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It's important to note that to a large extent, this is the reality of bringing consumer goods manufacturing back to the US. The only way it will ever make fina
by mdorazio 7y ago
It's important to note that to a large extent, this is the reality of bringing consumer goods manufacturing back to the US. The only way it will ever make financial sense for companies to do so is if it either comes with a massive subsidy or if the number of human jobs is small. Any deal promising thousands of blue collar jobs doing what is far cheaper to do elsewhere should probably be regarded as bullshit until proven otherwise.
Note: this does not necessarily apply beyond "cheap" consumer goods. For example, cars and trucks are still produced at many US plants for a variety of reasons.
- RaiseProfits 7y agoIn the long term a supply chain that is predominantly local will consume fewer resources and be more resilient to disruption. This isn’t always possible but the incentives you’re referring to are only because us corporations optimize short term profits over sustainable businesses.
- microcolonel 7y ago> us corporations optimize short term profits over sustainable businesses Speak for yourself. I think the investor culture is where this comes from, more than from the people operating the businesses.
- Arn_Thor 7y agoAs long as a business' primary responsibility is to shareholders rather than, say, the local community, the consumer or the environment then that won't change. Investors are a big part of it, yes, as they demand quick returns today rather than steady returns years from now.. but the fundamental problem is that investors' demands set the pace because of the structure of the structure of the entire economy
- SamReidHughes 7y agoIt's more basic than that. Businesses can't operate if they run out of money.
- RaiseProfits 7y agoIt’s also a hell of a lot more complicated than that. Investing is only one income source, and companies like Amazon and Walmart are counter examples to my own reduction. I think there are cultural elements at play here on why more companies don’t take a longer views and investors/certain business schools are an obvious place to look.
- RaiseProfits 7y agoI agree wholeheartedly, actually. I was writing in shorthand.
- londons_explore 7y ago> In the long term a supply chain that is predominantly local will consume fewer resources... This is false, and understanding that is key to understanding why globalization brings greater efficiency. A local supply chain may only cater to local customers, leading to substantial loss of efficiency due to lack of scale. A local supply chain might use inputs which cannot be transported (labor, electricity), and those might entail more resource cost (Americans are much more resource intensive per person than Indians, coal power stations use more resources than geothermal). Where externalities are correctly priced, and without tariffs or subsidies, buying from wherever is cheapest will always work out most resource efficient.
- RaiseProfits 7y agoThis depends on the process of manufacturing and the stability of the trade network. What industry does not benefit from redundancy and locality? Efficiency is only one thing to optimize. > Where externalities are correctly priced, and without tariffs or subsidies Where is this market!?!? We live in the real world with events, people, and utterly irrational decision makers.
- pintxo 7y agoCost and availability of transportation has a significant effect here as well.