Manufacturing

[jackellis]

I think this article speaks for itself. I've talked with a Boeing employee about how large parts for the 787 are built all over the world and how expensive it is to move them to the assembly plants at a cost of $200-400k per flight. Boeing's problems with quality control and coordination have been laid out in the press many times.

Let's not forget the importance of math and science.

[chopnhack]

Good article, lets not forget though that the unions have killed Boeing on the west coast with there famous strikes every ~2-3 years. I am not saying that the companies in this country have been fair or smart in there rush to outsource all manufacturing, but there are some good causes for many to have left. Environmental regulations that don't exist in other countries, high wages, strikes even anti business laws or regulations and in some cases energy costs. I would prefer to keep everything in house myself and if done safely and according to code, there would probably be quite a few things that would be far more expensive that they are now.

[Richard in Smithville]

And lets not forget the record bonuses given out to the CEO's and top executives of these companies. It's kind of hard to expect the people actually making the product to take cuts when the company brags about their profits and pay outs, especially when they are having trouble buying the basics and watching their children go with out.

When it comes to things that you really want to stay in one piece, I would rather not be paying Walmart wages to the workers.

[LCHIEN]

there are pros and cons to outsourcing parts all over the world. One of the reasons is political. If you make key parts of the plane in some country X then country X will buy your planes, or else they may go with company A instead of Company B.

[cwsmith]

I've spent more than 30 years in the compressor industry. Much of the article can apply there as well. At one time, my work-place was the largest compressor plant in the world, but now it barely supports 600 employees.

Much of the operation as been moved elsewhere. In 2000, NY State gave the company $10 Million to expand its employment in the state and on that very day, they layed off 140 workers, most in violation of the "Older Workers Protection Act". I lost my job on that day also; but because they needed my skills they hired me back as a "consultant"... less pay, no benefits! Within two months of that State check, they moved two major product lines out of the plant; one to India and the other to China. Then they moved the corporate offices to Texas.

The sad part of this is that our Eastern Hemisphere customers mostly demanded "Made in U.S.A.", but the company CEO could make better profits by building the product "off-shore".

Today, the plant holds the community hostage in it's demands for significant tax relief. The plant gets a lot of product back from China where it has to correct all kinds of problems! I've been told that the plant also "relabels" a lot of the foriegn product, by sending it back here, having further work done on it and then labeling it as "Made in U.S.A."

Too much of this goes on in industry IMO,

CWS

[chopnhack]

Root cause analysis is therefore greed.

[jackellis]

Greed is only part of the problem. It's also part shortsightedness, part stupidity (sorry, I'm in a foul mood today) and sometimes part following the crowd for fear of being left behind.

When it comes to China, I think stupidity is the dominant problem. Many supposedly intelligent business leaders made the decision to invest in China for market access. In many cases, they were required to transfer technology as a condition of gaining that market access. If they can't continue to innovate faster than the Chinese competition they've been forced to create, they're toast. I had to consider this problem about ten years ago while serving on a company board, and I never thought the benefits of market access were worth the cost in terms of technology transfer and the ability to repatriate profits.

Apple is gambling they can innovate faster than any Chinese competition that might develop from their suppliers, and they may also be gambling on their ability to better manage product quality.

As far as I can tell, GE does most of their high-value-add work in the US. No way would I want to teach the Chinese how to clone my expensive and very profitable jet engines.

BTW, anyone who travels to Russia or China should pay attention to this article:

[Old Dutchman]

I don't realy know much about this subject, but I have heard that a few of the companies are returning here. It is hard for some to get the quality that is expected from buyers. About the computers getting robbed of the contents! Sounds like a great place to take all of Our failures to: