Ford’s most advanced manufacturing plant is located in Brazil. Why didn’t they make this capital investment in the USA? Larry get real here. It’s called “outsourcing” to maximize shareholders profits in a global competitive market. These manufacturing jobs will not return to this country regardless of what the politicians may claim.
As I think about the concept of “outsourcing,” I need to point out that this concept predates the current US industry dilemma.
Sadly after World War II we were the only manufacturing game in town. The U.K. was destroyed as were the factories in the industrial countries of Germany, Japan and Italy to name but a few.
We helped rebuild their manufacturing plants while we neglected our own. One industry colleague of mine was Philip Crosby who coined the expression “Zero Defects.” Two of his peers, Ed Demming and Joe Juran, found the Japanese manufacturers receptive to their quality control improvement processes while the “big three” in Detroit felt no need to focus on improving quality. Note: I guess in this example we outsourced brainpower. With the early oil embargo’s the Datsun, Honda, Mazda, Mitsubishi and Toyota plants cranked out smaller, reliable and more affordable cars while we were building muscle cars with over 300 HP. I know, I once owned one. We did not care about mileage when paying 25 cents per gallon for 100 octane fuel. So in effect, consumers created outsourcing in the postwar years by demanding better quality and lower cost vehicles. Look what has become of our domestic auto industry while Toyota is now the number one auto manufacturer in the world today.
When the US finally woke up to competition we were faced with increased labor costs thanks to strong collective bargaining agreements with unions that drive up the cost of every vehicle. One solution is to go off-shore which is what has happened not just in the automotive industry. We passed huge auto manufacturing plants in China last year where VW, GM and Daimler-Chrysler have invested billions into joint venture plants that are working around the clock turning out record number of cars for both domestic use and export. We were told that by 2010 China will surpass Japan in number of cars produced.
However, to show what can be accomplished when you invest in robotic manufacturing the recovery of said costs should happen rather quickly, watch the video as linked below. While I see “investment tax credits” available for solar energy do other domestic industries enjoy similar opportunities? If not, why not? This short video is worth a few minutes of your time.
http://info.detnews.com/video/index.cfm?id=1189
Detroit is a virtual ghost town now because of this. A lot of the work actually staying in the U.S. seems to be heading south to states that have otherwise slow economies – states like Tennessee and the Carolinas.
Unfortunately, it’s the foreign car companies (again) that seemed to have figured out they could save money this way.
SMS
Sarah.
My Toyota Avalon was produced in Tenn.from Japanese manufactured or supplied parts. That is not to say the material source location was in Japan.
Oh goodie, I love global comparisons… let’s not forget the cost of providing health insurance that American companies have and in any competitive endeavor in the global economy they are at a disadvantage which is why in our discount Walmarts and Pic n Save Stores we wont find American made products, even if we invented the product. Heck its getting hard to find American made products anywhere. Perhaps its not “you are what you eat” but rather “you reap what you sow,” uh-oh.
anon 10:47 pm
So you introduce a four letter “f” word in this post.
“Free” trade v. “fair” trade!
There is a huge difference between the two and its more than a few vowels.
Lack of competition, all the mergers are creating a one business world.
Cook.
We could probably sit down and write a book together about all of the acquisitions and/or mergers that we have seen. And it doesn’t matter which name we use, at the end of the road we end up with fewer choices and higher costs.
Where to begin. The airline industry has seen mergers on both sides of the Atlantic. Air Franc/KLM, Lufthansa/Swiss Air to Delta/Northwest and another major US carrier who will shortly follow.
Let’s skip to department stores that have taken a hit be it stores like Montgomery Ward, Broadway and Federated/May to Gemco which preceeded Costco. I can’t say how the marriage between Kmart and Sears has turned out in that they retained their own identity.
Let’s not overlook the Internet where we read of the current activity involving Microsoft and Yahoo. What ajbout our cell phone service provider mergers such as Cingular/AT & T Wireless or Sprint/Nextel.
And lastly let me site the banking industry. During the 20 plus years of our CA corportation our bank was acquired around six times with our accounts being transferred to the victor.
Some major names in this industry are Wells Fargo/Crocker, B of A/First Interstate, B of A/Security Pacific, Washington Mutual/Great Western and most recently Wachovia’s acquisition of World Savings.
I am sure that you recognize many of these names.
With regard to the air carriers it makes it more difficult for any new player to enter the game as they will not ahve anywhere close to the number of gates and cities to get a foothold.
Bottom line. consumers are the losers in mergers where our selection becomes limited.