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America underestimates the difficulty of bringing manufacturing back

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Re: America underestimates the difficulty of bringing manufacturing back

#151

Post by Ajedi32 »

firejake308 wrote: post #41
jonathanstrange wrote: post #6

It's easy to bring manufacturing back, just give it a decade or two, but impossible to make it internationally competitive without large-scale market regulation such as tariffs or handing out government subsidies.

My problem with large-scale market regulation is that it also increases the price of inputs for companies who would otherwise be interested in building a factory in the US. Do you have a solution for that?

Inputs are cheaper (and thus have lower tariffs in an absolute sense) than outputs. I think the author underestimates the ability of the market to adapt to incentives.

They're still correct though that there are plenty of good reasons why we don't do manufacturing in the US right now, and tariffs do absolutely nothing to change that reality, they just artificially make the alternative worse at significant expense to consumers.

Re: America underestimates the difficulty of bringing manufacturing back

#152

Post by franktankbank »

digianarchist wrote: post #49
PaulKeeble wrote: post #9

Its the integration and overall combined effect of the entire industrial pipeline that makes China so incredible. It processes all the raw materials and the recycling/reuse of off cuts through every possible way to turn those raw materials into components and then into goods with very little need for import from other countries. Its the complete system for a huge variety of goods. To compete with that the entire pipe…

Absolutely. Canada for example should not be shipping lumber and oil to the United States for further refinement. It should be processed domestically.

Canada and the US are long time allies and should be able to benefit from eachother without much hesitation. China is an adversary, big difference in posture.

Re: America underestimates the difficulty of bringing manufacturing back

#153

Post by krapp »

franktankbank wrote: post #152
digianarchist wrote: post #49

Earlier quoted context omitted.

Absolutely. Canada for example should not be shipping lumber and oil to the United States for further refinement. It should be processed domestically.

Canada and the US are long time allies and should be able to benefit from eachother without much hesitation. China is an adversary, big difference in posture.

Canada and the US are no longer allies.

Re: America underestimates the difficulty of bringing manufacturing back

#154

Post by kjkjadksj »

rkozik1989 wrote: post #63
vishnugupta wrote: post #19

No kidding! Beyond the obvious skilled labor there’s supply chain network, maintenance, townships and supporting system around them. And all of this needs human labor which is taken from somewhere else. How do you incentivize them? Just throwing money at the problem won’t solve it either. Because more often than not it’ll attract charlatans who will promise the sky, take the money and move away.

Americans have a very 1980s idea of manufacturing (and China in general) in that there aren't actually that many humans being used in Chinese factories let alone the American ones some of them want to build here. There's even a concept of, "Dark Factories" in China which are 100% automated factories that operate in the dark. The only jobs that will come from bringing manufacturing back to the states will be in automa…

Given the all the minimum wage staffing at most distribution centers these days despite all this off the shelf robotics technology seemingly available on order and already proven, makes me thing the american worker is cheaper than we might suspect compared to building out these dark amazon warehouses.

Re: America underestimates the difficulty of bringing manufacturing back

#155

Post by pjc50 »

ChrisMarshallNY wrote: post #60
nine_zeros wrote: post #50

Earlier quoted context omitted.

> I'm surprised that the administration didn't understand this. Curious why you are surprised at incompetence being unable to understand complexity.

Fair point. :/ My friend is watching his business get ready to die. His wife is still the CEO, and she's losing her shit. They're not alone. There's thousands and thousands of similar operations, all over the US, that will have to shut down, if something doesn't give. I guess the mega-rich oligarchs think this is great, but they don't employ the majority of Americans.

> They're not alone. There's thousands and thousands of similar operations, all over the US, that will have to shut down, if something doesn't give.

I wonder where they were on election day, when they had a choice. The record of business owners voting D is .. not great.

Re: America underestimates the difficulty of bringing manufacturing back

#156

Post by elbasti »

Like OP, I work in manufacturing (after 15 years in startup land). I'm not as experienced as him, but I work in manufacturing that makes similar products on both sides of the US/Mexico border.

Let me add some thoughts:

1) Capacity, not cost, is the main driver for nearshoring. All things being equal, a manufacturer would rather produce a product in the US than overseas. The cost of modern products is mostly parts & material, not labor. When you add logistcs expenses, the theoretical cost advantage of overseas vs local is not that great. Remember:the people on the other side of the border are capitalists too! They want to keep most of the surplus of nearshoring to themselves! The problem is that there simply is no capacity, both in facilities and especially in people.

2) What matters even more than capacity is the first derivative of capacity. In other words: how quickly can I spin up a new factory if I win a big deal? How quickly can I spin one down if the client goes away? How long will it take me to get a permit to connect my new factory to the highway? In the US, these costs and timelines are massive. Real estate, permitting, hiring. There is an order of magnitude difference here, in cost and time.

3) The labor problems are real. I don't want to disparage the american workers I work with, because they are amazing. Truly fantastic craftsmen. But they are hard to find. You'd be surprised how many people show up who can't read or can't read a tape measure. How hard it is to find people that want to work 8 hours a day, 5 days a week. By contrast, in our overseas facility we have qualified workers literally showing up at our gate every day asking for work.

In other words, the root cause problems with american manufacturing are—-surprise surprise!--the same problems as with other parts of the US that are in decay:

- Disfunctional local government, especially around permitting, construction, housing and transit

- Disfunctional education & healthcare systems.

- A lack of strategic investment in infrastructure (rail, highways)

- A social safety net that is totally out of whack, with a high cost burden for employers & employees, with little to no immediate quality-of-life benefits for the working population

Tariffs solve exactly zero of those probems!

Re: America underestimates the difficulty of bringing manufacturing back

#157

Post by system7rocks »

This is an interesting read though I’m not an economist but even pick up that the author is wrong about some of these points. Still, I don’t think the author is an economist either. And a little harsh on US workers - but I know there are people really struggling in the US who need work and bring their problems with them.

What a mess this country is in.

Re: America underestimates the difficulty of bringing manufacturing back

#158

Post by Bouncingsoul1 »

Teever wrote: post #147
tokioyoyo wrote: post #84

Earlier quoted context omitted.

Once again, want to point out how this is simply American leadership not wanting to accept their loss and move on. For the first time in the history they're not being perceived as the "global leader", and that's not acceptable from their POV. Now it's just freaking out and hoping that some extreme policy changes will change the course. From my personal experience, most people act this way when they're in distress and…

This isn't just ego. This is an impending existential issue. America needs to increase manufacturing capacity if it wants to maintain hegemony and possibly world peace. China will soon have the ability to take Taiwan and Korea and Japan. If that happens it's game over for any American interests and perhaps democracy as a whole. Wargames[0] paint a grim picture of an upcoming conflict between China and America over Ta…

Hello slippery slope how are you doing?

Re: America underestimates the difficulty of bringing manufacturing back

#159

Post by pjc50 »

margorczynski wrote: post #133

Still, this kind of outsourcing of manufacturing (or even more food production) puts the US in an incredibly uncomfortable position, especially that China is its main geopolitical enemy. What if a war erupts? Suddenly the US cannot produce a lot of essential stuff - I think Covid was a good example of that happening. Of course the question is can this be done and what will be the price if so.

Last time I looked the US was a net exporter of agricultural products to China. Well, until the retaliatory tariffs hit.

Re: America underestimates the difficulty of bringing manufacturing back

#160

Post by mlsu »

csense wrote: post #46

There are plenty of people saying these tariffs will not work. But a person used to be able to graduate high school and get a job that could support a house with a yard, a car, a non-working spouse and children. How we get that level of prosperity back? That's the people really want. Tariffs are simply a means to that end. I wish people would stop writing articles about 100% criticizing tariffs and instead write arti…

Why will a factory job will pay enough for one person to raise a family and buy a house on a single income?

Like what is unique about factory work that allows for this? I’ve heard stuff like this so much and I just do not believe it. Is anyone working in a factory in the USA today able to buy a home and have a stay at home spouse on a single income?

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