In article <061220050103469593%lucasirag
...@rogers.com>,
Luke <lucasirag
...@rogers.com> wrote:
> In article <43950ba2$0$38660$742ec
...@news.sonic.net>, SMS
> <scharf.ste
...@geemail.com> wrote:
> > Luke wrote:
> > > This from Sheldon Brown's Bentride Podcast (@ 8:50). No wonder
> > > manufacturing is a declining sector in North America! This can't be the
> > > total cost of production (stock and labor); does the figure apply to
> > > labor cost only?
> > It's quite possible that $8 is the cost of an aluminum frame. Aluminum
> > is extremely inexpensive (why do you think the bicycle manufacturers are
> > using it?!). Look how cosmetically poor the welds are--no effort is put
> > into filing them. Welding seven or eight pieces of aluminum tubing
> > together is not a long or expensive process.
> Still, to put it in perspective, the cost is only a couple of dollars
> more than the price of a typical fast food meal. Unfinished welds
> aside, that's an incredible achievement - if achievement is the right
> word. It's an astounding fact. I wonder what the cost of production
> would be on this side of the Pacific for a frame of comparable quality.
> With domestic industry under siege by the Asian manufacturing
> juggernaut on so many fronts, it's obvious the scope and degree of
> economic advantage is pervasive.
> > I think the real question is what is the ROI, including the cost of the
> > equipment and factory.
> Well, generally speaking, it's enough to flood the region (mainland
> China, specifically) with a torrent of FDI; and capital, supposedly,
> always seeks the highest rate of return. How long can it continue?
> Luke
See Japan, postwar rise of. Or Taiwan, or Korea. Basically, it continues
until a combination of rising wages and skills in the country
effectively puts them out of the global low-end manufacturing business,
but into more skilled, more valuable specialties. With Japan, it meant
they stopped manufacturing cheap electronics and stamped-tin trash and
became suppliers of good electronics, cameras, automobiles, bicycles,
and so forth. Taiwan similarly faced that pattern, to the point that
while they produce many good, high-end bikes (Giants, most notably, but
a great many other non-crappy bicycles are built there, regardless of
the nationality of the company that designs the bikes and puts their
name on them), they are now facing serious competition from China for
the Wal-Mart end of the market. Korea is similarly making the transition
from making terrible cars and commodity electronics to better cars,
desireable mobile phones, and HDTVs.
The interesting thing about China and India is that both have much
larger populations to draw on, many of whom are not off the proverbial
(and often literal) farms yet. That means they have a potentially longer
cycle of drawing workers into good jobs than my other three examples.
After China? Well, it will be a while, but Africa is waiting for its
turn. Most African countries suffer from devastating AIDS rates,
anarchy, horrendously bad political leadership, or all three, so it's a
bit like Maoist China. Until there is some stability in Africa,
industrialization can't happen.
--
Ryan Cousineau rcous...@sfu.ca http://www.wiredcola.com/
"I don't want kids who are thinking about going into mathematics
to think that they have to take drugs to succeed." -Paul Erdos
