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Production Changes

hooferinsane

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Bet we see a price increase in gear as well.
 

Southern Gent

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Bet we see a price increase in gear as well.
Possibly, but I have to wonder how much if any reduction in price was being passed on to the consumer anyhow. As in so many products outsourced to China I suspect manufactures were padding profits rather then saving the consumer money. Honda Hyundai, and Toyota have plants here in our state. The subassemblies are constructed in clusters of smaller plants around the state. With production almost wholly in this country all three still manage to produce a quality product at a competitive price.
 

DonS

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There is a reason they make things in China: cheap available labour. Cheap being the key part. So production costs will rise not just short term as companies move their eggs to different baskets but in the long term as some of those baskets will cost more.

Look at Leica. Made in Germany. Do we want all cameras to be at that level?
 

DonS

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Possibly, but I have to wonder how much if any reduction in price was being passed on to the consumer anyhow. As in so many products outsourced to China I suspect manufactures were padding profits rather then saving the consumer money. Honda Hyundai, and Toyota have plants here in our state. The subassemblies are constructed in clusters of smaller plants around the state. With production almost wholly in this country all three still manage to produce a quality product at a competitive price.
Of course most of it goes to profit, but it is a balance: you need to provide the product at a price consumers will pay and make a profit. Production costs generally increase over time, in the past mostly labour, so how do you reduce costs, go where labour is cheaper.

Honda and Toyota parts are sent here to Ontario. There are some small suppliers, but most come from elsewhere to build the final cars. Related, GM does not make cars here anymore. GM Oshawa at one time was second only to Detroit. It closed in the fall. The first time cars have not been built in Oshawa since 1907 when the McLaughlin Motor Car Company Limited started up (the same family made carriages before). They ended up buying Buick drive train parts when they started. Later this all became GM.
 

Southern Gent

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@DonS I would only partially agree with that, as labor cost is not as big a factor as you'd think. I had some experience with this as I watched companies move out after the NAFTA agreement. In most cases worker pay was only a small part of the overall labor cost when you added in the cost of SS, FUTA,WC, Insurance, Benefits, Federal and State mandated regulations. Of the companies that rushed to move production out of the US I never saw any reduction in price to the consumer. One of the reasons the car plants I mentioned above have been successful is they rely heavily on robotics, which bypass the lion share of labor cost. US manufactures, courtesy of our inept politicians, chose to run rather then invest in the technology.
 

imagesBV

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That's exactly what's been happening in the UK.
I went to China 10 years ago and they were investing heavily in automation then.....which was perplexing as imported automation would have to be justified against their low labour costs.....China wins both ways now, while the west has sat back and let them get us over a barrel.
Massive profits for corporates while workers end up struggling with no market for their skills.
 
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