Saturday, August 19

Made In America

The last thing that I want to do is buy something because it is MADE IN AMERICA...


There are two reasons for this being my choice:   PRICE AND QUALITY


For some reason, American manufacturing has lost sight of quality in favor of higher production, higher sales, and higher revenue streams.


American manufacturing CEOs believe that 99.7% accuracy is the best that they can do...  If a company is 99.7% accurate, it is still producing 2600 out of spec parts per million.  It is highly likely that one of those out of spec parts is going to be sold to a customer.


When something is manufactured in JAPAN, it is 99.999997% accurate which means their manufacturing process is producing 1-3 out of spec parts per million and none of them will be sold to the customer.


The other issue with American manufacturing is the constant battle or hatred between management and labor.  Part of that hatred comes from the different wages that are paid to each group.  Part of that hatred comes from the fact that management perceives labor as basically being stupid, therefore they are treated like expendable raw materials.


If you don't like it... then quit...


That is the quality side of the equation.  The other side is price.


An HR Director once told me (years ago) that if they paid a salary of $50,000/year it would actually cost the company another $100,000/year in benefits.  In other words, benefits are twice as much as wages.  Benefits include:  annual leave, sick leave, holidays, maternity leave, health insurance, and contributions to retirement.


If an hourly worker makes $15/hour...  that is $600/week or $31,200/year.  If benefits are twice wages, the that worker costs the company $93,600.  That total cost of each worker, including management is calculated into the selling price of each item sold.


Wages are so low for the worker, that they find themselves coming into work when they are sick.  That decision causes other workers to get sick.  Also, if a person is sick at work, they are not going to work 100%...  so, output is reduced.


Oftentimes, the wages are so low compared to the cost of living that the worker must work a second job which also causes them to be tired at work.


Cost of living varies depending upon one's geographic location.


Now, let's look at it from another vantage point...

Wages in the USA are higher that any other country in the world because of the cost of living and because of benefits.


THEREFORE, tennis shoes made by Americans will cost more than tennis shoes made by Indonesians.


Because of our high cost of living, American Companies are FORCED to have their manufacturing done overseas where the costs are much lower.


As far as Americans are concerned, we would be paying at least TWICE what we are paying now if everything was MADE IN AMERICA...


When politicians tell you that they are going to bring jobs back to the USA, they are either lying or letting you know that your cost of living is going to increase substantially.


IF you want to keep YOUR cost of living LOW, then don't try to get manufacturing job to come back to this country...  it will mean jobs, but it will also mean HIGHER PRICES...


 

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