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Lego breaks ground on first US manufacturing facility

manufacturingdive.com

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Re: Lego breaks ground on first US manufacturing facility

#61

Post by diskzero »

minton wrote: post #5

I’m so confused by Lego’s market share. They sell cheap plastic at insane premiums. Why is there not more competition?

I am an adult who has built several Lego kits recently. These include the NASA Saturn rocket, the NASA LEM, a grand piano and a Fender guitar amp combo.

The plastic parts are more than just generic shapes; many of them are custom and designed for the specific kit. The plastic itself has a good feel and is durable.

The kits are unique and must have required numerous hours of research and development, prototyping and user testing.

The documentation is extensive, high-quality and complete. In addition to the instructions, there is nicely researched and presented material about the subject of the model.

If anyone is reasonably able to come up with a process to compete with the sum total of all of these elements, I wish them luck. I would also like to invest!

Re: Lego breaks ground on first US manufacturing facility

#62

Post by dukeyukey »

obblekk wrote: post #6

Interesting learnings for me from this article: - Lego operates multiple $1B+ factories around the world - they are not just a design and marketing company - 1400 manufacturing jobs in Virginia expected - not just an automated thing. Anyone know what changed economically to justify the high US labor costs? Particularly compared to MX - 100% Carbon neutral via on-site Solar in Virginia (not particularly sunny). No off…

> Anyone know what changed economically to justify the high US labor costs? Particularly compared to MX

My understanding is the US:

1. Is more politically, economically, and frankly physically secure than Mexico.

2. Has cheaper energy

3. Has a better-trained manufacturing workforce for the kinds of machine Lego is gonna use.

Re: Lego breaks ground on first US manufacturing facility

#63

Post by iso1631 »

mlyle wrote: post #49
iso1631 wrote: post #40

Earlier quoted context omitted.

> 100% Carbon neutral via on-site Solar in Virginia (not particularly sunny). No offsets shenanigans. Oil prices might be too high today if this is about to happen to most new factories in the world. No mention of exporting kWh during the summer days and importing during winter nights? Still good as every kWh of solar is a kWh of gas not burnt.

> No mention of exporting kWh during the summer days and importing during winter nights? Almost certainly a great deal of this. But > > No offsets shenanigans. Means they're not entering some shady arrangement with someone else that is doing green things and doing accounting magic to claim it's about the same. It's much harder to play games when you're talking about netting zero on-site. > Still good as every kWh of…

Is California not able to export electricity?

The lowest I see in thee last week was 3.1GW of natural gas for CISO. Similar amount to the lowest gas usage last June and July (2.7GW I think on June 19)

https://www.eia.gov/electricity/gridmonitor/dashboard/electr...

Re: Lego breaks ground on first US manufacturing facility

#64

Post by foobarian »

obblekk wrote: post #6

Interesting learnings for me from this article: - Lego operates multiple $1B+ factories around the world - they are not just a design and marketing company - 1400 manufacturing jobs in Virginia expected - not just an automated thing. Anyone know what changed economically to justify the high US labor costs? Particularly compared to MX - 100% Carbon neutral via on-site Solar in Virginia (not particularly sunny). No off…

How do you mean not particularly sunny? Even Boston is at a similar or lower latitude than Southern Europe, can imagine Virginia being even better for solar.

Re: Lego breaks ground on first US manufacturing facility

#65

Post by sidewndr46 »

magnuspaaske wrote: post #28
casion wrote: post #13

Earlier quoted context omitted.

Because they are the best quality, in every dimension, and when something is almost purely a hobby then many people are willing to pay a premium for a friction-free experience. There are other brands that are just fine, but you will occasionally get missing pieces, poor fitment, poor/strange construction etc... With LEGO you'll not get any of those (except the occasional strange construction). I used to buy ~50/50 LE…

Also, the "cheap plastic" thing is clearly said by someone who don't know plastic. NASA included a bunch of pieces on one of their Mars crafts to check the cameras since they knew the parameters of the LEGO pieces losing their color better than the cameras. LEGOs are durable. Also, even if the unit cost of injection molding plastic might not be super high, the cost of making the molds is. I've heard discarded molds a…

all you'd have to do to a mold is overheat and deform it or crack it. Way easier and super easy to verify it. Suggesting someone dispose of it in concrete sounds like something the mafia would do.

Re: Lego breaks ground on first US manufacturing facility

#66

Post by lotsofpulp »

brookst wrote: post #45
cedilla wrote: post #44

Earlier quoted context omitted.

This isn't even the mistake. Price has very little relation to costs - except that most products can't be sold below cost, at least not for long. The price of the iphone is a good example. All the costs that you name exist, but they are completely irrelevant. Apple sells the iPhone for a thousand dollars because enough people still buy them at that price.

Yes. Commodities are priced at cost plus. Differentiated goods are priced based on value delivered.

>Differentiated goods are priced based on value delivered.

I prefer “perceived utility” rather than “value delivered”.

Re: Lego breaks ground on first US manufacturing facility

#67

Post by Sivart13 »

outlace wrote: post #8
minton wrote: post #5

I’m so confused by Lego’s market share. They sell cheap plastic at insane premiums. Why is there not more competition?

As someone with young kids who recently bought a $70 Lego set, it’s not just the plastic blocks, it’s a whole design. My daughter built this awesome Lego tree house with over a thousand pieces. She followed the instructions and built it step by step over a few days, which was fun for her in and of itself, and now that it is complete she continues to play with it. So sure the plastic pieces are easily reproduced but c…

yeah 41703 and a lot of the rest of the Friends line is awesome

Consider Andrea's Theater School as well (https://www.lego.com/en-us/product/andrea-s-theatre-school-4...) though it's a little pricier ($100)

Re: Lego breaks ground on first US manufacturing facility

#68

Post by shadowgovt »

iso1631 wrote: post #63
mlyle wrote: post #49

Earlier quoted context omitted.

> No mention of exporting kWh during the summer days and importing during winter nights? Almost certainly a great deal of this. But > > No offsets shenanigans. Means they're not entering some shady arrangement with someone else that is doing green things and doing accounting magic to claim it's about the same. It's much harder to play games when you're talking about netting zero on-site. > Still good as every kWh of…

Is California not able to export electricity? The lowest I see in thee last week was 3.1GW of natural gas for CISO. Similar amount to the lowest gas usage last June and July (2.7GW I think on June 19) https://www.eia.gov/electricity/gridmonitor/dashboard/electr...

IIUC it's complicated.

Because the grid is, fundamentally, still storage-starved (though that's been improving in recent years), even with export the CA energy companies run into grid over-saturation problems on clear, sunny days. Eventually losses catch up with you pushing the power geographically far enough; they couldn't, for example, power the entire United States off of enough California solar.

So I naively suspect the issue is either exporting just saturates the adjacent grids too or other power companies are loathe to crash their prices by letting their grids saturate and therefore use whatever restrictions are allowed against exporting to keep CA's surplus off their grids.

Re: Lego breaks ground on first US manufacturing facility

#69

Post by GalenErso »

dukeyukey wrote: post #62
obblekk wrote: post #6

Interesting learnings for me from this article: - Lego operates multiple $1B+ factories around the world - they are not just a design and marketing company - 1400 manufacturing jobs in Virginia expected - not just an automated thing. Anyone know what changed economically to justify the high US labor costs? Particularly compared to MX - 100% Carbon neutral via on-site Solar in Virginia (not particularly sunny). No off…

> Anyone know what changed economically to justify the high US labor costs? Particularly compared to MX My understanding is the US: 1. Is more politically, economically, and frankly physically secure than Mexico. 2. Has cheaper energy 3. Has a better-trained manufacturing workforce for the kinds of machine Lego is gonna use.

Maybe they just received some good old-fashioned tax incentives? It's not always about geopolitics.

Re: Lego breaks ground on first US manufacturing facility

#70

Post by GenerWork »

swarnie wrote: post #58
GenerWork wrote: post #52

This makes it sound like there's quite the demand for Lego sets/bricks. Has their market (people who want to play with Legos) grown a lot? I stopped playing with Legos about 2 decades ago, so I haven't really kept up with any potential growth that they've experienced/predicted to experience.

My understanding is the company was pretty dead a decade or so ago, since then its had a massive revival after moving away from the family-run-inheritance model. Three (anecdotal) things i've seen with Lego: > Its a toy that old and young can play with together which is semi-intelligent/challenging. Parents and Grandparents seem to be the driver of sales for the physical product rather than the kids. > They have bran…

Thanks for the answer. I had no idea that Lego had brand deals with other IPs like Marvel, which would definitely explain the drastic ramp up in sales.
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