What is the future of manufacturing?

Also, in a petroleum-based economy, there's the question of how fast we can pump oil out of the ground when 1.4 billion Chinese suddenly want as much of it as we do. This is offset by increases in efficiency every time the price goes up, and reduced efficiency every time the price goes down (SUVs).

Until recently China's economy was mostly coal-based, just because they have a lot of it (I don't know if that's still true). They were still using steam locomotives just because they burn coal instead of oil. I don't know about India. We also have a lot of coal, but we have a bad history with coal miners' unions (apparently they don't like getting killed on the job).

But conventional free trade measures won't help us either. New ideas are in short supply.

The idea of limiting imports to the amount of exports is not traditional protectionism, because it doesn't target specific products. The problem is that it doesn't guarantee that we'll have anything to export. But it might limit or slow down the damage-- ie, if we're going to get hit, we might at least soften the blow, until someone comes up with a better idea.

It reminds me of the "opium wars", when England was smuggling opium into China to balance their tea imports. The problem was that England didn't have any legal products that China wanted to import (but you can always create a market for drugs). The other option for England would have been to stop importing tea from China (which they eventually did, after they learned how to grow it in India).

Certain Central American countries are doing the same thing to us with Cocaine, and it's keeping their economies alive. Winning the "drug war" would mean bankrupting several other countries. BTW some people claim that this wouldn't work if only poor people used cocaine, because there wouldn't be enough cash flow.

Reply to
Ron Bean
Loading thread data ...

I think it was Gary Coffman who made the interesting point that China gets about 1/3 of its oil from Iraq. Maybe 'ol GWB isn't so crazy after all.

Jim

================================================== please reply to: JRR(zero) at yktvmv (dot) vnet (dot) ibm (dot) com ==================================================

Reply to
jim rozen

Read a blurb a year or so ago in a motorcycle mag about China's emerging motorcycle manufacturing efforts. As in mold making, their stated goal was a fairly significant portion of the global market. The picture that accompanied the article showed a bike that probably would sell well there, but sure wouldn't fly over here. Motorcycles are generally an enthusiast product, and the near death of the econo-bike market in favor of sport bikes, cruisers, and touring bikes (all higher dollar status machines) shows that bikers shop performance and/or image first. The Japanese are smart and how many decades did it take them to figure out that a proper cruiser was more than goofy handlebars and a sissy bar? The big 4 from Japan had to establish design centers here in the US before really getting a grasp on what the US market wants, at least in the street bike arena. I think it will be decades before they really penetrate the US market with bikes designed in country.

Jon

Reply to
Jon Anderson

Ummm. Not quite. How do you explain the fact that Honda basically put every british motorbike company out of business, and all but one of the US ones, during the 60s?

Maybe they were short on styling, but they sure understood engineering.

Jim

================================================== please reply to: JRR(zero) at yktvmv (dot) vnet (dot) ibm (dot) com ==================================================

Reply to
jim rozen

Bg, you need to put some numbers on these opinions of yours and start evaluating which ideas are real and which are a delusion. There is only one reason there are so many opinions about the issue: most people don't make the effort to track down the quantitative values that lie behind them, which would replace their opinions with facts. Popular discussions about it quickly turn into a bunch of qualitative mush because nobody knows what's significant and what's not.

When you examine the numbers behind conventional ideas about what we should do, you find that most of them are 5% solutions to a 95% problem. They are palliatives, grasped by politicians who are looking for any scapegoats they can find to avoid facing the real problem. And the real problem is this: You can't compete with a country that makes decent products with a wage rate of

80 cents/hour. No way. It's the definition of "competition" that has to be examined. And the public has to be made aware of the underlying ideas behind our trade policies. If we saw them in the light of day, we may decide we don't particularly like their objectives.

-- Ed Huntress (remove "3" from email address for email reply)

Reply to
Ed Huntress

Yes, much different. But don't ask me to explain how. That's an entire course in economics.

Jobs in the financial sector depend on having access to, or control of, vast amounts of capital. It isn't the same thing as an investment in plant or equipment but you don't have financial jobs unless you're sitting on a mountain of capital.

Yes, and I believe that still holds. We are in danger of losing the *source* of innovation in manufacturing.

Yup.

In dollar terms, the service jobs that count the most are the ones that can be delivered electronically from halfway around the world. Thus, the movement of financial and even some legal service jobs to India.

Be very wary of that old bromide. Productivity has little meaning outside of its importance in competition. The direct effect of a 5% increase in productivity is almost unmeasurable in terms of its effect on our lives -- or on the accumulation of wealth. But it can make the difference between profit and bankrupcy for a corporation.

Ed Huntress

Reply to
Ed Huntress

And swift justice on a end of a short pointy sword. One of the reasons that west is so much more expensive is the cost incurred by various insurance driven pressures. All thanks to a bloated legal system that serves its interest primarily.

Reply to
Boris Mohar

If anyone remembered how. Knowhow doesn't come out of a spigot.

Reply to
Boris Mohar

Sorry, I meant to reference their pathetic initial attempts to produce cruisers, not the overall streetbike market. Pull back bars and teardrop tanks on an inline 4 cylinder do not make a cruiser, at least not in the HD image they were after. You don't see many of those bikes on the road today. Took them a while to figure out what the real attraction to cruisers was. Big inch V-twin engines and that deep throaty rumble.

Overall however, yes they nearly killed most of the competition. The bar has been raised so high today for quality, in terms of power, reliability, handling, braking, etc. that shabby products, or even mediocre products, will not fly in this country. Going to be hard to break into that. Doable, but not easy nor cheap, nor will it happen overnight.

Ducati is a prime example of what China lacks. The bikes have huge appeal even in the face of frequent service requirements and owners sometimes having to wait weeks for parts. They look and sound good and win races. Italian mystique goes a long way here. Chinese mystique in the performance motorcycle arena is a long ways off.... I mention performance bikes here instead of cruisers as the Chinese bike I saw in the article was a sport bike.

Jon

Reply to
Jon Anderson

They'd only all be unemployed if you made the assumption that they're all employed in manufacturing now. But that's an unwarranted assumption. In fact, less than 8% of the US workforce is employed in manufacturing now.

The US economy is not primarily a manufacturing economy, and it hasn't been one for at least 50 years. Even then that was just a blip caused by war time production requirements. Over the course of the last century, the primary occupation of the US work force has moved from agriculture to service jobs, with a short period of domination by manufacturing centered during and just after WWII.

Gary

Reply to
Gary R Coffman

Hmm. Interesting stat. One (this one, anyway) tends to think of the US economy in terms of steel mills, car manufacturing, etc.

What you say has the ring of truth, but I'll ask anyway: Do you have any cites? To be more precise (I'm pretty sure you DO have cites), would you post cites?

Thanks.

R, Tom Q.

Reply to
Tom Quackenbush

I think the question is what happens if there's a sudden 8% jump in our unemployment rate (or whatever the number is).

That's interesting, are you saying the shift to a service economy happened *before* WWII? So all that stuff about manufacturing in the 50s and 60s was just window dressing? (Or is that what you mean by "and just after"? Meaning the shift happened around 1950?)

Reply to
Ron Bean

I always believed the tale that manufacturing jobs are pretty highly leveraged, that the 8% in manufacture actually generate much more than that in serivce jobs, like a factor of two or three.

So what if (playing 'what if') the 8% unemployement increase really winds up being 24% increase?

Jim

================================================== please reply to: JRR(zero) at yktvmv (dot) vnet (dot) ibm (dot) com ==================================================

Reply to
jim rozen

What are you saying Ed? I am giving you examples. I cant also give you the formulas and do the complete research myself. (No one has paid me yet). I can give you more examples if you choose, but i dont see it necessary. I am not saying our MFG base will not suffer. They are and will continue to suffer. But the best medicine is for greater innovation. Innovation is our advantage at this moment in time. we need to take advantage of that in ways that go beyond our current methods. The industry I speak of, energy is just in my opinion, the best candidate for an all out effort, the likes of which have not been seen since the Manhattan project. But many other industries currently are also representative of our innovation.

I have not even mentioned Nanotechnology, which is receiving huge amounts of money for research and development. It is a viable, tangible technology, that has few visible limits at the moment. It would take generations for countries like India to catch up to that research. Just because eventually they will catch up someday, does not detract from the benefits the USA will receive from it. At the moment, no one is coming close to the USA in this field, which has the potential to employs a large amount of mfg workers in the USA.

I personally dont have a problem with the current objectives the way they stand now. It is cyclical. The countries who beneft today will eventually raise their standard of living to the point where it is cheaper to MFG somewhere else. Though with China's size, she has a great advantage over the rest of the world for decades to come. But it will happen. It is already beginning. Have you seen the golf courses, country clubs, Mercedes', real estate values in China lately? It is just slow moving, because of the sheer numbers involved.

No, we cannot compete in mfg the same items as a country with $.80/hr wages. But we can have a mfg base that produces items that represent the latest in innovation and design. Business must learn to transform itself and adapt. If it does not adapt, it will perish, and maybe rightly so.

Reply to
bg

formatting link
Total US civilian labor force is 141,815,000. Total manufacturing employment is 17,698,000 or about 12.5% of the total work force (13.4% of nonfarm employment). That's a little higher than I'd recalled. The largest segment is the service segment at 65.2%.

Note that government employment (nonmilitary) at 15.8% is larger than manufacturing.

Gary

Reply to
Gary R Coffman

I'm saying that the US economy was primarily an agricultural economy at the turn of the century, and agriculture remained the largest segment up until WWII. During and immediately after WWII, manufacturing employment jumped dramatically, but it has been declining ever since. Now the service sector dominates.

Gary

Reply to
Gary R Coffman

The service jobs associated with manufacturing, ie distribution, sales, after sales service, etc don't go away when the primary manufacturing activity goes overseas. The people who were distributing, selling, and servicing the domestic product merely switch to distributing, selling, and servicing the imported product.

A good example is the auto industry. There are about as many people now distributing, selling, and servicing import cars as there are for domestic cars. Ancillary businesses, such as auto parts stores, gas stations, etc don't really care who made the cars.

Gary

Reply to
Gary R Coffman

Oh heck, had a parts manual for one of those a few years ago, traded it for a book...

Jon

Reply to
Jon Anderson

This is a point of confusion and contention. The U.S. Dept. of Commerce published some figures a couple of years ago that said there are 3.28 service jobs created for every manufacturing job that *produces a product for export*. In other words, the manufacturing itself creates 3.28 service jobs.

When I questioned the people in Commerce who came up with this figure, it was obvious they backed into the number and they really don't know what it should be.

In any case, there are service jobs associated with manufacturing, from building and maintaining plants to supplying power, to transporting raw materials, and there are service jobs associated with the finished products, which, supposedly, would be the same no matter where the product comes from.

I don't think there are any reliable figures that break the two down. At least, no one in Commerce seems to know of any.

-- Ed Huntress (remove "3" from email address for email reply)

Reply to
Ed Huntress

Oh, I should have completed that idea: No matter what the breakdown is, it's clear that you create more service jobs by manufacturing a product and selling it in the same country, than you do by importing the same product. If you both manufacture and sell, you add both types of service jobs to the equation.

-- Ed Huntress (remove "3" from email address for email reply)

Reply to
Ed Huntress

PolyTech Forum website is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.