead management. But our grand muck-a-mucks of industry and finance don't have to be smart. They just have to be less retarded than their Chinese counterparts. Its kinda like out-running the bear-- You don't have to run faster than the bear. You just have to run faster than your buddy. :)

Edited July 3, 2013 by Lester Weevils

[Just2Honor]

Several years ago a GM manager told me that GM had more money in retiree benefits like free health care for their family for life than they had in the steel in a car. 

[Guest Lester Weevils]

Management signed the union contracts.

[ted]

this will help you under stand a little better of what is going on in the world http://www.youtube.com/watch?v=6a0zhc1y_Ns Edited July 3, 2013 by ted

[vontar]

I see the points you are making and I agree with many.  I also buy the 1-3 dollar cables and they seem to work just fine for me.

 

I have one dashcam, but no wear near the features of that one.

 

I added that one to my wish list.

[Guest TankerHC]

It's a little big and heavy. I was actually hoping for something a little more discrete. Interesting that it has the gps maps. I assumed when you said GPS it was going to be just for recording location.

 

 

Naa, this thing isnt discreet at all.

[Guest 6.8 AR]

Like frankmako said, you correct the government intrusion(taxes) and labor problem(unions) it can get the

cronyism away from the problem. Of course, when you do that, other things like trade deficit go away and

then, the other problems, like restrictions on domestic oil production, when fixed, our economy could do just fine.

 

Government is the cause of most of the problem. We are playing against a stacked deck with the Chinese.

With our current political leadership, and after China implodes, we would just end up bailing them out. At least,

that's where I think our politics would lead us.

 

Our stability would come with a huge price tag. Our use of technology is one of our weakest points. We need to

make our technological infrastructure more resistant to attack. With the bad actors ability to utilize something

like an EMP to kill our country, something which we rely on heavily in our day to day like GPS, and the internet,

to control all sorts of things we take for granted, would be gone in a flash. Some things should be immediately

addressed, instead of being left to be a constant threat. China can afford to play with it's version of pseudo-

capitalism, if you can even call it that, with more than a billion or so of nothing more than slaves to rule.

 

Our unions are nothing more than communists waiting for the next dollar. They don't represent their members,

at all. Maybe once upon a time, but not now. To back that statement up, all you have to see is their support of

the minimum wage laws, which go completely against the grain of their own members' interests, along with

Trumka's very statements about this topic.