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Views like these are the problem. Too limited. A lot of work has been brought back over the past 4 years because it is NOT profitable to have the work done overseas. Why? Because they cannot do all the work effectively overseas. China is good for making Marti Gras beads. Do you really expect them to make jet engines and complex aerospace parts, which have always been a big part of the U.S manufacturing base? Many companies did try to outsource increasingly more complex work overseas. They found out the hard way that it doesn't work that easy.
Can China manufacture and assemble MacBooks and Iphones more cost effectively than if done in the U.S.A.? Absolutely. That's why they are made there. That doesn't mean the majority of manufacturing will be done elsewhere.
I'm not talking about offshoring manufacturing to make more profit selling in the U.S. I am also not talking about the status quo only, and general comments are never intended to cover 100% of situations.
Welcome to the global economy. The most profitable firms will do business in emerging markets. Controlling costs will be critical if they wish to do this. Firms who figure out how to manufacture in cheaper locations will then have the ability to sell those goods in the U.S. as well. That's why the talk about whether firms can make a profit manufacturing in the U.S. is silly. This topic is based on the flawed assumption that the U.S. consumer market will retain the same level of global dominance.
Why is Bombardier building a new aircraft parts plant in Morocco? Because competing in North America and Western Europe is not good enough anymore. Those markets are relatively saturated. Bombardier needs to pick up market share in emerging markets in Asia and (increasingly) Africa. That means competing with Embraer's low Brazilian labor costs, which Bombardier's Quebecois labor force cannot do. For now, nobody is getting laid off. We'll see what happens if Bombardier can manufacture efficiently in Morocco.
Why is Bombardier building a new aircraft parts plant in Morocco? Because competing in North America and Western Europe is not good enough anymore. Those markets are relatively saturated. Bombardier needs to pick up market share in emerging markets in Asia and (increasingly) Africa. That means competing with Embraer's low Brazilian labor costs, which Bombardier's Quebecois labor force cannot do. For now, nobody is getting laid off. We'll see what happens if Bombardier can manufacture efficiently in Morocco.
I believe most of us are aware they move somewhere based on labor costs, but I already said they currently work in a lot of countries based of greed. What I'm trying to ask is could they do it and still make a reasonable profit? That answer has clearly been yes.
Maybe I would have more sympathy for the companies if they weren't making huge profits, allowing their foreign workers to have horrible conditions, working in areas that have very lax regulations. I'm sorry, but if you would rather keep the poor being poor in another country in order to make a bigger profit off an already gigantic profit base, meanwhile preventing that work from being done somewhere where it would make a difference for those who could be put to work, then it just comes down to outright greed.
I believe most of us are aware they move somewhere based on labor costs, but I already said they currently work in a lot of countries based of greed. What I'm trying to ask is could they do it and still make a reasonable profit? That answer has clearly been yes.
Maybe I would have more sympathy for the companies if they weren't making huge profits, allowing their foreign workers to have horrible conditions, working in areas that have very lax regulations. I'm sorry, but if you would rather keep the poor being poor in another country in order to make a bigger profit off an already gigantic profit base, meanwhile preventing that work from being done somewhere where it would make a difference for those who could be put to work, then it just comes down to outright greed.
1. You should read Ambient's comment (#15) because the idea of a "reasonable profit" doesn't make sense in this discussion. Firms aren't altruistic because capital isn't altruistic, either. If I'm complacently satisfied to sell in the U.S. and Canada while my competitors are aggressively capturing market share in Asia, guess who is going to have a higher profit in the future? Investors don't care that I wasn't greedy; capital is mobile.
2. Multinationals have an interest in developing emerging markets. An increase in the standard of living in sub-Saharan Africa, for example, would open up massive new consumer markets.
3. Sorry, but I don't buy your concern for the poor of developing nations. I sense that you wish to return to The Good Old Days...maybe I would have more sympathy if the West weren't exploiting the natural resources of the rest of the world in order to sustain a grotesque standard of living.
1. You should read Ambient's comment (#15) because the idea of a "reasonable profit" doesn't make sense in this discussion. Firms aren't altruistic because capital isn't altruistic, either. If I'm complacently satisfied to sell in the U.S. and Canada while my competitors are aggressively capturing market share in Asia, guess who is going to have a higher profit in the future? Investors don't care that I wasn't greedy; capital is mobile.
2. Multinationals have an interest in developing emerging markets. An increase in the standard of living in sub-Saharan Africa, for example, would open up massive new consumer markets.
3. Sorry, but I don't buy your concern for the poor of developing nations. I sense that you wish to return to The Good Old Days...maybe I would have more sympathy if the West weren't exploiting the natural resources of the rest of the world in order to sustain a grotesque standard of living.
Well see, I'm not concerned with the standards in these other countries or exploiting other countries. I would like to see the poor here get jobs so more people will have purchasing power.
Actually, given how the military budget is less than 20% of what the Federal Government spends, I'm thinking you should amend that to "gotta pay for the welfare state somehow."
The military budget itself has held right at 4% since Clinto used it as the Peqace dividend to balance the budget. The reaso CBO warned that it can be used this time to any extent. But the inductrial military comlex i reality is almost 100% lose job i USA when its cut i spending. Alot of people i alot of occupatio are goig to lose their jobs. I know one now you got layed offfat Lockheed martin.hat si why we saw every Democarts fight base closig i his/her state o base closures. Talk is often rethoric when it effects jobs and it will comig upo soon agian.
3- China makes things WAY WORSE than here. Everything I've ever seen come out of China is a piece of *****. Period. Like most countries do, their quality is much higher within their own country.
And why is that? Because the countries’ (business) are being instructed to make products inferior/just acceptable for the American consumer. Plastic crap, & $100 items that break every 2 years, is feasible because that’s what the US consumer will tolerate!
Quality products are dictated by quality procedures, & management enforcement of quality methods. ANY COMPANY* (foreign/domestic) can make quality products if the support/will is there to make it happen.
This talk of bringing jobs home is great news, but it’s only to pacify/appease the US consumer IMO. Mega-business is starting to wonder if, &/or worry that, its over-consuming meal ticket is dwindling too fast.
mattee01"What I'm trying to ask is could they do it and still make a reasonable profit?"
Corporations are obligated to maximize shareholder value. Not to make what your version of "reasonable" profits is. Did your family members ever own a home, and sell it for a large profit? I could just as reasonably say, "They made an unreasonable profit, and the excess profit should be seized for redistribution to others". I'd be as morally wrong, as you would be to think you, and not the shareholders, have the right to call the shots. Your family member who sold his home was its sole shareholder-he called the shots on his asking price. No interference.
Actually, given how the military budget is less than 20% of what the Federal Government spends, I'm thinking you should amend that to "gotta pay for the welfare state somehow."
By welfare state you mean Social Security, Medicare and Medicaid? At least with those programs, the people paying in get their own money back. Kinda hard to see how any of us benefited from the Iraqi war, except maybe Halliburton employees. Given our deficits and debt issues, I believe we will be addressing Medicare very soon. And we need to. And we need to trim the defense budget too.
The corporate tax rate in the United States is 35%.
The corporate tax rate in the EU and elsewhere is now roughly half that. And you want to know why corporates have sent so much off shore?
I remember reading an interview with a tech CEO (I think it was Andy Grove of Intel) who was discussing how much it cost to build a new plant in the United States versus overseas. By the time you add up all the regulations, permitting, taxation, licensing, etc. etc. etc., It was roughly $1 billion more before the plant start spitting out the first chips -- and only 1/10th of the price difference was in salary. I really wish I could find the article.
But, I do support creating a healthy environment for business in the US, even if I suspect any CEO has a biased agenda.
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