Some years ago, I was visiting a friend who worked for Sunbeam, in their electric blanket division.  The discussion concerned the large percentage of manufactured goods that are now made in China, and he told me an anecdote about a fellow engineer who was having problems with his Chinese suppliers.  He looked around locally, where he found a small American company that could make the electrical components he needed quickly, with better quality control and specifications, and even cheaper than those from China, especially since they didn't need to be shipped across the Pacific Ocean.  His bosses, though, wouldn't let him pursue it, for whatever "big picture" reason they had.  My own thoughts are that we need to start bringing our production back to our own country, especially with such an uneven balance of trade.  Are the injection molding machines, and molds, and copyrights owned by Atlas, Walthers, and Horizon?  Or are they the property of the suppliers in China?  If they belong to the manufacturers, can they not bring them home and build their products here?  Kadee does.  Especially since the free-market labor costs in China are increasing, perhaps it would be cost effective to make the locomotives and cars in Des Moines, or Panama City, or Reno.

Paul

Capitalism at work, the guys who own Bachmann suck everyone into their production facility.

Then tell the competitors to find somewhere else to make their competitive product.

Ahh, capitalism, Darwinism at it's best. Survival of the fittest.

Where are they going to manufacture anything in the US?

The US manufacturing base was gutted in the '90's by "vulture" capitalism, all the "moneychangers in the Temple".

I was in the injection molding business in the '90's when it was leaving, that is all gone now.

Harold

Well,

Money may not buy happiness, but if you have enough money you can build your dream model railroad.

Regards,

John

PS > I don't believe Bachmann "sucked" everybody in. The factory was a subcontractor that went belly up and Bachmann purchased the facility. Anyway the predictions and issues from this earlier post seem to be moving right along.

http://model-railroad-hobbyist.com/node/6448

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I've read the last page of the Bible. It's all going to turn out all right. >> Billy Graham

An Answer to darwinism, " I
Tue, 2012-07-24 20:41 — EspeeRte51
An Answer to darwinism, " I Returned to see under the sun that the Swift do not have the race, nor the mighty ones the battle, nor do the wise have the food, nor do the understanding ones have the riches, nor do even those having knowledge have the favor; because time and unforseen circumstances befall them all. "

Eccl: 9:11

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WTF?

TG: 7:12

anyone? Looks like history repeats itself.

The place I used to work at also went to China to open dealerships for their machines. A majority of the factories are along the coast of China. So the product goes from factory to ship in a short distance. As the Tri-Com workers westernize with higher wages the factories have moved in land to get cheaper labor. With that came unskilled labor and a longer distance to transport the goods thus a problem with quality and cost of transportation.

I for see that perhaps as time goes by there will be more and more manufactures bringing the base back to the US. Good example is Railflyer that is starting to due more of his own manufacturing in house because of quality work done outside.

So practice your scratch building techniques and load up on raw stock and hope for a long winter to build those models that will no longer come in RTR form.

Bernd

Thanks, Tom Tomblin, for the industry overview!  I appreciate the information.  I'm a newby and am still trying to find what is up and what is down.

Some of the posts to this topic have "pushed a button" so I thought I'd butt in.  I'm not trying to be controversial, just want to show the other side of the issue. 

The free market is incredibly empowering!  We are all very much richer than we would otherwise be.  As consumers we can choose what to buy, from whom to buy, and when to buy, not to mention whether to buy.

Free markets give producers a similar set of options.  If you think you can make a profit by meeting the needs of consumers better than competitors can, then go for it!  "Profits" are a sign of achievement, not greed.

The free market system is why we have videos by Fugate, chargers/RC/trucks by Stanton, RC by Ring, RC by TVD, etc.  Hell, it’s why we have MRH!  (However, since my UG degree is from IU I feel obligated to add a qualification to my Stanton and Ring references:  “even though they went to Purdue.”  ]-: )

The free market is why we no longer have dial-up telephones.  (Remember those beauties?)

When we find that virtually everything we want to buy in this wonderful hobby is produced outside the U.S., it is not because those “evil capitalists" want to screw us or because they hate America.  It is a sign that the U.S. business environment has gone sour.

Do you get that?  "Outsourcing" is not a problem, it is a symptom.  Something makes the U.S. environment less attractive for business than say, China.  And it is clearly not just labor wages, U.S. labor productivity is second to none.

A combination of factors accounts for the negative current U.S. environment:  taxes, regulation, labor costs, and uncertainty about the future.  If Americans ever elect people who understand these issues, and actually address them, then there will be hope.

Maybe it would be instructional to have a forum for North Americans—producers, distributors, retailers—to discuss their business challenges and solutions.

Having “vented my spleen” I must confess that I am a bit of a Luddite, I catch a lot of grief for using a crank egg beater, manual hedge scissors, and hammers without batteries, hoses, or magazines.  I can honestly say that I’ll never own a riding lawn mower!

Thanks again, Tom Tomblin, for the info!

Tom Leonard

Ok, I gotta ask, Tom, as I get from your well thought out post that you both seem to know what's going on, and that the current government is to blame....

As outsourcing began in the 1970's and has continued unabated ever since, when exactly was the environment good for American business?  Before child labor laws? Under Roosevelt?

The points you make seem reasonable enough, but I'd wager there's been a large incentive by most of the business to maximize short term profits.

Scarpia,

Thanks for your 22 Stories Up posts, they’re very inspiring!  I was very impressed that you could just draw lines, lay rail without special jigs, and come close to workable turnouts, etc. on your first try!

I’m not sure how to address your questions.  First, I must confess to being a recently-retired, pointy-headed, SFB marketing professor—my major area is Consumer Behavior and my minor is Research Methods. 

Regarding a short-term profits perspective: 

The short answer is that Americans are very short-term oriented.  We usually evaluate managerial performance on an annual basis.  The Japanese, in contrast, tend to use a much longer time frame.  This is a problem with the traditional American business model.

Long answer:  This is an American cultural trait—really hard to change.  Thirty years ago  Hofstede, a sociologist (I think “Geert” was his first name—makes you want to name your first-born Geert, doesn’t it?), did a noted study of several different world cultures seeking to identify the key dimensions that differentiated them (used factor analysis, I think).  His five resulting dimensions were:  individualism vs. collectivism, power distance (social distance between the manager and subordinates), uncertainty avoidance, masculinity, and long-term orientation. 

Regarding the business environment:  It is easy to trace a steady degradation of “free markets” to the early 1900’s—starting especially under Roosevelt (Teddy) and Wilson.  Going back a bit farther, look at the U.S. railroad regulations passed in the 1890’s! 

To be sure we need some regulations to protect all the free market players.  In my humble opinion, though, we’ve gone far overboard. 

I lived in Rhode Island in the 90’s.  A neighbor once threatened to report me to “the authorities” because I put a 6-foot diameter fish pond in my back yard.  Apparently, an official permit was necessary because the state is a “wetlands.”

How many N.Y. City police officers should be allocated to monitoring the sizes of sugary soft drink containers rather than crime?

Time to get off the soapbox...  Talk with you later!

Tom

PS:  How about a fun topic?  I think I'll try to draft a "Questions we have for Ring" post.

....all the factors involved here because this is supposed to be a Model Railroad forum, so keeping focused on model railroad manufacturing, it still is being done (in small scales) here in the US, and there is still a strong manufacturing base in this country (my dad works for a company that machines large gears, and interestingly enough one of their customers is a large supplier of equipment to China) but there are certain factors that if they occured which might be possible starting next year, we could see the return of manufacturing here in the states.  PERHAPS if the manufacturers would start offering kits again instead of completed models, unless the additional cost is small.  If i'm in error on that, i apologize.  FWIW,

Ken L

And it is clearly not just labor wages, U.S. labor productivity is second to none.

Oh really?  We can say "we're number one' all day long,but that does not make us "number one."  Once, we WERE number one, and that is why we could say "we're number one."  Alas, over the decades, the lesson has turned from "here's how to do things right" [n turn, the reason why we became number one] into "We're Number One."  We're number X on too many lists that matter, such as literacy rate and literacy level, to name two off the bat.

At this point we have too many professional Non-workers in our economy to make any claims whatsoever about the productivity of the American worker.  I am reminded of a punk kid on a Hotrod show who spent half the show talking about how hard his cutting edge design job is to do; his boss saw right through his conceit for what it was, because it's nothing more than a matter of time and training to do what this kid was doing.

Most of the boxes around here are stamped "made in China" so I'd suggest the most productive workers in the world are Chinese.  Most of my food and my landscape care is done by people of South American/Central American descent.  We have 24-hour taco stands, but none of the American stores are open past 11 or 12.  So I'd suggest these people are the second most productive workers in the world.

Working capital has dried up for many manufacturers. In foreign countries, a number of manufacturers may be taking funds from one customer and applying them to another, they are “robbing Peter to pay Paul” to stay in business.

I know of a number of our North American importers, with manufacturers overseas, who are in this position of waiting, and waiting, and waiting. They have supplied funds to their overseas manufacturers for research and development, tooling, raw materials and production costs, and are waiting on receiving a pre-production sample. They may even have approved the sample and are waiting for production to occur, but they are still waiting. It is out of their control.

It is a global issue.

BS.  It is a manufacturer issue, they made their bed and now they sleep in it; some companies will not be waking up.  We robbed peter to pay paul, all the while giving the bulk of the opportunity to those who are now in charge - companies like Kader took our capital and invested it in technology, training, better products, and buyin gout their competitors.

It is a National Issue.  We held the pot, and we were foolish with it, and now we hold an empty pot.

So practice your scratch building techniques and load up on raw stock and hope for a long winter to build those models that will no longer come in RTR form.

Buy a laser cutter and in short order you'll be on par with the majority of the North American producers remaining...

To be sure we need some regulations to protect all the free market players.  In my humble opinion, though, we’ve gone far overboard.

Ha.  In trying to provide protection against the large, the large have adapted, maneuvered, and now are larger than ever.  And when we told them WE controlled them, they discovered the shortsightedness of their company plan and went global.  If the US shrugged off Coca-cola, they'd laugh at us and marvel in how they're doing fine even without us.  In short, Companies have become "sovereign" in and unto themselves...and their stockholders, but the only stockholders who matter are the people who meet in the board room.  Globalism is GREAT for companies but it is Terrible for countries...

We went astray some where back in the sixties/seventies and then we made things worse by trick-thinking ourselves into bad economics.  Oops...

PERHAPS if the manufacturers would start offering kits again instead of completed models, unless the additional cost is small. 

Not going to happen.  The US consumer has a whole closet full of kits.  Twenty years of RTR, it's not going back.