China Now Comes to USA for Cheap Labor?

Re: [spiers] China Now Comes to USA for Cheap Labor?


On Tue, 18 Jul 2006 13:37:10 -0700, Paul Snyder
wrote :

>
> Agreed on all points. I presumed you would argue that they would hire
> US managers and that demonstrates superiority of Our managers versus
> theirs. But you also agree that they will probably bring Chinese execs
> to US to run the place.
>
***Yes, copying the japanese and German success in auto building in USA... we do
not have
the best auto execs in the world, as is proven by their inability to make money
at it in USA...
Years ago I heard a comparison, Gemeral motors, USA's biggest manufacturer had
43 layers
of management; the Roman Catholic church, the largest single organization on
earth, had five
layers, from pope to parishioner. One reason foreignors can compete is they do
not need so
much managment. On the other hand, they still hhire USA marketers, becasue usa
marketers still do best in USA***

> I find this fascinating, because another approach is Bricklin's, who is
> using the Spiers method, tailoring cars already made in the best place
> (China he thinks) and bringing in Chery cars (and someone else is
> bringing in Geely cars).
>
> Perhaps the success will be determined by the design and quality of the
> final product, rather than the nationality of the assembler? I wonder
> who is designing them?

*** well, the "spiers method" is not really mine, I learned it from others...
but yes, design and
quality is what matters. A major problem is malinvestment, which makes all biz
decisions
dicey, since USA money policy distorts the markets and causes misallocation of
resources.
But good design will always win...***

John
>
> On Tue, 18 Jul 2006 12:56, John Spiers wrote:
> > Exactly... China is going to do exactly what USA has been doing... "So
> > they will take a
> > respected name (MG), build it with high priced labor, use
> > Chinese-sourced parts, and make
> > good margins" Since USA pays the most for everything, they can do
> > this.
> >
> > But a couple of points... if the Chinese can use high priced USA labor
> > and make money, then
> > labor cannot be critical. If they turn a nice profit, how so? since
> > USA automakers cannot. If
> > they do, the difference will necessarily be Chinese management, since
> > all other factors will be
> > the same.
> >
> > Another reason to make cars in USA is China has a labor shortage right
> > now, and
> > unemployment is rising in USA if you take govt jobs out of the
> > picture. With inflation, USA
> > labor has been getting cheaper.
> >
> > I agree China will sell these cars inside usa, because they will cost
> > too much to sell outside
> > the USA, any more than any other USA car will sell well outside of usa.
> >
> > Finally, the Chinese market is growing rapidly, so saturation is hard
> > to gauge, I suspect there
> > will be new car companies yearly in china, until the decide to leapfrog
> > USA and go completely
> > mag-lev.
> >
> > John
> >
> > On Mon, 17 Jul 2006 18:26:02 -0700, Paul Snyder
> > wrote :
> >
> >>
> >> I don't think it supports your theory about management. It's just an
> >> investment decision. The Chinese auto market is super-saturated, so
> >> Nanking Motors is looking to put their money somewhere it will grow
> >> better. So they will take a respected name (MG), build it with high
> >> priced labor, use Chinese-sourced parts, and make good margins. The
> >> car will sell only in the US, I predict.
> >>
> >> On Jul 17, 2006, at 1:18 PM, John Spiers wrote:
> >>
> >> > Folks,
> >> >
> >> > If you believe cheap labor is a factor in int'l trade, then what do
> >> > you make of China to build
> >> > British cars in USA?
> >> >
> >> > http://tinyurl.com/lu9fq
> >> >
> >> >
> >> > John

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