[Steve9]

Some interesting research - "It is now cheaper to produce goods in Mexico than in China and about 25% more expensive to manufacture products in Brazil than in the U.S"

Quote:


"The conventional wisdom that China and Asia are low cost and South America is low cost and Europe and the U.S. are high cost is no longer true," says Hal Sirkin, a co-author of the report and a senior partner at Boston Consulting Group.

BCG analyzed the 25 top exporting economies according to key drivers of manufacturing and created an index to show their competitive rankings. Among the results: the competitive edge for China over the U.S., which was historically about 20 points, has narrowed to just five.

"The gap is closing and, when you add the transportation costs, it makes a lot more sense for a lot of products to be made in the U.S. than in China," Sirkin tells The Daily Ticker. He says at least 300 companies have moved manufacturing operations back to the U.S. from overseas, a move known as "re-shoring," because "it just makes economic sense."

The U.S. workforce is among the most productive in the world, with relatively flat wages, and has easily available energy resources, Sirkin explains in the video above.

As a result, says Sirkin, foreign companies like Volkswagen (VLKAY) and Siemens (SI) have opened plants in the U.S. and Siemens is even exporting some of the products it makes here. "We're seeing exports from the U.S. rise dramatically."

http://finance.yahoo.com/blogs/daily-tic...48699.html

[T and A Man]

The way the US can compete with countries of the third world, is to become the third world.

Make all this stuff, but all these minimum wage workers are going to become your customers?

[spalex]

(04-29-2014 07:03 AM)Steve9 Wrote:  

Some interesting research - "It is now cheaper to produce goods in Mexico than in China and about 25% more expensive to manufacture products in Brazil than in the U.S"

Saying "Produce goods" is the same as saying "Make things".
Its general as fuck and doesn't really mean anything.

Anyway. I'm pretty sure what comes into play with all this is:
The availibility of natural resources ie, coal, oil, rare earths.
Logistics and transport costs.
Labor costs.


If you look at china. Electronics are being made by a 4 year old, on an outdoor production line where they pay 6 cents / Kilo Watt for electricity.
You can get a lot of crappy electronics in a shipping container.
How can you compete with that?!

But shit like furniture and mattresses are shit to transport. How many beds or couches can you fit in a shipping container? You have to make that shit as close as possible but with the cheapest labor costs. So then mexico is your go to guy.

Also, how many of us are living in countries where the government is giving tax breaks to companies that "go green" and then raping other industries for polluting the environment?
That has to throw a spanner in the works for many industries.

[spalex]

Double post

[Bad Hussar]

Doesn't surprise me at all. There are a lot of problems with manufacturing goods in China. Serious quality issues for a start. And anything that is consumed internally (i.e. food, medicine) is a non-starter. Western retailers generally wont touch any food product that has even one ingredient amomgst many produced in China. There is 0% trust in Chinese food by Western companies. They're worried about things like melamine poisoning.

With other non ingested goods the main candidates for staying in first world countries, or being reshored, are any goods that are:
1) Very heavy/bulky.
2) Capital intensive rather than labour intensive.
3) Where delivering in a short time is a benefit. i.e. Having a shorter supply chain has significant benefits.

Any members running or working for companies which compete directly with Chinese ones should make sure that they have point 3 down pat. Arrange your entire supply chain so that you can react very fast. Customer orders today, and you can deliver to them in 10 days rather than the 30 days it would take a Chinese company. For many products this is a bigger benefit than it sounds.

[kosko]

(04-29-2014 10:16 AM)Bad Hussar Wrote:  

Doesn't surprise me at all. There are a lot of problems with manufacturing goods in China. Serious quality issues for a start. And anything that is consumed internally (i.e. food, medicine) is a non-starter. Western retailers generally wont touch any food product that has even one ingredient amomgst many produced in China. There is 0% trust in Chinese food by Western companies. They're worried about things like melamine poisoning.

With other non ingested goods the main candidates for staying in first world countries, or being reshored, are any goods that are:
1) Very heavy/bulky.
2) Capital intensive rather than labour intensive.
3) Where delivering in a short time is a benefit. i.e. Having a shorter supply chain has significant benefits.

Any members running or working for companies which compete directly with Chinese ones should make sure that they have point 3 down pat. Arrange your entire supply chain so that you can react very fast. Customer orders today, and you can deliver to them in 10 days rather than the 30 days it would take a Chinese company. For many products this is a bigger benefit than it sounds.

90% of consumed garlic comes from China among with other foodstuffs.

[Bad Hussar]

(04-30-2014 12:45 AM)kosko Wrote:  

(04-29-2014 10:16 AM)Bad Hussar Wrote:  

Doesn't surprise me at all. There are a lot of problems with manufacturing goods in China. Serious quality issues for a start. And anything that is consumed internally (i.e. food, medicine) is a non-starter. Western retailers generally wont touch any food product that has even one ingredient amomgst many produced in China. There is 0% trust in Chinese food by Western companies. They're worried about things like melamine poisoning.

With other non ingested goods the main candidates for staying in first world countries, or being reshored, are any goods that are:
1) Very heavy/bulky.
2) Capital intensive rather than labour intensive.
3) Where delivering in a short time is a benefit. i.e. Having a shorter supply chain has significant benefits.

Any members running or working for companies which compete directly with Chinese ones should make sure that they have point 3 down pat. Arrange your entire supply chain so that you can react very fast. Customer orders today, and you can deliver to them in 10 days rather than the 30 days it would take a Chinese company. For many products this is a bigger benefit than it sounds.

90% of consumed garlic comes from China among with other foodstuffs.

Yes, there are a couple of food products that China has a stranglehold on, but most western food manufacturing firms do all they can to avoid Chinese ingredients. I've been involved in this. A retailer will just phone up, or send a letter, and state something like: "Provide me with written assurances that no Chinese sourced ingredients go into any of the products I buy from you in 30 days or I'm de-listing the products." It really is a big deal to them, especially when scares like the melamine poising of milk products hit the news. As a manufacturer you have to find other sources, even if they are more expensive. In the rare case where there is no suitable substitute you have to talk the client through the reasons you can't get another supplier. But no bullshit. You really have to be unable to find another.

Even in my personal life I avoid any food coming from China or India. Here in SA, which isn't as strict as the west, most of the cheaper shellfish you see for sale in stores is packed in China or India. Not a chance I'm touching that stuff. On the rare occasion I have prawns, say, I make sure they are from Mozambique. Much more expensive, but I just don't trust that the Chinese or Indian firms packing the stuff to properly ensure that it is not contaminated.

[spalex]

I think they just like to say that a lot to look good.
All these Chinese flavorings are just loaded with MSG that everybody wants to stay away from.

[Spede]

(04-30-2014 01:59 PM)spalex Wrote:  

All these Chinese flavorings are just loaded with MSG that everybody wants to stay away from.

The US, afraid of MSG?