How can we keep doing what we do?

I'm in the lens-making business. One of our products is up for quotations, and in researching it we found material from a Chinese company was one tenth the cost of the same material from an American company. This means they can make a finished lens for less than we pay for the raw material. Before you start thinking about expensive union labor in the American shop, let me tell you that I know the shop, and that it is definitely not the case. They are middle-of-the-road for our industry. So where do the huge differentials occur? Our little mom and pop operation cannot compete with China, full stop.

I figure I would have to go back to my first job, circa 1975, to achieve the equivalent pay-cut.

We have survived this long because we achieve a certain amount of protection from government contracts which cannot be made overseas. But those contracts have become so technically demanding as to eliminate all but a few selected vendors. Small operations without corporate support virtually cannot play any more.

We have survived this long because the quality of the off-shore products was, for a long while, pretty terrible. But they are learning and adapting, and purchasing the same equipment, so there is no longer any great difference in quality. So even with huge fuel costs, they can still ship lenses here more cheaply than we can make them.

So. What is the future of manufacturing in America? I'm not ready to retire yet.

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6 Responses to How can we keep doing what we do?

  1. jaklumen says:

    I've been thinking a lot on what you've said on this subject in general, and I wonder even more reading what you've written now.I'm guessing it has to do with the yuan being horrendously devalued compared to the dollar, but I'm sure it's all part of that rather Gordian knot of trade relations with China. I was watching yet another PBS documentary about the history and evolution of the stock exchange. Beyond explanations of options, futures, junk bonds, hedge funds, etc. there was discussion of the concept of "Chimerica", the recent recession, and how trade got to be as it is now.They were saying that China has been saving for years, and have bought up the dollar in their savings, among other investments in America. By comparison, the U.S. does far more spending. Of course the host mentioned Wal-Mart making a killing by selling a lot of cheap Chinese goods.Add to the mix that there is a huge wave of post-industralization that is modernizing China– lots and lots of farmers and people that used to work the land from poorer provinces pouring in for industrial jobs. Based on another documentary I saw concerning their education system, testing is brutal, and the stakes are high on whether a student passes them to be one of the few in a white-collar job or gets cut to be part of the blue collar masses.They work for far cheaper than we do, they live far cheaper than we do. Manufacturing isn't the only domain they are slowly taking over– yet ANOTHER PBS documentary I saw featured many Polish musicians lamenting that when they once played like machines, they now play Chopin with great passion and feeling.Might as well be a Star Trek parody: WE ARE THE CHINA. YOU WILL BE ASSIMILATED ?

  2. Doug says:

    This has been happening all my adult life. I think we have reached a tipping point, especially given that young people don't seem interested in the work. We have to figure something out, because it's wrong to let the skills evaporate.

  3. Emmi says:

    To me this is the pinnacle of our problems as a nation. On a microcosmic level (and the only one I really understand personally) I try to buy only local products but if I cannot afford something (and indeed if the average working poor can't afford it) one has to wonder how China do things so much cheaper. Is it because they pay their workers horribly, or is it cheaper to live in China? I honestly don't know, but we as a nation had better figure it out soon.

  4. bringing all the economies in the world and all the workers in the world to something approaching parity is a bitch – especially if it means lowering your life style as that of others is raised. I am not that charitable – it hurts

  5. Doug says:

    It seems that living within our means is not really that fashionable. For every dollar that I earn and put away, there are hundreds more that people I know squander carelessly on cheap Chinese crap. I don't have any answers, but I think we are our own problem, and our "trading partners" merely facilitators.

  6. Doug says:

    The lifestyle probably needs to be lowered, and it is truly painful. But when it takes two incomes to purchase the least hovel to live in, how can we say that wages are too high? But, if the prices plummet our situation gets even worse. I'm not smart enough to figure this out.

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