> Constant pressure to hit quarterly performance targets meant that machine quality often suffered. In some cases, machines would be shipped out the door unfinished so the delivery could be booked, and assembly would be completed by service technicians at the customer’s location. In his history of the American machine tool industry, Albert Albrecht states that “the actions of these larger corporations and conglomerat…
> Constant pressure to hit quarterly performance targets meant that machine quality often suffered. It’s not necessarily the case that greedy, ignorant MBAs came in and ruined everything. Like, if their practices were so inferior, then any domestic firm that didn’t get taken over by them should’ve had a leg up and could’ve dominated the domestic market. Don’t you think the more likely source of “pressure” was the int…
In this instance, it was people like Icahn.
Machine tools were a very cyclical market. Consequently, they did well as part of a vertically integrated conglomerate where the profits could be booked over time and the R&D could be shared with the manufacturing parent. When forced to spin out and stand alone by corporate raiders, those companies were effectively doomed as you just ripped out their ability to do R&D.
In addition, people forget that the Japanese companies were very much not playing fair. MITI (Ministry of International Trade and Industry) and the keiretsu/zaibatsu companies were actively attacking the US companies--this was effectively governmental and monopoly collusion. This attack was to the point that they almost wiped out the semiconductor industry (which prompted the DARPA VHSIC project and later Sematech in response) for example. They did similar actions in the manufacturing industries but the government never responded with the same vigor.
> Was the policy to outsource everything, or liberalize markets and let firms and consumers more freely choose where to buy things from?
The policy was to fund the hell out of West Coast (high tech and mostly no unions) and to leave the Rust Belt (manufacturing and lots of unions) to rot.
I will be one of the first to line up to piss on Reagan's grave for the complete shit that he was. However, to be fair, NOBODY had any answer to the fact that manufacturing automated and could get by on two orders of magnitude fewer employees. Every country dependent upon manufacturing went through a horrible time (see: England and Thatcher for similar vitriol). In fact, nobody still has any answer 4 decades+ later. It's one of the reasons there are so many old, very angry MAGAs.
> Globalization has done quite a lot to lift people out of poverty and keep prices low.
At what local cost? Nobody in Cleveland gives a shit about whether someone in Africa is doing better when they can't make their house payment.