...USA?

REPATRIATING JOBS: U.S. MANUFACTURING GAINS MOMENTUM

http://www.businessweek.com/articles/2012-04-20/repatriating-jobs-u-dot-s-dot-manufacturing-gains-momentum

>>Maybe the once-ubiquitous label, “Made in the U.S.A.” should be updated to: “Made in the U.S.A.—Again.”

According to a survey by my firm, Boston Consulting Group, 37 percent of U.S.-based manufacturing executives at companies with sales greater than $1 billion are planning to bring back production to the U.S., or are “actively considering” doing so. The rate was even higher, 48 percent, among executives at companies with $10 billion or more in revenues. This is the first time we’ve surveyed executives on this topic, but five years ago almost no one talked about reshoring. It was all about outsourcing.>>

ARE THE U.S. AND CHINA TRADING PLACES?

http://articles.marketwatch.com/2012-04-17/economy/31354552_1_michael-pettis-china-export-growth

>>In the United States, meanwhile, there has been a string of four positive monthly employment reports. … Manufacturing production, in particular, has grown impressively, underscoring recent optimism about the “re-onshoring” of previously offshored manufacturing jobs.

American manufacturing, in other words, is back. U.S. companies have taken the Great Recession as an opportunity to streamline their operations and boost productivity….>>

But maybe not UK

OFFSHORING AND ONSHORING: IT'S ALL A BIT MORE COMPLEX THAN YOU THINK

http://www.forbes.com/sites/timworstall/2012/03/21/ofshoring-and-onshoring-its-all-a-bit-more-complex-than-you-think/

>>This is an interesting little tale of a small British company trying to reshore, … There are most certainly benefits of doing so:

[…]
A few months on, and Tainton cuts a frustrated figure: his experience of trying to manage a UK manufacturing base has been characterised by inefficiency, high levels of absenteeism and a skills shortage.

“Most young people in Brighton have degrees, but they often lack the life skills even to get to work on time.”

He’s been most shocked, however, by departing staff who have told him they regard unemployment as a lifestyle choice. “We’ve had lots who have just quit because they said they prefer to be on the dole and housing benefit,” he says. “I hate the waste. I felt sick with stress the whole time I was on the dole. I’ve found not everyone shares that view.”>>

What about Australia?

Will we be left behind?

I'll believe it when I see it.$15 trillion debt for the Govt and how many $ trillions more for private individuals?

The Central Banksters Steven, have us all by the balls.They own Greece and Italy.Do you think they will give up now?

An interesting observation stevenlmeyer. But is it particularly surprising? I would have thought that it is simply the economies of manufacturing following an entirely predictable and natural progression.

The major factor in the early equation for manufacturing overseas and importing the resulting product was labour costs. When the manufacturing country was able to improve its own economy through a boost in labour participation rates, it did so largely through paying substantially less to its workforce. The workers themselves benefited from employment they would otherwise not have, and the employing business reaped the benefit of low-cost production.

However, this will always, inevitably, change. Expectations created by a new population of (relatively) well-off workers will create an internal demand for better conditions and... more money. Over time, this will bring the labour cost factor into competition with the inconvenience of distance, the difficulty of remote management, the challenges of maintaining quality and so on. This has nothing to do with China - it is a cycle that has already taken place in many other Asian countries.

But - and there always is a but - the US that these manufacturers will "return" to, is itself a different place. The economic hold that business now has over its native workforce is far higher than it was when the jobs were exported. Unions are, quite naturally, less eager to fight for their workers' pay and conditions, as their members nowadays, quite realistically, want jobs more badly than they feel the need for featherbedding. And the advances in automation that have occurred in the meantime will also contribute to the productivity that is essential to making the “Made in the U.S.A.—Again.” decision.

>>What about Australia? Will we be left behind?<<

That depends.

What, in your opinion, are the manufacturing industries that we should bring back onshore, and reap the same economic benefit that the US can see?

In fact, can you think of any at all?

Pericles

You're quite right. As manufacturing productivity continues to grow exponentially labour costs become an ever smaller percentage of the total. That makes other costs such as transport and the costs of being far from your factory and of your factory being far from your markets assume ever greater importance.

Even the "inconvenience cost" starts becoming important.

Have you seen this clip?

How to build a Volkswagen?

(See: http://www.youtube.com/embed/nd5WGLWNllA?rel=0)

I think we're only at the beginning of the automation revolution.

You ask:

>>What, in your opinion, are the manufacturing industries that we should bring back onshore, and reap the same economic benefit that the US can see?

In fact, can you think of any at all?>>

No I can't. AND THAT'S THE PROBLEM!

Moreover I think China's growth will start slowing and that has profound implications for Australia.

I have no doubt that China will emerge as a great power. I don't think they're going to implode.

But at the same time I don't think they're going to supplant the USA as the number one great power just yet and, given their rapidly aging population, maybe never.

Last weeks Economist special report on manufacturing and how it is
changing, made for interesting reading. According to their chart,
the US still manfuctures as much stuff as China, so its a myth that
US manufacturing died. Its just highly automated these days,
requiring far less workers. It also makes high value items, as
compared to cheap consumer products as China does.

The other interesting analysis was the value of an Apple Ipad and
where the money goes. Parts are made all around the world, from
Europe, the US, Korea, Japan. Assembly is in China, but that is
a fraction of the value. Most profits go for IP to Apple.

But now of course, Apple's new star market for selling Iphones and
Ipads is you guessed it, China!

A few limited companies in Australia will compete Steven, but I'd
say that in general, Australia provides such cushy welfare, that
many opt not to work. We'll just remain a mine and a farm.
We can't even train enough doctors to fill the country's needs.
Australians have simply had it too good for too long

my site...had something.. re the 60 billion gm bailout
going to china..to buld industry

i tried to find it

its must be in here..somwhere

its going global

the first of many
http://www.fcpablog.com/blog/2012/4/3/the-corporate-investigations-list-march-2012.html

dirt..[i got dirt]
these guys are busy too

1st amendment[ammended]
http://revolutionarypolitics.tv/video/viewVideo.php?video_id=18636

CISPA Bill
To Remove Your 4th Amendment
http://revolutionarypolitics.tv/video/viewVideo.php?video_id=18635

the world is rotten
10 corperations running a scam
http://www.businessinsider.com/these-10-corporations-control-almost-everything-you-buy-2012-4

the party system corrupt
http://www.businessinsider.com/the-presidents-new-rules-for-killing-people-with-drones-over-yemen-is-unbelievable-2012-4

i recall much more
at my news paper
http://whatreallyhappened.com/

but noted this
http://www.activistpost.com/2012/04/private-prison-corporations-are-slave.html

wunder how the states..will go here
[who' egsempted from that list]

how many states..allready got privatised prison aggrements?
are they egsempt?

whats with the 90 occupancy..for 20 years..[guarentee]
blackwater at it again?
http://blog.alexanderhiggins.com/2012/04/26/war-table-backed-mercenaries-training-syria-terrorists-126981/

CIA KILLS US TROOPS
http://aangirfan.blogspot.com/2012/04/cia-kills-us-troops.html
Why would the CIA want to kill American soldiers and blame the killings on Moslems?http://globalresearch.ca/index.php?context=va&aid=30545

"To enrage American troops..
http://www.rawstory.com/rs/2012/04/25/israel-military-chief-iran-not-pursuing-nuclear-weapon/

so that the slaughter continues".
http://jewishvoiceforpeace.org/blog/60-minutes

BUT HOW..get rid of cash ecomony
or shut down anyone
http://foodfreedomgroup.com/2012/04/23/obama-seizes-farmers-money/
http://www.blacklistednews.com/Russia_And_Mexico_Both_Buy_Nearly_%241_Billion_Worth_Of_Gold_In_March/19157/0/38/38/Y/M.html

little wonder
http://news.cnet.com/8301-1023_3-57420551-93/who-owns-your-files-on-google-drive/
http://www.telegraph.co.uk/technology/internet/9225370/Acta-treaty-unacceptable-says-European-Data-Protection-Service.html
http://www.activistpost.com/2012/04/10-facts-about-americas-energy.html

yes
we going to need HONEST JUDGES*
who can we trust?

i dont trust neither*..party..nor country

but im fine with china..get over it..
our grandchildren will be part chinese...its abouit the people..not the corperations[see who controls what]..link

the world is rotten
10 corperations running a scam
http://www.businessinsider.com/these-10-corporations-control-almost-everything-you-buy-2012-4

which are chinese?

Yabby telling us about US industry? Which US manufacturing products do we buy here? Name one television,computer etc.Holden and Ford are Australian creations which are subsidised.

http://www.ustr.gov/countries-regions/southeast-asia-pacific/australia

Arjay, we spent 21.9 billion $ buying US goods in 2010, you really
need to open your eyes a little.

From Catepillar equipment powering our mines, to John Deere
harvesters and tractors on our farms, Boeing aircraft in our skies,
military equipment, billions worth of drugs, medical equipment in
our hospitals, dna analysers in our labs, Cisco equipment in our
telecommunications, gas turbines in our power stations, Intel
chips driving our computers, let alone Microsoft and Apple software
driving our computers

Yabby,

It goes even further than that. In the important technologies of the future such as nanotech and biotech the US for now at least seems to have the lead.

Another factor working in favour of the USA is that China's neighbours, including India, want an American presence in Asia to counter-balance China. This includes regular joint exercises between the Indian Air Force and the USAF, something that would have been unthinkable not too long ago.

Incidentally that other emerging Asian giant, India, seems to have a limitless appetite for Israeli military technology.

Yes Steven, nanotech and biotech are two more. I think that the
Arjay's of this world, simply don't have a clue as to how
manufacturing is changing. 3D printers for instance.

As the Economist special report on manufacturing pointed out,
the total value of US manufacturing and Chinese manufacturing are
about the same, but the US does in with 10% of the labour.

Its all about change and innovation and America remains an
innovative country with a flexible workforce, unlike ourselves.

Hi Yabby,

3D printing is one of the technologies I had in mind under the rubric of nanotech. I don't know which way it will go. Will we really be "printing" motor car components on demand? Maybe.

Have you ever looked at the insides of an iPhone? It's a work of art the way all those components are packed into such a tiny space. No wonder you need a huge labour force with nimble fingers and low wages to manufacture them profitably.

But my guess is that within a few years all those components and more will be in a single chip. A phone on a chip! Will it then still be worthwhile manufacturing phones in China?

In fact if there had been no FoxConn in China my guess is that smartphones would have been engineered differently. We would already have "phonechips."

Hi Steven,
No, I don't have an Iphone, but I have a couple of Ipads, they are
also assembled by Foxconn, with materials from specialised companies
around the world. According to the Economist report, the labour
value in China for assembling them, is only around 8$ a piece!

Samsung of Korea will likely develop far more efficient ways of
building smartphones. IMHO the reason why Apple are doing so well
is not the hardware, but in terms of offering consumers solutions
and of course that includes the software. In the end, that is
what consumers want. Samsung still rely on Google for software and
anything that Google makes, comes with being bombarded with advertisements.

Apple clearly learnt their lesson, when they nearly went broke in
the 90s, for overpricing their products and Bill Gates undercut them.
Now I can buy great apps for the Ipad for just a few bucks. But
when they sell hundreds of millions of them, its huge money and even
more sales of ipads and iphones. No wonder that they have 110 billion
cash in the bank. The thing is, assembling the ipad is only a tiny
fraction of its final value. The big money is being made elsewhere

Yabby wrote:

>>The thing is, assembling the ipad is only a tiny fraction of its final value. The big money is being made elsewhere>>

Agreed.

And that's why I think China's current economic model is reaching the end of its life. If they want the living standards of the Chinese population to continue rising they're going to need to move beyond low value added mass assembly to higher value added areas which is what they're trying very hard to do.

But now it gets more difficult. I do not expect China to implode but I do expect their growth rate to slow down just as Japan's did.

But China also faces an aging population. Will they get old before they get rich? I don't know.

BTW Yabby it's a pleasure having an intelligent conversation in this forum with somebody not blinded by ideology or befuddled by mostly imaginery conspiracy theories.

Another BTW Yabby

Interesting you mention Samsung. I've got them pegged as a company to watch. If I had to choose between Samsung and Apple as a medium to long term investment I'd go for Samsung.

Steven, I agree with you that Samsung are a company to watch, they
invest huge amounts in r&d and are making serious money, whilst
some of the older Japanese electronics companies are running at a
loss. Their new Galaxy Note will be an interesting product to
watch, its kind of a cross between a smart phone and a tablet.
It will be interesting to see if Apple copy the concept.

I think that given time, China will act much like Japan did, only
10 times bigger. They started with so called "Jap crap" in the 60s
but over time just kept improving. People thought I was crazy when
I bought a Toyota Corolla in the 70s, they were all buying European
brands. Yet it ran like a charm whilst I had it.

So I think that similar companies will emerge from China, those who
focus on consumer value for money, will grow and grow. Other emerging
economies will do some of the el cheapo work, like Bangaladesh or
Vietnam, or a host of others.

Meantime the rising Chinese consumer class will help Australia
keep the wolf from the door, as we keep exporting mining and
agricultural products to them. So overall for us, China is a good
thing. Our consumers benefit, so do our exporters.

Arjay, well he'll probably go out of business, as the world leaves
him behind :)

These central bankers ;'
China has much to bring up to standard, at the moment the people in the manufacturing city's are doing really well, probably add up to many millions of people.
There are many millions that do not enjoy their new found wealth, and that is what will keep China expanding for many more decades to come.
To eliminate China's cheap useless junk, would be a plus for AU, but someone else will fill the hole.
Unless there is a mechanism that can prevent the importation of trinket commodities, the trash will continue.