Tool Manufacturer moves to China

[tjmac44]

Interesting article about "Vise Grip". I never owned a pair of the named brand, always to expensive compared to imported version. Kinda wish I would have bought the Nebraska made pliers now. I guess this is what happens when a family run business sells out to a food container maker.

http://www.omaha.com/index.php?u_pag...u_sid=10420276

[paintandbodtman]

vise-grips

No you had it right at the start of you post, this is what happens when people don't support their local bussinesses and their products and or services

Wayne

[sparkeyjames]

Nope your both wrong. It's what happens when greedy people get their way. The family was probably given a great big buy out offer from Newell-Rubbermaid and took the money and ran. Then 6 years later in order to sell tools cheaper they so they can make more profit they close down the american plants lose 300 employees and potential customers by moving their jobs to China. The only gains made are by the corporate greed barons aka the upper management and the stock holders. U.S.A. loses 300 high paying jobs and the money those people put back into the economy. This is not the first time Rubbermaid has sold out their country of origin by moving jobs to China. Large corporations such as Rubbermaid do not care about you this country or anything but making money. Wall street is slowly and inexorably dragging this country down.

[Thalermade]

Interesting article about "Vise Grip". I guess this is what happens when a family run business sells out to a food container maker.

http://www.omaha.com/index.php?u_pag...u_sid=10420276

Well, there is a little more to the history of the "food container maker". Do some reading about Newell Rubbermaid and its leader, and the move of Vise Grip won't be as surprising. Taken from the linked article.

January 2001 Joseph Galli named as President and Chief Executive Officer of Newell Rubbermaid. In 1995, he became President of Black & Decker Worldwide Power Tools Business. Galli is credited with developing and launching the DeWalt brand of industrial power tools.

The link below is from January of 2001.
http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/01-08-2001/0001398393&EDATE


It is interesting, as in the contradiction - in general - of many Americans, that as employees, a high salary is desired (along with health care benefits but I digress), but as a consumer - a low price is desired.

Huffy bicycles kept getting squeezed as well under pressure from their largest customer,, with moves from Ohio, first to the South, then to Mexico, but finally Huffy ended up in China.

[LCHIEN]

Well, there is a little more to the history of the "food container maker". Do some reading about Newell Rubbermaid and its leader, and the move of Vise Grip won't be as surprising. Taken from the linked article.

January 2001 Joseph Galli named as President and Chief Executive Officer of Newell Rubbermaid. In 1995, he became President of Black & Decker Worldwide Power Tools Business. Galli is credited with developing and launching the DeWalt brand of industrial power tools.

The link below is from January of 2001.
http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/01-08-2001/0001398393&EDATE


It is interesting, as in the contradiction - in general - of many Americans, that as employees, a high salary is desired (along with health care benefits but I digress), but as a consumer - a low price is desired.

Huffy bicycles kept getting squeezed as well under pressure from their largest customer,, with moves from Ohio, first to the South, then to Mexico, but finally Huffy ended up in China.

Interesting read, Galli was also president of Amazon for a number of years.

I have used American made Vise-grips for many years, and also some chinese- knock-offs, but of course not any Foreign-made Vise-grips. The originals (including the ones my dad must have had from the fifties) always worked well. The knock offs were less desirable from fit and finish but they also worked. I'm sure that there's lots of specialized tooling to bend and form those Vise-grips and they'll be shipping the tooling to china. Going offshore is very expensive to initiate, the cost of breaking down a factory, writing off certain assets, moving, setting up and training, administration, communication shipping and travel is expensive and is something they are not undertaking lightly.

I know in America shop labor is expensive. I have worked in several companies in industrial (oilfield) equipment sector for many years and I have seen labor and burden rates for normal, semiskilled manufacturing labor (not higher paid technicians) range from around $90 to 110 per hour. For those of you not familiar with the terms, labor and burden is the cost of the worker and his benefits (health insurance, vacation, 401K match, etc) and the divided costs of the plant overhead expenses (lights, utilities, rent, fixed capital building and tools associated with his department), but not including the costs of the sales, marketing or management.

We typically build prodution lots of 10's 100's and sometimes 1000's, but not at consumer device rates of 10,000's and 100,000's and up. Still, its easy to see how labor costs can really add up when there's an significant amount of handling done by people. I have no idea what the labor and burden costs are for chinese manufacturing but if you imagine $10 per day, limited health coverage costs, and less than comfortable, pleasant buildings with rudimentary tools and little enviromental or occupational safety needs, labor and burden in the range of $20-30 might be on the high side.

I don't know what point I'm getting to but I can see why its happeneing. Most corporate charters will say their mission is to increase shareholder value and or returns on investment. I don't know of any that say their mission is to provide workers in the state of Nebraska or the USA with jobs. Or even to subsidize jobs at a losing rate. Still, the loss of industrialized jobs in the US is somehow alrming to me. One important social question is, are we jepardizing the health and welfare of the foreign workers who risk safety, and health from the products they make, and is it polluting the country in a cost that will be borne by future generations. They may be willing to work for less per hour, but should they also be subjected to less stringent health, safety and environmental restrictions than here in the US?

[Warren]

Value for price. I purchased my BT3000 for that reasonl Country of origin never entered into the equation. I wanted the most bang for the buck.

If I had shares in Rubbermaid and moving operations off shore was the only viable option to keeping the company viable, I'd go with the move. I'm not averse to making money. I'm dead set against losing money.

[Thalermade]

The link below is from 2004. It is a good primer on how the retail business, in order to be competitive, seems to be done now.

Warren is pretty much correct from the dividend point of view.

When my brother was a small business owner, he often said he was in business to make money, not to just support the lives and families of his employees. Kind of cold, but it does contain some basic truths.

http://www.pbs.org/wgbh/pages/frontl.../walmart/view/

[dbhost]

If the products can be made with the same value to the consumer in the U.S. compared to foreign imports, then the U.S. manufacturers will flourish. Generally speaking, that is not the case, for several reasons, not the least of which, China is a communist nation, with price controls, and a MUCH lower cost of living, combined with a MUCH lower standard of living compared to the overwhelming majority of the United States, Canada, and to a lesser extent, Mexico.

My HF bandsaw is a great example. I needed a bandsaw that would fit in my budget, and fill a needed function. I did not care about if the paint was perfect, or of it had every single feature I could ever want. Admittedly my HF bandsaw is nowhere near as fancy as a Powermatic, but for the price of my HF, with the riser block, and the roller guides, and the fence, and the timberwolf blades, and the tension quick release setup, I can buy and modify two more just like it for the price of one Powermatic...

There are items where there is still a great deal of value buying domestic, but in the case of tools, that is not always the case. Where quality and accuracy are a must, such as Torque Wrenches, spanners, measuring instruments and the like, I would never purchase import unless it is German or Italian import... The Asian manufacturers, aside from the Japanese, are simply too sloppy to produce a useful measuring instrument.

And I agree with the comment from Thalermade's brother. Business is in business to make money, not to provide jobs and support the lives and families of the workers. If you don't understand that, you most likely failed your freshman economics class in high school... The fact that business happens to provide good wages to support the lives and families of the employees is just a happy coincidence and a cost of doing business.

I don't know what point I'm getting to but I can see why its happeneing. Most corporate charters will say their mission is to increase shareholder value and or returns on investment. I don't know of any that say their mission is to provide workers in the state of Nebraska or the USA with jobs. Or even to subsidize jobs at a losing rate. Still, the loss of industrialized jobs in the US is somehow alrming to me. One important social question is, are we jepardizing the health and welfare of the foreign workers who risk safety, and health from the products they make, and is it polluting the country in a cost that will be borne by future generations. They may be willing to work for less per hour, but should they also be subjected to less stringent health, safety and environmental restrictions than here in the US?

Yes... That is exactly the point. But the problem is that these same nations would much rather push off their dirt cheap labor produced products than improve the living and working conditions for their workers. Funny thing is, these are typically from communist "workers paradise" regimes...

American workers were at one time subject to the same sorts of poor, unsafe conditions with dirt for wages. Then we unionized. Now I am not a fan, or a detractor of unions, just saying that is what helped to move us forward at a time when big business was crushing the individual citizens. Workers also had friendly ears in Washington who eagerly responded to the needs of such a massive block of voters. I highly doubt that such a thing could happen again. Particularly in China.

[MilDoc]

And I agree with the comment from Thalermade's brother. Business is in business to make money, not to provide jobs and support the lives and families of the workers. If you don't understand that, you most likely failed your freshman economics class in high school... The fact that business happens to provide good wages to support the lives and families of the employees is just a happy coincidence and a cost of doing business.

I do understand that. I just wonder where Americans will work in 20-30-50 years.

[shoottx]

And I agree with the comment from Thalermade's brother. Business is in business to make money, not to provide jobs and support the lives and families of the workers. If you don't understand that, you most likely failed your freshman economics class in high school... The fact that business happens to provide good wages to support the lives and families of the employees is just a happy coincidence and a cost of doing business.

I happen to disagree. People are in business to make money, if not then they run not for profit organizations. But the really successful organizations manage to balance the requirements of customers, employees and Owners or stockholder. There is a huge body of evidence showing companies that manage all three constituencies consistently out perform those organizations that mange to only one or two.

The mistake I make is trying to apply my set of values and expectations on other corporations with out understanding the requirements they face. While it is a shame, that vise grip is moving out of a small town in Nebraska. Look at the resurgence of small high end tool companies in America; Lie Neilson, Bridge City Tools, Blue Spruce Tools, Knight Tool works, and then the Canadian Lee Valley.

All most all of discussions on this site discuss the cost/value trade off of tools. In these discussions there are those that look at cost vs. function and worship at HF, the other extreme are those buying Festools, many are non-denominational in purchasing patterns. No where in any of these discussions have I heard a discussion of nationality of the tool or the impact on a community of buying one versus the other. So businesses address their customers, employees and owners in the model that makes them money if not they go out of business.

[Hoover]

I liked the Vise Grip brand because it WAS made in the USA. They were around for a long time, and made a quality product. Another good tool sold down the river. It's sad to lose what little the US does make.

[dkerfoot]

Nope your both wrong. It's what happens when greedy people get their way. The family was probably given a great big buy out offer from Newell-Rubbermaid and took the money and ran.

Probably not until after the workers unionized and started telling the family how THEIR business would be run.

[jackellis]

A couple of points about this thread:

First, manufacturing is beginning to move back because the cost of shipping is beginning to erode the labor cost advantages of manufacturing offshore. A weak dollar also helps.

Second, there are businesses that have managed to be profitable while taking care of their workers.

Third, successful firms and their employees remember that there is no "I" in team. Those firms are few and far between, but they exist.

Finally, for all the hand-wringing and moaning about American industry, we are still the world's largest exporter.

[Russianwolf]

It's hard for me to talk about this without getting political, but I can tell you this. Given the choice of a product made in the US or a similar quality product made overseas at a similar price, I'll always opt for the US made one. Problem is finding them.

Jackellis mention that we are still the largest exporters in the world, but in what sectors? Many of the products that I look for are made in the US by highly niched companies that due to this demand much higher prices (Lie Neilson for example).

The last 5 cars that I've owned have all been Domestic Models, and I've even started looking at the door tags to make sure they came off American Assembly lines.

If you want to support your neighbors, it seems to me that sending business to companies that hire your neighbors is the ay to go. And for the Companies, If 90% of your sales are to US citizens, moveing overseas seem to me he wrong plan. Why? If every company who fits this catagory moves, then people won't have the money to buy the product and your sales will go down, making the reason for the move rather moot.

[jlm]

Finally, for all the hand-wringing and moaning about American industry, we are still the world's largest exporter.

Actually, we're second behind Germany for manufactured merchandise exports, with China very close behind us in third.

But whether we're the top or not is not the real concern - it's the trend, and the trend is not good. We've been losing ground steadily for quite a while against the Asian and European countries. I'm less concerned about it from a "we're losing all the good jobs" standpoint, and more concerned from a self-sufficiency standpoint. What happens when America doesn't have the capacity to make refrigerators or microchips anymore, and we're totally dependent on another country? What happens when a political disruption in China stops the flow of telephones, computers, electric motors, etc to the U.S., and we have no factories to make them ourselves?