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Steve Jobs commented that it's really easy to open a factory in China, but it's really hard to open a factory in America.
Offshoring/outsourcing has been a huge problem for at least 20 years, but what can be done to encourage American companies to keep their factories inside the US?
One problem is that if you're a politician and you do something that causes American companies to lose money, you will be voted out in two days.
Another relevant Steve Jobs comment was that they have so many engineers in China that help out in the factories. He implied that it's hard to find engineers in America, although he didn't mean PhDs. (My source is the biography of Jobs by Walter Isaacson.) One day Jobs decided he wanted to make an Ipod with a really nice aluminum case so he opened a factory in China for just that. I wonder if he even considered opening it in America.
Some American capitalists like that environmental and labor regulations are lax or non-existent overseas. Their only value is money, they don't care about American unemployment, poverty or global warming. They don't have an inner morality or conscience which would motivate them to devise a way to compete without chucking their workforce overboard. I would like to see the government impose severe penalties on American companies which outsource domestic jobs offshore, and work with those companies which want to keep jobs here.
Read up on the Hormel Food strikes in 1986. IMO this is when US LABOR should have began the incremental, SLOW adjustment of wages as to reflect the new economy that was just around the corner!
Wages should be based on the profitability of the company. What is good enough for the executives is good enough for the rank and file.
^^I agree there's more to the story than meets the eye. From what I understand, the Banks hoodwinked the Corporations back then; & the Corporations got mesmerized by the wealth effect.
Last edited by DSOs; 11-12-2012 at 03:35 PM..
Reason: added ^^
Not entirely true. The FAST, high-tech, modern-sophisticated machine shop has been established since the late 80s. Inspection equipment/machining METHODS have seen a lot more progress than CNC equipment IMHO.
And they continued to develop after that. In fact, the first CNC machine was developed around the 50's.
The Milwaukee-Matic ran on punched tape, a method of code that was still used up until the 80's, when CNC really started to catch on in the manufacturing sector. By that time, there were plenty more productive machines available, but used machines were a common way to break into the sector with a new business. Just like today, we have machines floating around that are 20 years old, and we have considerably more productive and complex machines capable of achieving much greater productive potential. Machine manufacturers are in a never ending battle to create something better, faster, more productive.
As far as the methods... They are all the same. The difference is in the capacity and capability of the machine. It's the job of the programmer to know the core basics of the manufacturing process, and what the capabilities are of the particular machine. Everything that goes on in the machine is the same as what would go on in a manual machine. The only difference is the machine is much faster, more ridged, and offers better coolant flow. Most would agree that the best programmers are those who started out on manual equipment.
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Originally Posted by DSOs
No it’s not! Your company is attracting Union mentality lackeys. Put an ad in for $14-$18/hr TO START & the skilled machinists’ will take you seriously. Also, a company that offers $35/hr TO START is getting Gov’t/politician money/kickbacks & or has a guardian angel in the machining industry.
For $14 hr, the skilled tradesman would laugh and apply for the lawn care tech job. If you want a top of the line machinist who can program the latest equipment, work EDMs, work the grinders and the manual equipment... Whatever is needed, you have to open your wallet. You get what you pay for. It all depends on what you need. Do you need a machinist to cut out blanks for EDM machines? Sure, that might be a $15/ hr job, and a great job for an apprentice. If you need a guy who can lead a department, handle QC problems, consult with customers, program your equipment, handle maintenance issues, order your tooling and train operators and staff, you could be talking 80K in many of the most modern shops. Many of those guys end up being salary. Last guy I worked for claimed to be making 120K, and with the car he was driving around, I could believe it.
As far as the machining industry goes, you're talking about one of the few sectors that is void of government intervention, other than EPA and OSHA regulations and obscene taxes. Government contracts generally go to larger manufacturers like Sikorsky and Boeing, and they in turn find smaller manufacturers to contract work out to. $35/hr to start is what it takes to get a guy with 20 years experience with a VERY in demand skillset. Compare that with other professions and that's not all that much relative to experience. Add to that the amount of investment the machinist must make towards tools. My box is insured for 6K. The guy I worked for before had tools that cost 1K A PIECE. He claimed his had to be insured for 50K.
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Originally Posted by DSOs
Yeah, I see the trend: Gov’t handouts in the name of Job creation. Too bad they can’t get the laid off, highly skilled engineers to do the work for $22/hr.
The only thing the government has done for manufacturing was cut the tax rates on factories. All that does is allow the company to place a lower bid on work. The customer wins at the end of the day. Donno what is so hard to believe about working professionals getting good wages relative to their skillset and experience. I sure would hang around this profession if it were any other way.
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Originally Posted by DSOs
Yep, don’t forget the factor in the free airline tickets. The USA relies on phantom, manufactured inflation, with no care/regard to what’s going on around them! Are you starting to understand what Steve Jobs was talking about yet?
None of this really effects me. I have mainly worked for small-medium sized manufacturers who supply parts for the larger companies. None of us are flying around in private jets, that's for sure. Steve Jobs knew that his suppliers hand an endless supply of cheap labor who would happily toil for next to nothing. When all you need are people to assembly products, it does great things for the profitability of your company.
Donno what "manufactured inflation" is, but there isn't much any of us can do about it.
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Originally Posted by DSOs
This sounds like more wackiness/ridiculousness. Why would a company do such a thing? Oh yeah, Gov’t/politician subsidies/kickbacks & or a guardian angel in the machining industry.
An expert on a subject you know little about clearly... Seeing as how everything that doesn't fit in your realm of understanding is explained as some imaginary government meddling... When a hospital hires a fresh grad nurse, they do so knowing that that nurse will not make them any money. When going to nursing school, this is what EVERY nursing instructor told us. This is also what every recruiter told us. Many professions are like this, but young people still have to be trained because older workers will retire at some point. Every businessman knows that labor is a commodity, and without it, you simply cannot make money.
Consider it like a "take a penny, leave a penny" bin. I guess I should assume you are the guy who takes all the pennies, but refuses to leave a penny because that wouldn't favor the bottom line. Many sensible employers know that if they do not train more workers for the future, they will not have a talent pool available to make money off in the future. People go to school for much the same reason... Yes, it costs money and does nothing for your immediate earning potential. The idea is that in the future, you can make more money with the skills and education.
Why do shops pay apprentices $15/hr? Potential. Smart kids don't work for $8/hr. Smart people do have the potential to make you a lot of money when they become proficient. The smart business man pays a little more and get's the kid with the better upward potential. He also treats him decent so his investment doesn't jump ship before maturation.
These days, many employers have been holding off on training in many professions because it does cost money, and more often than not, it ends up an expense. What I would like to see the government do is share in the burden by offering tax breaks for companies that train. The government subsidizes the wages of apprentices in the trades who are working towards journeyman status. They have been doing this for decades. We have a whole lot of young kids who desperately need to start a career. I'd rather see them working in a career where they will be paying taxes, instead of flipping burgers and collective tax payer subsidies to make ends meet.
At any rate, I would sure love to know about these lucrative kickbacks being given to manufacturers. Since they likely don't exist, I will assume you don't know much about the business, or the level of training and time required to actually produce a skilled tradesman. An operator can make money for his boss day 1 by sitting in front of a machine poking parts. A machinist who will be setting up and programming machines is quite another matter entirely. They are slow, tend to crash a few machines, break tools, make excessive scrap, have plenty of other rough edges... Machinists, like any other skilled worker or professional, don't grow on trees though. If you can't find the type of machinist you need, then you know it's time to kick the apprenticeship program in full gear. You have no choice, and that's a 2 year commitment at the very least.
My point is that the quality of life in America, in general, is better when the unemployment rate is down. There's more people working and therefore paying income taxes, buying things, and are less likely to be on welfare. I wasn't thinking about whether the jobs are below somebody's skill level.
Outsourcing does save money for America's companies but it dries up the economy. It was mentioned on 60 Minutes a few weeks ago. A textile company in America laid off half its people and opened a plant in Honduras. That's good for the textile company and good for Honduras. How is it good for that little American town?
The funny thing is that the people who run American corporations and many members of the Democratic and Republican parties appear to be more concerned w/ spreading the wealth around the globe, than ensuring prosperity for our countrymen.
I am still puzzled about how CEO's can pay themselves millions of dollars and politicians can continue to sign free trade agreements and consider themselves Americans, while so many Americans are suffering. Long-time CD'ers pls forgive me if the following sounds paranoid...
I am a minority and a 1st generation immigrant. I am honestly wondering if these guys are ruining the country on purpose because it is becoming more "colored." You know, whites are projected to make up a lower proportion of the population in the future, so the people who are wealthy do not care.
Is that the reason for both parties literally giving away jobs, devaluing the dollar and squandering all of the country's money? These guys literally handed billions in tax dollars to rich outsourcing corporations, and a select list of foreign countries, and already wealthy bankers.
They're also completely destroying the natural areas in the country as if they didn't care if anyone has air to breathe or clean water to drink in coming generations.
As someone who was born overseas, I am happy my family made it to the USA so we can live the well-educated, high-paying American dream, but I am sorry for the youngsters. If only because they'd been led to expect a better life.
There are a lot of kids going to college, which is expensive, and then getting low-paying jobs or no jobs. And they're already saddled with debt.
Not only that, but these days housing is so much more expensive, even rent. How can these kids even have a chance? It is like why am I caring, but I care. No, it is not "fair" people in other countries may be well-educated or work hard, but earn less, but life is not fair.
I guess it is the new normal. All I can do about it is vote.
Nothing can be done..........Amerit**** want 20 bucks an hour to make a toilet-brush. Then you have the Demor*** who want to put the squeeze on the businesses and encourage union thuggery.
stop making laws to drive american companies out of america. if we must fight wars in the mid east to get oil, then the oil is not cheap. where do they get the money to fight us with? from us, we make them rich.
The funny thing is that the people who run American corporations and many members of the Democratic and Republican parties appear to be more concerned w/ spreading the wealth around the globe, than ensuring prosperity for our countrymen.
I am still puzzled about how CEO's can pay themselves millions of dollars and politicians can continue to sign free trade agreements and consider themselves Americans, while so many Americans are suffering. Long-time CD'ers pls forgive me if the following sounds paranoid...
I am a minority and a 1st generation immigrant. I am honestly wondering if these guys are ruining the country on purpose because it is becoming more "colored." You know, whites are projected to make up a lower proportion of the population in the future, so the people who are wealthy do not care.
Is that the reason for both parties literally giving away jobs, devaluing the dollar and squandering all of the country's money? These guys literally handed billions in tax dollars to rich outsourcing corporations, and a select list of foreign countries, and already wealthy bankers.
They're also completely destroying the natural areas in the country as if they didn't care if anyone has air to breathe or clean water to drink in coming generations.
As someone who was born overseas, I am happy my family made it to the USA so we can live the well-educated, high-paying American dream, but I am sorry for the youngsters. If only because they'd been led to expect a better life.
There are a lot of kids going to college, which is expensive, and then getting low-paying jobs or no jobs. And they're already saddled with debt.
Not only that, but these days housing is so much more expensive, even rent. How can these kids even have a chance? It is like why am I caring, but I care. No, it is not "fair" people in other countries may be well-educated or work hard, but earn less, but life is not fair.
I guess it is the new normal. All I can do about it is vote.
Great observations!
The fact is that the CEO's of the major corporations do not consider themselves Americans. They consider themselves world leaders.
They have no loyalty to any country, just the drive to dominate world trade, and by dominating world trade they dominate governments making them the most powerful people on earth.
Rockefeller gave some insight to this in a speech where he made this statement.
"The supranational sovereignty of an intellectual elite and world bankers is surely preferable to the national
auto-determination practiced in past centuries."
In this statement he reveals that the causes he champions, NWO, CFR, Trilateralists, have the agenda to take power from individual countries, and to concentrate that power among the world elite and the world bankers.
That statement was made decades ago, and since that time we have seen the formation of the EU, NAFTA, GATT, WTO, and many more development’s designed to create a world where leadership comes not from citizens of countries, but by "World Kings". There is a rational calculated reason for the direction we are going. It is the execution of a plan.
It has been detrimental to the people of the United States, and yet they are powerless to do anything about it.
The Corporations controls media, and government, and the government controls education, so tell me who is going to tell the people the truth?
Last guy I worked for claimed to be making 120K, and with the car he was driving around, I could believe it.
Quotes’like this convince me that you have a shiny-object outlook on what hell is going on. You said that you were tested before being hired. What about the 3 CNC machinist that didn’t last 6 month’s; weren’t they tested before being hired? If it’s so hard to find a qualified machinist, why is your company WASTING MONEY--& 6 MONTHS OF TIME--to figure it out. I’ll tell you why: because your company has all the effing skilled machinists they need; the new hires are for other dubious reasons!
One reason why your shop STARTS out @ $35/hour is to keep the other workers’paychecks intact! Another reason is lackey obedience, & cleaning up territorial messes. If a CAPABLE $20/hour machinist came through the door, your shop will go ballistic. I’m not talking Union, I’m talking Union mentality!
Of course not all shops are like this; & don’t forget that I agree with 90% of what you’ve been saying.
Quotes’like this convince me that you have a shiny-object outlook on what hell is going on. You said that you were tested before being hired. What about the 3 CNC machinist that didn’t last 6 month’s; weren’t they tested before being hired? If it’s so hard to find a qualified machinist, why is your company WASTING MONEY--& 6 MONTHS OF TIME--to figure it out. I’ll tell you why: because your company has all the effing skilled machinists they need; the new hires are for other dubious reasons!
One reason why your shop STARTS out @ $35/hour is to keep the other workers’paychecks intact! Another reason is lackey obedience, & cleaning up territorial messes. If a CAPABLE $20/hour machinist came through the door, your shop will go ballistic. I’m not talking Union, I’m talking Union mentality!
Of course not all shops are like this; & don’t forget that I agree with 90% of what you’ve been saying.
The $35/hr offer was made out of desperation. They offer what it will get the worker through the door. I certainly did not start there at $35/hr. Not even close. He got us by in a pinch, but he certainly was not worth $35/hr. I also know my limitations, which the previous candidate apparently did not. Wages have nothing to do with union rates these days, as there is very little union representation to be found in this trade anymore. In fact, I know what some of the union machinists are getting paid in the auto plant where I came from. $28 is the top out. Takes a long time to hit that, and a lot of guys in the past 6 years were laid off before they could reach that. Replaced by cheaper labor, since the automakers were successfully able to push through lower starting wages for new hires. $14/hr at the bottom. Many of the younger machinists ended up leaving because they could make more in the private sector in many shops. They ain't getting rich in the union, unless they are working for Boeing (where temps are the new thing), or on the railroad.
And why would a shop pay more for their labor than they have to? To hold up other workers labor rates? That makes no sense. Not unless all the other shops are doing the same, like the plumber's union used to do. The hole in your logic is that shops all bid for the same work. The only reason we can afford to pay so much is we do work that few shops are able to do. Fewer available competitors to bid on the same job. Having a niche can do wonderful things to you profit potential. We also do so with less overhead (most machines were bought without financing), fewer workers (I definitely have to work harder than any other place I've worked) and we have skilled staff who is very quick to solve problems (solve them quick to keep those machines cranking out parts).
Anyways, my shop did hire a guy for $22/hr that didn't last a full week. I'm not sure of the current guy's wage, nor do I really care. Wages are a function of supply and demand. You can find an operator for next to nothing up here (cheap illegal migrant labor). Welders go for $15/hr, set up guys go for $13-$20/hr depending on the level of skill, type of machine and ability required. You're talking about a position that is the highest pecking order of them all. Many never reach the top with regards to skill, ability, management ability, etc. Those that do can still earn a pretty decent dollar. That's also a role that takes a fair bit of intelligence and work ethic. If the reward wasn't there, those guys are just as capable of changing careers and making good money at something else. When I went to nursing school, we had a couple machinists doing just that. Now the shops want them back... Maybe this time, they will learn.
Why do you find it so hard to believe that skilled workers can still earn a decent income? Do you have any idea how much many medical and aerospace parts sell for, and how much time, energy and intelligence goes into making those things happen? The question you should be asking... If a part requires 7 or 8 operations, requires 2 weeks of labor costs to make, and has tolerances that require extreme caution, how can a shop NOT afford to find the best quality worker for the job? Sometimes, it's cheaper to pay more for a skilled worker. Not for simple tubes with holes blasted in them... Parts that make you ask... How the heck did they make that happen? I'm guessing that's work that you have had little exposure to. Problem is, we have plenty of skilled workers who know how to make hollow tubes with holes and such... Far fewer capable of the latter.
Would it shock you that when I lived in Michigan, I saw a listing advertised for a tool and die maker for $40/hr? We don't need armies of those guys either. We still need a few, and good luck finding them. Nobody has trained one of those dinosaurs in a good decade or two. Supply and demand. The die might be made in China, but you still need a skilled worker to fix the mistakes, and they always make a few at least.
Mind you, when I speak of these high end labor rates, this is the exception, not the norm. Your average skilled machinist is going for maybe $24/hr round here. There's a difference between him, the guy running the department, and the guy running the shop under the owner himself.
But back to the topic... There's not much that really needs to be done about offshoring. The U.S. just has to find a way to remain viable. That means training workers to handle the work that cheaper wage nations cannot do. This is how Germany, Switzerland, Canada and other high wage nations have handled this dilemma. They run trade surpluses quite regularly. The U.S. should be competing with these countries, not China. That means aiming a little higher in our K-12 system, encouraging apprenticeship programs, and if needed, allow the government to aid in this effort. Most other successful manufacturing nations do help in some regard. The payoff is noticeable when Johnny is paying taxes, instead of sucking up tax payer subsidies. Time for America to compete.
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The USA relies on phantom, manufactured inflation, with no care/regard to what’s going on around them! Are you starting to understand what Steve Jobs was talking about yet?
