11 ms·

America is back in the factory business

135 points by lxm 4y ago

News-Dog 4y ago
[Dupe] America Is Back in the Factory Business (wsj.com) 13 points by mfiguiere 9 hours ago - 1 comment : https://news.ycombinator.com/item?id=35490517 https://news.ycombinator.com/item?id=35490517
- deleted 4y ago
  [deleted]
VLM 4y ago
I interviewed at one; the picture says it all. Clean facility full of robots and perhaps one human per acre. More janitorial staff than production staff LOL. Production staff is mostly QA/QC auditing as I understand their explanation. I was (or maybe will?) sysadmin their SCADA/IoT stuff. The article is behind a paywall I can't pierce so I didn't read it, they may have mentioned that but I'll never know.
- bluGill 4y ago
  America has plenty of cheap reliable electric, particularly in the interior, and a great education system. Those are the things automated factories need. Non automated factories need lots of cheap labor, but when you don't hire thousands of people cost of labor isn't as important.
  - delfinom 4y ago
    >and a great education system. Those are the things automated factories need. Disagree. I work with a few factories. There are barely any engineers on staff. Needing engineers to service the factory is considered a failure of automation. Instead the factories are maintained by great guys who like doing hands on work but most of them that I know don't even have college degrees. They are just capable of following instructions and basically are the guys who in older times would be fucking around in a machine shop or working on cars. The engineers who designed the automation are actually from a design and service provider that can troubleshoot the machines remotely and tell the on-site techs what to do. And even that's rare because of the automation is breaking down frequently, you also have a failure of automation. So I argue education really isn't required for automated factories.
    - flatiron 4y ago
      They are all contractors. It’s contractors all the way down.
      - WJW 4y ago
        The contractors need education though, especially the ones designing the automated machines.
    - Espressosaurus 4y ago
      I've worked with the factory techs before, and my experience was the same. The techs move assemblies from point A to point B, and hit the big green go button, and occasionally hit the big red stop button. They know how to diagnose failures that they've been given a runbook for. New failures they're clueless about and don't have even the first idea how to diagnose. For that, there's the engineers that designed the station and the engineers that designed the underlying thing being assembled. Once the factory is up and running, the engagement of the engineers follows a power law distribution until the failure rate is below whatever is considered acceptable for what you're producing (starting point: 0.1%), at which point the engineers are fully disengaged and fully working on the next product. Factories do not need engineers on staff other than for reconfiguring space to support producing a new widget and controlling the data flow from stations to whatever central repository exists within the factory confines.
    - bluGill 4y ago
      The engineering isn't in the factory, it happens behind the scenes. Often in different cities from the factory . One factory i supported has gone from 2000 workers in 1950 to 200 today, while producing somewhat more than before. The same quality of people are in the factory, but there are a lot less because of automation.
  - NikolaNovak 4y ago
    Does America have a great education system? I was educated in eastern Europe through grade 10 as a bright but somewhat lazy B+ student. I then completely sailed through grade 11 and 12 in Minnesota as an A++ student (battling for 1st GPA), and NOT due to my own brilliance :). We simply covered USA grade 11 and 12 material in greater depth in grade 10, whether physics or Shakespeare (calculus was the only thing slightly new so I took grade 12 2nd semester calculus in grade 11, then again grade 12. These were ap and ib courses in usa too). By the end of my North American computer science university, I was too embarrassed to talk to my friends from the old country. I could barely understand what they were talking about. Today I am reasonably successful, and have a job that's a multiple of their salary, but I would never claim it's due to my education or that I am smarter / better educated - I just live in a "better place" (for that very specific criteria). That's personal anecdata of course, but by most metrics, USA education is a poor return on the money invested whether compared to fellow developed or other countries. I've rarely seen education brought up as our competitive advantage. In fact there's a sibling post on front page right now detailing the myriad issues with usa education system and how far we are falling behind the global norm :-(
    - alephnerd 4y ago
      To quote South Park, there are gods and clods. A Production Tech who is maintaining, cleaning, and repairing electronics would attend a vocational program/community college in the US. Admissions to such a program doesn't need knowledge beyond Pre-Calculus/Algebra and basic literacy. American education really shines at the Tertiary level, which matters more to US competitiveness. We need people to design automation (physical and computational) for existing processes, develop new technologies and processes, and manage said technology and processes. All that comes from a college education, training programs such as within the armed services, research programs and labs within the federal government, or vocational programs taught by community colleges (which are almost free in most states). All these educational programs in the US teach and remediate the skills deficiencies that you pointed out at the high school level. A lot of the differnce is also due to the fact that High Schools in the US increasingly don't provide vocational education, whereas Central and Eastern European educational institutes too. Also, did you go to a vocational high school or a gymnasium equivalent school? In the US, Vocational Education and Gymnasium/College-Track education is clubbed into the same program in high school. To specialize in either a vocational or white collar field, the American system forces you to directly go to some form of tertiary education, whereas in the CEE educational model, you can jump straight into skilled trades after graduating vocational high school. Based on your username, I'm going to assume you were from Croatia. The Croatian educational model (which is ultimately based on the German model) sorts and places students in White Collar and Blue Collar tracks around Grade 8, with competitive exams to enter Gymnasium (so realistically you start prepping around grade 6 or 7). The North American system (US/Canada/Mexico) doesn't do that until Grade 12.
  - dirtyid 4y ago
    > a great education system There's ongoing STEM/skilled shortage for existing demand for years. US education system is "great" to small/medium tier countries but not relative to her needs. Even immigration leaching talent from world isn't enough to plug gap so far. IMO overall underperforming and one of the weaker but more resolvable issues.
- bityard 4y ago
  What's the salary range for this kind of job?
  - great_psy 4y ago
    (Canada perspective) - it’s on the lower end of the software engineer. If a software eng makes 80-120k in non faang, you are looking at 70-100k. Those are just example numbers, it’s been about 5 years since I worked in that industry. There are two paths in this industry though, work for the factory itself, very cushy job, sometimes unionized. You’re responsible for fixing small things as they come, but overall I don’t think much is expected since you’re one of the few in the factory who can program those machines so if you give a time estimate there’s nobody to argue. You likely stay in the lower end of the pays scale. There is the consultant route, which can be gruelling, but you make closer to the higher end of the pay scale. Here it’s just a programmer shop, much is expected of you because you’re billing by the hour, also you will travel about 1/3 of your time, because you need to go from factory to factory to fix/install new code or machines.
cpufry 4y ago
are we getting ready for wartime production or something lel
- rationalist 4y ago
  It wouldn't surprise me. War is an easy excuse to fix a lot of things.
  - FpUser 4y ago
    Fix of fuck up?
    - more_corn 4y ago
      In order to create you must first destroy what was before. War is probably the argument by absurdity that disproves the above though.
      - FpUser 4y ago
        >"In order to create you must first destroy what was before." Total BS.
- kilroy123 4y ago
  The people I know who work in the defense industry seem to think so. That's what I hear. We're gearing up for a big conflict. Take that with a grain of salt, though.
  - the_cat_kittles 4y ago
    a lot of people in the defense industry are q anon types that are very eager for a war. reliably some of the dumbest people
    - cscurmudgeon 4y ago
      > a lot of people in the defense industry are q anon types Lol, that is stupendously overgeneralizing.
alex_young 4y ago
https://archive.ph/pPK7U https://archive.ph/pPK7U
caseysoftware 4y ago
I'm old enough to remember the mantra "manufacturing is never coming back to the US!" ANY system with numerous, complex, and hidden dependencies is fragile and higher risk. Covid, Russia/Ukraine, and now the BRICS/de-dollarization are making many of those dependencies explicit.
- pixl97 4y ago
  Eh 'never' was always the wrong statement because a lot of manufacturing that required large amounts of stable power while having low manpower requirements never left the US. At the same time I don't think we should expect any factories coming to the US to provide massive amounts of jobs as they did in the past. Companies that manufactured overseas quite commonly had their administrative divisions either in the US already, or some other country, and as a huge amount of that is remote style work it will remain fungible.
- themaninthedark 4y ago
  I remember when we signed NAFTA and it was said we didn't need those jobs. Something about becoming a service economy. The 'never coming back' mantra was mostrecently the unfortunate cry of the democrats during the 2016 election cycle. A shame because it cemented in the minds of the rural working class that they are unwanted. We value diversity but then make these claims that our economy doesn't need this.
  - rayiner 4y ago
    [flagged]
    - digitaltrees 4y ago
      Said no one ever.
      - rayiner 4y ago
        That’s the underlying premise of their politics. The immigrants Hilary Clinton wants to bring to the country aren’t any less “deplorable” (from her viewpoint) than rural white Americans. They are just don’t feel the same ownership over the society, and are willing to support people like Clinton in return for being allowed to come here.
alephnerd 4y ago
History doesn't repeat itself but it sure as hell rhymes. Interesting to see this migration of manufacturing back to US+ now that Chinese manufacturing costs have caught up to Mexico (which is a MASSIVE compliment btw - a lot of North American high value manufacturing such as in the automotive, medical robotics, and IC space is done in Nuevo León, and China has caught up). https://www.voanews.com/a/a-13-a-2003-11-12-33-mexico-s-67294832/380756.html https://www.voanews.com/a/a-13-a-2003-11-12-33-mexico-s-6729... http://international-economy.com/TIE_Sp03_Rosen.pdf http://international-economy.com/TIE_Sp03_Rosen.pdf
- baybal2 4y ago
  Depending on what you are manufacturing Plasticky goods probably yes, but for electronics assembly, it's already USD 2500 a month for a good experienced assembler.
- _hypx 4y ago
  I find it very hard to believe that much of that won't just move to south Asia or southeast Asia.
  - alephnerd 4y ago
    There are different types of manufacturing. The supply chain to manufacture generic plastics (most concentrated around Guangzhou and moving to Northern Vietnam) is different from the supply chain needed to manufacture generic pharmaceuticals (mostly concentrated in Himachal, Hyderabad, and central Maharashtra) is different from the supply chain to manufacture medical robotics (concentrated around Tijuana). Cost of labor isn't the only variable when these decisions are made. Decisions need to take into account business continuity, availability of expertise, availability of suppliers, etc. This is why low value manufacturing began moving from Guangdong to the Haiphong Delta in the mid 2000s and 2010s, and is now moving to Laos+Cambodia. And this is why intermediate parts manufacturing (the kind which china is very competitive in) is returning to Mexico - incomes and costs in China have caught up to Mexico, which was the proto-China before the Peso Crisis and China's entry into the WTO. If I'm paying the same in labor in both China and Mexico, I may as well save money in logistics and taxes by reopening my plants in Mexico. The story of manufacturing returning to ASEAN and India is the same - the factories that South Korean, Taiwanese, and Japanese companies built in the late 90s/early 2000s moved to China by the mid-2000s, but started either returning to Malaysia (electronics, plastics, automotive), Thailand (electronics, plastics, automotive), and India (plastics, pharmaceuticals) or began opening greenfield such as in Vietnam (electronics, plastics). The return of manufacturing in South+SE Asia was due to trade wars the Chinese govt initiated against Korea (bought THAAD against NK, PRC didn't approve which sparked a mass boycott against Korean products in China), Japan (Senkakou/Diayou Islands standofd which caused a massive boycott against Japanese products in China), and Taiwan (a major Taiwanese origin KPop singer began pushing for Taiwan Sovereignty which sparked a mass boycott against Taiwan in China) in the 2012-2017 time period. This led South Korea, Japan, and Taiwan to initiate their "Look South" policies to decouple their economics from China. SK and Japan largely succeeded, but Taiwan lagged behind due to internal political acrimony.
tsunamifury 4y ago
High end manufacturing never left America. And low end is hardly coming back. This has be said many times in the past during brief alignments, then by the time we’ve tooled up the rug is pulled out from under us and a new 3rd world nation is doing it for 1/10th the cost. This is not easy for me to believe even with the desire for a rosy outlook. Those who know know this was bs before.
- Turing_Machine 4y ago
  > a new 3rd world nation is doing it for 1/10th the cost There are fewer and fewer of those all the time, though. Manufacturing is now starting to move to Africa because Asia has become more expensive. I don't think there's anywhere left to go after Africa.
  - jhoechtl 4y ago
    Well observed. They are the last to exploit or to be built up, however you would like to see it.
  - brvsft 4y ago
    We will have to create a new underclass.
  - uejfiweun 4y ago
    You're forgetting Antarctica. But nobody lives there, you say? Easy, that's where we will send the robots to.
    - whiskeytuesday 4y ago
      Just think of the coolant temperature advantages
      - pg938hkd 4y ago
        Data centers. And it’s centrally located
anovikov 4y ago
Contradictory perception of what's going on with manufacturing in the U.S. recently is because when seen by investors, economists, and mainstream press, things look like manufacturing is returning (or even never left apart from a few sectors); when seen by workers, it seems like it has almost disappeared. It's just because manufacturing may be growing but manufacturing employment isn't, and won't be growing: when labor is expensive, it is automated away. I can't say there's anything wrong about it. Do we want people in developed countries toil in sweatshops?
marianatom 4y ago
Meanwhile, China's factory business have dropped dramatically. - Tech multinationals are moving out of China fast. Apple is mandating Foxconn to move 50% production lines to India by 2024. And anticipates 50% iPhones out of India bu 2027 https://techwireasia.com/2023/01/india-is-anticipated-to-produce-45-50-of-apples-iphones-by-2027/ https://techwireasia.com/2023/01/india-is-anticipated-to-pro.... Most of the downstream apple supply chains in China have all left for Vietnam. Dell is going to cut all ties to China by 2027 https://www.tomshardware.com/news/dell-made-in-china-us-exit https://www.tomshardware.com/news/dell-made-in-china-us-exit. HP and LG is quietly exiting as well. Samsung has already left China a while back. - China factories are closing left and right, and there's actually a long line of labors going back to countryside to farm, or waiting to go to Vietnam to work. You can see in Chinese citizens videos such as https://www.youtube.com/@ZGQSL https://www.youtube.com/@ZGQSL https://www.youtube.com/@realchnrecord https://www.youtube.com/@realchnrecord or English channels like https://www.youtube.com/@chinainsights4458 https://www.youtube.com/@chinainsights4458 - According to the office for national statistics in China, for jan/feb of 2023 http://www.ce.cn/xwzx/gnsz/gdxw/202303/27/t20230327_38464161.shtml http://www.ce.cn/xwzx/gnsz/gdxw/202303/27/t20230327_38464161..., car manufacturing profits is down 41%. non-metal products manufacturing profits is down 39%. chemicals manufacturing profits is down 56%. electronics manufacturing profits is down 71%!! In fact, all businesses have dropped 22% in profit. This is supported by empty malls in Shanghai, Beijing, and Shenzhen, as well as 50% collapse in real estate prices in Tier 1 cities. - There are 7 stories high stacked shipping containers in all major ports in China. https://www.scmp.com/economy/china-economy/article/3210870/chinas-shipping-containers-pile-overcrowded-port-overseas-orders-dwindle https://www.scmp.com/economy/china-economy/article/3210870/c...
- jeeeb 4y ago
  Mmm. I think you’re misrepresenting what your linked articles actually say. 1. Apple is moving some of its assembly capacity out of China but the article itself mentions that they’re still dependent on component imports from China. 2. Dell has a plan to move manufacturing of products for the US market out of China. That’s hardly cutting ties. Similarly Samsung may no longer have assembly plants in China but that says nothing of where the components are manufactured.
thisgoesnowhere 4y ago
A harrowing idea that I think is correct is what Michael Hudson says about our current economy. Even if you paid for everything other than rent for a low skill worker, America and Canada are priced out of manufacturing based on rent/housing alone. This is a huge reason why low skill labour can't come back.
- miki_tyler 4y ago
  Hiring an employee is marrying their landlord. Jokes aside, highly automated manufacturing does not have this issue.
- petesergeant 4y ago
  > America and Canada are priced out of manufacturing based on rent/housing alone Which is ridiculous given how much space they have
  - joenot443 4y ago
    It’s never been about the space, for 40 years it’s always been about zoning and compliance. Environmental assessments costs multiple times what they did a few decades ago in ON, this is a problem we created ourselves.
- nostromo 4y ago
  There are several states in the US where rents are cheaper than in Shenzhen.
  - user_named 4y ago
    Garments aren't manufactured in Shenzhen.
Animats 4y ago
So is it now time for web devs to retrain as production engineers? I've been saying for a while, if everything you do goes in and out over a wire, you're in trouble.
- contingencies 4y ago
  Ex webdev here, did exactly that 7 years ago, 250× ROI within 4 years. Would love to have a meal once we get to the US. Send me an email.
deleted 4y ago
[deleted]
ksec 4y ago
Freight Cost, Robotics, Oil Price, Lead Time. I dont think every business will move back, but for some it makes a lot more sense. With interest rate and oil price I am not sure if the current freight cost are sustainable. Robotics have improved tremendously over the past 5 years, it wasn't because we cant automate something, it was simply the time and cost of those automation means less labours are required. The next frontier will likely be electricity price affecting OPEX. ( it has always been the case but never gotten media attention ) For the rest, read [1] alephnerd's answer. [1] https://news.ycombinator.com/item?id=35502944 https://news.ycombinator.com/item?id=35502944
dirtyid 4y ago
I've seen comments that this is nominal dollars not adjusted for inflation. Normalized in real dollars value and investment is slightly lower than peak 2015 factory spending of 70B. 5-10B is fab subsidy via CHIPs, which puts rest of spending within norms of past decade of 50-60B.

135 points by lxm 4y ago

[Dupe] America Is Back in the Factory Business (wsj.com) 13 points by mfiguiere 9 hours ago - 1 comment : https://news.ycombinator.com/item?id=35490517 https://news.ycombinator.com/item?id=35490517

deleted 4y ago
[deleted]

VLM 4y ago

I interviewed at one; the picture says it all. Clean facility full of robots and perhaps one human per acre. More janitorial staff than production staff LOL. Production staff is mostly QA/QC auditing as I understand their explanation. I was (or maybe will?) sysadmin their SCADA/IoT stuff. The article is behind a paywall I can't pierce so I didn't read it, they may have mentioned that but I'll never know.

bluGill 4y ago
America has plenty of cheap reliable electric, particularly in the interior, and a great education system. Those are the things automated factories need. Non automated factories need lots of cheap labor, but when you don't hire thousands of people cost of labor isn't as important.
- delfinom 4y ago
  >and a great education system. Those are the things automated factories need. Disagree. I work with a few factories. There are barely any engineers on staff. Needing engineers to service the factory is considered a failure of automation. Instead the factories are maintained by great guys who like doing hands on work but most of them that I know don't even have college degrees. They are just capable of following instructions and basically are the guys who in older times would be fucking around in a machine shop or working on cars. The engineers who designed the automation are actually from a design and service provider that can troubleshoot the machines remotely and tell the on-site techs what to do. And even that's rare because of the automation is breaking down frequently, you also have a failure of automation. So I argue education really isn't required for automated factories.
  - flatiron 4y ago
    They are all contractors. It’s contractors all the way down.
    - WJW 4y ago
      The contractors need education though, especially the ones designing the automated machines.
  - Espressosaurus 4y ago
    I've worked with the factory techs before, and my experience was the same. The techs move assemblies from point A to point B, and hit the big green go button, and occasionally hit the big red stop button. They know how to diagnose failures that they've been given a runbook for. New failures they're clueless about and don't have even the first idea how to diagnose. For that, there's the engineers that designed the station and the engineers that designed the underlying thing being assembled. Once the factory is up and running, the engagement of the engineers follows a power law distribution until the failure rate is below whatever is considered acceptable for what you're producing (starting point: 0.1%), at which point the engineers are fully disengaged and fully working on the next product. Factories do not need engineers on staff other than for reconfiguring space to support producing a new widget and controlling the data flow from stations to whatever central repository exists within the factory confines.
  - bluGill 4y ago
    The engineering isn't in the factory, it happens behind the scenes. Often in different cities from the factory . One factory i supported has gone from 2000 workers in 1950 to 200 today, while producing somewhat more than before. The same quality of people are in the factory, but there are a lot less because of automation.
- NikolaNovak 4y ago
  Does America have a great education system? I was educated in eastern Europe through grade 10 as a bright but somewhat lazy B+ student. I then completely sailed through grade 11 and 12 in Minnesota as an A++ student (battling for 1st GPA), and NOT due to my own brilliance :). We simply covered USA grade 11 and 12 material in greater depth in grade 10, whether physics or Shakespeare (calculus was the only thing slightly new so I took grade 12 2nd semester calculus in grade 11, then again grade 12. These were ap and ib courses in usa too). By the end of my North American computer science university, I was too embarrassed to talk to my friends from the old country. I could barely understand what they were talking about. Today I am reasonably successful, and have a job that's a multiple of their salary, but I would never claim it's due to my education or that I am smarter / better educated - I just live in a "better place" (for that very specific criteria). That's personal anecdata of course, but by most metrics, USA education is a poor return on the money invested whether compared to fellow developed or other countries. I've rarely seen education brought up as our competitive advantage. In fact there's a sibling post on front page right now detailing the myriad issues with usa education system and how far we are falling behind the global norm :-(
  - alephnerd 4y ago
    To quote South Park, there are gods and clods. A Production Tech who is maintaining, cleaning, and repairing electronics would attend a vocational program/community college in the US. Admissions to such a program doesn't need knowledge beyond Pre-Calculus/Algebra and basic literacy. American education really shines at the Tertiary level, which matters more to US competitiveness. We need people to design automation (physical and computational) for existing processes, develop new technologies and processes, and manage said technology and processes. All that comes from a college education, training programs such as within the armed services, research programs and labs within the federal government, or vocational programs taught by community colleges (which are almost free in most states). All these educational programs in the US teach and remediate the skills deficiencies that you pointed out at the high school level. A lot of the differnce is also due to the fact that High Schools in the US increasingly don't provide vocational education, whereas Central and Eastern European educational institutes too. Also, did you go to a vocational high school or a gymnasium equivalent school? In the US, Vocational Education and Gymnasium/College-Track education is clubbed into the same program in high school. To specialize in either a vocational or white collar field, the American system forces you to directly go to some form of tertiary education, whereas in the CEE educational model, you can jump straight into skilled trades after graduating vocational high school. Based on your username, I'm going to assume you were from Croatia. The Croatian educational model (which is ultimately based on the German model) sorts and places students in White Collar and Blue Collar tracks around Grade 8, with competitive exams to enter Gymnasium (so realistically you start prepping around grade 6 or 7). The North American system (US/Canada/Mexico) doesn't do that until Grade 12.
- dirtyid 4y ago
  > a great education system There's ongoing STEM/skilled shortage for existing demand for years. US education system is "great" to small/medium tier countries but not relative to her needs. Even immigration leaching talent from world isn't enough to plug gap so far. IMO overall underperforming and one of the weaker but more resolvable issues.
bityard 4y ago
What's the salary range for this kind of job?
- great_psy 4y ago
  (Canada perspective) - it’s on the lower end of the software engineer. If a software eng makes 80-120k in non faang, you are looking at 70-100k. Those are just example numbers, it’s been about 5 years since I worked in that industry. There are two paths in this industry though, work for the factory itself, very cushy job, sometimes unionized. You’re responsible for fixing small things as they come, but overall I don’t think much is expected since you’re one of the few in the factory who can program those machines so if you give a time estimate there’s nobody to argue. You likely stay in the lower end of the pays scale. There is the consultant route, which can be gruelling, but you make closer to the higher end of the pay scale. Here it’s just a programmer shop, much is expected of you because you’re billing by the hour, also you will travel about 1/3 of your time, because you need to go from factory to factory to fix/install new code or machines.

cpufry 4y ago

are we getting ready for wartime production or something lel

rationalist 4y ago
It wouldn't surprise me. War is an easy excuse to fix a lot of things.
- FpUser 4y ago
  Fix of fuck up?
  - more_corn 4y ago
    In order to create you must first destroy what was before. War is probably the argument by absurdity that disproves the above though.
    - FpUser 4y ago
      >"In order to create you must first destroy what was before." Total BS.
kilroy123 4y ago
The people I know who work in the defense industry seem to think so. That's what I hear. We're gearing up for a big conflict. Take that with a grain of salt, though.
- the_cat_kittles 4y ago
  a lot of people in the defense industry are q anon types that are very eager for a war. reliably some of the dumbest people
  - cscurmudgeon 4y ago
    > a lot of people in the defense industry are q anon types Lol, that is stupendously overgeneralizing.

alex_young 4y ago

https://archive.ph/pPK7U https://archive.ph/pPK7U

caseysoftware 4y ago

I'm old enough to remember the mantra "manufacturing is never coming back to the US!" ANY system with numerous, complex, and hidden dependencies is fragile and higher risk. Covid, Russia/Ukraine, and now the BRICS/de-dollarization are making many of those dependencies explicit.

pixl97 4y ago
Eh 'never' was always the wrong statement because a lot of manufacturing that required large amounts of stable power while having low manpower requirements never left the US. At the same time I don't think we should expect any factories coming to the US to provide massive amounts of jobs as they did in the past. Companies that manufactured overseas quite commonly had their administrative divisions either in the US already, or some other country, and as a huge amount of that is remote style work it will remain fungible.
themaninthedark 4y ago
I remember when we signed NAFTA and it was said we didn't need those jobs. Something about becoming a service economy. The 'never coming back' mantra was mostrecently the unfortunate cry of the democrats during the 2016 election cycle. A shame because it cemented in the minds of the rural working class that they are unwanted. We value diversity but then make these claims that our economy doesn't need this.
- rayiner 4y ago
  [flagged]
  - digitaltrees 4y ago
    Said no one ever.
    - rayiner 4y ago
      That’s the underlying premise of their politics. The immigrants Hilary Clinton wants to bring to the country aren’t any less “deplorable” (from her viewpoint) than rural white Americans. They are just don’t feel the same ownership over the society, and are willing to support people like Clinton in return for being allowed to come here.

alephnerd 4y ago

History doesn't repeat itself but it sure as hell rhymes. Interesting to see this migration of manufacturing back to US+ now that Chinese manufacturing costs have caught up to Mexico (which is a MASSIVE compliment btw - a lot of North American high value manufacturing such as in the automotive, medical robotics, and IC space is done in Nuevo León, and China has caught up). https://www.voanews.com/a/a-13-a-2003-11-12-33-mexico-s-67294832/380756.html https://www.voanews.com/a/a-13-a-2003-11-12-33-mexico-s-6729... http://international-economy.com/TIE_Sp03_Rosen.pdf http://international-economy.com/TIE_Sp03_Rosen.pdf

baybal2 4y ago
Depending on what you are manufacturing Plasticky goods probably yes, but for electronics assembly, it's already USD 2500 a month for a good experienced assembler.
_hypx 4y ago
I find it very hard to believe that much of that won't just move to south Asia or southeast Asia.
- alephnerd 4y ago
  There are different types of manufacturing. The supply chain to manufacture generic plastics (most concentrated around Guangzhou and moving to Northern Vietnam) is different from the supply chain needed to manufacture generic pharmaceuticals (mostly concentrated in Himachal, Hyderabad, and central Maharashtra) is different from the supply chain to manufacture medical robotics (concentrated around Tijuana). Cost of labor isn't the only variable when these decisions are made. Decisions need to take into account business continuity, availability of expertise, availability of suppliers, etc. This is why low value manufacturing began moving from Guangdong to the Haiphong Delta in the mid 2000s and 2010s, and is now moving to Laos+Cambodia. And this is why intermediate parts manufacturing (the kind which china is very competitive in) is returning to Mexico - incomes and costs in China have caught up to Mexico, which was the proto-China before the Peso Crisis and China's entry into the WTO. If I'm paying the same in labor in both China and Mexico, I may as well save money in logistics and taxes by reopening my plants in Mexico. The story of manufacturing returning to ASEAN and India is the same - the factories that South Korean, Taiwanese, and Japanese companies built in the late 90s/early 2000s moved to China by the mid-2000s, but started either returning to Malaysia (electronics, plastics, automotive), Thailand (electronics, plastics, automotive), and India (plastics, pharmaceuticals) or began opening greenfield such as in Vietnam (electronics, plastics). The return of manufacturing in South+SE Asia was due to trade wars the Chinese govt initiated against Korea (bought THAAD against NK, PRC didn't approve which sparked a mass boycott against Korean products in China), Japan (Senkakou/Diayou Islands standofd which caused a massive boycott against Japanese products in China), and Taiwan (a major Taiwanese origin KPop singer began pushing for Taiwan Sovereignty which sparked a mass boycott against Taiwan in China) in the 2012-2017 time period. This led South Korea, Japan, and Taiwan to initiate their "Look South" policies to decouple their economics from China. SK and Japan largely succeeded, but Taiwan lagged behind due to internal political acrimony.

tsunamifury 4y ago

High end manufacturing never left America. And low end is hardly coming back. This has be said many times in the past during brief alignments, then by the time we’ve tooled up the rug is pulled out from under us and a new 3rd world nation is doing it for 1/10th the cost. This is not easy for me to believe even with the desire for a rosy outlook. Those who know know this was bs before.

Turing_Machine 4y ago
> a new 3rd world nation is doing it for 1/10th the cost There are fewer and fewer of those all the time, though. Manufacturing is now starting to move to Africa because Asia has become more expensive. I don't think there's anywhere left to go after Africa.
- jhoechtl 4y ago
  Well observed. They are the last to exploit or to be built up, however you would like to see it.
- brvsft 4y ago
  We will have to create a new underclass.
- uejfiweun 4y ago
  You're forgetting Antarctica. But nobody lives there, you say? Easy, that's where we will send the robots to.
  - whiskeytuesday 4y ago
    Just think of the coolant temperature advantages
    - pg938hkd 4y ago
      Data centers. And it’s centrally located

anovikov 4y ago

Contradictory perception of what's going on with manufacturing in the U.S. recently is because when seen by investors, economists, and mainstream press, things look like manufacturing is returning (or even never left apart from a few sectors); when seen by workers, it seems like it has almost disappeared. It's just because manufacturing may be growing but manufacturing employment isn't, and won't be growing: when labor is expensive, it is automated away. I can't say there's anything wrong about it. Do we want people in developed countries toil in sweatshops?

marianatom 4y ago

Meanwhile, China's factory business have dropped dramatically. - Tech multinationals are moving out of China fast. Apple is mandating Foxconn to move 50% production lines to India by 2024. And anticipates 50% iPhones out of India bu 2027 https://techwireasia.com/2023/01/india-is-anticipated-to-produce-45-50-of-apples-iphones-by-2027/ https://techwireasia.com/2023/01/india-is-anticipated-to-pro.... Most of the downstream apple supply chains in China have all left for Vietnam. Dell is going to cut all ties to China by 2027 https://www.tomshardware.com/news/dell-made-in-china-us-exit https://www.tomshardware.com/news/dell-made-in-china-us-exit. HP and LG is quietly exiting as well. Samsung has already left China a while back. - China factories are closing left and right, and there's actually a long line of labors going back to countryside to farm, or waiting to go to Vietnam to work. You can see in Chinese citizens videos such as https://www.youtube.com/@ZGQSL https://www.youtube.com/@ZGQSL https://www.youtube.com/@realchnrecord https://www.youtube.com/@realchnrecord or English channels like https://www.youtube.com/@chinainsights4458 https://www.youtube.com/@chinainsights4458 - According to the office for national statistics in China, for jan/feb of 2023 http://www.ce.cn/xwzx/gnsz/gdxw/202303/27/t20230327_38464161.shtml http://www.ce.cn/xwzx/gnsz/gdxw/202303/27/t20230327_38464161..., car manufacturing profits is down 41%. non-metal products manufacturing profits is down 39%. chemicals manufacturing profits is down 56%. electronics manufacturing profits is down 71%!! In fact, all businesses have dropped 22% in profit. This is supported by empty malls in Shanghai, Beijing, and Shenzhen, as well as 50% collapse in real estate prices in Tier 1 cities. - There are 7 stories high stacked shipping containers in all major ports in China. https://www.scmp.com/economy/china-economy/article/3210870/chinas-shipping-containers-pile-overcrowded-port-overseas-orders-dwindle https://www.scmp.com/economy/china-economy/article/3210870/c...

jeeeb 4y ago
Mmm. I think you’re misrepresenting what your linked articles actually say. 1. Apple is moving some of its assembly capacity out of China but the article itself mentions that they’re still dependent on component imports from China. 2. Dell has a plan to move manufacturing of products for the US market out of China. That’s hardly cutting ties. Similarly Samsung may no longer have assembly plants in China but that says nothing of where the components are manufactured.

thisgoesnowhere 4y ago

A harrowing idea that I think is correct is what Michael Hudson says about our current economy. Even if you paid for everything other than rent for a low skill worker, America and Canada are priced out of manufacturing based on rent/housing alone. This is a huge reason why low skill labour can't come back.

miki_tyler 4y ago
Hiring an employee is marrying their landlord. Jokes aside, highly automated manufacturing does not have this issue.
petesergeant 4y ago
> America and Canada are priced out of manufacturing based on rent/housing alone Which is ridiculous given how much space they have
- joenot443 4y ago
  It’s never been about the space, for 40 years it’s always been about zoning and compliance. Environmental assessments costs multiple times what they did a few decades ago in ON, this is a problem we created ourselves.
nostromo 4y ago
There are several states in the US where rents are cheaper than in Shenzhen.
- user_named 4y ago
  Garments aren't manufactured in Shenzhen.

Animats 4y ago

So is it now time for web devs to retrain as production engineers? I've been saying for a while, if everything you do goes in and out over a wire, you're in trouble.

contingencies 4y ago
Ex webdev here, did exactly that 7 years ago, 250× ROI within 4 years. Would love to have a meal once we get to the US. Send me an email.

deleted 4y ago

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ksec 4y ago

Freight Cost, Robotics, Oil Price, Lead Time. I dont think every business will move back, but for some it makes a lot more sense. With interest rate and oil price I am not sure if the current freight cost are sustainable. Robotics have improved tremendously over the past 5 years, it wasn't because we cant automate something, it was simply the time and cost of those automation means less labours are required. The next frontier will likely be electricity price affecting OPEX. ( it has always been the case but never gotten media attention ) For the rest, read [1] alephnerd's answer. [1] https://news.ycombinator.com/item?id=35502944 https://news.ycombinator.com/item?id=35502944

dirtyid 4y ago

I've seen comments that this is nominal dollars not adjusted for inflation. Normalized in real dollars value and investment is slightly lower than peak 2015 factory spending of 70B. 5-10B is fab subsidy via CHIPs, which puts rest of spending within norms of past decade of 50-60B.