In sourcing versus outsourcing – the pendulum swings back to the USA

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    Oct 08, 2011 4:47 PM GMT
    I'm going to post something positive and NON Political

    http://www.gminsidenews.com/forums/f12/word-day-insourcing-some-manufacturing-starts-trickle-back-usa-106192/

    In spite of all the doom and gloom regarding our manufacturing segment over the last 20 years or so, we’re starting to see the pendulum swing back the other way. Outsourcing has leveled off and has begun to swing the other direction for a multitude of reasons.

    1) Rapidly rising Chinese wages have gotten to the point that once you factor in shipping costs, it’s just about as cheap to manufacture goods here.

    2) It’s too difficult to control quality. The novelty of getting junk back has grown tiresome. My major hobby over the last 15 years or so has been collector cars. This is how I’ve met most of the tea partiers I keep talking about. Many reproduction manufactures began outsourcing to China at least a decade ago. You not only get junk back, you also get your intellectual property stolen.

    We’d do a frame-off on some 50 year old whatever, and when you got into that much effort and expense, you renew everything or at least I do. Full nut and bolt restorations can cost $100k to as much as $250k on something like a 57 Eldorado Seville or 56 / 57 Mark II so it’s real disconcerting to replace a part that’s be working and serviceable for 50+ years and have the Chinese made part fail within a week. Another issue that we frequently found is aircraft grade fasteners that were fakes.

    About five years ago this multibillion dollar collector hobby made the move that we just wouldn’t buy anything made in China anymore and Moog, Eaton and others moved production back to the United States. OEMs found out the same thing. Many or most of the delays on the 787 were caused by outsourcing.

    3) As I mentioned above, as from the horrendous quality issues, you’d get your intellectual property stolen as Microsoft, HP and most others have found out.

    I have a little anecdotal story. I was out of town at the Tri Power Nationals up in Norwalk back in the first weekend of August and I was so excited to get up there nice and early because the show cars could race on Friday. So I get signed in and go borrow the dail-in to get my numbers on my windows, get in and try to start it and nothing. My 50 yr old NOS fuel pump died, frankly, because of the ethanol based fuels we have in the Midwest.

    We had a big bunch of vendors on the site so I run over to Ames and they sold their last one so I go to Performance Years and they have one. The AC Delco box looked a bit strange, but what the hell, I wanted to race so I didn’t have much choice. So within a half hour on a hot engine I had it done. I start the car, get up to staging and it quits again. I push a 4,200 pound full size Grand Prix back to where some of the other guys saw me and they all helped me get it back to the show side of the field.

    I had hugely knowledgeable people up around me helping trying to figure out what the hell happened. The only thing I could figure is that I had a brand new defective pump. The other guys were thinking everything from as minor as the pump diaphragm came apart and plugged the fuel filter to something as really bad as I lost the cam eccentric. That would be really really bad because I would have to take the entire from off of the engine on factory A/C car. I still kept thinking that I had a bad pump.

    One of the guys was kind enough to take me looking for another one in the small town of Norwalk. It was late so all the store were closed, but he knew them all and called them on their cells. No one had a pump and couldn't get one until the next week. After a day and a half ruined of the three day event I found a brand new NOS 50 yr old pump in the swap meet section of the show. 30 minutes later I was going fine again. It turned out that the pump I got from PY was a Chinese made fake Delco part. Thanks for ruining my weekend.

    So I learned several things. Never again on a Chinese part. Second, these tea partier, red neck, conservatives are the most helpful folks on earth. I had so many folks around me that I couldn’t see what I was doing. I had 80 yr old drag racers and USAC/NASCAR guys from the 50s and 60s, long retired factor engineering guys and none of them were wrong per se, it just ended being the simplest of possibilities – China.

    And another thing - some of or maybe many of these guys know about me because I've taken my asian BF to many events. He quit going because he was a generation younger than me and just couldn't figure out we what we old geezers saw in these, what he called "silly giant cars". Never once have I felt that I was treated different because of one aspect of my personal life. I may not be quite as old as many of those guys, but I'm one geezer who had been around the sport/hobby since I was a kid so they all know me from way back and I'm just one of the gang.



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    Oct 08, 2011 6:19 PM GMT
    I thought you said it was a NON POLITICAL post..

    Uh. hate to tell you but ya blew it.
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    Oct 08, 2011 6:24 PM GMT
    In sourcing probably won't produce too many more jobs. You can reduce the number of parts and use robots in the US.

    Wired magazine had an article about this a couple of months ago when they reported that Chinese factory workers in factories were committing suicides.
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    Oct 08, 2011 8:58 PM GMT
    TropicalMark saidI thought you said it was a NON POLITICAL post..

    Uh. hate to tell you but ya blew it.


    After all, it IS the News and Politics forum so I had to throw a bit of it in.

    Thanks for reading though. 'Made in China' sure screwed up that weekend.
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    Oct 08, 2011 9:09 PM GMT
    And it sure screwed up my pic taking. I still have this one from 2008 though. The opening shot of the ivory 61, 4 speed, bubble top was me and no car trouble that year. In fact this time this year is the only time it's ever happened to me. I always carry tools, but have never had to use them. From now on I carry a spare fuel pump.

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    Oct 08, 2011 9:21 PM GMT
    Since I'm way off topic anyway, anyone coming to the Colo's Classic Car Show at the Columbus Zoo tomorrow, Sunday the 9th? I'll be there with this one. It looks to be perfect weather so come on out. Lots of little curious rug rats so I won't be far from the car.

    IMG_1580-2.jpg


    http://www.columbuszoo.org/events/10-09-11/colos_classic_car_show.aspx
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    Oct 08, 2011 9:23 PM GMT
    Manufacturers will shift outsourcing from China to South America instead. Cheap wages, lax labor and environmental laws, and reasonably closer distance to oversee quality control. Intel has a couple of chip factories in Mexico. Ford and Volkswagen have plants there as well.
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    Oct 09, 2011 12:06 AM GMT
    81823350.jpg

    MOAR TEABAGZ!!!
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    Oct 09, 2011 12:25 AM GMT
    The whole reason outsourcing exists is because of huge worldwide discrepancies between rich and poor, so we have the 99%-1% discrepancy to thank for it...
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    Oct 09, 2011 12:38 AM GMT
    DY3L0Mh1Aqk33z8mimQNboUIo1_250.jpg

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    Oct 09, 2011 12:46 AM GMT
    Making that shit in china is a good thing... 90c on the dollar of any 'made in china' product goes into the designers, marketers, retails, after sales services, IRS pockets all you have to do is sell one in ten Ipods back to them and you win...

    plus they do all the messy work, offsetting the cost onto the lives of their people and the environment which they will eventually have to pay to clean up.

    The made in America problem is a distraction politicians use for the uneducated and unwashed masses


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    Oct 09, 2011 1:17 AM GMT
    FistersChoice said
    TropicalMark saidI thought you said it was a NON POLITICAL post..

    Uh. hate to tell you but ya blew it.


    And you said positive. Even though the quality and conditions of the products and the people making them were poor, they now have less work.


    Positive for the home team - yes. Safer for the rest of us.
  • conservativej...

    Posts: 2465

    Oct 09, 2011 1:18 AM GMT
    You know, it's a funny thing. I took the pictures below earlier today while traveling back towards the city. There are three seperate operations pictured below: Kia, Mobis, and PowerTech. Around these plants are perhaps a half dozen others of good size all humming away 7 days a week now days. It's remarkable. All in the U.S. and all with no union.

    Can we manufacture here? Absolutely. And in case some other big outfit wants land I'll sell it to you for $25,000 an acre -- before development.

    Photobucket

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    Oct 09, 2011 1:20 AM GMT
    GreenHopper saidThe whole reason outsourcing exists is because of huge worldwide discrepancies between rich and poor, so we have the 99%-1% discrepancy to thank for it...


    And this is how free markets take care of it. Demand for labor rises, wages rise, and rise to the point that it once again makes sense to manufacture here.
  • dancedancekj

    Posts: 1761

    Oct 09, 2011 1:22 AM GMT
    Shit_is_Fucked_Up_and_BS saidI found this helpful and yes there will be a return to manufacturing in the US, though not for what it was famous for manufacturing in the past.

    http://www.foreignpolicy.com/the_future_issue

    I was particularly happy about the excerpt on immigration and "by 2025, your grandchildren will question why you wanted to put up a fence between the US and Mexico"

    one important revolutionary concept, it won't just be insourcing and outsourcing, but crowd and density sourcing, and destruction at a much faster pace. Pretty good read.

    "Nonzero: The Logic of Human Destiny" is now on my reading list.



    Thanks, those were some very interesting articles to read.
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    Oct 09, 2011 4:03 AM GMT
    FistersChoice said
    freedomisntfree said
    GreenHopper saidThe whole reason outsourcing exists is because of huge worldwide discrepancies between rich and poor, so we have the 99%-1% discrepancy to thank for it...


    And this is how free markets take care of it. Demand for labor rises, wages rise, and rise to the point that it once again makes sense to manufacture here.


    I posted before him. You mentioned nothing of the previous workers?


    Better their 'previous workers' than our 'previous workers'.
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    Oct 09, 2011 5:00 AM GMT
    FistersChoice said
    freedomisntfree said
    FistersChoice said
    freedomisntfree said
    GreenHopper saidThe whole reason outsourcing exists is because of huge worldwide discrepancies between rich and poor, so we have the 99%-1% discrepancy to thank for it...


    And this is how free markets take care of it. Demand for labor rises, wages rise, and rise to the point that it once again makes sense to manufacture here.


    I posted before him. You mentioned nothing of the previous workers?


    Better their 'previous workers' than our 'previous workers'.


    So they deserve work less than us?


    Home team first. I always preference made in USA - when available and that's not often these days.