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OT...USA Vs China why is we better?

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  • OT...USA Vs China why is we better?

    Folks...

    I have read with interest many threads that more or less dealt with Chinese Vs. US manufacturing. With many posters indicating that the Chinese "advantage" was that their workers were paid at slave labor rates, etc., etc.

    Here's my question. From reading posts here from experienced and skilled machinists/shop owners, it seems that, sometimes at least, labor doesn't seem to be a very large percentage of the cost to produce. If this proposition is at least sometimes true, how do they (China) beat us on price so effectively?

    I have a vernier HG, made out of stainless, 24", put up in a nice wooden box. I checked it for accuracy using some borrowed webber gauge blocks. Turned out not too bad. This HG was shipped here from mainland China, sold to me (by ENCO) for just a little more than the raw stainless would cost from an online metal vendor. What gives? Can it really be just cheap, commie labor?

    Thanks Mike

    [This message has been edited by MMurphy (edited 04-28-2005).]

  • #2
    Rockefeller used to sell oil for cheaper than it cost to produce in order to drive the competition out of business and then buy the companies on the cheap. He had enough $$ take a short term loss for long term gains. He did the same with railroads by shipping so cheap and offering rebates that no one could compete. He then took hold of the transportation end of the deal and ran commuter trains out of business so they wouldn't compete with autos. Anti trust legislation was supposed to stop stuff like that.

    Rockefeller was just a very crafty dude with a lot of $$$. The Chinese have the resources of a whole country...


    ------------------
    Deep Sea Tool Salvage
    Techno-Anarchist

    Comment


    • #3
      China has under-valued currency and we have over-valued currency.

      $1.00 U.S is worth $1.00 U.S here, but it's worth a lot more in China.

      -Adrian

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      • #4

        Well you put your finger on it exactly. Labor is not the main cost. It is a factor. In China, workers on some production lines get $0.30 to $0.40 an hour. They work hard, and are capable - too. They might work 80+ hours a week. No lawyers - with corresponding lawyer economy - that even remotely compares to the US. Medical costs are not 20% of their GNP. Retirement costs? Are you kidding? Environmental costs? - You are kidding, right?

        Is this starting to make sense?

        Let's consider design software. Did they pay for that copy of M$ XP? Did you? Do they have the accounting infrastructure?

        Perhaps this is some more of the puzzle.

        If I want to build somthing there, I send an RFQ - with numbers - to one of many companies there. I get responses fast - usually overnight. Here, I have to beg and wheedle to get price information that is dependable or low enough. To get pricing information it is EASIER to get a Chinese quote - for a US product, then ask the US manufacturer to "meet competitive pricing" - for their own product. Rarely will a chinese supplier be more than two or three days in providing a quote. I also know what it cost to get stuff from there to Dallas. The US Port the imports come in on was built and subsidized with taxpayer $$. Was your company's loading dock built with taxpayer $$?

        Taxes... If they pay taxes there, it is because they want to: Property, school, sales, income.... What taxes?

        If I buy a Lithium Battery here - in volume, a certain type battery costs around 0.75. Same battery, both made in Japan, is $0.25 + shipping + duty - from HK. IE, about 0.28 all told - and that is air freight.

        A container from HK here to Dallas - well, the container is owned by the Chinese Army (*essentially*). Sometimes it goest through the Chinese Intelligence Service managed Panama Canal. The container comes over on a shipping line - also owned by the Chinese Army. It is unloaded at a container port - built with US tax dollars. It gets on a railroad that was built with eminant domain (sp) right of way. Rides on a Flat car - leased from the US Army.....

        The container goes to a Wal-Mart warehouse - perhaps they don't pay tax on any of that facility due to tax abatements.

        So.... knowing this, would you want to compete with that system.....

        FWIW - a 1% surface mount resistor there might be 0.000597 cents each. Here, they will be 10-30 times as much. Same resistors, same manufacturing location.. Getting US pricing quotes to be the same is almost a waste of time.

        Plastic Molds - typically, for what I used to do, they could be 4 Weeks - $4K for some items. Here, the same could be $19K - 19 Weeks.

        So where are the majority of mold designs done?

        PCB industry - collapsed here. Look at PC motherboards sometime - would you want to build a finshed product that complex and sophisticated - then sell it for $45 retail?

        We could talk about export financing, as well. Bottom line - the Chinese government is substantially more pro-business than the US government: by a substantial margin.

        If you want to play in the US, it is a lot harder and you better be a lot smarter. Otherwise you are DEAD.

        Our bleeding to offshore manufacturing isn't their fault. Chinese companies are not bringing products to the US - it is American companies doig it. I read the testimony of the ex-head of Tyco and it physically makes me ill. Tens if thousands of US employees cashed it in - and he think that $600M looted from Tyco - and the employees and stockholders - is OK. Worst than child molesting, in my opinion. Lots of hungry children out there due to this SOB.

        So ask your questions away. Follow the money trail, as the smart dective says. Who lined their pockets along the way? We let it go - did nothing to stop it. So who is the real moron here?

        jerry
        dvideo

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        • #5
          A strong influence in Chinese business is the philosophy that they would rather have "a little from many than all from one."

          Probably comes from living 3 per square foot.

          [This message has been edited by QSIMDO (edited 04-28-2005).]
          Len

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          • #6

            dvideo is absolutely right, here in Japan you are not going to buy chinese stuff unless
            it is heavily taxed, they are not going to sell there own economy down the river to support corporate welfare systems like walmart.
            I can go to Taiwan and get the latest machinerys handbook for $10 U.S. because they don't play the copywrite game.
            From a technical standpoint they are reverse
            engineering a lot of stuff so they they really can't
            make upgrrades. (you are still buying the same lathe they manufactured ten years ago).
            They also use inferior grade material.
            No we are selling our standard of living down the tubes for corporate greed and
            white trash wal-mart shoppers.
            Non, je ne regrette rien.

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            • #7
              Very thoughtful Posts!

              Americans invented most of what is being imported back into this country. I've seen and touched "old American Iron", and there was nothing better in its time.

              When did the goverment/corporate greed butts start selling us out? I don't think its the Chinese worker trying to get a little for themselves and loved ones who are to blame.

              I want my [email protected]#$^%# country back!! I feel very angry when I read and see the truth of what has been posted here. Sorry about the rant.

              Jerry... your post really pins it down.

              Now what in the hell can be done about it!?

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              • #8
                <font face="Verdana, Arial" size="2">I want my [email protected]#$^%# country back!! I feel very angry when I read and see the truth of what has been posted here........................................Now what in the hell can be done about it!?
                ..</font>

                Absolutely nothing.The last century was "THE AMERICAN CENTURY",it's over................. Well , actually if you could convince everybody in America to work for 10 % less than their Slave waged counterparts,disband OSHA, and raise taxes on the rich(Laywers),then you have a shot at it!

                Otherwise, Do as Randy Newman says," Drop the BIG ONE !" I.E. nuke the rest of the world. If we are the only ones left , we'll have nothing to fear from competition.We can raise our standard of living by just paying ourselves more...

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                • #9
                  dvideo,

                  “Our bleeding to offshore manufacturing isn't their fault. Chinese companies are not bringing products to the US - it is American companies doig it.â€‌

                  How right you are!

                  Offshore manufacturing isn’t anything new, been going on for years and is fueled by American corporate mentality and the willingness of other nations to offer hard-to-ignore incentives to do business in their country. There is a whole new industry of brokers here in the US just itching to help your company navigate the red tape to help get your parts manufactured or factory built offshore. Yes, I’d say it is us that has the finger on the trigger of the gun pointed at our foot.


                  Hoffman,

                  Your comments about Rockefeller kind of reminded me about a particular company I worked for that is well known for their sleazy business tactics - buying business while incurring a loss is their main MO. But, what really chapped me and others that worked their, was their automatic filing of lawsuits against any startup competition for some sort of patent infringement. This tactic is certainly not new and is practiced by many deep-pocket corporations. Doesn’t matter if there is any merit to the infringement or not, the idea is to crush the little guy with the legal system – for a little guy to “proveâ€‌ their innocence, as we all know, can be an expensive and time consuming ordeal.

                  Frankly, I think we are on a snowball ride to hell.

                  plm

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                  • #10
                    The problem as I see it, is that Americans want $40 an hour wages and a Cadillac STS for $10k. What we really have are companies that want to sell us goods at prices that meet the demand, low price. While our wages aren't going up, and many of us have to look at retirement costs. This is why Walmarts is doing so good, they get the products cheap from lots of places around the world, sell them to use cheap and they make money, lots of it.

                    What U.S. companies make TVs in America? How about home appliances? I used to be able to point to everything in my home and tell you they were made in the states. Now it's all made overseas or worse make by foreign companies here in the states.

                    Jerry

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                    • #11
                      There is a way to get our country back, it's called "Revolution". It was used before and it will be used again. While chinese prices are cheap, as are the goods, the prices for stuff we must have are going up and will soon bankrupt some of us. When enough of us are broke and homeless, we will rebel, the polititions we now have who are getting fat in their seats of power will be thrown to the wolves and our country will once again be run "by the people for the people".

                      ------------------
                      Paul G.

                      [This message has been edited by Paul Gauthier (edited 04-29-2005).]

                      [This message has been edited by Paul Gauthier (edited 04-29-2005).]
                      Paul G.

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                      • #12
                        Honda 750 K1 motorcycle, designed in the USA, New York to be exact.

                        Sold for $900-$1100 at a loss, to establish a marketplace. USA paid the net loss back to Honda to establish a marketplace in USA for foreign goods.

                        Looking at all the Japanese bikes that pass me on the roadway I'd say thier plan worked.

                        Our politicians cut our throats at every turn. Sure more jobs, at Mcdonalds, Hardees, floorsweep and nightwatchman.

                        Production jobs have left the country.

                        After all, It is just one shirt made in a Bangledesh bought at Wal-Mart? Right? Look around the USA for shirt manufacturers. I have seen NONE.

                        After all, USA produced cars and trucks are from USA produced parts? Wrong, look at the materiel list. I know of no vehicle made from 100% american parts.

                        After all, USA produced electronics are from USA produced parts? Wrong, look at the insides. I know of no computer made with 100% american electronics.

                        After all, USA produced products are from usually the cheapest source. We are cutting our own throats in addition to hiring our politicians to do it for us.

                        I could blame it all on saggy pants young people who have to use one hand to hold thier pants up as they walk? but my generation had long hair and hippies to contend with. I'd be pointing a wrongful finger.

                        So? why do you need a toy lathe or milling machine when you "know" you'll never get enough work to upscale into a production atmosphere that can compete with the USA-subsidized foreign competetion.

                        Sure, some big talk of big money to be made, but there sure is a lot of machineshop auctions for some reason.

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                        • #13
                          <font face="Verdana, Arial" size="2">There is a way to get our country back, it's called "Revolution"........we will rebel, the polititions we now have who are getting fat in their seats of power will be thrown to the wolves and our country will once again be run "by the people for the people".
                          ------------------

                          </font>

                          Be Careful with talk like that.In this day of the "Patriot Act" and offshore prisons and warrantless arrests you will never succeed with a revolution until the Powers that be have finished milking this country dry, and are ready to move on.
                          To dwell to long on that subject invites the Feds to swat you like a fly, they have the power AND the time to do it.

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                          • #14
                            Hello everyone,
                            I understand that our country represents 85% of the world marketplace. If this is true then we are in the drivers seat if we
                            regulate the goods coming into our country.
                            Back in the 1950's I was in europe while serving in the army. I noticed that a Buick special that sold in the states for 2500.00 was being sold in Germany for 10,000.00.
                            When I asked why? I was told that it was being done to protect jobs there.Our laws are being made by politicians, we vote for them. So who's in the drivers seat?

                            Comment


                            • #15
                              The only way this situation makes sense to me is that our stength is the U.S. dollar. We are trading our cheap printed paper for their cheap goods. Who would want to actually work if they could just print money and buy stuff from someone else? To be successful in America, you gotta be close to the money trough. You know "access to capital". That's why investment bankers and lawyers and CEO's etc do so well. A lot of "homeowners" with their ARM's are trying to do the same thing.

                              It's all pretty much insane to me. I think there was recently even a quote from Paul Volker where he warned that no society in history had ever lived beyond their means for very long. Sooner or later, the consequences of fiat currency will come to pass. I don't care how much "superpower military might", or how much "full faith and credit of the taxpayer" we've got, sooner or later - just like the dot.com insanity, this house of cards will fall.

                              It may be tough now being a practical, can-do, manufacturing type of person, trying to swim upstream against this system, but someday it will pay off.

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