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The only problem with the argument is that it’s completely false (not you, the company). > These days, China's labor costs are only 4% cheaper than those in th

The only problem with the argument is that it’s completely false (not you, the company). > These days, China's labor costs are only 4% cheaper than those in the U.S. when productivity is factored in, according to Oxford Economics. https://money.cnn.com/2016/03/17/news/economy/china-cheap-labor-productivity/#:~:text=These%20days%2C%20China's%20labor%20costs,in%2C%20according%20to%20Oxford%20Economics https://money.cnn.com/2016/03/17/news/economy/china-cheap-la.... So once you realize the company is using the excuse (lying?) about the labor excuse, then you have to wonder what the real reason is. Especially after their disaster of a 2022 (which was directly the result of supply chain problems in... Drum roll please... China). Good opinion piece: https://seekingalpha.com/article/4547012-stanley-black-and-decker-im-turning-away-from-this-turnaround-story https://seekingalpha.com/article/4547012-stanley-black-and-d... More information: https://www.logisticsmgmt.com/article/global_labor_rates_china_is_no_longer_a_low_cost_country https://www.logisticsmgmt.com/article/global_labor_rates_chi...

jncfhnb 3y ago
“Productivity” is a very hand wavey idea.
542458 3y ago
I’m not really sure how that’s possible - when I’ve gotten quotes for short run highly automated manufacturing (the stuff the US should be comparatively good at!), the overseas numbers are usually about half those of the US on a per part basis. IIRC can try this for yourself on Xometry by changing the manufacturing location. But there’s also more than just labor cost. In my experience: when we ask a Chinese manufacturer about something they don’t have the capability to do, they’ll come back with subcontracting options from the factory down the road who can do it. There’s so much manufacturing capability concentrated in a small number of places that every process option is on the table. But in North America, it’s a very different story. Everything is so spread out so your options are dramatically more limited unless you want to be shipping parts across the country. I’m not saying NA-based manufacturing is bad: the org I work for still does most stuff here for agility, communication, and security reasons. But it’s not cheap. Opinions are my own.
- theatrus2 3y ago
  The ability for contract manufacturers to simply source things from neighboring companies is a very real thing - and usually the quality is pretty good. Somehow, working between companies is a quick and fast thing, where here making a new business relationship is seemingly mired in problems.
- devilbunny 3y ago
  > There’s so much manufacturing capability concentrated in a small number of places that every process option is on the table Which is why the auto industry grew up in the Great Lakes in general and southeastern Michigan in particular: there were so many different machine shops that you could find someone to make almost any imaginable part and just order the quantity needed without having to worry about making something like the River Rouge plant that took in raw materials and spat out cars.
- sokoloff 3y ago
  Try it for short run PCB or PCBA and you’ll see the difference is 3-20x rather than merely 2x. (And the one that’s on the low end of the scale isn’t as flexible as the Chinese suppliers; most are in the 8-20x range.)
  - bsder 3y ago
    Running a PCB line in the US generally requires that you comply with a whole host of regulations about toxic emissions that China simply ignores. PCB lines are nasty and noxious.
glitcher 3y ago
> the argument is that it’s completely false But is it completely false? Or does that 4% statistic also suffer from an over generalization based on very broad averages that can have extreme fluctuations when individual, specific cases are considered?
- happytiger 3y ago
  No you are totally right in that point.
Vt71fcAqt7 3y ago
>>These days, China's labor costs are only 4% cheaper than those in the U.S. when productivity is factored in, according to Oxford Economics. This isn't true though.

jncfhnb 3y ago

“Productivity” is a very hand wavey idea.

542458 3y ago

I’m not really sure how that’s possible - when I’ve gotten quotes for short run highly automated manufacturing (the stuff the US should be comparatively good at!), the overseas numbers are usually about half those of the US on a per part basis. IIRC can try this for yourself on Xometry by changing the manufacturing location. But there’s also more than just labor cost. In my experience: when we ask a Chinese manufacturer about something they don’t have the capability to do, they’ll come back with subcontracting options from the factory down the road who can do it. There’s so much manufacturing capability concentrated in a small number of places that every process option is on the table. But in North America, it’s a very different story. Everything is so spread out so your options are dramatically more limited unless you want to be shipping parts across the country. I’m not saying NA-based manufacturing is bad: the org I work for still does most stuff here for agility, communication, and security reasons. But it’s not cheap. Opinions are my own.

theatrus2 3y ago
The ability for contract manufacturers to simply source things from neighboring companies is a very real thing - and usually the quality is pretty good. Somehow, working between companies is a quick and fast thing, where here making a new business relationship is seemingly mired in problems.
devilbunny 3y ago
> There’s so much manufacturing capability concentrated in a small number of places that every process option is on the table Which is why the auto industry grew up in the Great Lakes in general and southeastern Michigan in particular: there were so many different machine shops that you could find someone to make almost any imaginable part and just order the quantity needed without having to worry about making something like the River Rouge plant that took in raw materials and spat out cars.
sokoloff 3y ago
Try it for short run PCB or PCBA and you’ll see the difference is 3-20x rather than merely 2x. (And the one that’s on the low end of the scale isn’t as flexible as the Chinese suppliers; most are in the 8-20x range.)
- bsder 3y ago
  Running a PCB line in the US generally requires that you comply with a whole host of regulations about toxic emissions that China simply ignores. PCB lines are nasty and noxious.

glitcher 3y ago

> the argument is that it’s completely false But is it completely false? Or does that 4% statistic also suffer from an over generalization based on very broad averages that can have extreme fluctuations when individual, specific cases are considered?

happytiger 3y ago
No you are totally right in that point.

Vt71fcAqt7 3y ago

>>These days, China's labor costs are only 4% cheaper than those in the U.S. when productivity is factored in, according to Oxford Economics. This isn't true though.