Let's Talk About Made in the USA

[Kevinpreston3]

Let me start by saying that I am not an economist. I am also not anti-trade, and neither particularly pro or con union labor.

I will also state that I truly like items made in the USA, I seek them out, and am a bit saddened to find things like Lionel Trains, almost all toys, and even domestic car parts made in China, along with most of our appliances now. News of the upset at Maytag, etc, is not news to my friends here.

I think it's a big mistake to have so much reliance on foreign countries to make all our "stuff". I keep hearing how this is good for our economy. I took Sociology 101, so I know that healthy trading partners are good for all, but maybe I still don't get the trend of everything being made somewhere else, and the USA being some kind of "brain trust". What happens when other countries develop their own brain trust?

As such, I found an article that states some interesting points that I have heard before. I wanted to post some of it here, in context of our previous socio-economic-appliance discussions. For copyright reasons I post only a portion and the balance can be found in the link.

This is from an online appliance "newszine" for want of a better word.

--------------------------------
The list of companies that have moved their manufacturing outside of the U.S. is long. Most recently, compressor maker Tecumseh announced it was moving its production from the U.S. to India. Earlier this year, Maytag Corp. transferred four assembly operations to a maquiladora in Reynosa, Mexico and had additional plans to transfer 12 others. Then there is General Electric Co., a leading advocate of globalizing production. It uses Mexican factories to make everything from medical diagnostic gear to appliances.

The reality is that the manufacturing world is international. But some have trouble stomaching that belief when it comes to lost jobs for Americans. Such is the case regarding the North American Free Trade Agreement (NAFTA) of 1994, which frees up the flow of goods and services between the U.S., Mexico, and Canada. NAFTA in particular has been singled out as the reason that some Americans have lost their jobs. According to a report by the Economic Policy Institute in Washington, D.C., U.S. between 1993 and 2000, NAFTA is said to have claimed 766,030 American jobs. The state of California reportedly suffered the most, with 82,354 jobs lost and traditional industrial states such as Michigan, Pennsylvania, New York, Ohio, Illinois, and Indiana each lost more than 20,000 jobs. The NAFTA at Seven report says that number does not take into account the jobs shifted to China, Singapore, Indonesia, the Philippines, and the rest of the world beyond the NAFTA zone. The report does not take into account new jobs created by NAFTA.

Proponents of NAFTA, however, point to how foreign trade is the area of greatest growth potential for the U.S. According to the Office of the United States Trade Representative, NAFTA has actually helped to strengthen the U.S. economy. For example, during NAFTA's first 5 years, U.S. goods exports to U.S. NAFTA partners Mexico and Canada increased by approximately U.S. $93 billion or 66 percent. Export growth to Mexico and Canada alone accounted for more than 40 percent of U.S. export growth to the entire world.

Consequently, according to the USTR Office, formal trading arrangements can ultimately help the U.S. weather the shifts in the global economy. Therefore, although in the short term a small number of American employees may lose their jobs, a greater number can benefit from newly created jobs, an even greater number may benefit from low-cost products, and everyone in the U.S. benefits from a stronger economy due to healthy international trade and strong trading neighbors.

-------------------------------------------------

The last paragraph is one that I have seen in endless verstions and iterations. And I still don't get it. Or maybe I do.

It seems to me that one can glean from this article that our exports to Canada and Mexico have gone up. Since we are not making alot now, I would imagine that would be in raw materials such as wood, raw plastics and steel. I would imagine that would be so that they could cheaply make products for us. Am I correct so far? The article, like so many others, doesn't have much depth in this area.

It goes on to say that a "small number" of American employees lose their jobs, but a greater number can benefit from the "newly created jobs". Can anyone let me know exactly what these newly created jobs are? No article ever seems to state what that is. I do know that the biggest employer now is...er, yeah, that would be WalMart. So is the connection here that a machinist, fabricator, assembler, packager, etc can shrug off the closure of a plant and go happily and be a WalMart greeter? Are the pay and benefits close?

I am waiting to have someone answer what these jobs are. Hello? What about all the firms that feed the manufacturers when they are here? Suppliers, outfitters, maintenance, food service. What about the US jobs lost in these areas? Is there a domino effect, or am I just a stupid American who obviously does not get that the "manufacturing world is international"?

I benefit from low cost goods huh? Well, they better be low cost, so the folks working at WalMart can afford them. Why do my super conservative buddies (and I am conservative, just not a fool) claim that there is no such thing as a "race to the bottom". Are cheap prices all that really matters?

For now it is. People love WalMart. The love paying cheap prices, more than they care about their country, our future, service, trade, and US economic interests.

Me? I don't want a $9 toaster made in China. I want a $50 toaster made in America that lasts 20 times longer. That's value, and that is something we used to believe in.

http://www.appliancemagazine.com/applianceline/editorial.php?article=27&zone=205&first=1

 

[petek]

Kevin I don't quite understand it either where and why all the jobs are disappearing. As far as domestic household appliances, furniture, textiles (towels, linens, clothing etc) I don't think there is any of that left in Canada. What solely Canadian companies there were up through the 70's, many merged with US companies and as the shift turned to Malaysia, Singapore and then China, nothing much is left anymore. Everything here is from China as well. All there is for domestic products are the big 3, Ford,GM & Chrylser with some plants in Ontario and Quebec and with GM's notice yesterday or today some of those are closing here as well. Why Michigan is failing so badly is that they did not jump on the "import" bandwagon and solicit manufacturing plants from Toyota, Honda, etc where Ontario did and now aren't in the same predicament.
What tends to get some American knickers in a knot are things like raw materials and right now especially the softwood lumber dispute where the US government has been adding duties to Canadian lumber entering the US even though the NAFTA panel and the WTO have said it is illegal. The US government claims Canadian lumber companies have an unfair advantage with government subsidies but bot panels have found that's not the case and ordered the US govt to return the duties. In actual fact those duties add at least $1000 dollars to the cost of each US built home. The irony of it all is that many of these Canadian lumber companies are actually US subsidiaries, Weyerhauser, Crown Zellerbach etc. While all this scaremongering is going on that cheap imports are flooding the US market from Canada those same scare mongers neglect to let the citizenery know that currently about 1/3 of all US oil imports come from Canada a figure that is expected to exceed Saudi oil in the next 20 years as the US's primary source of imported oil and natural gas. This was recently alluded to GWB like a hammer to the head at the recent America's conference in S.America by the Cdn prime minister,that if he can't get the softwood etc fixed, there are other customers like China who are willing to buy Canadian oil and gas. Also the fact that the abundant supply way up in Alaska is sort of landlocked, how are they going to get it down to the 48 if they keep screwing around with lumber to appease some special interest group.
So in the end it's all more complicated than I can figure, all I know is that there aint many manufacturing jobs left here either, all there is are jobs in the "service" industry, like in the US.

 

[Kevinpreston3]

You're in the same boat Pete

it looks like.

I am just dumbfounded at what is happening.

There has always been competition in the marketplace, and that is good. However, we have never had certain variables in the mix.

Never has the retail landscape been so dominated by larger and larger "big box" organizations.

Never has so many multi-national corporations ever taken the mindshare that the US market is not the most important thing, but only one market of many. When GM or Ford or Boeing or HP or IBM or etc. start to see China as a more important market than the US, what then?

Never has the buying public, in my mind, ever been so fixated on cheap prices. Think back. We have always had a Kmart, or a Target (well, always being most of my life so bear with me folks who are older) and dozens of discounters where one could get budget and econo-merchandise.

But something has really changed here. There is a palpable buying frenzy with people that to me, borders on some kind of mania.

Only in the last several years have we had this "gotta have this certain toy" mentality that reduces people to quasi-animal states. Remember the Power Rangers deal? Then it was Cabbage Patch Dolls. Then Furbies. Then whatever.

On some of the other websites that I have been to, whenever there is a WalMart thread, people come out of the woodwork to blather on about how great WalMart is. One woman was stating that she can't wait until they get into banking. At that point, what with WalMart offering food, she never has to go but to one place. Hell, why doesn't WM just open a store in the bottom of a retirement village and people will never have to venture out into the world. Maybe I shouldn't give them ideas.

Others talk about how great cheap prices are, and I gotta tell you, it's like they are describing something sexual! It's so great, it's this, it's that, it's just wonderful! I wonder what kind of life people have when the best thing in it is a cheap retailer.

I don't have the answer. But I see the symptoms. It's dangerous to send all your manufacturing away. I'll take it one step further, I see it as potentially a national security problem. I really do. And in the meantime, the consumer loses choice. Less retail outlets, less opportunity for shelf space, less manufacturers, less innovation.

They call it a race to the bottom for a good reason.

 

[portendere]

50 years ago, the Soviets were going to destroy America. 20 years ago it was the Japanese. Now China, Taiwan, Malaysia and Mexico.

A race to the bottom is not sustainable. China is cheaper because of artificially low wages and disregard for environmental conditions. How long can you keep a billion people happy with poor wages and poor living conditions? Eventually they'll start demanding their own "middle class lifestyle" and their own Wal-Marts. Even today urban Chinese want cars and western fashions. The wants and desires of 1,250,000,000 people will do what no amount of trade barriers can.

I give China 15 years of being the cheapest labor around. Then production will go to Cambodia, or sub-Saharan Africa, or some other place for a while.

100 years ago, craftsmanship died out. Used to be, you dealt with carpenters, blacksmiths, cobblers, and tailors. When cheaper, mass-produced goods came along, people complained about the loss of livelihood for all these craftsmen. But people adapted, found ways to make a living in other ways. Some people even came to enjoy the mass-produced cars, washing machines, and vacuum cleaners that this change brought about.

The US will have to adapt. Biotechnology, alternative energy...who knows. There'd better be something this country is good at besides welding pieces of metal together.

 

[launderess]

While one can understand and on some points agree with posters, it should be pointed out the much of the United States was built by or with "cheap" labour in one form or another.

First it was the slaves, then free blacks. Chinese built the railroads. European and Eastern European immigrants worked in everything from the slaughter houses in Chicago to textile factories in New York City. Ever read the history of the coal miners? They were mostly all poor, all immigrant or people forced off their land so mining became the only way to earn a "living" if that is what it could be called. Unions were a dirty word for most of the American history when people with names like Rockerfeller ruled the land.

Yes, there was a time when craftsmen and their skills were valued, but again many of those men and women learned their trades either in the "old" country or at their father's knees. However the one thing about America is the desire to see one's children do better than you did. So it was not unusual for the son of a tailor to become a doctor, or the daughter of a boiler-maker to become lawyer.

Am old enough to remember when much of ladies and some mens fashions only came in certian sizes. If one was not a standard size (and few were), things had to be altered, which cost money. Those who could not afford this made their clothes at home. Today we have lots of various sizes of clothing at all price points, it may be "bad" from the point of view if one is a tailor, but if one is trying to dress a family on a budget it is a good thing.

Am all for saving American jobs, but OTHO cheaper goods have raised the standard of living in the United States. As appliance "freaks" many of us can remember a time when a family getting a washer and *gasp* a dryer was a big event. MOL and TOL units cost big money and that was not something everyone had. That was the reason for all the laundromats and used washer dryer stores, lots of people simply didn't own their own appliances. Dishwashers are another applinance considered a "luxury" now one can have them for under $200. Ok the quality might be the same as a TOL model, but it beats washing dishes by hand.

 

[pulsatron]

OZ not any better

Hi everyone,
I am afraid this situation is mirrored here in Australia, with nearly everything imported from Asian countries i..e. Taiwan, China Korea and so forth, now I don't have anything against the people of those nations, however I do wonder how we are supposed to compete with them on this supposedly wonderful "Level Playing Field" which our esteemed political leaders call it.
How do you compete when these folks work for a few measly dollars per hour and our minimum for an adult worker is something like 12 or 13 dollars per hour, and then add on benefits like holiday leave loading,penalty rates compulsory superannuation payments and the like.
The answer is of course you cannot, so without wanting to get too political about things, I wonder if this is not the real reason for these supposed workplace reforms are being bulldozed through Federal Parliament at the moment.
I believe Australia's foreign debt level at the moment is about 450 BILLION!!! DOLLARS or roughly about 6000 dollars per head of population,now we are constantly being told that this is nothing to worry about, however would this debt not have to be repaid eventually?.
I do agree with fellow posters about consumerism being like some insatiable disease and I am afraid quite a few of my fellow Australians only really care about price over quality when it comes to purchasing goods.
As for market dominance by a few giant firms, I am led to believe that here in Australia our retail industry is basically owned almost 88% by 2 firms Woolworths and Coles Myer and this is supposedly the highest concentration of ownership by a couple of firms in the western world, now how can that be called competition when 2 players control almost everything?
just my 2 cents worth.

Cheers,
Steve.

 

[tolivac]

This almost ties in with the plant closings and Riffing the emplyees at GM.Who and where are they going to build cars??In my area-the textile and clothing plants have long shut down.One of the former factories in Grimesland,NCJust down the street from me--is now a thrift store-Darn--no appliances-just junk.You can see the marks on the wood floors where the equipment used to be.The factory used to make underwear and T-shirts.And when Me and a friend were trying to sell TriStar vacuums--still built in the US,it was getting difficult-the high dollar jobs aren't here anymore.Fortunately the job I work at is higher than average income for this area--but its a Gov't job-and with budget trimming---am I next?One of the sites here is now in "mothball" status-not being operated-but staffed by two techs and kept in a state of "readiness" in case its to be reopened and put back on the program scheduals.With the prices of materials and lumber--is making ones own clothes and furniture a thing of the past??In my area its cheaper to BUY the completed furniture than the buy the lumber,tools and parts to make it.I would guess the same with clothes.Yet the sewing machine tech in this area is doing well.Has repairted many homes ones and a couple of commercial machines-one from a factory in Rocky Mount NC that makes truck tarps-that machine was HUGE!! had to help the man lift it onto his workbench while visiting him--and the machine was built in JAPAN!
which could bring up another strange product twist--the compactor and grinder builders are sure making steady profits--I guess to crush and shred the "Cheezy" import products when they break and can't be fixed!!If you want to work in a US factory-may be one that builds crushers and shredders.I hope I didn't offend anyone on my reference to imports-some are VERY good quality-others are not.And how long will it take for companies like Kirby,Filter Queen,Rainbow,TriStar,etc before THEY start building their machines out of the US. When I sold the TriStars--I would promply tell the prospect it was built in the US.Kirby does the same.Lets hope those are the "Holdouts" ad stay here-and providing good jobs.

 

[jetcone]

I can't believe this thread!

I just emailled this article a few days agot to all my friends so I will post it here with the original link to the article about WalMart.

Here goes:

Enlightening & Very Scary article I found today on the web that I think you all should be aware of.

see the link below: http://www.fastcompany.com/magazine/77/walmart.html

Now my take on the article:

Wal Marts business practices are far worse than just buying Imported goods. Its business model is a black hole of consumption.

Basically Wal Mart is forcing all its suppliers to compete directly with Chinese labor or die with its central mantra >>Shopper=Price Point<< and "Keep the store full with Shoppers". Brands like Levis, Master Lock, Vlasic, Dial, Companies that have built business over the last 50-100 years who get sucked in on the Big Box ideal are being wrecked by its unreal business practice.
The Wal Mart business model is to hold its price point somewhere out in "unreality" by holding Chinese Labor prices up to American Labor prices. Price blackmail.
We don't live in China nor do we want to.
In the article they say the Key to doing business with the Big WM is innovation on a yearly scale.
I know from experience business and technology can't innovate every year period!

This happend to Columbia Sportwear when it was supplying LL BEAN. They would innovate on a parka one year then LLBEAN would ship that parka over to Asia as a new model and then come back to CS and say "Well we can get it for this price can you do that?"
Columbia had to sever its ties to LLBEAN and go out on its own and create its own brand label, thats the only way it has survived.


My view:
This is a predatory strategy to business not a nurturing strategy. If mother nature really worked this way we would not be here. In fact Nothing would be here.

This predatory mindset to business is an echo of the 1970's still haunting the American business landscape when Wall Street moguls were buying up good companies just to part them out for a quarterly profit figure. The Moguls had no intention of ever "making anything" READ "actually working for a living doing something"!

The kernal of truth is: this predatory strategy can only exist and function in an atmosphere of pre-established wealth, because its only fuel is to burn up that wealth, to burn up the prior work that built that wealth. It therefore has a duration, a limit, once the old wealth is gone it has nothing left to feed on.
Do you see Wall Street Moguls buying and chopping up companies today?

On the other end once the Chinese labor wake up and say "Hey Beijing I am a Comrade too where's my cut of the State Pie?" and start demanding a real living wage, and want homes, refrigerators, medical care, cars then the marriage will be over for China and Wal Mart business.

The problem is not the Chinese Labor, its the business model of Wal Mart and the Mindset of the American shopper.

There are two sides to good business and this concept is not well understood in this country.
Business schools always throw out the demigod of "competition" but that is only half of the process. Competition creates innovation which can give you an edge, but Cooperation creates growth between companies, which grows business, which grows the country.

No one ever discusses Cooperation in business because they take it as the more risky strategy, the weaker strategy. It is a strategy that is dependant on the other party. But anyone on Wall Street can tell you "There is no gain without Risk".


The ugly flip side to the current size of Wal Mart is that it has now become the biggest Educator for training its Shoppers that price is the only thing a shopper needs to ever consider. The have pulled the wool over the consumers eyes by substituting the word "VALUE" for "QUALITY". "Hey Shopper You have a dollar in your pocket don't spend it expensively spend it on value get more stuff."

I'll finish up here with a story that happend 2 decades ago.

When I was studying Chinese, my teacher told a story to us about her Father in law. She was living with them in Taipei at the time. One day the Father was working around the house and his US Made Black & Decker drill broke after 22 years of service.
The very next Saturday he got up early went out and travelled all over Taipei to find another $75 US Made Black & Decker drill to replace his broken one. It took him all day but he found one. When he returned home joyful my teacher asked him why. Why did he spend all day and $75 to get a new drill when he could have gone to the local hardware and bought a Taiwanese one for $19.
His response: " I work hard for my money.I cannot afford to waste it on a drill that will break in two years when I know my B&D will last many many years.

True Story.

The old adage works here Penny Wise Pound Foolish.
I can tell you in manufacturing it takes alot of Pounds to make that first Penny! But it is the Income Stream of that Penny that makes a business thrive.


Buy smart. I think you all already do, but the word needs to get out there.

Now I'll step off the pulpit and give someone else a shot.

Cheers
jon & al

http://www.fastcompany.com/magazine/77/walmart.html

 

[gansky1]

In light of the recent trips to Latin America and Asia by our fearful leader, it should be clear to most people (who happen to be paying attention) that the United States is looked upon as the WalMart of the world.

 

[hoover1060]

ugh...Wal Mart

I'm like anyone else, I love a deal and a bargain, but at the same time I hate cheap crap.
I seldom shop at Wal Mart, and when I do its for toothpaste, deodorant, dog food, DVD's, and maybe cleaning supplies(Tide, Mr. Clean, ect...)
I would never go to Wal mart for an oil change, or to buy tires, or clothes or whatever. Cheap crap does not appeal to me.
Whats the point of a low price is you're constantly having to go buy another one because the previous one was crummy and didn't last?
Makes no sense to me

 

[dalangdon]

We have the luxury of being DINKS (dual income/no kids) but I will NOT shop at Wal-Mart, and I won't let John either. If we need bulk stuff, we go to Costco, because they pay their employees a good wage and provide heatlhcare. Whenever possible, we buy local stuff that we know is made here in the US.

It's desparately important that the middle-class support businesses that employ other middle-class people (and not just as white collar marketing doofuses - of which I am one, so I can say that) but that's not always easy to do.

The link below is to an interesting comparison between wal-mart and Costco. Granted, it's from the Seattle Weekly, so it might have a bit of a local boosterism angle to it, but it's still good.

http://www.seattleweekly.com/features/printme.php3?eid=59294

 

[goatfarmer]

My wife will be losing her manufacturing job in about a month.They (VIA Systems)made wiring harnesses for appliances,and one of the customers is the General hisself(GE).GE pushed VIA to lower costs,so a few years ago,VIA moved a lot of production to Mexico.That made the company more money,but it wasn't enough,they found out that China was cheaper. So the rest of the jobs are going to China,along with some of the Mexican jobs.
Ironic thing is,the quality from Mexico was poor,GE complained about it constantly,even after they pushed the company to go there.So VIA is going to try China. The last day in Mishawaka Indiana is Dec 23.Merry Christmas!!

kennyGF

 

[cadman]

I Spend It Where I Earn It

It's getting increasingly difficult to find products that are made here in the good old USA, but within the last year I've taken to flipping the box over on anything I buy to see where it's made. If it says China or Taiwan, I pass, even if it means having to pay twice as much for an equivalent product. This has been especially apparent in my tool and material purchases for the house project. I have had to succomb on the table saw...ALL of the Craftsman units were Taiwan or China as was every choice at Men@rds. It's rediculous. You'll even find the same brand having dual manufacturing facilities for the same products. Those one-piece molded sandal-like shoes, Crocs I think they call them, are made in China, Taiwan AND the US depending on size/color, or so I've noticed.

I assume everyone has seen the latest WM JibJab?!
Cory

 

[tolivac]

I have noticed it as well on tools-the Sears Craftsman ones are being built in China.You might want to look at the "Rigid" line of power tools at Home Depot-those are made by Emerson tool-were still being built in the US.but that could have changed.the Rigid line has a table saw,radial saw,lathe and a bandsaw,and miter saw.I beleive they are still built here.

 

[tolivac]

oh yes-it was years ago-the Lionel Model train co. tried having their trains built in Mexico-the quality was so bad they moved the production back to the US-have they now moved it to China?I can remember the quality of the Lionel models-had one in our family as a kid-got it out at Christmas.It was even a gift to us at Christmas-don't know what happened to it.Was very little at the time.Remember it was all metal-the cars and loco was all metal.

 

[sudsmaster]

It's a huge problem, really.

I have shopped at Costco for 20 years now, and I have noticed the that country of origin for most of their goods has slowly but surely shifted from mostly American-made to mostly China-made. The quality of the chinese made goods, at least at Costco, isn't all that bad, especially for lower tech items. But I have heard stories from those in manufacturing that it sometimes costs more to have stuff made in China. That's due to the fact that often the parts either get rejected for excessive failure rate, or they have to be re-worked back here in the States before the customer will accept them.

While it's certainly possible that China will undergo the same increase in worker costs that Japan experienced, I figure it's going to be slower due to the difference in government. Japan, while a patriarchal oligarchy type of government, isn't quite the same as the dictatorship that runs China. And, I figure, that when China experiences a spike in labor costs, world manufacturing will move to the next great untapped supply of cheap labor - such as Africa.

It's kind of sad that American culture has deteriorated into such a mess of compulsive shopping and materialism. I guess it's been this way for a long time, but with the flood of cheap imports and tech gadgets it seems to be getting worse.

 

[petek]

I got a bit of a shock the other day when I was browsing thru Chapters book store. I picked up a coffee table type picture book on historical N.American railroads and when I flipped it over it too was printed in China, probably on paper made in china from logs shipped whole from Canada or the US.

 

[mrsalvo]

I started boycotting WalMart when I found out they were cashing in life insurance policies on thier own employees when they died. That's just wrong.
The salaries and benefits are awful, I honestly don't know how anyone could live on those wages.
Also, lets not forget what a huge WM store does to local communities. In many small to medium sized towns, they are the only game in town, having driven everyone else out of business.

 

[knitwits1975]

Demanding their own Middle Class lifestyle.

Well, My friends, here lies the problem. This is what has prompted global trade in the first place. You see, The American Dollar has always been one of the most valued currencies in the world until recently, and still is more valuable than many. So, you don't think we are paying these goddamn foreign workers a living wage. By their standards, we are placing a silver spoon in their mouths. But we are sure shooting the shit out of our dollar's value, and in the process, we are forcing hundreds of thousands of merited, talented, and intellegent Americans to settle for piss ass bull shit penny ante jobs like Wal Mart where they are treated like first graders by shit head bosses and shit head customers, worked like a dog, and paid shit to do so. I will tell you this however, You get what you pay for. Never before has this been more true than in the 21st century. If you want a cheap dresser that will get you by for a while, you can get it at Wal Mart and buy it for a song and a dance if you choose to a tight ass, or you can select something that may cost 10-20 times more at a furniture store, and expect it to be passed down to your heirs, and chances are, American workers who actually were paid a decent wage to build it and probably love what they do for a living. And I'm not spitting on any Wal Mart employees, You gotta do what you gotta do to make a living. But It's high time that more doors are opened for the American worker. God Bless America.
P.S. If I ranted too much, I apologize. My Sister whom I am very close to used to work at a Wal Mart and used to come home from work in tears. So this is my frustration typing.