Re: [spiers] China Now Comes to USA for Cheap Labor?
To me the question is one of choice... do people who accept the jobs do so
freely...? if so,
they must surely have chosen among options... second, those who choose freely
inevitable
"conspire" against the bosses and begin to demand more of the income of the
factory...
(except in places like the United States where govt-sponsored inflation has seen
to it that
labor has not gotten an effective raise since 1973, and those who are retiring
are finding out
their pensions are bust). It seems to me the conditions in China are precisely
those we had
maybe 100 years ago, and China is using the exact same means we used to grow
rich.
John
On Fri, 21 Jul 2006 08:02:17 -0700, "choigrogan Choi-Grogan"
wrote :
>
> When we said that "the Chinese style labor market is with minimum wage
structure and
zero benefit structures", we are very much ill informed. The Chinese government
has
regulations in place and the employers are required to provide health benefit,
retirement
pension, and insurance to their employees. Moreover, many manufacturers there
have
difficulty finding good employees due to the tight labor market, minimum wage
without
benefit will not work per the demand and supply theory. Don't use a few news
coverage to
generalize the labor treatment there. Don't purely use the wage number without
understanding their living cost structure.
>
> Let's say a machine operator is paid US$400-500 a month, in most cases, the
factory will
provide housing and food for them. So they keep most of the take home paycheck
without
much living expenses. They often will send the money back to their family. If
they do need
to rent, the average rent per month is about US$90-100/month. This is not in
Beijing or
Shanghai city center of course, but this is the average housing cost near most
of the
manufacturing zones. A banquet full service dinner for 30's people cost
US$100..... I don't
think we can find that kind of expenses here in the States. With this cost
scale of living here
in the States, I think some of these Chinese workers have better situation than
the US workers
in some retails and fast food or service industries.
>
> ----- Original Message -----
> From: grp grp
> To: spiers@yahoogroups.com
grp123@gmail.com
> Sent: Wednesday, July 19, 2006 4:34 PM
> Subject: Re: [spiers] China Now Comes to USA for Cheap Labor?
>
>
> > Another few points:
> > 1) You say "labor cannot be critical.".... Labor costs >vary among the
> present US >automakers and a new >company entering the system, with no
> legacy >pension> costs, etc., >would be expected to have >lower labor costs
> than many existing manufacturers.
>
> > 3) Your thesis that labor costs are irrelevant is >absurd. Labor costs
> are one component > of final >total product costs. To the extent that labor
> is a large >component of final total product costs (vs. materials,
> >transportation, etc.) labor will be a relatively important >factor in the
> cost of the good, its price >competitiveness and ability to compete in the
> >marketplace.
>
> ***Little of what USA imports has a component cost of labor more than 5%...
> but that is not my main thesis, the cost of management to make baskets in
> USA is too expensive, management oversas is cheaper. People with Ag degrees
> go into govt, while mexicans
> manage the farms, since mexican management is cheaper than usa management.
> The thing is management cost,***
>
> If I can take an item from $Dollar store retailer in USA, as an argument
> for above; Which will cost a retailer .50Cents per item (for example), to
> bring it over to USA, after all the upfront cost and don't forget you have
> to buy in huge consignments to get best prices. With about 4 to 6 employees
> @ about $6/hr to 12/hr; retailer's cost of goods of the item can bring it UP
> to say .80Cents per item or more; than add other retailer's cost, where is
> the retailers margins? Even if retailer is doing the volume business!
> Somewhere, someone(s) is making lots of money minus the US retailer.
>
> When it comes to US labor; as per my opinion, are turning into Chinese style
> labor market with minimum wage structure and zero benefit structures. Large
> retailers and fast food chains in US have successfully been able to do this,
> now gradually auto workers will see the same trend, if they want to work in
> MG plant managed by Chinese management.
>
> Compete on Design: I as a consumer would prefer GM cars over KIA when it
> comes to design, because as per my opinion GM cars looks much better and
> designed much better. Than why is KIA selling more? I think it is more than
> a design when it comes to consumers phyche!!
>
> Grp
Saturday, July 22, 2006
China Now Comes to USA for Cheap Labor?
Friday, July 21, 2006
When to start and quit
Valdir,
Absolutely critical and fundamental is to first know who your custoemrs will bem
in any business, and the best way to start is to ask them.
Last week the tailors from Hong Kong came to town and a half dozen of us met
with them to go over capabilities and target customers.
As these discussions proceed, i feel the same old excitement I felt 30 years
ago, that dangerous "o boy!" that I know now from experience is simply fantasy
getting ahead of reality. We've carefully constructed what we are doing to be
limited to
1. What no one else is doing
2. solves a problem
3. has customers...
oops...see ... i just made customers #3 on my list... it is so easy to not make
them first... so consider them moved back to #1...
4. If this does not pay from day one, we stop. Day one we all ordered clothes,
far better than anything else we cpould buy off the rack, and at a better price,
although we'll not be competing oon price as we go "public." We'll compete on
access to the best the world offers in each fabric category, and first rate
tailoring. Price is not going to matter.
Stopping is important... it breaks my heart to see people struggling to get a
biz going, as they keep running this way and that, trying to get something,
anything to work. As we narrowly define what we are doing to mean only what we
want to do, either there are custoemrs or there are not. if there are, we
proceed. if not, that is the end to it. And worse case scenario is we got
beautiful clothes at a good price.
As to a carpet project I am working on, the artisit for whom the carpets samples
were made has found the first minmum or requirement is sold, so we are on to the
second minimum. Y'all recall we work only on frequency, never in volume at the
small biz level.
John
Hi John...
No yet... I did some research with some companies and some friends that work on
those companies...
Regards a costumer I did not make any contact if they want to work with me...
I know what you mind, first we have to get a customer than move forward...I that
right?
Thanks,
Valdir
>
> From: "Valdir Mota"
> Date: 2006/07/14 Fri PM 08:08:06 EDT
> To:
> Subject: [spiers] Hi John....
>
> Valdir,
>
> Always two questions, have you spoken with people who will be your customers,
and what do they say is the reason they will do business with you...?
>
>
> John
>
> Hello John...
>
> I am thinking to start a business with clean company...
>
> Clean homes after they finish the construction, offices, companies, events,
hospital, etc...
>
> What do you thing about this market?
>
> I am here in Mobile , Alabama state....
>
> Take Care...
>
>
> Valdir
China Now Comes to USA for Cheap Labor?
Re: [spiers] China Now Comes to USA for Cheap Labor?
When we said that "the Chinese style labor market is with minimum wage structure
and zero benefit structures", we are very much ill informed. The Chinese
government has regulations in place and the employers are required to provide
health benefit, retirement pension, and insurance to their employees. Moreover,
many manufacturers there have difficulty finding good employees due to the tight
labor market, minimum wage without benefit will not work per the demand and
supply theory. Don't use a few news coverage to generalize the labor treatment
there. Don't purely use the wage number without understanding their living cost
structure.
Let's say a machine operator is paid US$400-500 a month, in most cases, the
factory will provide housing and food for them. So they keep most of the take
home paycheck without much living expenses. They often will send the money back
to their family. If they do need to rent, the average rent per month is about
US$90-100/month. This is not in Beijing or Shanghai city center of course, but
this is the average housing cost near most of the manufacturing zones. A
banquet full service dinner for 30's people cost US$100..... I don't think we
can find that kind of expenses here in the States. With this cost scale of
living here in the States, I think some of these Chinese workers have better
situation than the US workers in some retails and fast food or service
industries.
----- Original Message -----
From: grp grp
To: spiers@yahoogroups.com
grp123@gmail.com
Sent: Wednesday, July 19, 2006 4:34 PM
Subject: Re: [spiers] China Now Comes to USA for Cheap Labor?
> Another few points:
> 1) You say "labor cannot be critical.".... Labor costs >vary among the
present US >automakers and a new >company entering the system, with no
legacy >pension> costs, etc., >would be expected to have >lower labor costs
than many existing manufacturers.
> 3) Your thesis that labor costs are irrelevant is >absurd. Labor costs
are one component > of final >total product costs. To the extent that labor
is a large >component of final total product costs (vs. materials,
>transportation, etc.) labor will be a relatively important >factor in the
cost of the good, its price >competitiveness and ability to compete in the
>marketplace.
***Little of what USA imports has a component cost of labor more than 5%...
but that is not my main thesis, the cost of management to make baskets in
USA is too expensive, management oversas is cheaper. People with Ag degrees
go into govt, while mexicans
manage the farms, since mexican management is cheaper than usa management.
The thing is management cost,***
If I can take an item from $Dollar store retailer in USA, as an argument
for above; Which will cost a retailer .50Cents per item (for example), to
bring it over to USA, after all the upfront cost and don't forget you have
to buy in huge consignments to get best prices. With about 4 to 6 employees
@ about $6/hr to 12/hr; retailer's cost of goods of the item can bring it UP
to say .80Cents per item or more; than add other retailer's cost, where is
the retailers margins? Even if retailer is doing the volume business!
Somewhere, someone(s) is making lots of money minus the US retailer.
When it comes to US labor; as per my opinion, are turning into Chinese style
labor market with minimum wage structure and zero benefit structures. Large
retailers and fast food chains in US have successfully been able to do this,
now gradually auto workers will see the same trend, if they want to work in
MG plant managed by Chinese management.
Compete on Design: I as a consumer would prefer GM cars over KIA when it
comes to design, because as per my opinion GM cars looks much better and
designed much better. Than why is KIA selling more? I think it is more than
a design when it comes to consumers phyche!!
Grp
Wednesday, July 19, 2006
China Now Comes to USA for Cheap Labor?
Re: [spiers] China Now Comes to USA for Cheap Labor?
> Another few points:
> 1) You say "labor cannot be critical.".... Labor costs >vary among the
present US >automakers and a new >company entering the system, with no
legacy >pension> costs, etc., >would be expected to have >lower labor costs
than many existing manufacturers.
> 3) Your thesis that labor costs are irrelevant is >absurd. Labor costs
are one component > of final >total product costs. To the extent that labor
is a large >component of final total product costs (vs. materials,
>transportation, etc.) labor will be a relatively important >factor in the
cost of the good, its price >competitiveness and ability to compete in the
>marketplace.
***Little of what USA imports has a component cost of labor more than 5%...
but that is not my main thesis, the cost of management to make baskets in
USA is too expensive, management oversas is cheaper. People with Ag degrees
go into govt, while mexicans
manage the farms, since mexican management is cheaper than usa management.
The thing is management cost,***
If I can take an item from $Dollar store retailer in USA, as an argument
for above; Which will cost a retailer .50Cents per item (for example), to
bring it over to USA, after all the upfront cost and don't forget you have
to buy in huge consignments to get best prices. With about 4 to 6 employees
@ about $6/hr to 12/hr; retailer's cost of goods of the item can bring it UP
to say .80Cents per item or more; than add other retailer's cost, where is
the retailers margins? Even if retailer is doing the volume business!
Somewhere, someone(s) is making lots of money minus the US retailer.
When it comes to US labor; as per my opinion, are turning into Chinese style
labor market with minimum wage structure and zero benefit structures. Large
retailers and fast food chains in US have successfully been able to do this,
now gradually auto workers will see the same trend, if they want to work in
MG plant managed by Chinese management.
Compete on Design: I as a consumer would prefer GM cars over KIA when it
comes to design, because as per my opinion GM cars looks much better and
designed much better. Than why is KIA selling more? I think it is more than
a design when it comes to consumers phyche!!
Grp
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
> >
> >
> >>
> >> 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
China Now Comes to USA for Cheap Labor?
Re: [spiers] China Now Comes to USA for Cheap Labor?
Response to points:
1) Maybe the automakers will renege on their pension plans sometime in the
future. But they have those costs today. And they affect the comparative cost
of labor for new companies entering the system today. Your comment is
speculative. We were talking about costs today.
2) Yep, taxes in Europe are high. So what. Prices include all the costs of
production, taxes being one of those. You say, "prices are higher for say gas".
But prices are higher for say almost everything. Been to London lately. Take
the prices of almost anything in pounds and it looks OK if you figure the price
is really dollars. But the conversion is 1 GBP to $1.82!
3) You say, "Little of what USA imports has a component cost of labor more than
5%" My point exactly. Labor costs in 3rd. world countries is very low and this
makes a difference in the costs of production and the final pricing of goods.
4) You say, "The history of heavy rail suggests otherwise... lighter and
lighter, rail roads, auto roads, mag-lev could follow the same trajectory if
govt was to get out of the road biz". But railroad and road (auto) technologies
are very different. Mag-lev may have its place in the future as one means of
propulsion for heavy (and maybe light) rail, but not as a substitute for autos
unless we fundamentally change our settlement patterns. And that kind of change
would take many decades; and require a fundamental change in personal
preferences from those of today. Not impossible in the long run, but not
possible in the short run.
You are good at what you do well - international small business development, but
you get out of your depth when your Austrian economic philosophy overwhelms your
common sense.
----- Original Message -----
From: John Spiers
To: spiers@yahoogroups.com
Sent: Tuesday, July 18, 2006 7:07 PM
Subject: Re: [spiers] China Now Comes to USA for Cheap Labor?
On Tue, 18 Jul 2006 14:22:00 -0400, "Pete Holt"
>
> Another few points:
> 1) You say "labor cannot be critical.".... Labor costs vary among the
present US automakers
and a new company entering the system, with no legacy pension costs, etc.,
would be
expected to have lower labor costs than many existing manufacturers.
***AS USA automakers and their suppliers go bankrupt and reneg on their
pension and
medical plans, they have no legacy costs either... the truckers in the 80's,
the pilots in the
90's...eventually they'll get around to everyone.***
> 2) You say "USA pays the most for everything". But US costs of goods are
generally not
higher and in many cases lower than in other western societies. If you have
been to Europe
lately, you will find that costs of goods (both in dollars and in the local
currency) are often
higher than here.
***The europeans love their taxes...prices are higher for say gas, due to
taxes, not costs.
Telephone bills in USA have gone up as costs have dropped partially due to
huge increases in
telephone taxes.***
> 3) Your thesis that labor costs are irrelevant is absurd. Labor costs are
one component of
final total product costs. To the extent that labor is a large component of
final total product
costs (vs. materials, transportation, etc.) labor will be a relatively
important factor in the cost
of the good, its price competitiveness and ability to compete in the
marketplace.
***Little of what USA imports has a component cost of labor more than 5%...
but that is not
my main thesis, the cost of management to make baskets in USA is too
expensive,
management oversas is cheaper. People with Ag degrees go into govt, while
mexicans
manage the farms, since mexican management is cheaper than usa management. The
thing
is management cost,***
> 4) Let me know when you mag-lev it to your front door, either here or in
China. Mag-lev
(which I have ridden in China) is, as you know, a form of heavy rail and
comparable to our
train or subway systems. Not anytime soon to replace all other forms of
transportation, but a
possible substitute for heavy rail in the future.
*** The history of heavy rail suggests otherwise... lighter and lighter, rail
roads, auto roads,
mag-lev could follow the same trjectory if govt was to get out of the road
biz... in 1971 a
book predicted there would never be a need for a small computer, only huge
computers... it's
only a matter of who goes first.***
John
>
> ----- Original Message -----
> From: John Spiers
> To: spiers@yahoogroups.com
> Sent: Tuesday, July 18, 2006 10:43 AM
> Subject: Re: [spiers] China Now Comes to USA for Cheap Labor?
>
>
> 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
Tuesday, July 18, 2006
China Now Comes to USA for Cheap Labor?
Re: [spiers] China Now Comes to USA for Cheap Labor?
On Tue, 18 Jul 2006 14:22:00 -0400, "Pete Holt"
>
> Another few points:
> 1) You say "labor cannot be critical.".... Labor costs vary among the present
US automakers
and a new company entering the system, with no legacy pension costs, etc., would
be
expected to have lower labor costs than many existing manufacturers.
***AS USA automakers and their suppliers go bankrupt and reneg on their pension
and
medical plans, they have no legacy costs either... the truckers in the 80's,
the pilots in the
90's...eventually they'll get around to everyone.***
> 2) You say "USA pays the most for everything". But US costs of goods are
generally not
higher and in many cases lower than in other western societies. If you have
been to Europe
lately, you will find that costs of goods (both in dollars and in the local
currency) are often
higher than here.
***The europeans love their taxes...prices are higher for say gas, due to taxes,
not costs.
Telephone bills in USA have gone up as costs have dropped partially due to huge
increases in
telephone taxes.***
> 3) Your thesis that labor costs are irrelevant is absurd. Labor costs are one
component of
final total product costs. To the extent that labor is a large component of
final total product
costs (vs. materials, transportation, etc.) labor will be a relatively important
factor in the cost
of the good, its price competitiveness and ability to compete in the
marketplace.
***Little of what USA imports has a component cost of labor more than 5%... but
that is not
my main thesis, the cost of management to make baskets in USA is too expensive,
management oversas is cheaper. People with Ag degrees go into govt, while
mexicans
manage the farms, since mexican management is cheaper than usa management. The
thing
is management cost,***
> 4) Let me know when you mag-lev it to your front door, either here or in
China. Mag-lev
(which I have ridden in China) is, as you know, a form of heavy rail and
comparable to our
train or subway systems. Not anytime soon to replace all other forms of
transportation, but a
possible substitute for heavy rail in the future.
*** The history of heavy rail suggests otherwise... lighter and lighter, rail
roads, auto roads,
mag-lev could follow the same trjectory if govt was to get out of the road
biz... in 1971 a
book predicted there would never be a need for a small computer, only huge
computers... it's
only a matter of who goes first.***
John
>
> ----- Original Message -----
> From: John Spiers
> To: spiers@yahoogroups.com
> Sent: Tuesday, July 18, 2006 10:43 AM
> Subject: Re: [spiers] China Now Comes to USA for Cheap Labor?
>
>
> 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
China Now Comes to USA for Cheap Labor?
Re: [spiers] China Now Comes to USA for Cheap Labor?
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.
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?
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
>
>
>>
>> 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
China Now Comes to USA for Cheap Labor?
Re: [spiers] China Now Comes to USA for Cheap Labor?
Another few points:
1) You say "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." But, of course, labor
costs are not necessary the same. Labor costs vary among the present US
automakers and a new company entering the system, with no legacy pension costs,
etc., would be expected to have lower labor costs than many existing
manufacturers. That is not to say that management (and other factors of
production) are not also important.
2) You say "USA pays the most for everything". But US costs of goods are
generally not higher and in many cases lower than in other western societies.
If you have been to Europe lately, you will find that costs of goods (both in
dollars and in the local currency) are often higher than here.
3) Your thesis that labor costs are irrelevant is absurd. Labor costs are one
component of final total product costs. To the extent that labor is a large
component of final total product costs (vs. materials, transportation, etc.)
labor will be a relatively important factor in the cost of the good, its price
competitiveness and ability to compete in the marketplace.
4) Let me know when you mag-lev it to your front door, either here or in China.
Mag-lev (which I have ridden in China) is, as you know, a form of heavy rail and
comparable to our train or subway systems. Not anytime soon to replace all
other forms of transportation, but a possible substitute for heavy rail in the
future.
----- Original Message -----
From: John Spiers
To: spiers@yahoogroups.com
Sent: Tuesday, July 18, 2006 10:43 AM
Subject: Re: [spiers] China Now Comes to USA for Cheap Labor?
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
China Now Comes to USA for Cheap Labor?
Re: [spiers] China Now Comes to USA for Cheap Labor?
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
Monday, July 17, 2006
China Now Comes to USA for Cheap Labor?
Re: [spiers] China Now Comes to USA for Cheap Labor?
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
China Now Comes to USA for Cheap Labor?
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
buying other people's products from manufacturer
RE: [spiers] buying other people's products from manufacturer
I've never heard of a "Binding Ruling". Can anyone verify the above?
Thanks,
Roy Gilbert
RG PetComm
rgilbert11@cox.net
Roy,
sure, any customsbroker can get a binding ruling... and $125 sounds like the
price has dropped if
that is the going rate.
And he is right, the duty you pay at the tiome of importation, is "duty, subject
to liquidation."
Meaning, up to a year (I think), customs can come back and say, "we were wrong
you owe more
than we charged (or less)"
The way I handle these is to find out what the worse case sceanrio is among the
people who
cannot be sure withoout a bidning decision... I pick the worst case scenario.
If one says 5%,
someone else say 7%, and another says 9%, then I pick 9% as my cost when costing
the items, and
then after I import something and customs "liquidates" the entry, and the duty
rate is set, then I
adjust accordingly.
JOhn