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> What differentiates a Chinese worker from a US worker? That's an interesting and very important question that is both easy and hard to answer. My experience

> What differentiates a Chinese worker from a US worker? That's an interesting and very important question that is both easy and hard to answer. My experience with China is nothing but positive along just-about any angle I can imagine. Their attitude towards doing business, their entrepreneurial drive and desire to work with you is, in my opinion, unmatched. The best example I have is from the very first time I had a large (for me at the time) order I needed to have manufactured. It was a set of custom aluminum extrusions. I contacted about 80 companies. 75 of them in the US and 5 in China. Every single company in China came back with a quote the very next day. The lowest quote was $8,000. The highest $10K. Out of the 75 US companies I contacted with full, detailed bid packages, about 50 never responded to the request for quote. No emails, calls. Nothing. Of the remaining 25, about ten of them responded somewhere between two and four weeks after receiving the RFQ to "no bid". In other words, not interested or could not do it. In most cases they offered no explanation at all. Of the remaining 15 companies, not one of them responded faster than one week. When they did, they engaged in an interrogation phase that is very typical of US companies: How many of these are you going to make per year? How frequently are you going to order? How many years do you think you'll need to produce these parts? Do you have other parts you will need manufactured? What are they? What's the volume? Etc. You always get combinations of these questions and more. After that, in most cases, you end-up getting bounced around additional people. In one case the email thread reached something like eight people. For a fucking quote. By this time a couple of weeks had gone by. I had already awarded the job to a Chinese company and it was something like three weeks from shipping. Yet, I humored the process because I just wanted to compare. This was my first job going out to China many years ago. After the interrogation about ten of those companies dropped out by either no longer responding to emails or flat-out saying they were not going to bid. Of the remaining 5 I got two bids, one for over $30K and the other was about $25K. Getting these bids took an additional week. The other three told me they had issues with the design and only wanted to make one of the two parts. One of them told me that they could extrude the aluminum but did not want to handle the finishing and anodizing. By the time I got all responses from US companies the extrusions were in a container and on their way to me from China. The Chinese company I ended-up working with just blew me away. I had actually contacted them just as Chinese New Year started. Still, their sales person and one of the engineers stayed behind to make sure all my questions were answered and, if I decided to work with them, the order could get started as soon as they came back. They personally gave me a tour of the 1.5 million square foot (~150K square meters) factory campus. It was nothing less than incredible. For those who might not have a sense of scale, that's like 15 Home Depot size buildings on a single manufacturing campus. And yet that's not what blew me away. Once I understood this company's scale I was astounded at the level of attention I received. I was nobody. An $8000 order for this company was a rounding error. They did not have to treat me like that. They did not have to stay back and take the time to show me around and make sure I was comfortable with them. They treated me like a million dollar buyer. Nothing less. They never asked me how many I was going to make per year or when they would get the next order. They just wanted my business and treated me with the kind of respect and attention anyone would recognizes in the US as reserved for million dollar clients. That, to me, describes the cultural business and entrepreneurship difference between the US and China. They have earned every bit of success they have realized. Nobody gave them anything. They work hard and treat everyone like a million dollar customer. Here in the US you'd be lucky to get the time of day when you send out for quotes. When you do, it takes weeks to get anything done. I don't think we are lazy. I think we are not hungry any more. And it shows. Nobody gives a shit. What's sad is that if we keep on this path people will learn the lesson in a really ugly way. > And if they are the same in your eyes, then why shouldn't things get worse here and better there until they reach some equilibrium? So, they are not the same. Yes, things will get worse here. I don't see enough of cultural shift or evidence of making it happen any time soon. Things have been getting better in China and will continue to do so. China will become the dominant top economy in the world and probably hold that dominance for a century or more. What happens in the US and Europe is anyone's guess. I look at the history of Latin America, where I lived for a number of years, and see echos of their failed policies and mistakes in the US. I don't know how anyone can change that other than to push very hard for a serious change in culture, which will not be popular at all.

tsimionescu 5y ago
So in this example, at least half the problem was definitely not high prices on the factory floor, it was bad salespeople, an obsession with extracting profit, corporate bureaucracy, inefficient work practices. Given what you witnessed from the customer facing side, so you think there were no similar delays and inefficiencies in their manufacturing and acquisitions side, and no similar attempts at maximizing profits in their quote? I'm not claiming they could have matched the Chinese price, but I am also not willing to blame either the full price nor the whole exchange on 15$/h factory floor staff.
- robomartin 5y ago
  > bad salespeople More like the business culture is in serious need of recalibration. At the same time, some of it is easy to understand. Manufacturing is hard, for most, unimaginably hard. The sad reality in the US is that, because of costs and the layers of bullshit you have to deal with, the easiest way to survive is to focus on high dollar/high margin markets. That means that if you can land jobs in aerospace or government contracts you can be set. You might bring in other work on a very selective basis, yet, for the most part, your "meat and potatoes" has to be --by necessity-- the low volume/high margin stuff. Going back to the sales folks. When your job is to bring in just a few deals per year and, more importantly, keep the customers you have, you are not going to kill yourself for every opportunity put on your desk. Sales people in the US are generally compensated in a mercenary fashion (something I have never liked). You get to make some baseline and then get paid on some percentage of what you land. This does not make for a sales person who actually cares about every single potential customer. In the long run they will, very naturally, optimize for their own ROI. So, it can't be boiled down to "bad salespeople". There's a lot more to it than that. At this point thousands of elements working together to make it almost impossible to compete. Simple example: Stupid-as-fuck oil and policy that makes it so fuel and oil derivative products (oils, lubricants, plastics, etc.) cost more. So trucking your materials to your factory to make something cost more. Now we force a doubling of the minimum wage. Innocent enough, right? Well, the guy making $10 is now making $15. The folks making $15 now demand $20 (after all, they are not minimum wage workers). And so on up the entire wage scale. Your COGS goes up and your customers are not going to spend one additional dime for your products unless there is no other option. And this is where China comes in and is able to force such low pricing that your ONLY available option is to move all of your manufacturing to China and come in with a new price model and lower margins. In a lot of cases this will eventually lead to going out of business. > an obsession with extracting profit The only people who use phrases like this one are those who have never started and operated a non-trivial business. I don't know any successful business who's driving force is an obsession with "extracting profit". That term in particular, "extracting profit", is linked to Marxist indoctrination --which, in the US, is being delivered constantly by our universities by professors who have also never had to survive in the real world. In short, sorry, this is complete horseshit. Entrepreneurs and the companies they build are driven by wanting to delivery great products. Profit is a necessity for growth and survival. I thought people were also going to learn this from the pandemic. Companies need cash to survive all kinds of issues that come up on a daily basis in the course of doing business. Once again, those who have never had to face these realities simply don't understand and refuse to listen, sometimes due to being in the grips of a truly astounding level of indoctrination. I had an incident about 15 years ago when a multi-billion dollar company we were buying key sole-source components from discontinued these components virtually overnight and without prior notice. This cost us about a million dollars in real cash as well as about a year's worth of an engineering effort to design a product line based on these components. If we had not generated enough profit from our activities to survive such a hit everyone would have lost their jobs almost instantly. Instead, because we had the cash to weather the storm, we were able to regroup, invest and take a few months to redesign every single product around new components we could actually get. Your views of business are as wrong as thinking that gravity pulls in the opposite direction. And yet I can't blame you for it, because it is obvious to anyone with business experience that you don't have the benefit of that experience. My suggestion would be to try to make something at a reasonable scale and learn from it. I and when you do, statements like "an obsession with extracting profit" will make your blood boil. > inefficient work practices Not so. In the US you have to be efficient or you won't survive. What we are competing with is obsessed with being efficient. The only companies in the US who can afford serious inefficiencies are those who do government/military work. This is where we waste more money than anyone can imagine getting work done for ten times the cost. We have problems everywhere. This is what I am talking about when I say we need a major cultural shift. We have politicians constantly talking about raising taxes, as if we work for them. No! The conversation should be about ALWAYS lowering taxes and lowering costs. This means being more efficient at everything. Our national goal should be to half our expenditures and get more for our money. Not double our taxes and costs and support ever-growing bureaucracies. This isn't a formula for long term success. This is a formula for long term disasters. I have sold product into various government agencies, from local transportation agencies to branches of the military. I left that world because it was simply disgusting to see just how much money we are burning for nothing at all. I remember one case where we were bidding for a contract with a local public transportation agency for custom systems that needed to go into every passenger bus. We gave them a very reasonable bid. No special pricing, just normal "this is what it costs" pricing with normal profit margins. They ended-up giving the contract to someone who bid FIVE TIMES our bid. Why? Because the layers of people working at this agency are so ignorant that everything they do is designed to cover their collective asses. It isn't their money. They can't be fired. There are no consequences for them at all other than if something serious goes wrong. Even then, they probably won't lose their jobs. So they push the easy button (easy for them) and went with a contract that had all the "I will cover your ass 100%" elements they needed. So, we raise taxes and they spend five times more money than any reasonable buyer in the private sector would pay for exactly the same thing. > I am also not willing to blame either the full price nor the whole exchange on 15$/h factory floor staff. You are correct in that it isn't just one thing. At this point, it is thousands. Wages are a big deal though because they setup a chain reaction that ripples through the entire ecosystem. It isn't just a few people working for you that just cost more. As I explained above, this explodes through your entire wage scale. And, of course, it does the same for every single supplier and company you work for. The net effect is that the entire commercial/industrial ecosystem in the entire nation sees a step change in the cost of doing business. When they deal with each other, when the flour making company sells flour to the bakery, the cost will be higher and the baker, in turn, will have to charge more or make less, and so on. Making less is not sustainable. It leads to the destruction of businesses and industries. What we have is a complex multivariate problem. At the most basic level we need a serious shift in culture and policies. We need to be more pro-business, pro-oil, pro-entrepreneurship than ever. The clean future with equality and a solid social net we all want cannot happen with oil at $100+ per barrel, an anti-business ideology and our schools teaching Marxism and Socialism rather than graduating rabid entrepreneurs full of solid skills right out of high school. None of what I am saying is ideological in nature. I want 300 million electric cars in the US. I've done the math. I've taken the time to analyze this and understand what it will take. The shit people like AOC is pushing for will not get us there. That's ideological fantasy land. In the real world, we need to do almost the opposite of what we are being fed day after day. I challenge anyone to show me that we can actually achieve a clean energy future with oil at over $100 per barrel. No hand-wavy stuff. Math and physics. Numbers. They don't lie and they don't do ideology. For example: What does it cost to build a solar power plant that will produce output equivalent to a 1 GW nuclear power plant? How much land will it consume? How much steel, concrete and other key materials? What will it cost to transport all of the materials and elements needed? How much fuel/oil will it require to manufacture all the pieces, transport them, and do the construction? How much will it cost to maintain and service this plant over a period of fifty years? How much waste will it generate? How will it affect the environment (for example, wildlife)? Etc. Real analysis, not "solar is pink unicorns and bubble gum". Once you look at these realities with honesty and start to pull back the layers, the inevitable conclusion is that we have allowed our politicians to destroy our nation from the inside-out. And for what purpose? All I can think of is that their optimization function is only focused on keeping their jobs and retiring with a solid pension and benefits. Their equation does not include consequences for any of their actions. This is not a simple problem.

tsimionescu 5y ago

So in this example, at least half the problem was definitely not high prices on the factory floor, it was bad salespeople, an obsession with extracting profit, corporate bureaucracy, inefficient work practices. Given what you witnessed from the customer facing side, so you think there were no similar delays and inefficiencies in their manufacturing and acquisitions side, and no similar attempts at maximizing profits in their quote? I'm not claiming they could have matched the Chinese price, but I am also not willing to blame either the full price nor the whole exchange on 15$/h factory floor staff.

robomartin 5y ago
> bad salespeople More like the business culture is in serious need of recalibration. At the same time, some of it is easy to understand. Manufacturing is hard, for most, unimaginably hard. The sad reality in the US is that, because of costs and the layers of bullshit you have to deal with, the easiest way to survive is to focus on high dollar/high margin markets. That means that if you can land jobs in aerospace or government contracts you can be set. You might bring in other work on a very selective basis, yet, for the most part, your "meat and potatoes" has to be --by necessity-- the low volume/high margin stuff. Going back to the sales folks. When your job is to bring in just a few deals per year and, more importantly, keep the customers you have, you are not going to kill yourself for every opportunity put on your desk. Sales people in the US are generally compensated in a mercenary fashion (something I have never liked). You get to make some baseline and then get paid on some percentage of what you land. This does not make for a sales person who actually cares about every single potential customer. In the long run they will, very naturally, optimize for their own ROI. So, it can't be boiled down to "bad salespeople". There's a lot more to it than that. At this point thousands of elements working together to make it almost impossible to compete. Simple example: Stupid-as-fuck oil and policy that makes it so fuel and oil derivative products (oils, lubricants, plastics, etc.) cost more. So trucking your materials to your factory to make something cost more. Now we force a doubling of the minimum wage. Innocent enough, right? Well, the guy making $10 is now making $15. The folks making $15 now demand $20 (after all, they are not minimum wage workers). And so on up the entire wage scale. Your COGS goes up and your customers are not going to spend one additional dime for your products unless there is no other option. And this is where China comes in and is able to force such low pricing that your ONLY available option is to move all of your manufacturing to China and come in with a new price model and lower margins. In a lot of cases this will eventually lead to going out of business. > an obsession with extracting profit The only people who use phrases like this one are those who have never started and operated a non-trivial business. I don't know any successful business who's driving force is an obsession with "extracting profit". That term in particular, "extracting profit", is linked to Marxist indoctrination --which, in the US, is being delivered constantly by our universities by professors who have also never had to survive in the real world. In short, sorry, this is complete horseshit. Entrepreneurs and the companies they build are driven by wanting to delivery great products. Profit is a necessity for growth and survival. I thought people were also going to learn this from the pandemic. Companies need cash to survive all kinds of issues that come up on a daily basis in the course of doing business. Once again, those who have never had to face these realities simply don't understand and refuse to listen, sometimes due to being in the grips of a truly astounding level of indoctrination. I had an incident about 15 years ago when a multi-billion dollar company we were buying key sole-source components from discontinued these components virtually overnight and without prior notice. This cost us about a million dollars in real cash as well as about a year's worth of an engineering effort to design a product line based on these components. If we had not generated enough profit from our activities to survive such a hit everyone would have lost their jobs almost instantly. Instead, because we had the cash to weather the storm, we were able to regroup, invest and take a few months to redesign every single product around new components we could actually get. Your views of business are as wrong as thinking that gravity pulls in the opposite direction. And yet I can't blame you for it, because it is obvious to anyone with business experience that you don't have the benefit of that experience. My suggestion would be to try to make something at a reasonable scale and learn from it. I and when you do, statements like "an obsession with extracting profit" will make your blood boil. > inefficient work practices Not so. In the US you have to be efficient or you won't survive. What we are competing with is obsessed with being efficient. The only companies in the US who can afford serious inefficiencies are those who do government/military work. This is where we waste more money than anyone can imagine getting work done for ten times the cost. We have problems everywhere. This is what I am talking about when I say we need a major cultural shift. We have politicians constantly talking about raising taxes, as if we work for them. No! The conversation should be about ALWAYS lowering taxes and lowering costs. This means being more efficient at everything. Our national goal should be to half our expenditures and get more for our money. Not double our taxes and costs and support ever-growing bureaucracies. This isn't a formula for long term success. This is a formula for long term disasters. I have sold product into various government agencies, from local transportation agencies to branches of the military. I left that world because it was simply disgusting to see just how much money we are burning for nothing at all. I remember one case where we were bidding for a contract with a local public transportation agency for custom systems that needed to go into every passenger bus. We gave them a very reasonable bid. No special pricing, just normal "this is what it costs" pricing with normal profit margins. They ended-up giving the contract to someone who bid FIVE TIMES our bid. Why? Because the layers of people working at this agency are so ignorant that everything they do is designed to cover their collective asses. It isn't their money. They can't be fired. There are no consequences for them at all other than if something serious goes wrong. Even then, they probably won't lose their jobs. So they push the easy button (easy for them) and went with a contract that had all the "I will cover your ass 100%" elements they needed. So, we raise taxes and they spend five times more money than any reasonable buyer in the private sector would pay for exactly the same thing. > I am also not willing to blame either the full price nor the whole exchange on 15$/h factory floor staff. You are correct in that it isn't just one thing. At this point, it is thousands. Wages are a big deal though because they setup a chain reaction that ripples through the entire ecosystem. It isn't just a few people working for you that just cost more. As I explained above, this explodes through your entire wage scale. And, of course, it does the same for every single supplier and company you work for. The net effect is that the entire commercial/industrial ecosystem in the entire nation sees a step change in the cost of doing business. When they deal with each other, when the flour making company sells flour to the bakery, the cost will be higher and the baker, in turn, will have to charge more or make less, and so on. Making less is not sustainable. It leads to the destruction of businesses and industries. What we have is a complex multivariate problem. At the most basic level we need a serious shift in culture and policies. We need to be more pro-business, pro-oil, pro-entrepreneurship than ever. The clean future with equality and a solid social net we all want cannot happen with oil at $100+ per barrel, an anti-business ideology and our schools teaching Marxism and Socialism rather than graduating rabid entrepreneurs full of solid skills right out of high school. None of what I am saying is ideological in nature. I want 300 million electric cars in the US. I've done the math. I've taken the time to analyze this and understand what it will take. The shit people like AOC is pushing for will not get us there. That's ideological fantasy land. In the real world, we need to do almost the opposite of what we are being fed day after day. I challenge anyone to show me that we can actually achieve a clean energy future with oil at over $100 per barrel. No hand-wavy stuff. Math and physics. Numbers. They don't lie and they don't do ideology. For example: What does it cost to build a solar power plant that will produce output equivalent to a 1 GW nuclear power plant? How much land will it consume? How much steel, concrete and other key materials? What will it cost to transport all of the materials and elements needed? How much fuel/oil will it require to manufacture all the pieces, transport them, and do the construction? How much will it cost to maintain and service this plant over a period of fifty years? How much waste will it generate? How will it affect the environment (for example, wildlife)? Etc. Real analysis, not "solar is pink unicorns and bubble gum". Once you look at these realities with honesty and start to pull back the layers, the inevitable conclusion is that we have allowed our politicians to destroy our nation from the inside-out. And for what purpose? All I can think of is that their optimization function is only focused on keeping their jobs and retiring with a solid pension and benefits. Their equation does not include consequences for any of their actions. This is not a simple problem.