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China and the Decline in Quality (and Soon in Profits)
Of Two Minds ^ | 08/18/2015 | Charles Hugh Smith

Posted on 08/18/2015 8:20:27 AM PDT by SeekAndFind

Automation poses an insurmountable obstacle to China's full employment and spells the end of Corporate America's vast skimming operation based on low wages and zero-regulatory costs in China.

The general decline in the quality of tools and consumer goods predates the emergence of China as the workshop of the world, but the decline has gathered momentum with China's dominance of manufacturing.

Young people have little to no experience of tools and consumer goods that function for decades; today, everything that isn't disposable is expected to fail/break within a few years. Whatever doesn't break must be upgraded or tossed as uncool.

This is partly the result of planned obsolescence: designing the device or appliance to fail or become obsolete within a few years so the consumer has to replace it.

But planned obsolescence is not the entire problem; the quality of goods has declined dramatically due to shoddy manufacturing, poor quality control and low-quality materials. This trend has accelerated as production moved to China.

A few decades ago, things built in the U.S.A. and elsewhere were built to last: not just tools and appliances, but electronics: My 31-Year Old Apple Mac Started Up Fine After 15 Years in a Box (February 28, 2015)

Correspondent Mark G. has been sharing his experience with machine tools that were made in the U.S.A. 60 or 70 years ago that are still going strong.

By his reckoning, table saws sold in the U.S. in the early 1960s--tools that are still working today--were only 10% to 15% more than current table saws (when adjusted for inflation) that are made of plastic and inferior components that won't last a decade, never mind 60 years.

Here are Mark's comments on comparing table saws made in the early 1960s and those sold today:

Comparing tablesaws is problematic. The reason is even consumer level American made table saws in 1960 used heavy machined iron castings, structural steel, sheet steel and ZAMAC die castings in all parts. My Magna 10" table saw is a classic example of that era. Far lower grade plastic and stamped metal contraptions are sold now. Devices of that low a grade simply weren't on the market before.

Regarding Do-it-yourself: Popular Mechanics had run a 1950s article on building a Delta Unisaw style table saw from plywood and parts machined on a metal lathe. The classified ads of Popular Science and Popular Mechanics were full of DIY shop tool plan sets for $5 or so.

The key take-away is that tools and appliances of the current low quality simply weren't available in the Made-in-USA era. In a competitive market, i.e. one that isn't dominated by cartels and quasi-monopolies, competition would drive out low-quality goods designed to fail or made to fail by default.

But with virtually everything made in China now, competition is no longer about quality--it's only about price. Where's the competition in quality when everything is made in China? There isn't any. the quality is low regardless of the brand on the device, tool or appliance.

The life-cycle costs in cash and wasted resources for poor-quality goods are horrendous. What is the total life-cycle costs of low-quality goods that soon end up at the dump? If a table saw (for example) costs 10% less than a table saw in 1965, but the new tool fails in 10 years while the one made in 1965 is still working fine, what is the total cost of having a functioning table saw for 50 years?

Five new table saws at 90% of the original cost equals 450% higher life-cycle costs for the poorly made modern tool.

The profits from fabricating low-quality goods flow to the Western owners and buyers, not the Chinese workers. If you watch China Blue, a documentary on a clothing manufacturer in China, you will see a Western buyer squeezing the factory owner to wholesale blue jeans for $4 each that the Western buyer will retail for $40 each. Meanwhile, the factory workers (mostly teenage girls) go months without pay and are penalized if they can't work crushing slave-labor hours.

The horrendous human costs of working distant factory jobs for low pay is explored in the documentary Last Train Home.

I have explored the dependence of U.S. corporate profits on cheap goods made in China many times: Trade and "Trade War" with China: Who Benefits? (October 5, 2010)

Mark G. compared the modest price reductions in shoddy goods made today and asked where the savings end up. Here is his answer:

It is crystal clear the slight cost reductions were obtained by reducing the material specifications and much corner cutting in the manufacturing processes. Where then did the large additional costs saved by the labor and regulatory arbitrage of the China Trade go? We both know the answer to this. See soaring income inequality.

A key observation is the Chinese import retail prices are not as cheap as they should be. Equally clearly, improvements in manufacturing technology and automation since the late 1950s should have enabled such production to stay onshore with production cost cuts and a retention or even increase in quality and specifications. In many instances the 1950s production was coming out of line shaft powered factories. Instead of manufacturing process modernization the movement to China and offshore has been accompanied by process stagnation and even a reversion to more labor intensive hand work methods.

The rise of cheap automation and robotics dooms mass human labor in China and everywhere else. This poses an insurmountable obstacle to China's full employment and spells the end of Corporate America's vast skimming operation based on low wages and zero-regulatory costs in China.

China Builds City's First All-Robot Factory Replacing Human Workers

The era of reaping stupendous profits from low-quality goods produced by low-cost labor in a lax anything-goes regulatory system are ending, not as a result of policy changes but as a result of far deeper structural changes. Anyone thinking China, Inc. and Corporate America will emerge unscathed is living in Fantasyland.


TOPICS: Business/Economy; Culture/Society; News/Current Events
KEYWORDS: china; manufacturing; quality

1 posted on 08/18/2015 8:20:27 AM PDT by SeekAndFind
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To: SeekAndFind

Time to bring the jobs back to America.


2 posted on 08/18/2015 8:22:32 AM PDT by Biggirl ("One Lord, one faith, one baptism" - Ephesians 4:5)
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To: SeekAndFind

I don’t mind paying a higher price for quality, but now it’s higher price for junk.

Look at home appliances. Five years and you need a new microwave or dryer or dishwasher.

Junk.

And you pay a premium price for the junk. Disgraceful.

We could have a new book entitled IN SEARCH OF ADEQUACY.


3 posted on 08/18/2015 8:34:28 AM PDT by blueunicorn6 ("A crack shot and a good dancer")
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To: SeekAndFind

Without morality, why not make junk and sell it for a high price?


4 posted on 08/18/2015 8:35:59 AM PDT by blueunicorn6 ("A crack shot and a good dancer")
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To: SeekAndFind

Our house was robbed in April. One of the items taken was my Craftsman Router Table. It was made out of steel and cast aluminum parts. I have a replacement value policy. The insurance company decided I could by a new one for $50 and that mine was now worth $15. Never mind that the new $50 ones are made out of particle board and plastic. So they gave me $15 for Router Table and if I buy a new one for that is similar to what I had for $200 they will still only give me $50 because Sears now puts the Craftsman name on crap that even Harbor Freight wouldn’t try to fool people into buying.


5 posted on 08/18/2015 8:36:33 AM PDT by fireman15 (Check your facts before making ignorant statements.)
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To: SeekAndFind

I agree completely.

My father (92) has hung on to his Delta table saw he used to build my bedroom in 1954. I remember going on the train with my Dad into Manhattan to pick it out.

I’ve been through three Chinese pieces of shit, each worse than the last.

Two other quickies: I bought a plastic garden sprayer in June - identical brand and model to one (Chinese, of course) I’ve had for two years. The new one broke in three weeks.

Right now, I’m looking for a mop and mop bucket. Back in the day, I washed a factory floor twice a day with a real mop and real bucket. It would appear that real mops and real buckets no longer exist.


6 posted on 08/18/2015 8:41:29 AM PDT by Jim Noble (You walk into the room like a camel and then you frown)
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To: SeekAndFind

My dad is a woodworker.

He needed a drill press, and scoured the land to find one that met his minimum standard for quality.

He bought a used one from 1947.

19 40 freaking 7!

I asked why and he said it was of a far higher quality, even having been in use for 50 years.

PS: When I house sat for him I used it to drill extra cooling holes in my AR’s hand guard. It was a smooth mechanism, like butter!


7 posted on 08/18/2015 8:42:21 AM PDT by T-Bone Texan ('Zionists crept into my home and stole my shoe' - Headline)
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To: SeekAndFind
The discussion of how we got to where we are seems about right. However, the conclusion does not seem to follow logically from the discussion.

If people are replaced by robots it is possible that companies will be able to generate higher quality parts at lower cost. They could choose to continue to use lower quality materials to further save costs, but the products would still tend to have fewer defects if made by properly managed robots.

The problem will be that there will not be enough consumers to purchase the products because far fewer people will be employed.

What the liberals are suggesting is that lots of people will go on the dole and be able to live free and creative lives. I guess governments will tax the profits of businesses to provide dole payments to consumers who will then use those dole payments to buy products. But I don't see how that will work out.

8 posted on 08/18/2015 8:43:01 AM PDT by who_would_fardels_bear
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To: Jim Noble
They can't even make buckets?

We're going to hell in a hand basket.

The good news is the hand basket was made in China and we may fall threw the bottom and escape before we get transported to hell.

9 posted on 08/18/2015 8:45:16 AM PDT by who_would_fardels_bear
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To: blueunicorn6

“I don’t mind paying a higher price for quality, but now it’s higher price for junk.

Look at home appliances. Five years and you need a new microwave or dryer or dishwasher.

Junk.”

It isn’t just your imagination, either. I read an industry paper recently that indicated the expected life of large consumer appliances is now about 6 years, down from 9+ years of just 20 years ago.

I bought a house full of new appliances at the same time, and they have all failed within the now normal 6 year life span. At first I thought it was just a run of bad luck, but was just a run of reality.

As to buying cheap junk for cheap prices, I have bought very cheap china-made tools to use once and then throw away , if need be. When the China-made was $1 compared to the USA made for $20, it was a good decision. But now, the retailers want $16.50 for that 1 dollar tool, and their cost is still the same.


10 posted on 08/18/2015 8:48:24 AM PDT by wrench
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To: blueunicorn6

I have an Black and Decker toaster oven that’s over 20 years old and still working great.


11 posted on 08/18/2015 8:52:26 AM PDT by captain_dave
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To: fireman15

I miss 70s and 80s era Craftsman tools. Sometimes score some ebay or Craigslist.


12 posted on 08/18/2015 8:57:21 AM PDT by wally_bert (There are no winners in a game of losers. I'm Tommy Joyce, welcome to the Oriental Lounge.)
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To: SeekAndFind

With the kids grown I’ve started doing some updating and redecorating to the house. The price of furniture is ridiculous, especially looking at the poor quality of even some of the good name brands.

I’ve started finding quality used pieces in need of re-finishing, reupholstering etc and I end up with a quality piece with much less cost. I am spending much of my time in doing this but I didn’t realize how much I would love doing it!

Stripping, staining and getting a very smooth finish is my favorite, the sewing and upholstering I don’t enjoy quite as much. Nice upholstery fabric can be quite pricey but it still comes out better than buying new junk furniture.

I’ve learned so much doing this and it’s quite enjoyable and satisfying to have such a nice piece and to know that I had a part of bringing something old and tired— back to life. I miss quality but if you buy used and spend some time, you’ve got something to be happy with and it will last many, many more years.


13 posted on 08/18/2015 9:05:40 AM PDT by Irenic (The pencil sharpener and Elmer's glue is put away-- we've lost the red wheelbarrow)
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To: T-Bone Texan

My drill press is an old line shaft powered outfitted with an electric motor and pulley system. It was made sometime in the early 1900s. It even has a power feed. All cast iron #2 Morse taper spindle. It’s a beast and noisy but it punches holes in metal—and any other material for that matter.


14 posted on 08/18/2015 9:12:06 AM PDT by BudgieRamone (Everybody loves a bonk on the head.)
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To: Jim Noble

I cant use the miter slot on my table saw. It is tight where it slides in then becomes lose where the blade is then tight again. I paid extra for the saw when I bought it because it was one of the better models.

Now I have to build around faulty tooling. My work is designed to work around flawed equipment. Cant do some things I would like too because of this.


15 posted on 08/18/2015 11:54:59 AM PDT by jimpick
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