Goodbye, Production (and Maybe Innovation)

The New York Times ^ | December 24, 2006 | Louis Uchitelle

[DB]

We've been "giving it away" for a long, long time. Why are we continuing to get wealthier?

[Sandreckoner]

"The United States is still a powerhouse in manufacturing, and the output of the nation’s factories continues to rise."

But wait, I'm assured on FR (and pretty where everywhere else in American and non-American media, blogs and society in general) that we don't make anything any more, that we're also-rans industrially, even despite having an industrial sector that alone would be the third largest economy on the planet.

I have no problem with folk getting together to discuss the issue decades before it becomes an actual problem, mind you. But this article is just another in a very, very long line that vastly oversimplifies the issue (not just the problem) and provides little beyond Ominousspeak.

[Fairview]

I'll add, who makes the money from a music CD?

A perfect example. The NV Philips company of the Netherlands invented the CD and the CD player. They still manufacture these things, and they make an enormous amount of money from the sales of CDs and players and from licensing the manufacturing rights to other companies. They can continue to innovate because they know how to research, engineer, and produce the machinery.

[kerryusama04]

I worked supporting equipment for a US manufacturer that moved things overseas. This is not a strategy for success. Yes, overhead drops, but not nearly as much as one would hope. The engineers and the manufacturing jobs go, but the bureaucracy and the admin jobs at minimum remain. Equipment support staff end up duplicating the overseas efforts in order to support their customer base. Travel and shipping costs skyrocket. Customer service drops far below acceptable levels. You go from being able to get a part ovenight to 6 week lead times because support parts now compete with "just in time" shipment parts for manufacturing that have to clear customs.

This outsourcing can work with really high volume durable goods or throw away stuff. The problem comes when the cookie cutter MBA's try to shoe horn every industry into the management fad of the day while never even glancing up from the spread sheet.

[DB]

But they don't manufacture them.

[RaceBannon]

Unions are only part of the problem.

Of the 3 companies that I worked for that sent their labor overseas, none were union.

It is all about the cost of production, labor unioned or not, the cost of production is all that matters.

[rabidralph]

Wisconsin is full of manufacturers. My little town and its surrounding area has foundrys, finishers, wood/paper mills, furniture and window manufacturers and a hugh HVAC factory. We have a shortage of welders up here.

[FrankR]

The key is, if we keep exporting jobs, then who will have the money to buy the very things we innovate?

The Chicoms?

The Ruskies might be proven correct...they will bring us down "without firing a shot".

And yes, to avoid taxes and high union wages, it IS cheaper for companies to have the labor performed elsewhere. Companies are moving to Mexico in droves, yet, the Mexicans are still coming up here to suck up our tax money.

It's a shame when a company can have it made overseas, ship it over here, and market it, and STILL make more profit than having Americans build it. A damn shame.

Thanks for nothing, politicians.

[RaceBannon]

tarriffs

fair trade

eliminate foreign trade deficeits

[DB]

In the 80's the Japanese were going to own us.

Not.

[Mr J]

Already American society is re-organizing to cope with a declining standard of living. Young people are taking longer to leave home, if they ever do. Out of financial necessity, it will become common for multiple generations to live in the same house, reverting to the historical pre-World War II norm.

Increasingly, many will never own a home, spending a lifetime in an apartment or trailer. Squatting and shanty towns will become ubiquitous. Violence will spread, as the new white underclass clashes with Hispanic immigrants. For the first time in our history, children will be worse off than their parents, grandchildren even moreso.

Of course, none of this applies to the elites. The global and historical norm is for a tiny, super-wealthy oligarchy to rule over a massive underclass -- America was the greatest exception in history. Now, America will simply revert to the economic and social conditions that have been normal all over the world, for thousands of years of human history.

IMO.

[EGPWS]

By any economic measure we are wealther now than ever before in history.

A graph of the DJIA from 1900 to 2004.

This supports your statement DB.

[gas0linealley]

At some point, unions WERE necessary, because there were some pretty hideous examples of employer abuse in the early 1900's. BUT they went to far, making good jobs excessively expensive - I mean, someone getting $27 an hour just to shove a piece of metal in a furnance? No industry can compete with costs like that for no-talent work.

If all our labor unions ceased to exist, how long would it be before those "hideous examples of employer abuse" again became the norm? Look around, that sort of abuse never totally ended, and there is plenty of it today. As for someone earning $27 an hour to do what appears to you to be "no-talent" work, what are you comparing it to? And what qualifies you to judge the matter?

[Fairview]

But they don't manufacture them.

Yes, they do. They also manufacture refrigerators, TVs, electric shavers (Norelco), light bulbs, and other stuff.

[EGPWS]

But they don't manufacture them.

Some things are still 100% made in the USA.

[A. Pole]

Furthermore, when designing things, there are perhaps two or three people that actually have the skills to do it in any particular company.

These "two or three people" WOULD NOT BE THERE without many others around. Top experts do not exist in vacuum, same way as you cannot have movie industry making only "two or three" blockbusters. You need the whole social environment for that, starting with the ENTRY LEVEL jobs for the FUTURE leaders (they do not leap out of Zeus head like goddess Athena did).

There will ALWAYS be people in the USA that will be able to make anything.

Really? Or maybe you do not need even that?

"Let London manufacture those fine fabrics of hers to her heart's content; let Holland her chambrays; Florence her cloth; the Indies their beaver and vicuna; Milan her brocade, Italy and Flanders their linens...so long as our capital can enjoy them; the only thing it proves is that all nations train their journeymen for Madrid, and that Madrid is the queen of Parliaments, for all the world serves her and she serves nobody."
(Prominent Spanish official - Alfonso Nunez de Castro in 1675)

[DB]

Declining living standard?

Right.

People own more stuff than ever before. How many cars does the typical family have these days... How many old cars do you see on the road?

Now one could argue that we've become a slave to our stuff, that materialism is taking over. And that we over extend ourselves to get those things.

When I was a kid in the 70's virtually nobody I knew had health insurance. Yes we pay a small fortune for it now - but yet we still buy it - therefore we feel we can afford it.

The fact is we are so wealthy that we feel like we can spend endless sums of money all kinds of feel good things in endless regulation. If life were a we bit harder we wouldn't have time or concern ourselves with the color of our neighbor's house or if he has a flag pole in the yard, etc.

[DB]

Ya, in plants in China, Taiwan, Mexico etc.

That's the point.

[gas0linealley]

Wow...the article appears to have missed the whole part about unions driving the cost of labor up so that it makes a lot more sense to make your goods in countries where there are no unions.

Right, then you turn around and sell your goods in countries where there are unions and you can charge more for your goods. ...Until they go broke from importing more than they export.

[Condor51]

****My little town and its surrounding area has foundrys, finishers, wood/paper mills, furniture and window manufacturers and a hugh HVAC factory. We have a shortage of welders up here.****

You live near Schofield?