Interesting thoughts about "Buying American"

Discussion in 'The Okie Corral' started by totaleclipse02, Nov 8, 2010.

  1. totaleclipse02

    totaleclipse02

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    I've always tried to purchase American Made products because I am a strong proponent of keeping Americans - our brothers and sisters - at work. I think globalization is inevitable - but I like to think every little bit I do helps.

    Here's the thing. I've been in business school for about a year now (another year to go) and am interning at a Fortune 50 corporation. It is amazing that the whole curriculum is centered around efficiencies and promoting the outsourcing of manufacturing jobs or any type of job out of country if a profit can be made. I also see this first hand at my summer internship. The corporate culture ruthlessly promotes a standard of being as cost efficient as possible. I have been in meetings first hand where executives closed down multiple American plants to send the capcity overseas. This was a pure numbers game to them...and in truth...from a business perspective it made sense.

    This attitude and culture of cost cutting and market efficiencies also permeates throughout all my classes and core curriculum. It's fair to say a lot of my peers will be future business leaders. It is disappointing and disheartening that this is the type of curriculum that is being taught and fostered.

    A lot of people are also hypocritical in a sense when they say they support American companies because these very companies are constantly focused on cutting costs and shipping overseas. It's so ironic that companies like Kia and Toyota are so focused on creating manufacturing jobs in American to overcome their stigma. Also If you own any stocks, mutual funds, or 401k - what you don't realize is that you are putting pressure on these companies to perform and ONLY focus on profits. There is absolutely no consideration for anything else when it comes down to how much the dividends are (not the people on this board - just a general statement). I have seen guest speakers from corporations like Coke, Procter and Gamble, Colgate, GE, all talk about the how they dramatically save on costs by shipping jobs and manufacturing facilities overseas.

    Sorry for this rant - but I was just frustrated after working on another case study today that resulted in expanding manufacturing capacity overseas and cutting jobs here. I think we shouldn't blame other countries. They are just trying to make a living. I think it has to start from the core. Our country itself and the very corporations that drive it need a shift in business culture - but sadly I don't ever see this happening.
     
    Last edited: Nov 8, 2010
  2. HiddenEyes

    HiddenEyes It can be done

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    The jobs moving overseas is not, and has never been, the fault of corporations. As you say, they are focused on making a profit, which is exactly what they should focus on.

    The blame rests at the feet of those that have passed foolish laws that rob corporations of the ability to compete. From laws about union labor, to environmental laws, to workplace safety, to higher taxes, it all adds up to choking off the profit making potential in this country. Jobs are not leaving, we are chasing them away wholesale. It must not continue.



    Mr. HE:cool:
     

  3. totaleclipse02

    totaleclipse02

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    I agree somewhat. The term "competitive advantage" is relentlessly drilled in our heads. Regardless of environmental laws, OSHA requirements, taxes, etc. I see firsthand that THE most important thing is cutting cost and maximizing profit. It's what everyone wants. It's what your 401k and stock dividends wants to see.

    It's purely a numbers game. Manufacturing capacity in "X" country is 40% less costly than here. What is said corporation going to do? You betcha.

    I know I am ranting - and it is never productive to rant without providing some type of solution - but this is a tough problem I will have to chew on for a while...I may end up writing some type of case study up on it...
     
    Last edited: Nov 8, 2010
  4. HiddenEyes

    HiddenEyes It can be done

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    The solution from an overall perspective is really simple. Cut the size of government. Cut taxes. Do away with about 90% of Federal agencies and laws. States will fall over themselves to write laws that make them competative again.

    As far as an insider business perspective I don't know what to tell you.



    Mr. HE:cool:
     
  5. gearjammer351

    gearjammer351 EnemyOfTheState

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    I like your approach (rant -then solve). I would like you to consider what HiddenEyes posted, and ask yourself, your profeessors, and your mentors how could the US be a more hospitable environment to do business in.

    Manufacturing cost differences of 40% (as in your hypothetical example) would certainly make an executive shift operations, but where is that threshold? Would they move it for 20%? 10%? 5%? A skilled motivated workforce and infrastructure are also considerations. Companies wouldn't have to have an advantage to do business here, but they'd need not to feel like staying in the US is fiscal suicide. Shipping costs, tariffs, and other ancillary costs of overseas operations aren't insignificant.

    What I'm getting at is that 'we' wouldn't have to be as cheap as China or Bangladesh to retain jobs; we just have to avoid making companies feel punished for staying. It's hard to do when you have an entire culture that villifies productivity and profits and only thinks of productive enterprises as taxpaying entities.
     
  6. devildog2067

    devildog2067

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    While that is part of it, that is NOT where the "blame" lies.

    The numbers tell the story. Workplace safety, taxes, and environmental laws are small costs compared to the largest cost involved in running a business--labor.

    Americans expect a high standard of living. It's not possible to support that standard of living with unskilled jobs, because unskilled jobs can be performed by people who are willing to work for less.

    The truth is that simple. Americans either need to accept that the high-wage unskilled jobs are gone for good, or accept a lower standard of living.
     
  7. totaleclipse02

    totaleclipse02

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    Appreciate the insightful comments. I started out the post with somewhat of a jaded attitude - I feel compelled to investigate this issue and try to understand it from all aspects. I hope it does not end with the goal of any company or business...."to make money."
     
    Last edited: Nov 8, 2010
  8. HiddenEyes

    HiddenEyes It can be done

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    My corrections to your post in bold.



    Mr. HE:cool:
     
  9. HiddenEyes

    HiddenEyes It can be done

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    I really appreciate your insights into the world of big corporations.

    If you did get a chance to ask corporate leadership what it would take for them to keep jobs here I would love to hear any and all answers they give.


    Mr. HE:cool:
     
  10. totaleclipse02

    totaleclipse02

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    I will try my best. From what I have seen it is purely quantitative measures and tests. While they consider many things when they decide to outsource (management proficiency, people, operations, regulations, etc.) it seems it mostly goes back to the numbers.

    I am a first year and will try my best to broach the subject and understand it from all levels. I am just trying my best to be an elephant right now....Big ears...small mouth.
     
  11. devildog2067

    devildog2067

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    It varies depending on the size and type of business, of course, but my statement is true on average. Economic research from all sides of the political spectrum shows it to be so.


    The truth doesn't care about what you refuse to accept.

    We are still the envy of the world. America is still the world's largest economy, the largest manufacturer of goods, the leader in scientific research. In pretty much all the ways that matter we have the world's best health care system. We still have the world's best military. Americans live better than any other people on the planet.

    We achieved it through hard work, and yes, freedom. What we've achieved is to have almost every American live a life more luxurious than what royalty lived a century ago. The average size of our houses has doubled. We own more stuff than any other people did anytime in history.

    It is simply not possible to afford all of that stuff on the wages that you can earn pushing parts on an assembly line, but we as Americans have become used to the idea that all of that stuff is a "minimum" standard of living.

    I love this country just as much as you do, but I don't let that blind me to the facts. If a Chinese worker is willing to do the same job as an American worker, but live in an unheated shack with 20 other people and get paid a dollar a day, the American worker won't be able to compete unless he's willing to live the same way.

    I'm not saying that Americans should work for Chinese wages, I'm saying let's do the jobs that the Chinese can't do (yet) and let's keep training the scientists and engineers that invent new jobs that the Chinese can't copy. Unfortunately, that's going to mean that the folks who can't or won't learn new skills get left behind.
     
  12. devildog2067

    devildog2067

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    Everything always goes back to the numbers, because numbers don't lie.
     
  13. totaleclipse02

    totaleclipse02

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    That is very insightful and I think where the solution will come from.
    We cannot compete from a labor costs level - but we can innovate.

    As the saying goes "Innovate or Die."
     
  14. Ol Timer

    Ol Timer ↓ hog hunter ↓ Millennium Member

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    When corporations close up five to ten year old manufacturing facilities in Mexico, which has a sub $5 a day minimum wage, lesser tax, no OSHA, little or no environmental laws and move operations overseas for more profit potential, do you really think the US has any chance to retain or encourage new labor?
     
  15. HollowHead

    HollowHead Firm member

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    This, exactly. When unskilled jobs became careers decades ago, the fate was sealed. HH
     
  16. HarlDane

    HarlDane

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    Anyone who thinks providing an unskilled worker making cheap consumer goods with a solid middle class paycheck is in the best interest of our country is kidding themselves. We were able to do it for a few decades following WWII due to a number of factors, including being the only industrialized country that wasn't bombed into oblivion, but those days are past us. As Devildog points out, our future is in skilled labor and innovations through science and technology and the unskilled will get left behind if they insist on getting paid more than they're worth and refuse to arm themselves with the skills necessary to find gainful employment.
     
    Last edited: Nov 8, 2010
  17. vikingsoftpaw

    vikingsoftpaw DEPLORABLE ME!

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    That was the subject of my Sociology class recently. I found out that a lot more consumer good are made in the USA, save electronics than people realize. They will cost a good bit more.

    www.stillmadeinusa.com
     
  18. Ersatz

    Ersatz

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    Just felt like bumping a good thread. :wavey:
     
  19. f150man

    f150man

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    Devildog, This is one of the dumbest things I have ever read on the 'Net.

    Check the books on any major manufacturing companies and you will see that utilities cost more than labor. Look at GM.......GM spends more money on lights and water than they spend on Union member payroll

    I was looking at the books of a mid-size manufacturing plant and in 2009 they spent $140,000,000.00 for raw materials, $10,200,000.00 for utilities (lights, water, gas, etc.) and only $4,250,000.00 for labor.

    These are real numbers from a real company that made a record profit for 2009.

    Yep, labor is a very, very small piece of the pie (chart).

    f150man

    P.S. It's about greed and money.
     
  20. american lockpicker

    american lockpicker License to Il

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    After I took buisiness classes in high school I decided communism was better.