Reshoring (protectionism)

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Aabidano
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Reshoring (protectionism)

Post by Aabidano »

Read a paper earlier by one of our business analysts discussing the need for US businesses to reshore work to the US even if costs more short term. To sum up, "a middle class without good paying jobs doesn't spend money". Henry Ford really had it right in this respect, as opposed to Carnegie & Co.

Protectionism has been a dirty word for the last 30 years and US businesses haven't had the good sense not to cut themselves off at the knees.

Using GM as an example, once you've sent all your labor-expensive work elsewhere, who do you expect to buy your products? Go look on a GM lot, count the cars that have any significant benefit to the US beyond direct sales & maintenance. In most cases you'd put more cash into our market buying Japanese.

Interesting note was despite everything, the US still produces 21% of global manufactured goods with a comparatively smaller workforce.

I don't think US business leaders are smart enough to do so unless forced to in some manner. They've shown they're happy to ride this dead horse right into the grave.
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Re: Reshoring (protectionism)

Post by masteen »

Aabidano wrote:I don't think US business leaders are smart enough to do so unless forced to in some manner. They've shown they're happy to ride this dead horse right into the grave.
This is the problem, right here. They'll all be dead before their gravy train collapses, and they'll leave their heirs enough of the cash they've filtered from the money rivers flowing out of the US to enable them to establish themselves in whatever niche remains for plutocrats (a la Russia) or leave if it gets bad enough here.

So why should they care? They're rich, bitch!
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Re: Reshoring (protectionism)

Post by Siji »

I often wonder if middle class Americans are getting lazy or if we're getting fed up to the "fuck you" point for the way middle class is being treated by both the corporations and the government. At what point does middle class disappear and the wealthy people start wondering why there's nobody left to buys their shit anymore?
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Re: Reshoring (protectionism)

Post by Aabidano »

Depends on what happens first, our economy collapses or the some decent sized percentage of people wake up from their TV induced slumber. "I"ll vote for anyone who'll reduce my taxes." "What do you mean they're cutting off Grandma's social security and medicare?".

Tag line from a show when I was flipping through on the tube the other day; "The very best in vicarious living". Sums up where our society is headed.

Wal Mart has hit "end stage capitalism", their years long intrusion into their suppliers' business practices and the continual push to make it cheaper has turned them into a vendor of absolute shite. Who cares if your prices are 3/4 your competitors if the product lasts 1/4 as long?
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Re: Reshoring (protectionism)

Post by masteen »

Aabidano wrote:Wal Mart has hit "end stage capitalism", their years long intrusion into their suppliers' business practices and the continual push to make it cheaper has turned them into a vendor of absolute shite. Who cares if your prices are 3/4 your competitors if the product lasts 1/4 as long?
Consumers who have been taught that the only difference in products is price. This same mentality pervades almost all American businesses as well, in that management always believes there are costs to be cut because the quality of the final product if irrelevant, only cost, price, and profit margin.
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Re: Reshoring (protectionism)

Post by Aabidano »

masteen wrote:Consumers who have been taught that the only difference in products is price. This same mentality pervades almost all American businesses as well, in that management always believes there are costs to be cut because the quality of the final product if irrelevant, only cost, price, and profit margin.
As part of an NPR piece on the impact of Chinese knock offs in Africa a vendor selling them was asked why customers would buy his products that they know are crap and will wear out in half the time of the real thing. He replied "because they keep buying them over and over and can't afford anything else". Went on to say that vendors like him have driven the people selling the real deal out of business.
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Re: Reshoring (protectionism)

Post by Chidoro »

A lot of businesses are not reliant on whether they even make money or not any longer. If a company is publicly traded, analysts dictate whether a company is performing. It's all about beating expectations. A lot of companies are performing but still will not hire because they may not beat the street if they do.
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Re: Reshoring (protectionism)

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Chidoro wrote:A lot of businesses are not reliant on whether they even make money or not any longer. If a company is publicly traded, analysts dictate whether a company is performing. It's all about beating expectations. A lot of companies are performing but still will not hire because they may not beat the street if they do.
While it might pay dividends in the short term it's not a sustainable model. Wall St is almost totally detached from reality.

A guy I used to work for said something along the lines of "if you're chasing analyst expectations rather than taking care your customers you've already lost the game" and "I take care of my engineers, engineers take care of the customers, stock price will follow".

The (French) company I currently work for came up with a plan the US analysts have never liked and have been executing on it for 3-4 years now. We're making money, have a good order stream and the stock price is rising. Most of our stock price focused, analyst chasing American execs have been booted over time.
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Re: Reshoring (protectionism)

Post by Gzette »

I'd go further and state that Wall Street is completely detachted from the economic reality of America. But why should they care?

The evidence is as easy to see as looking at the Dow Jones index from Fall '08 to present day. Wall Street has made a complete bounce back, and many shares are now trading above pre-recession levels. Despite this, our unemployment remains stagnant (and the numbers are worse than the 9.4% that is commonly reported), many are facing either no salary increases or even pay cuts.
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Re: Reshoring (protectionism)

Post by Gzette »

The US's manufacturing sector is actually growing quite steadily over the past 1 to 1.5 years. However, growth in the sector does not mean jobs. Unlike China, un-developed, and industrializing nations, the US manufactures very sophisticated products like health care equipment as an example. These products require very sophisticated machinery and are extremely important products for us to continue moving forward with, however, they generate little manufacturing jobs.

The US is the largest manufacturer in the world.
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Re: Reshoring (protectionism)

Post by Neroon »

The company I work for just had record profits last year. And we just had a 20% layoff "to remain competative in the marketplace".....
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