Oct 10, 2010

Chinese Manufacturing and Why the USA Should NOT be Behind

I recently had a very interesting opportunity to learn about Chinese Manufacturing from a gentlemen I met from Qingdao (pronounced Ching-Dow).  We were picking on him for all of the Chinese Holidays and he explained why this was so.  80% of all workers in China are what we would refer to as long term commuters.  Meaning that they leave their families at home in the countryside and come to the city for work.  Only during the two week or one month holidays do they get to go home to see their families.

Guangzhou Train Station

Now from an American mindset, we would get in the car and drive home.  Not so in China, they have to try and get a bus or train ticket.  Eager workers can wait up to a week to try and buy a ticket, many will not be successful.  Traffic jams in and out of the cities can last a week.  Many workers once they finally make it home, will not return to the factories.  Instead they take the money they have saved and open grocery stores and the like in their own villages.  Thus, the highly skilled workers needed for complex manufacturing are always turning over.

Beijing Traffic Jam
This is where the American Manufacturing, workforce, and culture SHOULD be able to kick the Chinese collective butts.  We have an educated, stable, and motivated workforce who can go home every night to their families.  We also are the primary consumers of many of the products the world makes so shipping costs remain constant and are not subject to the massive fluctuations we have seen in International Freight.

So why are we loosing this battle?  I contend we have two problems - Government and Unions.  Both of which are represented as the "answer" to the current economic catastrophe we are in by the party in power.  The Democrats represent bigger and more powerful entities that are in my opinion the most significant impediment to recovery and world competitiveness.

Government suppresses American Manufacturing in a number of ways but primarily with punitive taxes and regulations.  Once again, the Democrats class warfare on the "evil rich" and their penchant for "safety" regulations render it virtually impossible to put out a competitive product.

Unions strangle the ability for businesses to adapt, change, and maximize a skilled work force by ridiculous rules and wages that far outpace the market.  Pensions, lavish healthcare plans, and inflexibility also make it much more difficult to compete.

As I listened to the Chinese gentleman describing the real situation in the Chinese firms, I couldn't help but think that the Democrats actually admire China and if they had their way, we would be just like them.  The American spirit will never be subjected like this though, they have forgotten who they are in their quest for control and power, but the American people have not forgotten.

We will begin to throw off the bonds of regulation, government, and communist unions.  We will begin to rise again and we will not loose our place in the world, no matter what the Democrats would like.  We The People will never submit.