Made in China (For Now): Manufacturing’s Slow Return to America, Case Study

Leave a comment


made in china

Made in China (for now)

Outsourcing is the bane of American manufacturing… except for in a little town in Michigan named Saginaw.  The great wrecks of the rest belt dot the town.  Meanwhile one Nexteer Automotive is adding jobs by the dozens.

Who is injecting money into the American economy?  If you were to follow the money trail your answer would be “China.”

In 2010 the national Chinese firm Aviation Industry Corporation bought the factory from General Motors.  The previous owners had been determined to sell the plant or demolish it.  The Chinese are determined to make a profit.  I believe the Chinese are correct in this case, otherwise they would not be investing in new machinery, technology, and above all workers at the same plant that General Motors had given up on.

The lynch pin in the success of the factory under its new leadership has been a stellar relationship with the factory’s union. Careful and respectful negotiations were made concerning wages.  Bloated union contracts were watered down; however, the terms were still generous for the plant’s union.  New employees are paid less than half of what they would have been paid ten years ago.  This matters little to the workers whom are just happy to be employed.  Over 600 hundred jobs have been added to the factory in the last two years.  More are on the way.

Many workers had apprehensions about the foreign acquisition of Nexteer Automotive.  Some worried the firm would be liquidated.  Others were concerned the experience and technological knowledge of the employees would be sponged from the plant and the factory itself would be leveled.  These fears have been unfounded.  Rather than taking away from the plant the Chinese have pledged to invest over 15 billion over the next couple of years.  Nexteer Automotive is quickly putting in cutting edge systems to secure the factory’s future.  The only criticism Aviation Industry Corporation has of Nexteer Automotive is the factory is not expanding fast enough.

While General Motors, the previous owner of the Nexteer Automotive, had seem only a money pit Aviation Industry Corporation found a gem.  The American worker is second to none; it is a proven fact that on average Americans work more diligently and with greater output than any other country in the world.  The Chinese are simply cashing in on this hard-won fact.  In addition, the highly developed infrastructure throughout American and the sunk costs of existing factories means that future developers will also invest in America.  We are the best and most economic choice. In virtually every industry American leads the way with a culture of intrepid determination, it is only right manufacturing is coming back to America.

An (Indomitable) Argument for Protectionism

Leave a comment


Seagate Wuxi China Factory Tour

Protectionism helps us at home and our friends abroad

The expired Multi-Fiber Arrangement left thirty million people across the world unemployed.  These workers were unfortunate victims of globalized free trade.  Free trade leads us to believe that goods should always be produced by the firms competing under pure capitalist conditions.  This idea is not wrong; it is only the dangers of free trade should be mitigated in emerging markets around the globe to give them the opportunity to succeed.  Protectionism, the antagonist of free trade, is the solution to best prepare infant industries and emerging economies anywhere in the world; this policy employees more denizens, produces stronger industries, and cultivates stronger markets than free trade ever could.

Inefficiency creates more jobs.  If the entire world can exploit a market then only those countries with the most efficient industries will be able to sell.  Protectionism erects a wall of tariffs that prevents foreign goods from ever contaminating domestic markets by driving prices up to an inclusive level for domestic products.  Under protectionism, small industries gain a foothold, bloom, and employ more denizens in every country across the world.  There are minor concessions; on a global level less of goods are produced and the cost is driven up slightly as well.  These negligible effects diffused throughout the consumer markets means the world to the now employed workers who can support their families.  Protectionism is more humane than free trade.

Stronger industries are built under the shield of protectionism.  Behind a wall of tariffs the United States built mighty firms of  industry that dominated the world for the second half of the twentieth century.  Preceding the Americans, the British had done the same when the pioneered the Industrial Revolution and built an empire upon which the sun never set.  Since the 1970’s China used numerous protectionist policies, notably keeping its currency artificially low.  It is predicted to have the world’s largest GDP by 2020.  Examples of booming economies that got their start in free trade are scare.  Columbus and Admiral Perry opened up trade to the Americas and East Asia respectively.  In both countries widespread exploitation of natives and complete sterilization of domestic industries ensued following the introduction of cheap free trade imports.  Free trade is a tool of the strong to stay in power and collect wealth; for weaker nations and industries free trade is a poison which cripples.

Stronger markets evolve under protectionism.  Protectionist policies protect infant industries and prevent exploitation of weak economies.  In an international market of free trade monopolies are certain to emerge.  Monopolies are established when there is not industrial competition.  This problem hurts everyone.  Consumers suffer from an inferior product; without the Darwinian survival of the fittest threat the producers have no incentive to innovate.  Marginal producers are harmed.  Any attempts to breach the market are squelched under the monopoly.  The monopoly hurts itself through stagnation.  Protectionism is the best means in a globalized economy to give marginal producers and infant industries the time to create a profitable industries despite the monopolies.  Consumers and marginal producers benefit from better products and pay checks while potential monopolies are broken out of self-defeating cycles of stagnation.  Protectionism helps everyone.

Protectionist protects countries.  It harbors citizens and gives them jobs.  It cultivates infant industries under a cocoon of tariffs.  Better products and firms are brought to market thanks to protectionism.  It seems almost silly to even think about introducing globalized free trade to emerging economies; it corrupts infant industries and kills jobs.  If it were not for multinational corporations, who preach fallacious free trade to all for a better profit margin, protectionism would indisputably hold in its rightful place as protector of firms, consumes, and employees.

Above the Law (Of One Child Policy)

Leave a comment


Pink Face Tibetan Girl

Cute Enough to Risk a Second?

At the heart of every blockbuster rests a simple question: how far would you go to save a loved one?

In China, the distances are further from here to a galaxy far, far away and the trials exceed Rocky’s worst nightmares.

Having a second child in China is not just heavily frowned upon, it is against the law.  The government is ruthless and despicable in its dark crusade against the unborn: in some regions of China infanticide is commonplace, two-child mothers are forcibly sterilized, and corpses of the unborn are tossed in ditches on the side of the road.  It is little surprise that around 500 women commit suicide every day in China

There are three major routes for the daring few to have a second child.

1) Face the Fines

Wealthy families can pay the stiffs fines to have seconds.  The costs per child range with from providence to providence and with the ferocity of the population administrators.  Many of the fines range between 200,000 yuan and 300,000 yuan, $20,000 and $30,000 American dollars, per year in a country where the household income is just over $10,000 American dollars.  The costs rise quickly with additional child.  Only the elite have two children, having three is almost unheard of , and more than that seems to be sacrilege.  This path is only open to the wealthy. The 99% must look elsewhere.

2) Bribe the Bureaucrats

For the majority of the 160,000 “out of plan” children are born into China this is the best option since  corruption is a core pillar in Chinese culture.  For a bride, officials are more than happy to legitimize the paperwork for illegal children.  Loopholes in the law are stretched to the breaking point.  The second child can be declared a member of a childless family or that of a rural family which was alloted two children.  More daring families risk simply declaring the second child a twin of the legal first-born one.  As families get poorer they go to further extremes to meet the loophole conditions; it has driven some to marry relatives to hide seconds while others hide children when inspectors arrive.  This path is dangerous, however it is the only option presented to most parents.

3) Births Abroad

Middle income parents choose to have babies abroad.  Some are born in capitalist cities like Hong Kong, where the restrictions are not in place.  Others go to great distances; some fly all the way to Japan or even the United States to birth children.  Illegal clinics host the expecting mothers, paying lucrative rates, until their children are ready.  These children are then birthed  like normal babies in conventional hospitals.  The problems arise with getting the mother and baby back to the family.  Since the babies were born on foreign soil they are technically foreigners.  This makes life difficult because parents still pay hiked rates for education and health of the children.  This is generally the cheapest legal option.

Conclusion

Out of love and passion every year tens of thousands of children are born “out of plan” every year.  This is a bold statement about the indomitable nature of mankind as the desire for having multiple children survived terrifying propaganda encompassing half a century.

This situation brings to mind a quote from chaos theorist Malcolm, of Jurassic Park, “Life will find a way.”  Another, lesser known, Jurassic Park quote comes to mind as well: ” OH-MY-GO-THE-DINOSAURS-ARE-EATING-ME-SHOT-IT-SHOT-IT-SH——*crunch, crunch*.”  With its one-child policy the Chinese government is fighting the very forces of evolution.  A hundred thousand years of primal struggle cannot be snuffed out by a few misguided politicians and a little red book.

When the Jurassic side of China’s one-child-policy emerges the country will be torn asunder.  Love of family is stronger than the logic of population parameters.  These massing illegals parents and activists indicate a revolution will happen sooner rather than later.  Change is coming to China: life will find a way.

Chengguan: China’s Rouge Gestopo

Leave a comment


PAP Guard in front of Tiananmen Square

In China, criminals arrest the police.

The Chengguan, known officially as The City Urban Administrative and Law Enforcement Bureau, is not as orderly as their name would suggest.  Across China they are scorned because of their ruthless and violent tactics they use against illegal housing and unregistered street vendors and anyone who blocks the path of their perception of the law.

Their actions are similar to barbarians than public servants.  The lists of atrocities they have committed known no end.  A one-legged street vendor was brutally beaten to death in broad daylight.  Western foreign exchange students were stalked and forced off a food stand they were operating. A police officer, aiding an old man who was being beaten by the Chengguan, was chased down, strangled, and arrested.

The Chengguan are above the law.  Even in the incident with the brutalized police officer the Chengguan escaped unscathed.  There was no follow-up investigation, police were report they have little knowledge of the incident, and the assaulted police officer refused to meet with the reporters.

This suppression of justice is commonplace in China.  Even their twitter counterpart has administrators dedicated to rooting out any “polluted” information concerning the true face of the Chinese government.  Radical artists, such as Al WeiWei, are mercilessly persecuted and arrested on downright false charges because of their antigovernment messages.

China aspires to be a world leader.  Currently they are acting like a radical and destabilized country.  Their human rights practices are more comparable to Syria, who has also been rightfully accused of butchering its own citizens.  While racism and income and economic inequality persist in the developed countries their human rights violations are sporadic and severely mitigated.  The single worst incidents of the Occupy Wall Street protests involved pepper spray.  Isolated incidents of police brutality and violent discrimination taint the image of the Western World on the whole these are stable countries with honorable police.

China is the emerging superpower.  This is fact.  However, they will only be treated like an equal country once they treat all of their citizens equally and fairly.  As long as rampant breaches of human rights, such as this state sponsored brutality, their widespread environmental disasters, and suppression of minorities, they will not be treated as an equal member in the developed world.

They have made it clear they want to be treated with respect.  I say let them earn that respect by correcting these mistakes.  That is how America got to where it is today. Fractures in that american integrity, such as widespread anti-immigration racism, are one of the great threats to that stability.

U.S. Solar Panel Manufacturers Declare War On Chinese Imports For (Justified) Protective Tariffs

2 Comments


Solar Panels

The American-Chinese Trade War Heats Up

After years of American solar panel producers giving the cold shoulder to sizzling Chinese competition sequestering colossal sales with unscrupulous warlike tactics.  Now at the brink of extinction seven American solar panel producers banded together to defend American manufacturing.

How Will the Americans Save Their Industry?

Seven Solar companies, led by SolarWorld Industries America, have filed a broad trade case before Commerce Department to institute tariffs that would double the price of imported Chinese solar panels.  This protectionist tax wall would inflate the price of Chinese imports.  Demand for Chinese solar panels would elastically erode with the price increase.  The supply of Chinese solar panels in the American market would also deteriorate.  Meanwhile, American panels would be substituted into the fair playing field.

Critics question the damage this move could do to the blossoming solar market.  This will doubtlessly raise the price of solar panels and reduce quantity.  However, everyone agrees it will funnel money to American industry and build American jobs to compete with the Chinese.

Chinese solar panel manufactures have already captured over fifty percent of the international market and eclipsed the United States’ production.  Only a scant six percent of sales remain in American hands.  However, with recent blows to domestic companies such as the bankruptcy of Solyndra, it appears the Chinese seek to monopolize the market.

This cannot stand.  America is in a trade war with China; mobilizing in support of the American companies is the first step in retaking our own economy

How are the Chinese Acting Illegally?

Nationally, the Chinese government is stacking the deck.  Chinese companies are able to outbid American manufactures at extraordinary rates that far outpace Chinese technical development.  Their government sabotages laissez-faire and gives the Chinese produces a disproportional advantage with no interest loans and free land.  This is a definitive trade violation.  America reaps bittersweet sorrow with the Chinese criminality. Early solar energy adapters are excited by the prospects of cheaper solar panels in the short-term.  Meanwhile, their neighbors lose their domestic alternative energy jobs and cannot afford anything more than unemployment will allow.

Each company itself is also rife with corrupt affairs.  Accusations of corporate fraud against Chinese companies rival the gross output of #OccupyWallStreet.  Chinese panel output is hampered intermittently by furious strikes that threaten Chinese manufacturing and international sustainable energy.

Bernie Madoff would be proud; not since his bankrupting of charities has such wholesale criminality at the expense of the American public.  The Chinese parallel this infamous criminal on a transcontinental scale.  First, trust is built on the quicksand of an inflated currency and illegal tactics.  Second, in the darkest days of the recession the criminal is unmasked.  An empty husk of charitable hopes and broken panels of the alternative energy dream are all that remain.

How Must America Retaliate?

America is in a trade war with the Chinese.  Action must be taken.  Currently, Both sides symbiotically cooperate for shared prosperity.  However, nibbles of this analogy are being eaten by the Chinese as they consume the American economy for their own benefit.  Already, China has simply cut off trade of rare-earth metals to the United States.  In Libya, they opposed NATO by attempting to arm the Pro-Gaddafi forces with over two hundred million dollars in weapons.

Whether the politicians like it or not America is at war with the Chinese.  Protect our own industries is the only way to insure the continuation of the American dream.  The only alternative is to watch the lights across the United States go dark, one by one, as we are blotted out by the Sino smog.

Athens and America: A Study of the Paralleled Rise and Fall of Empires

8 Comments


Zeus or Poseidon?

History Repeats Itself

The global empire of the United States bears staggering similarities to that of the ancient Athenian empire; both rose through an influx in foreign wealth, fought long and costly wars, and lost their supremacy due to singular, devastating defeats.

Athens’s rise and fall was intertwined with the grand conflict of the Peloponnesian War.  Before the war, Athens dominated Greece.  Tribute, paid through monetary and naval capital by Delian League, was arbitrarily used by Athens for its own betterment.  Under Pericles, Athenians built great public works, such as the Parthenon, with foreign money.

Later, the tectonic Peloponnesian War erupted between Athens and Sparta.  Neither could defeat the other, so the conflict evolved into a regional, strategic struggle.  Foreign campaigns, like in Sicily, eroded the strength of the Athenians.  Athens was too heavily invested in these foreign conflicts.

Athens risked too much and the Peloponnesian League, Sparta and her network of Allies, punished them for it.  The tipping point for the Athenian Empire was at Syracuse.  Athenian generals procrastinated at the beginning of the conflict; this delay resulted in the unsuccessful siege of the city rather than a victorious strike.  Spartan reinforcements had enough time to reinforce Syracuse and beat back the Athenians.  Countless ships of Athens were lost in the harbor of Syracuse.  Athenian morale was splintered with their strength broken.  The downward spiral of Athens lasted eight painful years before they surrendered to Sparta.

America is on the downhill slide of the Athenian curve as she circles her own defeat.  Historians would place the high point of the American empire at the close of World War Two.  At this point, many nations adored the victorious liberators.  Wealth flowed into America in exchange for manufactured products.  Destruction of international economic competitions, with the bombings of Europe and the wars of East Asia, enabled this modern reincarnation of Athenian tribute.  Buoyed by foreign wealth, politicians constructed highways, funded Social Security, and created Medicare.  Meanwhile, the Cold War flickered into forest fire.

Forces mobilized against the United States; America’s Cold War would mirror Athens’s Peloponnesian War. Many nations sided with the USSR, and later China, in a manifold communist threat against the United States.  Communist converts were afraid of being poached by America’s predatory foreign policy; the CIA coup of democracy in Iran, GI’s fought the rightful rule of Vietnam, and paratroopers invaded Grenada.  This only empowered America’s enemies.

American capitalism and USSR’s communism fought long and hard, sapping global capital. China besieged the United States in Korea, freedom fighters in Afghanistan killed millions of Russians, and the Middle East burned as Israel, Egypt, and Syria warred.  Ideological conflicts continue to this day in various modern forms.  By 2011 America had overextended herself.  Tens of thousands of troops were stationed in Afghanistan and Iraq, NATO jets controlled the airspace of Libya, and drone strikes assassinated opposition figures in Yemen.

Here the American model caught up to the Athenian timeline.  The next chronological event was a major defeat of the American Empire at the hand of the Chinese.  Despite having the best universities, arguably the most innovative populace, and the most capital the American economy was overtaken by the oppressive, environmentally destructive, and antagonistic Chinese economy. The Americans would be surpassed by 2020; China was declared the Sparta of the modern age.  As early as 2011 the Chinese were flexing their strength, the flow of resources, such as rare metals, was halted to the United States.  It would not be long until other essential elements of the globalized economy simply went missing.  America’s empire unraveled, just as its star-crossed ancestor Athens did before it.

India Invades Tablet Market: $35 “Aakash” Goes Viral In India’s Education system

4 Comments


Apple’s Ipad 2: $499

Amazon’s Fire: $199

India’s Aakash: $35

Connecting 220 million students with the world’s cheapest tablet: Priceless.

India - Kids - 063

India drives to connect rural students

What is The “Aakash“?

It is a low-cost, high-performance computer tablet, price at $35 per device.

It is designed to proliferate knowledge through education in India, especially in rural regions. Despite its rock bottom price it still displays a 7 inch screen, plays high-definition video, streams video chatting, hosts word processing, runs Android 2.2 operation system, possesses 32 gigabyte memory, uses GPRS for connecting to the Internet from anywhere, and uses WiFi for Youtube streaming in hot spots. The Indian government will subsidized each table down to $35.  This is ideal for university students because it allows them to build better human capital with their limited resources.  Previously, many have been cut off from the rest of the world due nonexistent infrastructure.

The English translation of Aakask is “sky.”  This tablet’s release will mark the beginning of a new dawn in education in India and the world.

What Does Aakash Mean For The Tablet Market?

Datawind, the private company manufacturing Aakash, announced that the tablet will be priced at $60 dollars for the commercial market. It will be on shelves by November.  This will encroach on the tablet war already progressing in India; currently Samsung’s Galaxy Tab 7 holds just under half the market and less than one in five tablets is an Apple Ipad.  Dozens of other models struggle for niches.  The vanguard shipment of Aakash tablets numbers 100,000.  When this large-scale field test proves successful eight to ten million more will be bought by the Indian government.

Undercutting the more expensive tablets the Aakash will force innovation and a price war.  Aakash forces a technological survival of the fittest; the best and cheapest technologies will overthrow the more expensive models.  The economist term for this is creative destruction.

Unless other companies build a better tablet they very simply will be locked out of the market.  The cunning Indian government will disseminate cheaper and higher quality tablets, with internet access, by forcing the hand of the private sector.

What Does This Mean for the Future of Indian Education?

At the unveiling today Kapil Sibal, the Indian Human Resource Minister, aptly described Aakash’s historic significance,

“There are some moments in history that will be milestones recognised by future generations. This is one such milestone. Today, we see the beginning of a dream realised, a dream in which every student in every corner of this country will have access to technology that defines the 21st Century.”

By bringing the world to the fingertips of their students schools towards increasing the quality of education exponentially.  Answers to impossible questions will be just a click away.

It also forces the hand of Western education.  Already, towns and cities across the Western world have already launched similar educational initiative.  This is not enough; every statistic points to American and European students falling behind their Chinese and Indian counterparts.  Many American colleges already distribute laptops, tablets must be given to the coming classes if American schools are to stay competitive.  Otherwise, American education will fall victim to creative destruction.

Older Entries

%d bloggers like this: