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jlinstrom
User Rank
Gold
Re: Reality check
jlinstrom   1/30/2012 2:16:17 PM
NO RATINGS
Companies already have $$ they aren't investing in jobs - and it's not because of taxes! It is because there are no customers!  Get the customers back in paychecks and they'll begin to buy again (it was the consumer drawback that started the recession).

The difference between no regulations (right wing crazies) and all regulations (left wing nuts) - just to insult both flanks ;-) SHOULD be enough to discourage the lazy thinkers that can only imagine a rapacious activity and the timorous who won't admit do-nothing is only a short-term solution. THEN - encourage the company and all activists with a stake in the area to back up all environmental concern, either with proof or money.

It's an open economy. Those who will work by the rules get the profit, those who grumble at the sidelines about 'strangling regulations' get to bribe their favorite politician to stack the rules their way. The U.S. doesn't owe anyone the right to plunder our resources.

Oh, yeah - and tort reform will protect the sloppy from payouts for recklessness. Torts are rigorously examined in courts; this ain't a one-armed bandit with huge jackpots.

Watashi
User Rank
Platinum
Re: SOTU and manufacturing
Watashi   1/30/2012 2:15:24 PM
NO RATINGS
I beleive you are correct, Mobile was not going to be a full-up manufacturing facility. As a veteren and american, I would have gone with Boeing as well.  But the counter-offer was used to keep Boeing honest and would have brought an appreciable number of jobs anyway.

Boeing's SC plant would probably be the second spot.  That plant voted itself non-union around the time of the competition.

bronorb
User Rank
Silver
More money for the rich
bronorb   1/30/2012 1:54:32 PM
@Ollie:

The three steps you outline do nothing more than put more money in the pockets of rich corporations that they will hoard away. They only invest in new manufacturing when they can get slave wages.

If you haven't noticed, tax rates for the wealthy have been going down steadily for decades and all that has done is make the rich richer and the middle class.. gone.

Dave Palmer
User Rank
Platinum
Re: Reality check
Dave Palmer   1/30/2012 1:29:19 PM
NO RATINGS
@Ollie Prophet: The World Bank rates the U.S. as the fourth easiest country in the world to do business.  China is rated 91st out of 187.  You can argue that the U.S. could improve its business climate to become number one on the list, but the fact remains that companies are leaving the U.S. for a country with a much worse business climate.  The main reason is -- as you correctly point out in the beginning of your comment -- the far lower living standard of Chinese workers.

Ollie Prophet
User Rank
Bronze
Re: Reality check
Ollie Prophet   1/30/2012 1:11:29 PM
I disagree.  The combination of high wages (including all the goodies like health care, vacation, disability, etc), high corporate taxation, high litigation rates and over regulation all conspire to drive companies off shore.  To minimize the effect of the plethora of regulations imposed on companies from the alphabet soup of federal and state regulators such as the EPA, OSHA, EEOC, NLRB, etc. is a fool's game.  Currently, approx. 12% of our GDP goes to compliance, i.e. meeting regulations.  The problem is, if you say we are overregulated, you get the specious argument "well, do you want to go back to Sinclair's "The Jungle" days, when things were unregulated...?!".  thinking that if some regulation is necessary and beneficial, more regulation is better, ad naseum.

Obama can authorize all the R&D investment and training he wants, it will not stem the bleeding of jobs to places that have a more fertile climate for business, which America certainly is not.  While clamoring for business postive actions with one voice, he argues for higher taxes, more union control, more regulations (ala E. Warren as the poster child...), and more intrusion of the government into our lives.  Here's the simple formula to entice business back:

1. Lower taxes- (implies reduced debt and government programs, including reining in public service unions)

2. Reduce regulations

3. Tort reform

Do these three (3) simple things, and jobs will return.  Omit any of these, and continue to watch this nation's fortunes decline.

The other aspect of this dynamic is that buyers have a choice.  I buy Made in USA whenever I can, and I pay mightily for it at times.  Most Americans are living in cognitive dissonance, arguing for BHO to bring jobs back here, but personally unwilling to pay more for the items those workers would make.  A nation of hypcrites does not deserve to prosper. 

 

Jeff_A
User Rank
Silver
US Manufacturing and Executive Arrogance
Jeff_A   1/30/2012 12:42:12 PM
For more than two years, every month, US manufacturing has increased.  We are making more in the US every month.  This article has a certain "the US is useless when it comes to manufacturing and doesn't really make anything anymore" attitude that I find rather arrogant and uninformed.  Thank you Apple execs for sounding the gun officially starting the race to the bottom.  At least we will all have cheap iphones.  Apple execs should go live in the barracks like slaves, I prefer to live with my family, thank you.

When I had to ship the automated manufacturing lines that my engineers and I developed to other countries, first I was told we were saving direct labor.  Then I was told the  engineers and the assembly workers over there were way harder workers than Americans. Not true.  When I arrived in this unnamed country, I found out the real reason.  Their engineers made 5% of what my American engineers made.  If you make 5% of what the  American makes, my company can hire 4 of you for what 1/5 of me costs. My company execs are of course modern business geniuses. Four of their guys have some chance to outengineer my guy or me.  One of them has zero chance to outengineer my guy or me. 

What manufacturer wouldn't want free manufacturing facilities, free engineers, production workers getting slave wages and working in slave conditions, coupled with huge scale up and down exercises with no economic consequences? I always had to deal with tradeoffs, these guys don't seem to have that burden.  What arrogance these Apple execs show by stating that America just can't get it done.  I read a similar article a few months ago marvelling at the scale of Chinese sock manufacturing, how we could never do that in the US. 

I thought I lived in the country that won World War II, invented modern electronics, and sent a man to the moon.  We are now unable to build a tall and strong enough levee to keep New Orleans from going under water, we are unable to make socks, and unable to make iphones and ipads? Are you kidding me?  I find it interesting how all of these large product companies who like to wring their hands at the unavailability of American engineers and technicians are the same ones who laid off the last generation of American engineers and technicians.  They are actually wringing their hands that Americans aren't available for slave wages.  Americans are available for American middle class wages but they don't want to spend that.

 

 

 

 

 

 

TJ McDermott
User Rank
Blogger
Re: SOTU and manufacturing
TJ McDermott   1/30/2012 12:23:56 PM
I had the impression the tanker conversion would have taken place in Mobile.  The airframe would have been built in France as usual, and flown to Mobile for conversion.

Boeing's plane, I believe, would undergo the same two stages: airframe in Everett WA, and tanker hardware elsewhere in the USA.

 

 

Jon Titus
User Rank
Blogger
Government Should Get Out of Businesses
Jon Titus   1/30/2012 12:19:36 PM
The US Federal government has no business investing taxpayers' money in business ventures. Last week, lithium-ion battery maker Ener1 filed for bankruptcy.  The company, financed with a $55 million grant from the Department of Energy, burned through enough of this money and money from the investors to rack up a loss in 2010 of $165 million.  As far as I can tell, nothing in the Constitution gives government the power to load money to, or guarantee loans to, businesses.  Venture-capital groups invest their own money in high-risk ventures and don't commit taxpayers to paying for their losses due to poor investment choices.  Government should stay out of the business of businesses and let companies and their private investors sink or swim on their own. --Jon Titus

Watashi
User Rank
Platinum
Re: SOTU and manufacturing
Watashi   1/30/2012 12:18:04 PM
NO RATINGS
Actually, the EADS tanker was goning to be built in Mobile, AL.  while not providing as many jobs as a Boeing win, it would have added an estimated 10K (I think that was the number).  I'm not necessarily in favor of a "scarebus" based tanker, but how do you get competition to decrease the price when Boeing has a monopoly on large aircraft in the US?

DoD contracts, unlike commercial, can enforce how much of a product is made where and who gets the rights to design and manufacture.  This is for national security reasons; we don't want to have to rely on others with possibly competing military interests (potential adversaries) during a conflict.

Dave Palmer
User Rank
Platinum
Reality check
Dave Palmer   1/30/2012 12:17:32 PM
NO RATINGS
The argument that U.S. companies are moving manufacturing to China because there is too much government interference in the U.S. simply doesn't hold water.  If you think U.S. bureaucrats are bad, try dealing with Chinese bureaucrats.  In spite of Deng Xiaoping's reforms, China still has a planned economy.  Government plays a role in the Chinese economy which is almost unimaginable in the U.S.  Major sectors of the Chinese economy are still state-owned, and foreign investors face significant regulatory hurdles which are intended to benefit Chinese nationals.  If the real problem were regulation, these companies would be going to places like New Zealand, not China.

U.S. companies are moving manufacturing to China because of low labor costs and access to a rapidly developing economy.  On the other hand, they are moving manufacturing back to the U.S. because of quality and manufacturing agility.  These are the things we should focus on.

I might add that relatively higher labor costs tend to incentivize quality.  Chinese manufacturers are willing to accept levels of scrap and rework which would be unacceptable in the U.S., because the labor costs associated with scrap and rework are relatively low for them.  Higher labor costs encourage U.S., Japanese, and European manufacturers to develop more efficient, higher quality manufacturing processes.

I agree with those who point out that the U.S. has an edge when it comes to innovation, but I wouldn't count on this lasting forever, unless we are willing to make it a policy priority.  China is educating large numbers of scientists and engineers -- including in U.S. universities -- and is spending huge sums of money on research and development.  They are also doing a much better job in ensuring that the vast majority of their population is numerically literate. (This is at least as much of a function of culture as it is of government policy).

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