Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Labor costs are not the only reason Nike and other casual shoe manufacturers are located where they are. Weak environmental and safety laws allow them to use glue and solvents that have severe side effects that would not be allowed in the U.S. without severe (and expensive) mitigation measures.
Didn't Black and Decker buy Craftsman Tools and aren't they opening a huge facility in Fort Worth to manufacture them there?
I love my Black and Decker products. My rice cooker and blender have lasted for over a decade. I heard about the Craftsman buyout, I hope the Fort Worth factory hires many people.
I love my Black and Decker products. My rice cooker and blender have lasted for over a decade. I heard about the Craftsman buyout, I hope the Fort Worth factory hires many people.
I love my Black and Decker products. My rice cooker and blender have lasted for over a decade. I heard about the Craftsman buyout, I hope the Fort Worth factory hires many people.
I used to like B&D. Being from Maryland they were 'local'. Neighbors worked for them. They were the only powertools in the neighborhood. But they went down hill in the 90s about the time they sold off their big plant and distribution center in Hampstead and moved a lot of production overseas. They seemed to have lost their way among the buyout/merger mania of the late 80s and 90s.
Throughout the history of the world since the industrial revolution, clothing manufacturing has always chased the lowest cost labor, wherever it is.
That used to be the U.S. when it was a (larger) immigrant destination with few unions or labor regulations, and incidentally was the world's source of cheaply produced cotton.
Now, cotton and labor can be had cheaply elsewhere.
Nike worker in Vietnam gets 61 to 89 cents/hour.
Labor cost to produce pair of Nike is about $4. That's 5-7 hours of labor.
Let's pretend that everything stays the same, and US worker is as effective as Vietnam one. With the minimum wage set to $15/hour we are looking at at least $75 (instead of $4) just in labor.
Let's assume that materials are still China-made, and their cost stays at $17. So we are looking at ~$90 self-cost. Add brand operating costs ($25), now we are looking at $115 - cost at which retailer buys these sneakers from Nike. Retail upcharge is normally 100% (on some items it's 800%, but let's be modest here), so the price in store that you would see is $230.
So, China/Vietnam/India/wherever else/ made Nike sneakers are sold for $100 right now. USA-made will cost $230. Are you ready to buy at that price? Remember - your personal income is not going up.
Then take into account that after Nike moves production to USA, it will no longer be competitive with other brands in other countries. So, loss of markets will lead to even higher costs (in overhead costs and even materials cost), so end price will be closer to $300.
Net result? Nike lost foreign markets, employs less number of higher-paid Americans here (since they don't need that many people in the offices because market shrunk), employs quite a few of Americans at a minimum wage, and you pay 3 times more than now.
Good picture, isn't it?
That's why people like Matzoman don't run multinational companies. They think they have good ideas, but really have no clue how marketing/pricing/operations of companies work to produce a profit.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
