Why is American manufacturing in the sorry, sad shape it's in?
About a year ago some associates and I came up with an idea for a product to be manufactured here in the good old US of A. We drew up our prototype requirements and started searching for suppliers who could put it together. After soliciting many firms we narrowed down our choice - a company in the western United States who seemed eager and interested in building our prototype and then producing our product.
After several delays and a very poor prototype, we were forced to abandon our first choice supplier for our second choice. We sent our second choice supplier the original prototype along with a detailed list of the issues. We were also very clear as to the reasons we left our first supplier and made it clear that we had high expectations for them as our new supplier.
We paid both of these suppliers a reasonably large sum to create our prototype, too. We didn't expect the work to be done for free.
Our experience with the second supplier wasn't any better than the first supplier. By now, we're at least 12 months behind our original schedule. We've missed the window for our first and second retail seasons and are now forced to wait until the next retail season several months away.
We haven't given up. We called the third choice on our list of suppliers. We discussed our issues with them and explained what had happened.
This third supplier told us that we could not expect the quality we were looking from a US manufacturer. They had a plant in the US but it wouldn't be able to provide the product at our expected quality standards. Not only would the quality not be there, but it would cost significantly more than an overseas-made product.
Having no choice, we asked for an overseas quote. The price shocked us. It was just over one third of the cost of what it would have been from the US suppliers and at a much higher quality standard.
Then, just as we were ready to order another prototype, the company called us back. A very sad voice on the phone said they were shutting down their international operations and she was now unemployed. Our US supplier for a foreign made product wasn't able to help us, either.
Through the Internet, we located almost two dozen potential suppliers in China. Within a month we've had 6 high quality prototypes made.
These Chinese suppliers are eager to help us. They've been much more responsive than our US suppliers. They appear to want to create a product we can sell.
It seemed our US suppliers felt burdened by the effort to win business. It seemed like they had lost their will to compete.
We now are going to have our product produced in China. Not because we are unpatriotic, but for the very simple reason that nobody here was willing or able to do it for us, even at three times the cost.
How did we get here? Government and citizens are to blame - and in a democracy, aren't they one and the same? Government is to blame for taxing and regulating businesses, particularly manufacturing businesses, out of existence. It simply costs too much to produce products in the United States of America - so we don't, and over time lose the necessary skills to do it if we wanted to.
There are some examples of products like automobiles and aircraft being produced here. That will continue only until the Third World's workforce has developed sufficient skill to assemble these complex devices properly. Then, those jobs will also leave. This time is not far off - Hyundai was once a byword for shoddy cars, but now their quality competes with the Japanese and at a far cheaper price.
It's also important to note that the successful foreign companies don't have the same union related labor burden as do the domestic manufacturers. Are they unionized? Yes, very much so - but both the union leaders and the government recognize that nobody gets paid if customers are not willing to buy the product at a profitable price.
American unions and taxing authorities seem to have forgotten this truth and act as if money just grows on trees; then, the government uses your tax dollars to bail out the collapsing hulk.
It's this self-created burden that was the nail in the coffin of American manufacturers. Demand for more pay and benefits eventually made domestic production unprofitable; the business either folded or moved its operations to where it could operate at a profit. The problem was that the union bosses didn't see they weren't just biting the hand that fed them, but actively poisoning it.
With the loss of one manufacturer after another we lost the institutional memory of how to make quality products at reasonable prices. Quality products can still be made, but the labor costs associated with them make them too expensive to sell at a profit.
Products that stay exactly the same for years on end can also be made using highly roboticized factories, but that provides few jobs and can be upset by technological change at any time. The only thing left are the very most complex and sophisticated products which inexperienced Third Worlders can't handle, but that's only a matter of time.
We set out with every intention of producing our product in the United States. We tried. We did our best to locate manufacturers that could produce a quality product for a reasonable price in a reasonable amount of time. We discovered that they don't exist in this country.
We, as a nation, have lost the ability to produce goods. And I fear that ability has been lost forever.