America and Manufacturing

[cosmictraveler]

Actually, Daimler sold off 80% of Chrysler about a month ago. It's now owned by Cerberus Capital Management, an American firm.

Not that that has anything at all to do with China.

Well, you stated that Congress won't allow any foreigners to buy American companies and I just proved that that was wrong. There are other companies owned by the Japanese, Radio City Music Hall to be exact. It is only a matter of time when Chinese will learn how to buy out American firms probably by paying off Congress, they;ll do anything for money.

 

[quadraphonics]

Well, you stated that Congress won't allow any foreigners to buy American companies and I just proved that that was wrong.

No, that's not what I said. If you read the post in question, you'll find that I cited an example of a Chinese firm buying an American business. The point was that any acquisitions with national security implications are reviewed by Congress, and they are extremely unlikely to allow China to simply buy their way into control of America (not that they'll ever have the cash to do that). But, hey, arguing against a strawman must be very satisfying, so...

There are other companies owned by the Japanese, Radio City Music Hall to be exact. It is only a matter of time when Chinese will learn how to buy out American firms probably by paying off Congress, they;ll do anything for money.

It's not a matter of bribing Congressmen. There's a very substantial difference in the national security implications of acquisitions by Chinese firms on the one hand, and German or Japanese firms on the other. The difference is that the latter countries are long-standing treaty allies of the US who have hosted tens of thousands of American troops for decades.

Also, if you care to do your research, you'll find that American companies are investing in Chinese ones at a much greater rate than vice-versa. The whole reason China's economy is growing so fast is that they've liberalized their laws to allow foreign companies to come in and open facilities inside China. I read recently that 60% of their exports revenue comes from companies that were created by FDI (which is to say that 60% of the profits are going into the pockets of Americans and Europeans).

 

[cosmictraveler]

No, that's not what I said. If you read the post in question, you'll find that I cited an example of a Chinese firm buying an American business. The point was that any acquisitions with national security implications are reviewed by Congress, and they are extremely unlikely to allow China to simply buy their way into control of America (not that they'll ever have the cash to do that). But, hey, arguing against a strawman must be very satisfying, so... .

My statement was that Mercedes bought, awile back, Chrysler Corp. That was a defence contractor for it made the M1Abrhams tank. So why then did Congress let Mercedes buy Chrysler and their direct ties with the military back in the 1990's or so? I just wanted to point out that companies are bought and sold by foriegners all the time, I just don't keep abreast of who buys what and when. I know that England owns many firms here already.

 

[madanthonywayne]

I keep getting different opinions regarding America and manufacturing jobs.

I admit I feel some of your fear. I live in Indiana, a state with more manufactoring jobs than any other. So every time a factory closes, it pisses me off and makes me worry that the country's going to hell.

But if you look at farming for comparison, you can see that the sky is not necesarily falling.

At the time of the American Revolution, 95% of jobs were in agriculture. Now that figure stands at 2%. Yet we produce more food than ever.

As we become more efficient, we need fewer people working in a given industry. So the fact that the number of manufactoring jobs is shrinking doesn't mean we're making less stuff.

That doesn't mean we have nothing to fear. It's a global economy these days. To keep jobs in the US we need to keep taxes low and cut back on needless regulations (like that SOX monstrosity). I'd suggest cutting corporate taxes to zero. They don't pay them anyway, they just move their headquarters somewhere without taxes. Why not have them all relocate here?

 

[iceaura]

Well, there are hundreds of thousands of degrees in science and engineering awarded in the US every year.

That's odd. There are jobs for about 5 million total, most of these computer specialists of one kind or another. So you're talking about doubling the number of jobs every ten or fifteen years?

My understanding is that most of the downturn in manufacturing jobs was due to improved efficiency rather than offshoring. The jobs that used to be done by New Yorkers are not done by Iowans, Mexicans, Malaysians or Chinese, but rather by robots.

However those jobs are being done, they are not being done in the US - many entire industries have moved offshore. Any improvements in efficiency (edit in: in these industries) happened overseas.

To keep jobs in the US we need to keep taxes low and cut back on needless regulations

Right now the only way we are keeping jobs in the US is by superior infrastructure and amenities - good roads and airports, educated workforce not riddled with disease, well-enforced laws and well-run legal operations, fire departments and hospitals, zoning and environmental regulations that create attractive surroundings, etc. That is paid for by taxes. Cut taxes and these advantages go away. Then the only way we can attract jobs is by cutting wages and salaries, and allowing abuse of reources and environment. Then we live in a shitlhole.

I'd suggest cutting corporate taxes to zero. They don't pay them anyway, they just move their headquarters somewhere without taxes. Why not have them all relocate here?

If they aren't going to pay taxes, why would we want them around? So they can drive up real estate prices for the rest of us?

It is perfectly possible to collect taxes from corporations.

 

[Read-Only]

I admit I feel some of your fear. I live in Indiana, a state with more manufactoring jobs than any other. So every time a factory closes, it pisses me off and makes me worry that the country's going to hell.

But if you look at farming for comparison, you can see that the sky is not necesarily falling.

At the time of the American Revolution, 95% of jobs were in agriculture. Now that figure stands at 2%. Yet we produce more food than ever.

As we become more efficient, we need fewer people working in a given industry. So the fact that the number of manufactoring jobs is shrinking doesn't mean we're making less stuff.

Exactly what I've been saying since my first or second post in this thread - very near the TOP of the thread.

Case in point: a particular single peanut butter factory today employs 35 people who work a 40-hour work-week. They turn out an average of just over a million jars of peanut butter each DAY.

In the past, it took 22 dozen people (that's 264) for just ONE SINGLE STEP in the process - grading out the bad nuts. Total production? Just under 35,000 jars per WEEK. There were also many other employees as well and they worked two shifts per day.

And it's the same story in every type of industry - even more so in some.

 

[one_raven]

The problem with that reasoning is that the factories are closing down, not just laying off the people on the line, letting the robots do the jobs and hiring robot technicians.

 

[madanthonywayne]

The problem with that reasoning is that the factories are closing down, not just laying off the people on the line, letting the robots do the jobs and hiring robot technicians.

Well, they don't need as many factories either. Are you aware that there are more trees in the US now than at it's founding? Why? We don't need as much farmland to produce food, so much former farmland has returned to forest. The same is occuring in manufactoring.

Consider this table of total US manufactoring output:

Or this chart of U.S. manufacturing productivity performance, measured by output per man-hour

http://www.rutledgeblog.com/askrutl/archives/000340.html

 

[iceaura]

Or this chart of U.S. manufacturing productivity performance, measured by output per man-hour

Output of what? Dollar value? That just means the low margin stuff has moved offshore - we make airplanes, fancy weapons on cost-plus contracts, etc.

We don't (in general) make shoes, TVs, tools, plumbing fixtures, toys, appliances, etc. And even the stuff that does carry "made in USA" is like as not to have actually been made in the Marianas Islands or some other free trade zone.

Some of you may recall, not too many years ago, when Wal Mart advertised that it dealt only US made products. If it had held to that policy, its shelves would be pretty barren these days. That manufacturing base is no longer on shore in the US, robots or no robots.

 

[Read-Only]

Output of what? Dollar value? That just means the low margin stuff has moved offshore - we make airplanes, fancy weapons on cost-plus contracts, etc.

We don't (in general) make shoes, TVs, tools, plumbing fixtures, toys, appliances, etc. And even the stuff that does carry "made in USA" is like as not to have actually been made in the Marianas Islands or some other free trade zone.

Some of you may recall, not too many years ago, when Wal Mart advertised that it dealt only US made products. If it had held to that policy, its shelves would be pretty barren these days. That manufacturing base is no longer on shore in the US, robots or no robots.

I understand what you're saying BUT my question is why does it matter to you?

I honestly don't care if it's mostly planes or whatever as opposed TVs or shoes. Why not? Because the report I linked to way back in this thread showed that unemployment has steadly dropped in the period it covered - 1980 to 2007. It's jobs that matter- not so much what KIND of job.

 

[one_raven]

It's jobs that matter- not so much what KIND of job.

I couldn't disagree more.
That's the kind of thinking that makes for an unstable economy.

 

[Read-Only]

I couldn't disagree more.
That's the kind of thinking that makes for an unstable economy.

Not at all. As long as jobs are available, for instance in heath care as opposed to auto plants, the economy will hum along just fine.

I do understand what you're probably thinking, though. What if all our shoes and TVs are made in Asia and some event (like a war) cuts off our supply? The answer is simple - we just start making them again ourselves. It wouldn't be that difficult to start up. And it's not even a matter of a shortage of skilled labor either, since the factories would be mostly automated. Just a short delay is all that would be felt.

 

[one_raven]

Not so much a war, but yes.
More like all the people in India, Malaysia and Ireland saying, "Why the fuck are we bothering with these deal-brokers in the US, when we can just cut out the middle man and do it ourselves?", and they'd be right.
That leaves us with little to offer the world.
Once oil falls out as the major factor of world power (and it will), what do we have to offer to bolster and support our economy?
What do we really export, but money? Nothing that can't be obtained elsewhere, and cheaper.
What does that make us, but redundant?

Just a short delay is all that would be felt.

I guess I am not quite as confident as you are.
It seems a massive shift to take all these people with limited or no skills (waiters, entertainers, brokers) and shift them back to manual labor jobs, skilled technicians and craftsmen.
Seems a major paradigm shift that has taken 40 years to occur "naturally" would be a simple bump in the road.
I think we should plan for such an occurrence and not depend on things staying the way they are forever.

Two things I have never been able to find in government is common sense and future planning.
We need to plan for this inevitable future, and not just react when it gets here.

 

[madanthonywayne]

Not so much a war, but yes.
More like all the people in India, Malaysia and Ireland saying, "Why the fuck are we bothering with these deal-brokers in the US, when we can just cut out the middle man and do it ourselves?", and they'd be right.

Again, I totally agree with the sentiment. This whole "service economy" boils down to "you flip my burger, and I'll flip yours". It's scary.

We need to keep America a friendly place to do business. Low taxes, reasonable regulations.

We need to focus our education system on education rather than social engineering. Who cares about the racial makeup of schools? Stop with the affirmative action, busing, and other bullshit and focus on results. Fire incompetent teachers. Get rid of tenure. Flunk kids who don't learn the material. Send trouble makers to military type schools where they will be under extreem supervision.

Balance the budget. But don't raise taxes. Cut spending. This means no socialized medicine. Stop this bullshit where a decrease in the projected increase is a cut. Freeze all government spending until the budget is balanced and the debt paid off. Outlaw all earmarks. Give the president back the line item veto.

Enforce immigration laws. Build the wall. Fine employers who hire illegals. At the same time, let in people we need! More scientists and well educated people and fewer unskilled laborers who can't even speak English. Why not give preference to immigrants who can speak English? I say there should be no limit on well educated people coming in. Get them in here fast and get them working for us!

I'm getting off topic, perhaps, but the point is that there are a lot of things we could be doing better. I don't think the sky is falling, but things could definitely be improved. And while I'm sure we disagree on a lot of the above, I'll bet we agree on a lot too. So why the hell can't we get it done?

 

[one_raven]

And while I'm sure we disagree on a lot of the above

Of course.

I'll bet we agree on a lot too.

Sure.

So why the hell can't we get it done?

Answer THAT question, and I may just vote for you.

Three places you will never find common sense: Government, Religion and Corporate America.

I think we can't get it done for a lot of reasons.
We can not keep a diligent eye on public servants at the federal level in a country this huge - the focus of practical politics needs to be at the local level.
If the person who you vote and hire to represent you lives, works and cares for the community you live in, he has some accountability to the people he knows, and YOU know what is going on - as opposed to having to hear all the bullshit from talking heads on TV.
The two party systems forces people to vote for people who they disagree with on a lot of different aspects (or they have to convince themselves to pull the party line), leading to...
There are far too many politicians playing games to emotionally manipulate the electorate with so-called "wedge issues" and practical politics consistently gets swept under the rug.

As much money and power as there is in politics these days, getting the politicins to vote for things that will limit that is like trying to get a monarch to adbicate the throne.

The larger the government is, the more powerful it becomes, the less it has to answer to the peope and the less it is a real extension of the public.

Reduce the money in politics.
Force open governance.
Reduce the power of the Federal Government.
Reduce the power of the Executive Branch.
Introduce runoff voting (forcing multi-party cooperation and alliances, while allowing other parties to get their feet in the door).
Get "wedge issues" out of public governance discussion.

How does all this get done short of a revolution?
Answer that, and you will have a real following.

 

[Read-Only]

Not so much a war, but yes.
More like all the people in India, Malaysia and Ireland saying, "Why the fuck are we bothering with these deal-brokers in the US, when we can just cut out the middle man and do it ourselves?", and they'd be right.
That leaves us with little to offer the world.

I don't quite follow on this. They can already use as much of their domestic production as they like. Why pay for all the shipping costs overseas and back, import/export tariffs and whatever? Or or you saying we import from, say, Malaysia and then resell in Ireland perhaps? That could also be circumvented anytime Malaysia wants to build it's own factories alongside those owned by U.S. companies. Nothing but their own disinterest could prevent them from doing that today - in fact, it may have happened already (I don't see why not).:shrug:

Once oil falls out as the major factor of world power (and it will), what do we have to offer to bolster and support our economy?

How do you figure that? Oil is nothing but a drain on our economy - and that's been true for decades.

What do we really export, but money? Nothing that can't be obtained elsewhere, and cheaper.
What does that make us, but redundant?

Now that IS a good question and I don't have a ready answer right at the moment.

I guess I am not quite as confident as you are.
It seems a massive shift to take all these people with limited or no skills (waiters, entertainers, brokers) and shift them back to manual labor jobs, skilled technicians and craftsmen.
Seems a major paradigm shift that has taken 40 years to occur "naturally" would be a simple bump in the road.

Nope, no massive shift needed in the least. Let all those people you named keep on doing what they've been doing. All that's really needed is just a few skilled workers in addition to the ones that are already well trained in installing automated equipment. For sort of a side example, in one show I saw recently, it only took 48 hours of training to teach a woman who had never done it before to become skilled at remotely operating an ore mining machine. Point being that it no longer takes months to learn a skill in today's automated world. It's all been reduced to a few fairly simple things and machines take care of all the rest. Another quick example: circuit boards that used to require a lot of people placing components and making connections are now turned out buy the hundreds per hour with not a single person being directly involved. Machines mask and etch the boards, place the components, and process called something like "float soldering" makes the connections. No manual labor involved at all.

I think we should plan for such an occurrence and not depend on things staying the way they are forever.

Two things I have never been able to find in government is common sense and future planning.
We need to plan for this inevitable future, and not just react when it gets here.

I completely agree with you there. Fortunately, it's not the government that keeps a close eye on things and would see the signs of something coming like we've been discussing. Companies - private industry - does that and competition means they all want to be the first to take advantage of those changes on the horizon. You can bet they won't all be sleeping at the switch if there's even the slightest indication that our supply line of anything is in danger. Closed factories can be brought back to life with only a little delay involved. There are plenty of construction workers available in addition to the ones who install the equipment. Speed HAS become one of our most important resources in this country - and few other countries can even think about trying to catch up with us on that one!

 

[one_raven]

You make some good pints, Read-Only.
Thanks for giving me some food for thought.

I'm still a card-carrying Luddite, however.

 

[Read-Only]

You make some good pints, Read-Only.
Thanks for giving me some food for thought.

I'm still a card-carrying Luddite, however.

I don't hold anyone's prespective against them, Raven. Well... With the exception of the die-hard woo-woos, I guess.

You're very welcome to the points and thoughts. I'm the type of guy that tries to rely on hard facts as much as possible. That's in direct contrast to some around this place that operate on emotions and anti-this and anti-that and spend their time reading nonsense sites rather than looking for solid numbers. Their main problem is that, unlike thee and me, they let someone else do all of the thinking for them. And that's a real shame.

 

[one_raven]

Sadly, that's the majority of all people, not just those here.

 

[Read-Only]

Sadly, that's the majority of all people, not just those here.

How true! And it really IS sad - very sad indeed.