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monsoon

American Manufacturing

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A few months ago my almost 2 decades old Maytag clothes dryer stopped working. Over the past few years I have started to line dry for a number of reasons so it wasn't a big deal. However since the weather has gotten cold that I decided to do something about the dryer as I would rather not hang stuff out to dry in 30 degree weather. The dryer I have was manufactured in a plant in Newton Iowa. So when I went to Sears, Best Buy and Lowes to see what was on the market today I was surprised to discover there were no dryers (with one exception) for sale that I could find that were manufactured in the USA. A number of them were built in Canada and Mexico with some coming from Korea such as Samsung and Lucky Goldstar (LG).

This was fairly disappointing especially given the cost as it seemed these places mostly had $800 - $1500 dryers on display. The one exception that I saw was Bosch which is oddly enough a German company. Their dryers had a plate on them that said proudly assembled in the USA. I did some research and discovered that a few years ago when this European company decided to expand into the USA, they built a new plant to build appliances in the USA. (somewhere here in NC I am told) Interestingly enough while this is considered a premium brand the Bosch dryers, which seemed to be of high quality, tended to be at the lower end of the price range of what was on display.

This tells me the large corporations, mainly Whirlpool and Electrolux, which own most of the brands now, have simply moved production across the border and are pocketing the difference. I find this disturbing as I think it's one of the reasons our economy is doing poorly now. It seems to me that we did just fine when everything was still being manufactured in the USA.

BTW, I decide there wasn't a need to buy one of these expensive foreign made machines so I decided to fix my dryer. Fortunately the Maytag was well designed, back when they used to do this, and I was able to fix it myself. It took one $14.99 part and it's now operating normally again. Maybe it will run another 20 years before it fails again. I hope by then there are more choices of made in America machines.

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It is sad how all the American manufacturers are building their products overseas now.. this trend has been going on for the past 30 yrs it seems as the CEO's pocket more and more while the working class gets the shaft and communities lay in ruin after the plants have pulled out for off-shore locales.

I think the biggest reason for this is union wages have driven our companies to ship these jobs (mainly in rust belt areas) out of country. Foreign manufacturers seem pleased to place factories in non-union (read=Southern) states to supply the N. American Market.

I really think this gets down to corporate greed and that unions are going to destroy all American Manufacturing Industry.

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Realistically, though, are you willing to trade off the quality of life or the tax dollars to make manufacturing work in the US?

The US has some bad cases of poverty, no doubt about it. But we do not have the widespread lower class that most countries that rely on heavy manufacturing have. The simple fact is that manufacturing is not a good paying job. Products sell on quite a bit on their costs, and manufacturing plays a large part of those costs. In other situations, what allows manufacturers to pay cost effective wages is an economic structure that takes a number of the extra costs out of the manufacturers hands. Simply eliminating major costs such as health care and retirement, which are supported to a much greater extent by taxes drops manufacturing costs. Public transportation drops the level of wage needed to support a family. Same goes for education - that is a big one there.

The US could conceivably become a manufacturing giant again. But I am worried that what we would loose would not balance out the pride in having a made int he USA tag on the machine.

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^Yet the evidence does not support what you are saying. Forgetting the economic troubles of a country that no longer produces anything that it needs I say take a look at Japan as a comparison. There is a huge amount of manufacturing there and as a result the population has a high standard of living, there is health care for everyone and nobody worries about the ramifications of being laid off.

I think it has been demonstrated now that Reagonomics or Supply Side Economics, or Bush economics have been a complete failure. In the 25-30 years it has been in effect the USA's wealth has become concentrated in just a few hands and our economy has been destroyed. A society can't purchase everything it needs without something to trade in return.

Manufacturing has always been a good paying job. It created the American middle class. I recommend a read of Henry Ford's philosophy on this. The myth of globalization has been a smoke screen to place work in places where the treatment of workers would be unacceptable in the USA. As noted above, it has not resulted in lower prices.

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Also don't forget that a large part of the US winning two global wars was the ability to out industrialize its enemies. What if the US in its current state found itself in a third global war? Because of globalization, and out sourcing, the US does not have the industrial might like it had in WW I & II. In my opinion that does not bode well because we would not have the capacity to replace damaged and destroyed weaponry and produce the supplies required by our troops and those of our allies.

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^Yet the evidence does not support what you are saying. Forgetting the economic troubles of a country that no longer produces anything that it needs I say take a look at Japan as a comparison. There is a huge amount of manufacturing there and as a result the population has a high standard of living, there is health care for everyone and nobody worries about the ramifications of being laid off.

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Well I have two issues with what you are saying. First is the premise that modern society can't exist without essentially eployoing slave labor working in intolerable conditions. There is no reason for it to be that way.

Second is the premise this is a sustainable model. A society simply can't exist as a consumer society as eventually the bills come due as they have now. Why would the rest of the world send stuff to us for free? We have gone from an economy of production to one based on consumption. If what you say is correct, then we could just continue to throw money and our problems and they would go away. This is the snake oil they have been trying now for most of 2008 and it is not doing any good.

The solution to our issues is to close the borders to most trade and/or equalize it so there are no trade deficits. And where we do purchase goods form overseas, the workers there are paid on an equivalent scale.

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It isn't sustainable. And it isn't ideal, either. That is why we are in this mess we are in now. Because we in the US cannot look beyond a few years into the future, we have in essence undermined ourselves. We may very well end up again back at the point where we are behind and manufacturing does become once again a viable endeavor.

I do not think offshore manufacturing is slave labor, however. In fact I think in some ways it is socially responsible, IF assurances are made that in order to import an item, it has to be manufactured in a plant that pays a fair wage according to the country it is in, and has decent working conditions. In that case, you are actually helping that country establish a firm economic foundation. In a growing country this will give the population both power and drive to establish sound democratic policies. As much as our reliance on China is helping their government, by bringing the economic situation for many Chinese into a better position we are in fact shifting power away from the affluent bureaucrats and into more of the general population's hands.

What I do think is a more sustainable situation is in engineering. That is, designing and innovating. The actual manufacture can exist outside the country, but we still have to be deciding and planning what is built. That brings with it a service economy and can sustain a more affluent lifestyle.

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.... As much as our reliance on China is helping their government, by bringing the economic situation for many Chinese into a better position we are in fact shifting power away from the affluent bureaucrats and into more of the general population's hands.....

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It isn't sustainable. And it isn't ideal, either. That is why we are in this mess we are in now. Because we in the US cannot look beyond a few years into the future, we have in essence undermined ourselves. We may very well end up again back at the point where we are behind and manufacturing does become once again a viable endeavor.

I do not think offshore manufacturing is slave labor, however. In fact I think in some ways it is socially responsible, IF assurances are made that in order to import an item, it has to be manufactured in a plant that pays a fair wage according to the country it is in, and has decent working conditions. In that case, you are actually helping that country establish a firm economic foundation. In a growing country this will give the population both power and drive to establish sound democratic policies. As much as our reliance on China is helping their government, by bringing the economic situation for many Chinese into a better position we are in fact shifting power away from the affluent bureaucrats and into more of the general population's hands.

What I do think is a more sustainable situation is in engineering. That is, designing and innovating. The actual manufacture can exist outside the country, but we still have to be deciding and planning what is built. That brings with it a service economy and can sustain a more affluent lifestyle.

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Cloudship, that sounds idealistic and all, but globalization in reality is nothing other than a pretty guise for neocolonization. See Africa...

If you want your citizens to be consumers of products then produce the products yourself, but use others to produce cheap-quality products and expect the same results. That's why companies like Dell Computers damn near collapsed during the Dot-com Bust of the 2001-2003 because of their outsourcing of everything except upper management. Globalization would only ideally work properly when products are produces by those qualified to create a quality product not just ship it to a peripheral or developing nations with a hotbed of disposable labor.

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.....

We have to shift away from off shoring everything. Knowledge based stuff has to be done here. Like I said, we need to concentrate on the engineering. That includes designing products, making them work, and making sure that they remain working. That is where we are far ahead. Actual manufacturing - that is not something we are good at. Our societal mindset simply doesn't work for that anymore - people aren't interested in being robots anymore. There are some cases where production in this country does work - complicated situations where there is lots of skill involved and not true assembly line work. But the robotic assembly line simply is not functional in the US......

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^

Well said. When I was working on Computer Engineering degree, I did a number of internships with various companies where I got to see and participate in the process of bringing products into reality. The engineering and design of the product itself it only half the battle. The other half lies in fine tuning the manufacturing process for it. This takes extensive communication between all parties involved with the product and its kind of difficult when half way across the world and may not even speak your language for that matter.

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A big problem is that in the US is that most companies, even a big percentage of technology companies, are led by finance and marketing M.B.A.s who have no knowledge of engineering.

Look at what has happened at HP. It used to be a company known for engineering, and produced the finest technical instruments. Now it engages in services of rather dubious value and does not nothing very special. The same thing has happened at IBM, but they still have a sizable R&D division to my knowledge.

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HP was basically destroyed as you mentioned by Carly Fiorina during her disastrous tenure as CEO of the place. She was might be better known in her more recent role as one of John McCain's campaign advisors. Well, that is, until she said that Palin was not qualified to run a corporation. She was later silenced by that.

IBM for it's part has gotten rid of a lot of it's lines and most notably the PC business that it sold to the Chinese company Lenovo. However to give them a bit of credit, they still do a lot of engineering and basic research work in the USA on systems, microprocessor development (Powerpc) and still make the big iron mainframe computers including super computers. On the downside, IBM also makes a lot of money by helping companies shift their IT work to India, Argentina and Eastern Europe.

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"When you place engineers in one country who do a design and throw them over the wall to built in another company, you end up with crappy products which would describe most of the junk that is for sell in Walmart these days."

Very true. When I worked in manufacturing, I could go out and see what the problems were because the shop was right behind the offices. Many problems that arose couldn't be adequately or accurately described by the fab or assembly guys over the phone and the end was results would have been a disaster if I'd had to troubleshoot things that way (over the phone).

It may be a little more expensive to manufacture stuff domestically, but you generally end up with a better product that way.

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Consumers haven't helped this any by demanding cheaper and cheaper products. We have become a nation where nearly everything is disposable. If something breaks, just buy a new one because they are so cheap to buy. This, as a result, tells manufacturers that we don't care so much about the quality because we will just buy a new one, so it makes it even easier for them to move the jobs overseas. In reality, we are paying MORE, when you count all the jobs lost and people having to get government assistance to survive, which comes out of our pockets. I had always wondered if I were to open a store that sold nothing but products made in America if there would be enough people out there that would do their part to partonize the store so it could thrive...

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We have to shift away from off shoring everything. Knowledge based stuff has to be done here. Like I said, we need to concentrate on the engineering. That includes designing products, making them work, and making sure that they remain working. That is where we are far ahead. Actual manufacturing - that is not something we are good at. Our societal mindset simply doesn't work for that anymore - people aren't interested in being robots anymore. There are some cases where production in this country does work - complicated situations where there is lots of skill involved and not true assembly line work. But the robotic assembly line simply is not functional in the US.

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Wow, my parents still get Kenmore brand appliances, so I know my father will happy to know that all their appliances are made in this country.

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Consumers haven't helped this any by demanding cheaper and cheaper products. We have become a nation where nearly everything is disposable. If something breaks, just buy a new one because they are so cheap to buy. This, as a result, tells manufacturers that we don't care so much about the quality because we will just buy a new one, so it makes it even easier for them to move the jobs overseas. In reality, we are paying MORE, when you count all the jobs lost and people having to get government assistance to survive, which comes out of our pockets. I had always wondered if I were to open a store that sold nothing but products made in America if there would be enough people out there that would do their part to partonize the store so it could thrive...

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It's the reason the American automakers are in so much trouble. They make products people just don't want to buy anymore. They can't innovate. So people are buying cars from overseas (though most of those are built here in the US now).

I'm not sure the same rule applies to the troubles of the American automobile industry. Most everyone I know buys automobiles made overseas because of their high quality, not vice versa. I bought an Acura instead of a Ford or Chevy because I wanted to have a higher certainty that it wouldn't cause me me issues later down the road. Honda and Toyota products routinely shine as #1 in reliability and satisfaction. Even Hyundai is becoming a very reliable manufacturer when compared to the crap America puts out. Some models are ok, but take a look at the crap coming out from Pontiac. There is a reason they have one of (if not) the highest value losses for new cars driven off the dealer lot.

If America put high quality products on the roads I doubt you'd see as big of a problem as you're seeing today.

I am apparently in the minority that tries to purchase high quality products the first time to avoid throwing my old goods away for new. I know I'm not alone but most folks see a much cheaper alternative and figure it's probably made in the same factory as the higher priced brand so why bother spending the extra money. Considering almost everything we purchase is made in a far away land I don't blame them.

If American's didn't have a choice of purchasing a $20 DVD player over a more expensive, but higher quality, DVD player, I'm pretty sure they would still purchase the DVD player.

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I'm not sure the same rule applies to the troubles of the American automobile industry. Most everyone I know buys automobiles made overseas because of their high quality, not vice versa. I bought an Acura instead of a Ford or Chevy because I wanted to have a higher certainty that it wouldn't cause me me issues later down the road. Honda and Toyota products routinely shine as #1 in reliability and satisfaction. Even Hyundai is becoming a very reliable manufacturer when compared to the crap America puts out. Some models are ok, but take a look at the crap coming out from Pontiac. There is a reason they have one of (if not) the highest value losses for new cars driven off the dealer lot.

If America put high quality products on the roads I doubt you'd see as big of a problem as you're seeing today.

I am apparently in the minority that tries to purchase high quality products the first time to avoid throwing my old goods away for new. I know I'm not alone but most folks see a much cheaper alternative and figure it's probably made in the same factory as the higher priced brand so why bother spending the extra money. Considering almost everything we purchase is made in a far away land I don't blame them.

If American's didn't have a choice of purchasing a $20 DVD player over a more expensive, but higher quality, DVD player, I'm pretty sure they would still purchase the DVD player.

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I'm not sure the same rule applies to the troubles of the American automobile industry. Most everyone I know buys automobiles made overseas because of their high quality, not vice versa. I bought an Acura instead of a Ford or Chevy because I wanted to have a higher certainty that it wouldn't cause me me issues later down the road. Honda and Toyota products routinely shine as #1 in reliability and satisfaction. Even Hyundai is becoming a very reliable manufacturer when compared to the crap America puts out. Some models are ok, but take a look at the crap coming out from Pontiac. There is a reason they have one of (if not) the highest value losses for new cars driven off the dealer lot.

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I don't know which model you bought, but many Acuras and Hondas are made in the US. And many GM and Ford products ar enot made here. So it's not the capabilities of the US workers that is in question. Also, many engineers and designers float between companies, and those same designers and engineers can do great work with foreign brands (many which have engineering and styling centers in California), so it is not their skills either. What it IS is company management. Unions exists in other countries besides the US - in Japan it is part of management itself. So it's not even that - except that it does reflect the problems when management and workers don't work together.

Agreed, many Honda models (and all Acura models that I'm aware of...) are made in the US, including mine which was assembled in Ohio. I certainly don't question the skills of American workers required to manufacture high quality goods. I do oppose the fact that American engineers still have not mastered being able to produce extremely high quality products in other countries. Some have, but many are lacking that ability it seems. If they can't get it right then raise the prices of the goods a little.

Perhaps I'm naive for thinking that consumers will opt for the slightly higher priced item if it were engineered and manufactured in the US.

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