meatcleaver -> RE: What's good about overseas outsourcing? (1/24/2008 1:38:40 AM)
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ORIGINAL: samboct Meatcleaver Nope-German unions had more of a stranglehold on German companies- they couldn't outsource although in many areas such as electronics, they desperately wanted to. Outsourcing is not about market pricing, it's about hidden costs. China's costs are lower because they lack environmental standards, human life is cheap, and they respect no one's intellectual property. This is an economics problem and demonstrates that practitioners of that dismal science have screwed up yet AGAIN! (and we all pay for it- ARGGGHH!) China's mfg is NOT more efficient- heck the average efficiency of their coal generating plants is down in the high teens, whereas the average efficiency of US plants is in the mid 30s (Japan is a touch higher). It's also demonstrating that MBAs should stick to sweeping floors and not running businesses (who else can I slam here?) because the idea that you would take your hard won intellectual property (R+D ,. branding etc.) and GIVE IT TO YOUR COMPETITOR to manufacture is utterly idiotic. That most firms persist in doing so shows how lemminglike most businesses are. Sam To say German unions have a strangle hold on German companies is the position of an ideological capitalist. German companies do outsource many lines of products, it is necessary to compete with competition. However, Germany also makes premium products people around the world are willing to pay premium prices for which enables companies to pay for German high paid workers. The fact remains that Germany exports more manufacturing products than the USA with around a quarter of the population. Considering that, US manufacturing should be doing better at home but it isn't. Let's take US cars compared to German cars or Japanese cars, to see an American car (manufactured in the US) on the road here is a rare sight indeed, in fact any product that is manufactured in the US is a rare sight. However, it is not rare to come across German and Japanese products made in their respective countries (they have to label the country of manufacture, not the country of the company), in fact the street and homes are full of them. Both have comparable wage costs to the US. The problem with the US as it is with Britain, they are both fast-buck ideological capitalist cultures, they want a quick profit today at any price even if it comes back and bites them on the arse tomorrow. German business culture like Japan, is far more considered and think in the long term not the short term. Getting back to unions having a stranglehold on German companies, it is probably more correct to say there is a culture of cooperation between the unions and management. Many rights and duties of each side are embeded in German law. The unions made serious entitlement compromises to keep companies manufacturing in Germany with the understanding that if the company has success the work force shares the profits of that success. The German business culture seems to be far more successful for the German worker than the American and British system is for their workers. But then both countries think that union participation in industry is bordering on the resurrection of Karl Marx but such an attitude allows capitalists to cream off profit at the expense of everyone else. You point out that China's costs are lower because they lack environmental standards, human life is cheap, and they respect no one's intellectual property. Well that just about sounds like western capitalism in the 18th and 19th century before the rise of the trade unions and other workerclass organisations. China's mfg is NOT more efficient- heck the average efficiency of their coal generating plants is down in the high teens, whereas the average efficiency of US plants is in the mid 30s No one has said that Chinese manufacturing is more efficient, it is just cheaper. Well not cheaper for the world which will still have to pay for cleaning up all the shit or face the consequences but the real problem is the west's wastefulness and propensity to buy shit, throw it away after a year and go out and buy more shit. Over harvesting and using the planet as a free resource is not a Chinese problem, it is a problem of ideological capitalism. In reality our generation have never had it so good but without a serious change in our attitudes to consumption, our children and grandchildren won't have it so good and where stuff is made will be meaningless.
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