I read the article, its a good read but it does not tell the whole story nor does it consider the opposite question. Firstly hundreds of manufacturers have already moved in-land in China. Secondly China is a brutal country of over one billion people, if 50 million factory workers start complaining for higher wages the govt simply beats them over the head to get working. And if they quietly leave their jobs there are easily another 50 million to take their place. Thirdly China is more of an assembly plant than a manufacturer, the hi-tech pieces of an i-phone are not made in China, the pieces are sent to china where the i-phone is then assembled. Finally there are so many impoverished nations in the world that business will forever be able to exploit cheap labour.
Originally Posted by wallstreet
The opposite question to ask is not how China's labour costs are rising to US levels but how US labour costs are falling to China's levels. So if manufacturing does make a comeback in the US it will only happpen because the cost of labour has fallen to new lows and not because global labour has risen to new highs. Given that unions are almost all but extinct and the US has a fast growing peasant class that just might happen.
I would urge you to read a book called Manufacturing Consent written by the famous MIT prof Noam Chomsky. It will give you a new perspective on western media. The book was also turned into a film by the same title and is freely available on you tube, its not a bad film but a little dated now.
This is the normal flow of industrialization. Asian manufacturing started in Japan. When it got too expensive there, it moved to Korea. It migrated to China when Korea got too expensive. The movement out of China has started. Look to other industrialized nations that have the technology and infrastructure to support industrial manufacturing but still have low labor prices. Central and Eastern Europe, and the small countries around China are where it is moving.
Originally Posted by stepitup_onenotch
The only twist to this is the rising costs of transportation. If fuel costs continue to rise disproportionately, we'll see shifts to manufacturing closer to home (Central America, and even back in the US).
@StepItUp.. I really like Naom Chomsky & had read numerous works by him - remember his notes on Nike et al manufacturers. I shall look at this one you denote. It's more complex than we state. Here in Europe there is a flight now to growth countries: Poland, Croatia. The question often is at what cost.
On topic, I am often tempted to American handcrafted bikes eg Cannondale in the past. Mine are not those now. I had an amazing BMX by Raleigh and it cost a lot in those days. It never let me down. Sadly I gave it away! In my 20s! Only to get back into cycling mid-30s. Raleigh uk are doing great again but like the US it's Asian made. Costs are too high and since WWII manufacturing became uncompetitive. I think labour costs are now €20 per hour.
Last edited by wallstreet; 11-30-2012 at 01:54 PM.
yes all true. a friend of mine works at Renault who have opened factories/assembly plants in Roumania and Morocco as they exit production in France. It is a sad state of affairs in the entire western world......
Originally Posted by wallstreet
@Stepitup. Many to add to that list. AMD globally catching up to move to Croatia or Poland. Johnson Electric increasing in Poland plants and Croatia. Certainly it's like this when looking at manufacturing. Belgium has a cost of €37 per hr so we can see why Phillips is away, Ford shutting down too.
I feel lucky to be in a contained protective environment. In Switzerland, the manufacturers in CNC style machining are doing fine Agie SA, however smaller parts supply side are in the red or near it eg Cointrenex. The Swiss success stories like American large end bike sellers works here as I noticed most frames are Asian sourced carbon . Be great to read research from Chomsky on bike manufacturers.