Our May 21 edition of Motion Monitor posed the question, “How can America get manufacturing back from China?” Here are a few of the responses. To add your voice to the discussion, e-mail [email protected].
Having been involved with moving a portion of our manufacturing operations to China, I offer the following thoughts regarding why U.S. manufacturing has moved to Asia:
Business leaders have made this decision based on the tenets of capitalism and the principles of cost, supply, and demand. As consumers, we want our money to go far, so we demand low cost. We probably grumble when almost everything we purchase (except for fresh produce, meats, and items from the service sector) have a “Made in China” label, but we enjoy the increased purchasing power. Business leaders by nature are capitalistic. To be successful, they need to make the most money possible for themselves and their investors (if publicly owned), so they produce products where they have the lowest costs in labor, materials, and capital equipment. China offers all of those advantages along with less strict environmental regulations plus the ability for local governments to offer further incentives for foreign manufacturers to establish operations there.
So what will it take to move manufacturing back to the U.S.? As consumers, we must be willing to pay more for the products we purchase and stop buying anything not made in the U.S. The current “global warming” and “green” phenomena suggest that individuals may choose to pay more money or reduce demand for products for the “good of the earth” — why not for the good of their fellow workers?
At some point, the standard of living and corresponding income of the wage earner will increase in China to the point that the labor savings will no longer be there. They may ultimately improve their environmental regulations and enforce them, also driving up cost. This will force businesses to move to other low income, developing nations (Africa?) to repeat the China experience. Eventually we may have capital equilibrium in the world, resulting in production costs that are universal regardless of location. Then we can have manufacturing return to the U.S.
The only other opportunity is for the U.S. to develop new methods of manufacturing products or develop new products that can't be made anywhere else. At some point, patents will run out or equipment and processes will be duplicated so this is not likely to happen. Besides, the U.S. is no longer technically superior to other nations and probably is not as “hungry” as we used to be. I have seen that difference in China. As the government has allowed a type of capitalism, the Chinese are excited about the opportunity and they look for any way to make money for themselves.
Time is money
When you can propose your project, get government approval, and build and open your doors in China in considerably less time than it takes to get approval in the U.S., of course you go to China. Yes, it's about money. It's also about time, and time is money.
Curtis Schneider, via e-mail
Made in the U.S.A.
Today, China manufactures what is presented to them. There is no innovation. They can copy well, like Japan did in the early 1950s and 60s. They take a product and make it cheaper. Everyone wants to have it built cheaper, but at what cost in the long run? The world is using China as a stage for manufactured goods. China wants to build large cargo airliners and passenger jets and they are spending huge sums of money to accomplish this goal. They will find out, like the Russians did, better let the west do the building; unlike building a car, aircraft are not as forgiving. Plus, liability laws do not yet exist in China. This will change as liability laws gain strength.
Right now, the average Chinese worker is making chicken feed compared to the western cultures, so their products cost less. This won't last. Workers in China will see wages going up in the near future and this will translate into higher prices overall. Industry will then look for the next country to move to for cheaper manufacturing. The way to bring back jobs to the U.S. is to build a great product at an inexpensive price. Once the China experiment goes south, manufacturing and services will return to the U.S. because this is where great products are not only being made, but also consumed. Made in the U.S.A. will once again have new meaning and a stamp of both quality and value.
Ford V. Pulley
San Diego, Calif.