Manufacturing in the United States
Oct. 17th, 2017 03:14 pm![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
walkitoutYep, it’s coming back.
https://www.nbcnews.com/news/all/boeing-slams-questionable-airbus-deal-make-bombardier-cseries-jets-alabama-n811381
This is sort of the really in your face version of it. Making airplanes is super important if you are a military super power. It’s how you project force around the globe. You can talk boots on the ground, but the boots gotta get there, and it can’t all be on boats. The airplane industry, as a result, is highly protected. But there’s a fair amount of money to be made by undercutting on margin especially via innovation, and high barriers can stop that only for so long. The classic end run happened in my childhood / teenage years with cars: stop imports with tariffs? Fine, we’ll just make them in country instead. And, generally speaking, in the South, where the unions aren’t strong. As in, they don't actually exist.
But that isn’t even the kind of manufacturing I had in mind. It’s an important and interesting development, but while I may be from Seattle, I feel approximately the same amount of loyalty to Boeing as Boeing felt to Seattle (which is to say, not very much).
The kind of manufacturing I have in mind is moving to the US from Elsewhere (mostly China) for two reasons.
(1) As the relative value of US and Chinese currencies adjusts to reflect massive changes in the Chinese economy (it’s a slow process, but it is happening), the benefit of moving manufacturing from the US to China has reversed. Basically, the China wage isn’t what it once was. And automation these days is amazeballs.
(2) If you can automate enough of a manufacturing process to reduce the cost of labor required to a tiny fraction of the value of the end product, you don’t give a fuck _where_ you make it, at least not in wage terms. It turns out, you can get the labor cost so low, that you care _more_ about shipping costs than labor costs. At that point, it makes a lot of sense to move closer to where you are going to sell the final product.
Finally, states, local governments, the national government and other entities often create enticing packages of tax incentives and other benefits to move a manufacturer to a given location, in hopes of getting a bunch of sweet, sweet jobs along with it. Generally speaking, corporations seem to be better at hiring people to assess these deals than the politicians who create them (or maybe they just care about the bottom line in terms of dollars more, while the politicians care more about the votes, and it is really us voters who need to Step Up Our Game). That’s a powerful incentive to move manufacturing back to the United States.
Why not move to some other place in the world, cheaper than China? Well, China is already locking down a chunk of the African continent, in terms of manufacturing capacity. Governance issues can’t be entirely ignored, either, because governance tends to determine quality of labor force and infrastructure, which US businesses tend to expect more out of than Chinese businesses.
So, yep, manufacturing is coming back to the United States. But don’t be thinking that’s going to involve a lot of jobs. Because it probably won’t.
https://www.nbcnews.com/news/all/boeing-slams-questionable-airbus-deal-make-bombardier-cseries-jets-alabama-n811381
This is sort of the really in your face version of it. Making airplanes is super important if you are a military super power. It’s how you project force around the globe. You can talk boots on the ground, but the boots gotta get there, and it can’t all be on boats. The airplane industry, as a result, is highly protected. But there’s a fair amount of money to be made by undercutting on margin especially via innovation, and high barriers can stop that only for so long. The classic end run happened in my childhood / teenage years with cars: stop imports with tariffs? Fine, we’ll just make them in country instead. And, generally speaking, in the South, where the unions aren’t strong. As in, they don't actually exist.
But that isn’t even the kind of manufacturing I had in mind. It’s an important and interesting development, but while I may be from Seattle, I feel approximately the same amount of loyalty to Boeing as Boeing felt to Seattle (which is to say, not very much).
The kind of manufacturing I have in mind is moving to the US from Elsewhere (mostly China) for two reasons.
(1) As the relative value of US and Chinese currencies adjusts to reflect massive changes in the Chinese economy (it’s a slow process, but it is happening), the benefit of moving manufacturing from the US to China has reversed. Basically, the China wage isn’t what it once was. And automation these days is amazeballs.
(2) If you can automate enough of a manufacturing process to reduce the cost of labor required to a tiny fraction of the value of the end product, you don’t give a fuck _where_ you make it, at least not in wage terms. It turns out, you can get the labor cost so low, that you care _more_ about shipping costs than labor costs. At that point, it makes a lot of sense to move closer to where you are going to sell the final product.
Finally, states, local governments, the national government and other entities often create enticing packages of tax incentives and other benefits to move a manufacturer to a given location, in hopes of getting a bunch of sweet, sweet jobs along with it. Generally speaking, corporations seem to be better at hiring people to assess these deals than the politicians who create them (or maybe they just care about the bottom line in terms of dollars more, while the politicians care more about the votes, and it is really us voters who need to Step Up Our Game). That’s a powerful incentive to move manufacturing back to the United States.
Why not move to some other place in the world, cheaper than China? Well, China is already locking down a chunk of the African continent, in terms of manufacturing capacity. Governance issues can’t be entirely ignored, either, because governance tends to determine quality of labor force and infrastructure, which US businesses tend to expect more out of than Chinese businesses.
So, yep, manufacturing is coming back to the United States. But don’t be thinking that’s going to involve a lot of jobs. Because it probably won’t.
Hark! a SF concept!
Date: 2017-10-20 09:21 am (UTC)If you can automate enough of a manufacturing process to reduce the cost of labor required to a tiny
fraction of the value of the end product, you don’t give a fuck _where_ you make it, at least not in wage
terms. It turns out, you can get the labor cost so low, that you care _more_ about shipping costs than
labor costs…
So you pack these guys into a rocket -
https://youtu.be/0a0HnVqh1jU
- that doesn’t need any life support, can stack them like sardines and if it explodes that’s a darned shame, ain’t it - and you send them to the Moon. Where pollution is irrelevant, weather hazards don’t exist, solar power is constant and limitless for two weeks each month, and delivery costs? Well, escape velocity from Earth is 11 km/s, while from the Moon it’s all of 2.4 km/s, and from there the cargo just falls to Earth.
True, you have to get the raw materials up there first, but that's still way cheaper when you don't have to worry about life support or 100% reliability, and if it's somwething that can be mined ON the Moon, that's a win-win scenario!
[If I had the gigabuxx to do it, I'd start a space-tourism company using telepresence - you'd be one of these little guys, walking around on the Moon in perfect safety. Maybe we'd take it easy on the AI angle and use human operators! Jobs!
At the risk of being overly literal minded . . .
Date: 2017-10-20 01:23 pm (UTC)Lifting costs are still insanely high, but we are in the process of bringing lifting costs down (Blue Origin had an 50% engine test on its Big Engine that went really well recently). Once we bring lifting costs down to the point where we start lifting a lot, we're going to no longer be able to conceal the massive damage done to the atmosphere every time a rocket rips through it. Right now, lifts are rare, so it's basically okay. If lifts become frequent, the equation changes dramatically.
But, okay, SF authors through the 60s (conservatively) blew off environmental concerns on the theory that We'll Just Start Other Colonies On Other Planets Who Cares About This One Anyway It's Just Filled with Animals Who Make Too Many Babies and Don't Count As Real Humans Anyway Because They Can't Use a Slide Rule. I hear that -- I disagree, but pollution and environmental damage arguments had zero impact on that crowd so maybe it'll have no impact on you.
How about this, then. There is non-zero cost associated with catching and/or retrieving the shit you drop on the planet, and that's ignoring the unpleasant case in which you hit something valuable on the planet by accident and have to pay for that, too. I don't know capsule recovery cost, but I don't think it's particularly cheap, and that's part of transport cost, too.
Space tourism using telepresence, on the other hand, sounds pretty fucking brilliant. Let me know if you put together an investment group; I'd like to see the prospectus.
ETA: https://www.planetaryresources.com/ This is the mining part of what you were talking about (on asteroids vs. the moon) and it should help a lot with space industry, because you won't have to do so many lifts off of Earth, with the resulting atmospheric damage.
Re: literal minded . . .
Date: 2017-10-20 04:33 pm (UTC)I don't know where you're getting the data to form your assessment of my views. Not from me, certainly.
I will point out that we'd have to launch every ICBM of World War III every day to rival, let alone exceed, what jet airliners are already doing to the atmosphere. (Rockets - pfui! They leave the atmosphere!) And Pittsburgh at full blast with Detroit thrown in, would not make enough pollution on the vastness of the Moon to even be noticed. Especially if it's on the Farside!
Of the two, I know which I'd rather pollute! Having your industries on Earth is akin to cooking for your family on an open fire in the living room. Folks did that in the Middle Ages, but stopped doing it as soon as possible!
So let's have no more sneering about slide rules. I'm proud to have my father's slipstick, and I can use it, too!
p.s. As for hitting things, the Pacific is a nice big landing pad; see Project Apollo!
Re: literal minded . . .
Date: 2017-10-20 06:34 pm (UTC)People _still_ cook for their family on open fires in their only living space right here on Earth. It is a problem that needs to be addressed further.
I am reasonably certain that retrieving things that have been dropped onto Earth has some sort of cost associated with it. Which would seem to be the most relevant part in terms of my original post. (And that's ignoring packaging things to survive the drop.)
Re: literal minded . . .
Date: 2017-10-21 12:42 pm (UTC)Check, check and check.
- And thank you. I'm a LiveJournal refugee, and I MISS being able to discuss things like this!
Re: literal minded . . .
Date: 2017-10-21 01:16 pm (UTC)Re: literal minded . . .
Date: 2017-10-21 02:04 pm (UTC)> retrieving things that have been dropped onto Earth
> has some sort of cost associated with it
Well, here - let's try THIS
https://c1.staticflickr.com/5/4468/37697974641_f42abf100f_h.jpg
… it ought to work!
*grin*