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Blown 472
03-10-2003, 01:07 PM
Looking For Mr. Coffee
The relationship between imported products, manufacturing, and declining economic conditions. And what’s in store for America!
An insider’s view:
Politicians continue to announce schemes as to how they plan to turn the declining American economy around. If you have a service sector job (doctor, lawyer, architect, restaurant owner, drycleaner, soft drink delivery, etc.) you may have bought in to such optimism. If you are in manufacturing in America (machinist, engineer, process control, assembler, etc.) you probably are skeptical. This article is intended to show how dependent our country is on manufacturing. And why every person, no matter what their occupation, should be very concerned.
Let us consider a genuine American Classic – The Mr.Coffee Coffee Maker. Mr. Coffee is a true example of American entrepreneurship. It was invented in 1972, within five years, the company was doing $150 million in annual sales (in today’s dollars it would be triple that). Sunbeam, a company that has its beginnings dating back to the late 1800’s, purchased Mr. Coffee in 1998. At this point, Mr. Coffee was still being “assembled” in Ohio. The year 2000 saw the closure of the plant in Ohio, and subsequent relocation to Mexico. According to Sunbeam, most units are made in China today. Does it make a difference that the coffee maker brand that 1 in 3 Americans gets their morning coffee from is made in China?
What has actually happened here? Mr. Coffee sells millions of units per year. When the plant in Ohio closed, 400 American workers lost their jobs. But that is just the tip of the iceberg. A typical coffee maker has 4 to 6 plastic parts. That means there were an equal number of plastic injection steel molds that were used to form those parts. And these molds would be fairly large, up to 36” wide x 36” high x 36” long, with elaborate heating and cooling passageways engineered into them. After running approximately 100,000 plastic parts, the molds would need to be replaced. That could mean as many as 30 to 50 molds would be needed per year to make each plastic part. This amount of work was important for the machinists and mold-builders that produced those molds. It was also important for the heat treaters who conditioned the steel. Important for the engineers who designed the molds. Important for the polishers who polished the molds. Important for the plastic suppliers. Important for the factory that ran the plastic injection operations and actually produced the parts. Important for the office workers and maintenance crews. Important for the worker’s uniform cleaning service. Important for the truck drivers that brought the parts to the final assembly location. Important for a vast array of suppliers to all of these businesses. This “multiplier effect” reverberates through the economy.
The plastic parts are just one component of a coffee maker. There are metal stampings for the warming area and base. There is a glass carafe, a rubber cord, a heating element, an electric switch, and paper filters. If you trace these materials back to the point when they were mined from the earth, the list of occupations needed to produce these components is enormous. Imagine how many different people are needed to manufacture a simple coffee maker and get it to your home. Imagine how many lives are dependent on the income from careers in manufacturing that make parts that go into the finished product.
Now, take a look around your kitchen and home. The toaster involves metal stampings – tool & die shops make stamping dies. There are also plastic parts in the toaster – more machinists, mold-builders, assemblers. The cooking stove is a combination of metal stampings, die cast aluminum parts, wire forming, tube forming, glass, plastic, & electronics – numerous manufacturing and engineering jobs. Clothes washers and dryers – more plastic, more metal stampings, more die castings, more rubber gaskets, more electric motors, more paint – more careers & jobs. These manufacturing processes surround our lives. And it is all brought to you by tool & die makers, machinists, production workers, assemblers, miners, engineers, loggers, truck drivers, office workers, and on and on and on.
Now, pull virtually every consumer related product out of America. If you shift the manufacture of these products to foreign shores – you shift all these jobs to foreign shores. As goes the ability to produce these items, so goes the ability to pay for these items by the very people who used to make these items. As more ability to pay for the way of life that has created our once prosperous economic surroundings disappears, so goes the amount of people who seek out these services. A family who relied on manufacturing, who loses their means of subsistence, has little need for accounting services, law services, architectural services, dry cleaning, massage, expensive hair care, travel agencies, etc., etc., etc. As more and more people, who once had the ability to pay for such services, lose that ability to pay, the service sector erodes faster and faster. If this hasn’t affected you yet – it will!
This will erode until the point that we are down to only needing the minimum services to sustain ourselves: food services, health care, and housing. These services will remain by default. Now before everyone goes rushing into a career in an area that seems a safe haven, consider that these areas are at full capacity already. In fact, they are over capacitated. This is why you see a constant rotation of closings and openings at your local strip malls and fast food restaurants. As we continue to switch from a country of manufacturers, to a country that unloads foreign products from ships, warehouses these products, then distributes these products, we switch to a country of lesser paying retail and service dependant jobs. And household’s dependant on these lower paying jobs won’t be dining out at expensive restaurants.
As for the case of housing: How much house does a job in this new economy buy? Do you think a job at an “importer” like Home Depot, or Wal-Mart, will garner enough income to keep the housing market going? If you don’t see it already, you will start to notice a scaling back of what a family is willing to spend on a home. However, this industry is relatively safer than most others because a basic house is more impervious to foreign import. The items contained in that house, and the tools to build it, are a different story. Imported products for these items are reaching the saturation level!
Consider healthcare. This area of the economy has a number of considerations to deal with. The seemingly endless rise in healthcare costs is causing a huge decline in the amount of care Americans are seeking. How much healthcare can be included in a person’s retail paying position at Target? Or at a strip mall fast food restaurant? This new economy will see people seeking only mandatory procedures and care. The healthcare system is about to see a huge contraction.
Take a look around your town. Do you see restaurants, health clinics, home builders, architectural firms, investment services, and clothing stores struggling or closing down? If you do, chances are you live in an area that was once more dependant on manufacturing. If you don’t see these signs, chances are you live in an area that is more service oriented. Cities with higher concentrations of insurance companies and health care providers will feel the impact of the loss of manufacturing later rather than sooner – but they will feel it! People within these sectors should be asking themselves how much longer they have.
The frightening fact about this evacuation of manufacturing is that it is accelerating at an alarmingly fast rate. The countries that are replacing our domestic manufacturing have inexhaustible labor forces. China’s labor force alone is 700,000,000 people. Their desire to enter new markets, and for growth, is enormous. And they were just given WTO (World Trade Organization) and PNTR (Permanent Normal Trade Relations) trade status a little over a year ago. This served as final assurance for over half of America’s Fortune 500 companies to start (or continue) manufacturing operations in China. This strategy of eliminating your American manufacturing workforce, and setting up operations offshore to maximize profits, is helping to accelerate losses in this country exponentially. Just look at the devastation this has caused to US Manufacturing in a relatively short period.
As the US reaches its saturation point for consumer related products, what products will be replaced next? This is already fully underway. Commercial and industrial products are being rapidly replaced by offshore manufacture. Pumps for water municipalities, compressors to move natural gas that heat homes, electrical generators, military defense vehicles, etc. all have foreign components, if not fully made overseas and imported. This amounts for the loss of countless more American jobs. A century of manufacturing leadership is being wiped out in a decade! What happens when we lose the skills of the people who are responsible for this leadership? And where do all these displaced workers go?
These losses in the manufacturing sector can not possibly be filled with equivalent jobs in the service sector – not in number or in quality of employment. Just how many positions do you think can be created in the area of importing, shipping and distribution? These are concepts that both the former President, and current President, are obviously oblivious to as demonstrated when they make statements like: “Trade creates thousands of good jobs for Americans” and “More trade means higher incomes for American workers.” On the contrary. In fact, according to data from the US Bureau of Labor Statistics & US Census Bureau, trade policies enacted since 1994 (the first year of NAFTA) have resulted in increasing losses of jobs. Additionally, such policies have in fact caused real household income to fall. So the promises of what free trade policies were supposed to do for America have in fact done just the opposite. The manufacturing sector has been hit the hardest by free trade. Since these policies went into effect nearly two out of every three jobs lost were in manufacturing.
Some jobs are actually created by free trade. Importing, shipping, warehousing, and distribution (service areas) have seen increases in jobs. The reason is obvious - we import more. But, the resulting net loss of employment is far greater than the jobs gained. This is due to the larger number of manufacturing jobs that were eliminated by these trade policies. Again, this factual trend is observed when data from the US Bureau of Labor Statistics & US Census Bureau is analyzed.
Often you will hear politicians speak about the limitless opportunities in this new free trade global economy. And that the time is right for entrepreneurs to develop new ideas and start new companies and hire employees to see these ideas to creation. This is “job creation.” If an entrepreneur has an idea for a product, the next step is to check into what it will take to bring the product to market. This person will find that you have to pay a US worker a minimum wage by law. You also have to abide by laws about social security tax, health care funds, unemployment insurance, property and business taxes, and income taxes. There are additional laws about worker safety – OSHA, and the environment – EPA. All these laws are designed to protect the American worker and the environment. This entrepreneur has certainly grown accustomed to these rules and enjoys the way of life under such rules. When this business person checks into manufacturing off-shore they find little or no such rules. Realizing that they can save substantial money by having some of the components, or the entire product, made outside the US, the entrepreneur sees little incentive to manufacture here. If the entrepreneur were to manufacture in America, and include the costs of abiding by all our laws, they would have to factor in higher costs into the selling price than if it were made elsewhere. This business person considers that they might be able to manufacture here, but it would mean less profit! And, if the product is copied by someone else and hits the market (made in a foreign country that has no copyright or patent laws, etc.) it may be priced cheaper. With such an un-level playing field, why would this business person locate their factory in America and hire American labor? So the question becomes “what jobs will be created by what products?” Applying the current profit seeking standard being set by America’s largest companies, the answer is “none!” Ask the politicians making claims about “job creation” to explain this!
So, to answer our first question: What difference does the disappearance of Mr. Coffee make? Well, it makes a huge difference. Considering the disappearance of virtually every product that surrounds our lives from the American manufacturing scene, one sees that everyone’s life is affected – no matter what job in society you have! The rate US manufacturing companies are closing is exponentially accelerating. Consequently, every consumer decision to buy either a foreign product, or a domestic product, has significant consequences. Every US Company that decides to eliminate US manufacturing and move off-shore, has further detrimental effects to this declining economy. Trade policy needs to be considered in light of what kind of future is destined for America. When will Americans get angry enough at what is happening around them? When will the politicians understand what is unfolding for America’s future and do something about it? Maybe we can all help – before it is too late!

78Eliminator
03-10-2003, 02:42 PM
That's why I bought a Toyota Tacoma. It is almost 100% American made. More so than an "American" car.

78Eliminator
03-10-2003, 03:11 PM
Just think of all the inventions that have come out of Amrerica and how the production and revenues have been exploited and moved over seas. This list is endless.

Mandelon
03-10-2003, 04:33 PM
All sad but true. All you can do is to position yourself to be less effected or to take advantage of it.
I try to buy American made products....sometimes hard to find. Even my kids know to check for where their toys are made...if they pick up something at the store, and is says "made in china," they know that its cheap and probably will not last....funny to hear that coming from a 7 year old.

Stupid Fast
03-10-2003, 04:34 PM
I guess you could get a secure job at the welfare office. :mad: The company I work for relies heavily on manufacturing.(we build the plants & set the equiptment). We are really hurting right now. Kinda funny, one of our biggist clients is Honda. :confused: They aren't even American.

spectras only
03-10-2003, 05:16 PM
The way gas prices go , I see chineese made Chineese Junks will be very popular imports in the future wink .You woudn't have to worry about scratching your gelcoat jobs ,cause these junks will be made from recycled wooden shopsticks to be environmentaly friendly to californian laws :D They will have their auxiliary power run by Ballard fuel cells made here in burnaby b.c wink . Some of you guys may remember when the autoworkers were complaining about the ever increasing imports caused shut downs and layoffs ?Their plants parking lots were full of hondas and other imports.Hello , wake up and start buying american products. Todays domestic cars are much better and reliable than in the past ,so start supporting your country :p .
[ March 10, 2003, 05:44 PM: Message edited by: spectras only ]

Ultra5150
03-10-2003, 05:27 PM
It costs too much money to run a company in California anymore. Thanks to Davis manufacturing companies pay three times what they used to in electrical bills. Workers Comp costs are out of the ballpark and you have crooked lawyers and doctors getting rich and lazy people staying at home and getting paid. And Davis want to enhance theri benefits.
Not to count the taxes you get hit with.
And then you wonder why people build plants in China and Mexico??

mister460
03-10-2003, 06:47 PM
See, we all know that this is happening and it is frustrating. But it's society as a whole where the big problem lies. People will buy stuff cause it's a few bucks cheaper and not realize or care that it's not Made In America. I've done it, you've done it, we all do it. I'm not an economics genius or anything and I don't have some grand scheme but I know that we're not that bad off and the economy will do just fine. That's why all these other countries are jealous. :D Well, that's all I've got for now.