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Advanced Magnet Manufacturing Begins in the United States

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Re: Advanced Magnet Manufacturing Begins in the United States

#51

Post by lotsofpulp »

BLKNSLVR wrote: post #43
droopyEyelids wrote: post #39

Earlier quoted context omitted.

Its easy to throw around words like “stupid” on the internet, especially with hindsight, but how could it have been anything but a complex decision estimating values for many variables? Would they have been able to hit a competitive price while maintaining environmental regs and paying a domestic workforce, would china end up the only other supplier in the world? Can government subsidies be counted on to last multipl…

Strong disagree, this was obvious if not from the very start, then as soon as the first company that relocated manufacturing started making ridiculous profits. Keeping the retail prices the same whilst more-than-decimating the manufacturing cost? How could it not be obvious that anyone and everyone would follow once there was a proof of concept. When capitalism is measured on incredibly short term performance, with n…

> I've long been confused* to why there was no legislation to prevent "local" companies from giving away the keys to their kingdoms to foreign countries.

>*Not really, politicians are just as short-term motivated as business owners.

Voters also like lower prices today in exchange for higher volatility tomorrow. No one was forced to shop at national businesses rather than local businesses, but people like the lower prices of larger businesses.

Re: Advanced Magnet Manufacturing Begins in the United States

#52

Post by lotsofpulp »

yardie wrote: post #46
gkanai wrote: post #33

Time and time again we see the US moving production of some key product or material overseas only to regret that decision a number of years later. It happens over and over again. Market forces are great, but should be ignored in key sectors that are important for national security. That goes for rare earth minerals or shipbuilding or key supplies for munitions or PPE that we needed during the pandemic, (etc.)

The free market will always chose to go to the places for the cheapest material and labor. There is no strategy to it. But, there are some industries the US have placed strategic value on and will subsidize no matter the cost. - USPS - literally written into the Constitution - Passenger rail - Amtrak keeps pudding along even though financially it doesn’t make sense. - Merchant marines - cargo is cheap. And cheaper in…

I wonder if the US does or would subsidize USPS. USPS is required to earn enough money to pay for itself, which it mostly does by delivering advertising to people’s mailboxes.

Re: Advanced Magnet Manufacturing Begins in the United States

#53

Post by bombcar »

roenxi wrote: post #40
Animats wrote: post #21

MP Minerals got their magnet plant going. Good. MP Minerals operates the Mountain Pass, CA rare earths mine. This was the largest rare earths mine in the world at one time. After several shutdowns and two bankruptcies due to low rare earth prices, MP Minerals bought the mine in 2017 and had it producing ore in 2020. The mine already had a "beneficiation" plant, where raw ore goes in and a mix of rare earth elements,…

> After several shutdowns and two bankruptcies due to low rare earth prices... It's important to contextualise this, it is probably the most important part of the entire story. Rare earths aren't all that rare, they generally have a crustal abundance comparable to copper. The question of where rare earth mining & processing happens is mainly one of price. Or, accounting for second order effects, a question of environ…

And bankruptcies due to price are a common occurrence in the mining industry.

I’ve done consulting work at a giant open pit copper mine the size of which cannot be described, sitting idle waiting for the price of cooper to climb above a benchmark.

Re: Advanced Magnet Manufacturing Begins in the United States

#54

Post by fooqux »

lotsofpulp wrote: post #51
BLKNSLVR wrote: post #43

Earlier quoted context omitted.

Strong disagree, this was obvious if not from the very start, then as soon as the first company that relocated manufacturing started making ridiculous profits. Keeping the retail prices the same whilst more-than-decimating the manufacturing cost? How could it not be obvious that anyone and everyone would follow once there was a proof of concept. When capitalism is measured on incredibly short term performance, with n…

> I've long been confused* to why there was no legislation to prevent "local" companies from giving away the keys to their kingdoms to foreign countries. >*Not really, politicians are just as short-term motivated as business owners. Voters also like lower prices today in exchange for higher volatility tomorrow. No one was forced to shop at national businesses rather than local businesses, but people like the lower pr…

I was taught during grade school that capitalism drives lower prices, and since capitalism is good, it's alluded that paying less money for a product of similar value is almost a moral obligation. That company selling the "same thing" for more is obviously fleecing people and should go bankrupt.

That model may have worked hundreds of years ago when comparing horseshoes made by local blacksmiths, and possibly still held up when comparing mousetraps made in the same state / country. But it has issues when applied globally, and we have not adopted fast enough.

Re: Advanced Magnet Manufacturing Begins in the United States

#55

Post by michaelt »

BLKNSLVR wrote: post #43
droopyEyelids wrote: post #39

Earlier quoted context omitted.

Its easy to throw around words like “stupid” on the internet, especially with hindsight, but how could it have been anything but a complex decision estimating values for many variables? Would they have been able to hit a competitive price while maintaining environmental regs and paying a domestic workforce, would china end up the only other supplier in the world? Can government subsidies be counted on to last multipl…

Strong disagree, this was obvious if not from the very start, then as soon as the first company that relocated manufacturing started making ridiculous profits. Keeping the retail prices the same whilst more-than-decimating the manufacturing cost? How could it not be obvious that anyone and everyone would follow once there was a proof of concept. When capitalism is measured on incredibly short term performance, with n…

> I've long been confused to why there was no legislation to prevent "local" companies from giving away the keys to their kingdoms to foreign countries.

For a long time this seemed like an exceptionally good deal for the US.

Other countries dig up their rare natural resources, send them to us, and in exchange we send them intangible products like Microsoft Office licenses? That's a great deal. You're literally getting something for nothing.

Other countries' workers make refrigerators for us, sell them to us really cheaply, then they also send a load of the profits back to us because they licensed an American-owned design and brand? You cannot lose.

Meanwhile, supposedly the skilled, high-added-value manufacturing would stay in the West with our educated workforce. And to top it all off, this was supposedly making the poor countries less poor and more democratic as you can't trade without free-flowing communication and a prosperous middle class.

Of course in practice this has gone badly in the long term. The current generations are certainly feeling the consequences. But for the previous generations? They got the highest standard of living in the world!

Re: Advanced Magnet Manufacturing Begins in the United States

#56

Post by corimaith »

bombcar wrote: post #53
roenxi wrote: post #40

Earlier quoted context omitted.

> After several shutdowns and two bankruptcies due to low rare earth prices... It's important to contextualise this, it is probably the most important part of the entire story. Rare earths aren't all that rare, they generally have a crustal abundance comparable to copper. The question of where rare earth mining & processing happens is mainly one of price. Or, accounting for second order effects, a question of environ…

And bankruptcies due to price are a common occurrence in the mining industry. I’ve done consulting work at a giant open pit copper mine the size of which cannot be described, sitting idle waiting for the price of cooper to climb above a benchmark.

Which is where tariffs come in to offset low price dumping. Inefficient, but it's better thought of as insurance premium on future geopolitical risk.

Re: Advanced Magnet Manufacturing Begins in the United States

#58

Post by corimaith »

michaelt wrote: post #55
BLKNSLVR wrote: post #43

Earlier quoted context omitted.

Strong disagree, this was obvious if not from the very start, then as soon as the first company that relocated manufacturing started making ridiculous profits. Keeping the retail prices the same whilst more-than-decimating the manufacturing cost? How could it not be obvious that anyone and everyone would follow once there was a proof of concept. When capitalism is measured on incredibly short term performance, with n…

> I've long been confused to why there was no legislation to prevent "local" companies from giving away the keys to their kingdoms to foreign countries. For a long time this seemed like an exceptionally good deal for the US. Other countries dig up their rare natural resources, send them to us, and in exchange we send them intangible products like Microsoft Office licenses? That's a great deal. You're literally gettin…

Well the idea was those manufacturing countries would also transition to consumption based economies, paving the way for the next generation of manufacturers to then rise up the value chain. Once everyone was rich then I guess we would start relying on automation.

People forget that the flipside of keeping manufacturing in America is that it would have denied the ability for the global poor to rise up. And they should, they deserve that right too. What the neoliberals underestimated was the extent of how nationalistic these rising countries could become, as they instead not to transition but to instead keep on their low end manufacturing while simultaneously competing in the high end. Namely, it wasn't about improving the lives of their citizens, it was about achieving total control over the supply chain.

The sad part of this situation is that for all the global south cheers the "decline of the west", with the closing of the American market and the utter dominance of China, the economic ladders up may have been forever broken.

Re: Advanced Magnet Manufacturing Begins in the United States

#59

Post by myrmidon »

mikewarot wrote: post #26

Perhaps it was a bad idea to let it stop happening in the US[1] in the first place? I have acquaintances who told me about this more than a decade ago. We thought it was stupid to let the production lines go then... and obviously, we were right. [1] https://www.counterpunch.org/2006/04/07/the-saga-of-magneque...

I don't think that this is an obvious decision at all, and it is very easy to be deceptive about upsides and gloss over the downsides of forcefully retaining domestic industry sectors:

If you want to keep industries like this, you are basically arguing that taxpayers should subsidise them-- the jobs you retain are not a straightforward net gain, you pay for the wage difference in tax money (or price, where typically the consumer foots the bill, which is often just like a rather regressive tax).

There are good arguments that this is simply necessary for absolutely vital industries like agriculture, which gets a generous ~$20 billion/year to stay local. But it is clear to me that this is not something that you can do for every industry-- that would basically amount to a small-scale planned economy (with all its drawbacks), would be very likely to poach talent from sectors that are actually "more valuable" according to market consensus, and would also be likely to provoke retaliatory actions by international trading partners.

For this specifically, I think throwing some hundreds of millions of taxdollars around to keep/reestablish the industry is probably a good deal, but it is rather obvious to me that you have to draw the line somewhere; spending hundreds of billions to maximize autarky would be a really bad idea even though it is easy to make it sound universally good ("local jobs! supply chain safety! trade balance!").

Re: Advanced Magnet Manufacturing Begins in the United States

#60

Post by lazide »

fooqux wrote: post #54
lotsofpulp wrote: post #51

Earlier quoted context omitted.

> I've long been confused* to why there was no legislation to prevent "local" companies from giving away the keys to their kingdoms to foreign countries. >*Not really, politicians are just as short-term motivated as business owners. Voters also like lower prices today in exchange for higher volatility tomorrow. No one was forced to shop at national businesses rather than local businesses, but people like the lower pr…

I was taught during grade school that capitalism drives lower prices, and since capitalism is good, it's alluded that paying less money for a product of similar value is almost a moral obligation. That company selling the "same thing" for more is obviously fleecing people and should go bankrupt. That model may have worked hundreds of years ago when comparing horseshoes made by local blacksmiths, and possibly still he…

If you can pay $5 for something instead of $10, why wouldn’t that be better for you?
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