Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

U.S. Manufacturing costs are almost as low as China’s

fortune.com

Post reply on HN
Print view View original

151–160 of 172 posts

Re: U.S. Manufacturing costs are almost as low as China’s

#151

Post by facetube »

jblow wrote: post #69
s73v3r wrote: post #57

Earlier quoted context omitted.

"He could pay them $0/hr by not giving them the jobs." I've always found that to be the absolute shittiest of rebuttals, given by those who have absolutely no point whatsoever. This person is not "giving" anyone a job; they are not being seeing a group of people and saying, "Hmmm, they look like they could use some work. I will create some and give it to them." No. This person needed some work done, and they were off…

If you ever run a company you'll know that job creators exist. I had a bunch of money. I could have kept it locked in a box somewhere. Instead I decided to pay a bunch of people to help make something cool. Yes, that's a transaction, but for my part, I didn't have to engage in it. (In fact some days I kind of regret it, given all the garbage one has to put up with when running a company.) I could have kept the money…

Or, to spin it just as hard the other way: a bunch of people gave up half of their waking hours for years in order to help make your something-cool business successful, and accepted your money in exchange for that assistance. They could have stayed home or done something else.

Re: U.S. Manufacturing costs are almost as low as China’s

#152

Post by icelancer »

mistermann wrote: post #124
SiVal wrote: post #47

Earlier quoted context omitted.

You left out the biggest cost of all: technology theft. The Chinese government wants its manufacturers to watch for technologies that could be of economic or military value and to pass them on to relevant Chinese organizations for use. When the local Party leader's son starts producing your "specialty machine vision systems" in his factory down the road, are you going to go to the Party-controlled court and sue him?…

> You left out the biggest cost of all: technology theft. Or plain old fashioned outright theft. I did business for a few years with a Chinese supplier, the contact was made from a (local Chinese) reliable friend of many years who did international business so had contacts. After two years of a pretty seamless business relationship, one day the supplier decided to simply disappear with the $45k deposit on an order.

We are pretty sure that a previous supplier of ours was running their machines on a competitor's (of mine) dime and billing them for materials/goods and burying it in the sales sheets, while shipping us the product that was near-identical to theirs but with our logos and branding on it.

I understand this is fairly common when making knockoff goods, too.

Re: U.S. Manufacturing costs are almost as low as China’s

#153

Post by patrickk »

ChuckMcM wrote: post #136
sien wrote: post #60

This has been predicted for a while. This has been said as early as 2010 and possibly even before that by about 2015 costs would equalize. In 2013 there was an article in The Economist on this: http://www.economist.com/news/special-report/21569570-growin... Here is a key quote from the article: "BCG used to argue that companies unwilling to send their manufacturing to lower-cost countries were putting their very futu…

I was going to mention this as well, thanks for finding the economist article. Manufacturing costs are more than just the price of parts, sending people to and from the factory several times, communicating requirements, Dealing with tariffs and customs. For smaller runs it is definitely getting competitive in the US, but so far the parts suppliers haven't yet picked up on this. I'm expecting a midwest town or two wit…

Also quality issues. If you want the absolute best industrial part/tool/whatever on the market, often you go to a mid sized German company no one has heard of and get it there.

Strong apprenticeships and unions (meaning very high quality, loyal workers therefore low turnover) and an obsession with quality can all be important advantages in the competition with China:

http://www.economist.com/news/business/21606834-many-countri...

Re: U.S. Manufacturing costs are almost as low as China’s

#154

Post by paulojreis »

bobjordan wrote: post #54

Shenzhen China factory owner here. The costs are definitely rising in China for English speaking technical labor such as the engineers we need. We compete with companies like Apple and all the other foreign companies rushing to China these days to keep them employed. But we are still talking much lower salaries overall, for example, $30,000 USD/year for a degreed Sr. Electrical design engineer with 20 years experienc…

> $30,000 USD/year for a degreed Sr. Electrical design engineer with 20 years experience.

Just to add a little context: in some EU countries (even EU-15, such as Portugal), people with similar qualifications are actually paid less than that.

Re: U.S. Manufacturing costs are almost as low as China’s

#155

Post by ghgr »

paulojreis wrote: post #154
bobjordan wrote: post #54

Shenzhen China factory owner here. The costs are definitely rising in China for English speaking technical labor such as the engineers we need. We compete with companies like Apple and all the other foreign companies rushing to China these days to keep them employed. But we are still talking much lower salaries overall, for example, $30,000 USD/year for a degreed Sr. Electrical design engineer with 20 years experienc…

> $30,000 USD/year for a degreed Sr. Electrical design engineer with 20 years experience. Just to add a little context: in some EU countries (even EU-15, such as Portugal), people with similar qualifications are actually paid less than that.

It's already hard to compare salary/cost-of-life across cities, and definitely impossible between countries like China, US and EU (in the extended meaning of "country").

As a rule of thumb, when comparing a US salary with an European, I divide by 2 the number and I roughly get the equivalent in EUR and after taxes* (and considering cultural differences like the healthcare is already included in taxes, etc.) So 30,000 USD/year would be something like 15000 EUR/year, which is extremely low even for a engineering graduate working in academia.

* With "after taxes" I mean the part of the salary that you don't even receive, not the income tax that you pay (or receive back) once a year.

Re: U.S. Manufacturing costs are almost as low as China’s

#156

Post by jacquesm »

marincounty wrote: post #126
maneesh wrote: post #117

Earlier quoted context omitted.

Here's a tour of a few factories in Shenzhen that I made when I began doing my factory search for my company, http://pavlok.com http://www.youtube.com/watch?v=S0_blmix2IU

Really impressed with that factory! I am a part-time Horologist, and the gears in a mechanical watch always amazed me. I wondered how they were made in large quantities. I now know. For years, I wanted to do business(small quantities at first) in China, but always chicken out when I start to think about the risk of fraud. Do you know of any service that vets these factories, and is not subject to payoffs? I guess you…

An important anti-fraud measure is escrow, another is QA on the sending site before your stuff goes into the container.

Re: U.S. Manufacturing costs are almost as low as China’s

#157

Post by jacquesm »

chrischen wrote: post #11
chinathrow wrote: post #6

Earlier quoted context omitted.

And you feel pride? Seriously, 3$/h? Assumming that a large junk goes to the shop owner, that's not a lot to make each month.

What are you exactly suggesting everyone do? He could pay them $0/hr by not giving them the jobs. You're not offering any constructive feedback while criticizing from your pedestal of inaction. I assume you used a throwaway because you didn't want to attribute that to your personal identity. Billions of Chinese were lifted from poverty by American globalization, granted at the detriment of American jobs. However it f…

> Billions of Chinese were lifted from poverty by American globalization

No, they were lifted from poverty by their own hard work.

Re: U.S. Manufacturing costs are almost as low as China’s

#158

Post by rm_-rf_slash »

shoo wrote: post #132
unquietcode wrote: post #51

There are health and environmental costs to fracking which are not being adequately addressed, and which are unsurprisingly ignored by this article. China was able to get a leg up through dirty coal and oil operations, but there are consequences to this. Some of their cities are today near uninhabitable, some are just unbearably smoggy. We definitely do not want to pat ourselves on the back for an economic boom that…

> China was able to get a leg up through dirty coal and oil operations, but there are consequences to this. Some of their cities are today near uninhabitable, some are just unbearably smoggy. There is some interesting reading regarding China's "green GDP" accounting project. Here is one recent account: http://www.businessspectator.com.au/article/2015/4/9/china/c... Here is my brief summary: 1. pick a relatively simpl…

You forgot the part where layers upon layers of Chinese managers and bureaucrats cook their books to a crisp to keep their careers in motion.

Re: U.S. Manufacturing costs are almost as low as China’s

#159

Post by curious222 »

ghgr wrote: post #155
paulojreis wrote: post #154

Earlier quoted context omitted.

> $30,000 USD/year for a degreed Sr. Electrical design engineer with 20 years experience. Just to add a little context: in some EU countries (even EU-15, such as Portugal), people with similar qualifications are actually paid less than that.

It's already hard to compare salary/cost-of-life across cities, and definitely impossible between countries like China, US and EU (in the extended meaning of "country"). As a rule of thumb, when comparing a US salary with an European, I divide by 2 the number and I roughly get the equivalent in EUR and after taxes* (and considering cultural differences like the healthcare is already included in taxes, etc.) So 30,000…

in Poland, 30k USD would be considered extremely good salary for engineer (35k for software devs). With 30k USD gross income, you receive 22k net compensation (health care, retirement plan, included in tax ).

Re: U.S. Manufacturing costs are almost as low as China’s

#160

Post by markvdb »

kristofferR wrote: post #36
pjc50 wrote: post #33

Earlier quoted context omitted.

Export post from China is heavily subsidised.

Mostly by the postal services in the recipient country actually: "If you buy the cheap goods from abroad today, you can often get them shipped "free" around half the planet and to your home. It may be cheaper to order a remote control with batteries from China and throw the remote away, rather than going to the store and buying a pack of batteries. That this may be a problem for local businesses is obvious, but the r…

Thank you so much for this excellent description!
Post reply on HN