China Now Comes to USA for Cheap Labor?

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


On Tue, 25 Jul 2006 11:54:19 -0700 (PDT), M A Granich wrote
:

>
> > ***Here is the part that I find hard to communicate.
> > The cock crows before the sun
> > rises, ... We do extremely little biz with such
> > producers.***
>
> #####If the labor cost for a pair of Nike shoes made
> in Indonisia is $1.20 and the same pair made in
> Portland OR have a labor cost of $7.20, would that not
> have an impact on where the shoe is made and what
> country you want to make Nike shoes? Why are high
> taxes different? A cost is a cost...right? How is it
> that Ireland's tax structure can make such a
> difference where labor costs can't?
>
> Anthony
>
> PS. Ireland doesn't have to support a huge military
> industrial complex.

***According to Nike managers who've attended my class, and conversations with
top Nike
executives... Nike neither makes nor sells anything. they merely design and
market.

Nike does not have within it's employee skillset the management talent to make
50 million
pairs of shoes a year. It outsources that management skill for the simple
reason it is far
cheaper than similar management in USA. They;ve tried a few times to do it
themselves, and
failed miserably each time.

New Balance touts their shoes as "Made in USA" when in fact they are sewn here
out of parts
from overseas. The expensive part of making shoes is to gather all the parts
from around the
world, logisitically keeping the flow to maintain production, and cutting and
allocating
portions of the materials to maximum efficiency. That can make or break a
company.

New Balance and Nike (and everyone else) outsources this critical step. Nike
also lets those
outsources sew the shoes together, New Balance elects to sew them in USA. It
does not make
a difference, because the savings is in management cost, and the small
difference in per shoe
labor costs, especially in relation to the retail, makes no difference.

It's the management that matters.

As to "Ireland doesn't have to support a huge military industrial complex."
well, neither does
the United States.

John

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