> A strong dollar made imports even cheaper by comparison
I think that summarizes the article. It has been cheaper to import, so we do. The strong dollar policy supports some industries at the expense of others.
What happened to the US machine tool industry?
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Re: What happened to the US machine tool industry?
#22> A strong dollar made imports even cheaper by comparison I think that summarizes the article. It has been cheaper to import, so we do. The strong dollar policy supports some industries at the expense of others.
I'd say MBAs driving for quarterly numbers were unable to manage the business cycle is a better summary.
Re: What happened to the US machine tool industry?
#23Re: What happened to the US machine tool industry?
#24> A strong dollar made imports even cheaper by comparison I think that summarizes the article. It has been cheaper to import, so we do. The strong dollar policy supports some industries at the expense of others.
This is the answer to all American manufacturing woes. The dollar as a reserve currency gives the US a ton of global leverage but requires a trade deficit thus it comes at the expense of domestic industries.
Re: What happened to the US machine tool industry?
#25> A strong dollar made imports even cheaper by comparison I think that summarizes the article. It has been cheaper to import, so we do. The strong dollar policy supports some industries at the expense of others.
I'd say MBAs driving for quarterly numbers were unable to manage the business cycle is a better summary.
That’s just corporate political shade throwing. Fiscal policy has, for a few generations now, incentivized trade deficits for foreign policy reasons. Overtime this results in offshoring of all industry.
Re: What happened to the US machine tool industry?
#261. lack of stable production lines due to real-estate securitization and zoning. i.e. it is a huge liability to install something expensive likely to break if moved, and burning capital in a sucker lease.
2. lack of cheap 3-phase power in said zoning, and aging power infrastructure. EVs will likely make the problem worse.
3. lack of skilled labor due to career churn from outsourcing. i.e. it became a demand-deficient labor-force now reassigned to other careers.
4. Manufacturing domestically is strictly a niche industry, as consumers are cost sensitive, and value blind
If you go to foundry districts in India, one will see many US machines that were sold for scrap still powering emerging economies. The mechanical equity of 60 year old machines are still supporting entire communities.
Re: What happened to the US machine tool industry?
#27If you're into machining, the American Precision Museum[0] in Windsor, VT is highly worth a visit. I had the good fortune to tour the Starrett factory some years back. They were still running pre-NC screw machines to make parts. It really is true that old machines, well cared for, will last just about forever. Apparently it's something of an axiom in the machining industry that tools that are no longer economically v…
If you go in late August and have a strong affinity for amateur astronomy, you can have one heck of a weekend by visiting Stellafane 10 miles south of there in Springfield VT. Probably an abuse of a comment but it's so rare to find two things to do so close together in that area.
Re: What happened to the US machine tool industry?
#28[flagged]
Book recommendation: "Trade Wars are Class Wars" by Michael Pettis. If you don't buy the apologetics that permeate the popular economics sphere but still want an expert to walk you through the details, this is your book.
+1 for anything written by Pettis. Very clear communicator, and his Chinese Financial Markets blog[1] (now hosted at the Carnegie Endowment for Peace) is required reading on the Chinese economy.
Re: What happened to the US machine tool industry?
#29Earlier quoted context omitted.
It's a 100% increase (i.e. double) relative to what the ordinary demand for lathes would have been.
The universe isn’t quite that binary. Suppose those lathes ware out 0.1% faster than expected lasting ~3 days less than 10 years, now eventually you replace 2 of them in the same year thus doubling demand in that year… Except the manufacture wouldn’t notice a spike from occasionally sending out a few days earlier even if it’s crossing a calendar year.
a lathe doesn't wear out that way. It just slowly gets harder and harder to maintain tolerance. Eventually a new machine will be enough better as to make an experienced machinist take less time - they always have to stop and measure as no lathe can give you absolute accuracy, but when the lathe is new it is more predictable how much turning a handle will change things and so you measure before the last operation and adjust it to the right setting vs you measure get closer and measure again.
Re: What happened to the US machine tool industry?
#30So it is the story of losing because of market competition? Doesn’t feel that surprising of an outcome
Not really. The story is management wasn't able to handle a downturn and so failed to come out of a recession.