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koolaid wrote:Part of the problem with sourcing China to assemble products like this is that they aren't exactly opposed to engaging in rampant IP theft and undercutting the people whose products they are building.

In the process of putting things together they gain the knowledge to do an end run around the people they are contracting for. This has happened in the computer industry in some cases already.

If any US IP holder can prove that accusation, they would easily be able to stop any violating products from entering the US (or Europe and much of Asia) market. It would be a relatively simple legal process. In fact, it's a technique that been employed by US firms manufacturing overseas to block their US-based competition from making goods in China (sorry.. not on topic)...

You're using the rampant copyright problem (a very valid knock on Asia in general, and China is no exception) to paint a broad stroke. Heresay.

I've been involved in high-tech technology transfer for some pretty big programs. Yes, we have definitely helped the Chinese (and many others with cheap labor) to become better at manufacturing and quality processes. I have not seen any IP theft in all my years in the business. I'm not saying it doesn't happen, just that the problem is not as rampant as rumors make out. Copyright violations notwithstanding.

boba wrote:With Jobs gone, maybe Mainland China will buy Apple's iP*d division like they bought Lenovo.

I worked for IBM just prior to the Lenovo sale. I can say with certainty that Lenovo got little more than well-worn IP and the privledge of associating themselves with the Thinkpad brand. IBM just completely stunk (stank?) at the logistics required to deliver a configure to order computer.

IBM was happy to get rid of the sunset business. The associated jobs would have been gone regardless.

Here's an interesting analysis, published today...
Essentially, the argument here is that China is merely providing labor. The "trade deficit" with China would look MUCH different if the value of the finished goods was allocated among the various countries that supplied the components that wind up in those finished goods.

They give a good example with the iPad.... China make none of the components, they just provide the assembly. Why then do we assign 100% of the "trade deficit" value of an iPad to China.? If for example we assigned the value of the LCD to Taiwan, where the LCD is made, the trade deficit with China would look quite different..

US labor is in such a bind because the US GOVERNMENT is the biggest impediment to new job creation. YMMV

Punishing China no boon for U.S. manufacturing jobs

Published October 12, 2011

| Reuters

LONDON (Reuters) - For every Apple iPad sold in the United States, the U.S. trade deficit with China increases by about $275.

Yet by far the most value embedded in the device accrues to Apple and sustains thousands of well-paid design, software, management and marketing jobs in the United States.

By contrast, the value captured in China by the laborers who assemble Apple's products is a mere $10 or so, according to researchers led by Kenneth Kraemer of the University of California, Irvine, who crunched the data.

Viewed through this prism, offshore manufacturing of electronic products like the iPad is a solution, not a problem, for the United States, and seeking to punish China for its purportedly undervalued exchange rate is wide of the mark.

"Without China, Apple couldn't be so successful and Apple products wouldn't be so affordable," said Yao Shujie, professor of economics at the University of Nottingham in England.

In the case of the iPad, China is the final assembly point for components imported from a host of countries, including South Korea, Japan, Taiwan, the European Union and the United States itself. There are no Chinese suppliers [inside] the iPad.

"China is sitting in the middle: It's processing goods for rich countries," said Yao. As such, he argued, it would be more accurate to allocate most of China's bilateral "iPad trade surplus" to those supplier countries.

Kraemer agreed that trade data can mislead as much as inform.

........ Read more: http://www.foxbusiness.com/technology/2 ... uring-jobs" onclick="window.open(this.href);return false;

Another important point the article glosses over is...
Even if China policy changed, the US is far back in line for the jobs that would be created.
it's not just China that has cheap labor costs..... If we somehow manged to change policies and take jobs away from China, those jobs would go to India, Mexico, Cambodia, Indonesia, Vietnam and other places before they came back here. Reality is that the US labor force needs to focus on higher value-add jobs, because nobody, not you, not me, not an Asian or European customer, is going to pay $2500 for a US-made Visio TV that they can currently buy from a China factory for $800.

"Multinational firms that think currency appreciation is going to have a big effect on their export capacity from China to the United States are going to shift to other countries, not to the United States," he said.
....................
Jonathan Anderson, chief emerging-markets economist for UBS in Hong Kong, said U.S. and EU trade data showed that China's share of total low-end light manufacturing imports had peaked over the last 24 months and was now falling outright in the United States.

Gaining at China's expense were its even cheaper neighbors, including Vietnam, Bangladesh and Indonesia, as well as Mexico, Anderson said.

Strikingly, while overall U.S. imports of apparel and furniture have continued to increase over the past two years, domestic American production has plummeted. Foreigners have gained, not lost, market share.

Anderson said it made perfect sense that U.S. workers were not the beneficiaries of rising Chinese wages.

"If $300 per month for a 65-plus hour work week is too rich for, say, basic toy manufacturers, do they go to the U.S. and pay $1,200/month plus benefits for a 40-hour week at the minimum wage -- or do they go to Bangladesh or Cambodia, where workers put in Chinese-style hours for less than $100/month?" he wrote in a recent report.

wharvey wrote:Another big problem in the U.S. is the greed of some companies and the over reliance on market analyst. Back in 82 I worked for a large company that had record profits for 4 years running. The last year I worked for them their analysts predicted another record year estimating an increase of over 20%. The company did have another record year but it was only 7% over the previous year.

I'd think most companies would have been happy with yet another record year but not these people. They figured that they had actually lost money since the increase wasn't as large as predicted. As a result they had massive layoffs. Their competitors loved it and had more great years. This group of misfits lost much of their market share. Many companies now think that way and move. Workers do price themselves out of jobs and government intrusions are a big problem but don't just blame our economy on those factors. Now a CEO gets a pimple on his rear stock prices go down and people get out sourced.

The part about their competitors swooping in and taking advantage of the mistake......
That's the part that needs to happen, but doesn't when the government gets too involved.

This is the way it's supposed to work... Shareholders get hit when the people running the companies they've invested in make mistakes. This is a GOOD thing. If a person don't have the stomach for it, they should be investing solely in Treasuries and AAA-Rated fixed income. Being the beneficiary of government benevolence makes you fat, lazy and inefficient. Every day companies stock value gets creamed for superficial reasons. Good management will know how to ride out the storm most times. Bad management will find ever more clever ways to destroy shareholder value and put people out of work. This is not a problem for government to "solve". It is the result of an efficient marketplace doing its job. Governmental "intervention" makes such swings less predictable, more unfair to the efficient survivors (perhaps even destroying the "better" company that is not able to access the government teat) and their investors, and generally acts to extend if not exacerbate the problem. [/offtopic]

gigag04 wrote:

PBratton wrote:We have a faint shadow of the industry available that we had during WWI & WWII.

You're kidding right?

Wikipedia, but it seems close to what I've read if not right on:

"Below is a list of countries by Industrial output in 2010. Output is in millions of US$.

Rank Country Output

1 United States - 3,239,374
2 China - 2,756,903
3 Japan - 1,359,259
4 Germany - 921,749
5 Brazil - 560,204
6 Russia - 539,149
7 Italy - 519,944
8 United Kingdom - 489,945
9 France - 477,767
10 Canada - 413,975"

Here's the chart... Employment and Output charts over-layed.
One word... PRODUCTIVITY.


Source: http://mercatus.org/publication/us-manu ... utput-vs-j" onclick="window.open(this.href);return false;
Also: http://www.federalreserve.gov/releases/g17/current/" onclick="window.open(this.href);return false;

Money will be invested where it can earn the most (or at least a fair and predictable) profit....
Let's not lose sight of the word PREDICTABLE.

Random thought....
I have NEVER been offered a full time job where my wages would be paid by a poor person.
It would be a huge mistake to vilify the pursuit of profit. That would be called Socialism or Communism. Doesn't work long term.
The pursuit of profit at the expense of all other things poses it's own problems as well, but that's another thread.

So..... What are we talking about then?
Job creation in the USA.

Reality:
1. Global communication is fast and cheap.
2. Global transportation is faster and cheaper than ever.
3. Barriers to trade are, overall, the lowest they've ever been.
4. Investments will go where there is more profit to be made.
5. Western Europe, US, Canada, Australia, NZ, Japan, etc enjoy a high standard of living and high (relative) wages.
6. Much of Asia, Eastern Europe and India have lower standards of living and commensurately lower wages.

So... If I have some cash and an idea to start a business making widgets, what is the most profitable thing to do?
Produce my widget in a low-wage country and sell it in a high wage country, DUH.!

Just like.... WalMart, Target, IBM, HP, ------> everyone.....

This is a fact... No point in arguing about it, or feeling bad about it... It's just fact.
Money will seek the highest return. And that's a good thing.... but sometimes painful to those impacted.

The question we should be asking is.... "What can we do to stem the flow of jobs away from the USA and create new jobs here too?"

There is no single solution. Many things need to happen but the reality is that nothing will stop the flow of jobs that can be done (competently) for less wage from moving to a lower wage employee. Anything done to artificially halt this flow is only temporary. The solution...?

Reduce the cost of doing business in the USA.

Tax reform
Reduce regulations
Change the role of government back to "Keeping us safe and maintaining a level playing field" and get them out of the business of "Picking Winners".
Stem the tide of illegal immigration, purge the country of people who arrived here illegally, stop supporting illegal residents with taxpayer dollars.

Just a start... there's lots more we can do to make us a more desirable place for job creation.

I've been involved in global sourcing for some pretty huge electronics manufacturers. My educated opinion is that "a little more" would be 10% on stuff with little labor content (steel pipe, for example) and 30 to 100+% for high-labor-content, low-tech work (sewing/clothing)... These numbers are WHOLESALE price changes. Assuming a similar distribution chain (manufacturer or importer to national, then regional, then local distribution then to retail), the total change in price could be much higher after compounding all the markups at each step.

Your $800 47" LCD TV currently made in China, Taiwan, Thailand or Korea would cost several thousand dollars if made 100% in USA... from components to final assembly.