Radio Flyer to move production of wagons to China

Associated Press ^ | 3-30-04

[Oldeconomybuyer]

CHICAGO (AP) -- Radio Flyer Inc., maker of the little red wagon loved by generations of children, plans to move its manufacturing operation to China.

The 87-year-old company said it would keep its headquarters and distribution business in Chicago but decided the Chicago plant where the metal wagons are built is too expensive to maintain. With the plant closing, Radio Flyer will lay off nearly half its 90 employees.

[Oldeconomybuyer]

[Bikers4Bush]

"We're still a Chicago company. We're still a Chicago brand," he said.

No, sadly you are not.

[Buffalo Bob]

Another "this is great for the American economy" bump.

[MeneMeneTekelUpharsin]

We simply cannot continue to buy products we do not make. That economic model will NOT work indefinitely. It just won't work. However, who is listening (or reading)? Only those of us here who already agree? What a joke.

[humblegunner]

What's your CB handle?

[IYAS9YAS]

Funny, they just had a segment on Radio Flyer on that John Ratzenberger show "Made in America" that I just watched within the last two to three weeks.

[Owl_Eagle]

I can hardly wait to purchase a new Radio Flyer Wagon for my son.  Something about the "lovingly hand hammered by slaves" construction strikes deep within me.  And the new shade of Red is brighter than ever!

 

Owl_Eagle

”Unleash the Hogs of Peace.”
P.J. O'Rourke Parliament of Whores

I can hardly wait to purchase a new Radio Flyer Wagon for my son.  Something about the "lovingly hand hammered by slaves" construction strikes deep within me.  And the new shade of Red is brighter than ever!

[Fitzcarraldo]

Just what China needs - amphibious vehicles for its invasion of Taiwan.

[TXBSAFH]

You are right they are not an American corp anymore.

[azhenfud]

They're changing the name to "Ladio Flyler".

All your little led wagons are belong to us....

[7.62 x 51mm]

I've had 25 of those little wagons at my garden center, since '91, for customers to pull plant purchases and kids around. They were made in the USA back then.

Sadly, all have rusted-out and were sold off to customers at $10ea, for their use. I've replaced them with heavy-duty, USA-made green steel nursery wagons, and don't regret not re-ordering Radio Flyer replacements, after reading this bad news.

No, they are not a Chicago or American company, any longer.

[international american]

"We're still a Chicago company. We're still a Chicago brand," he said."

Yeah, Bejing, Chicago:)

[Flyer]

What's your CB handle?

DUH!

Radio Flyer

[Bringbackthedraft]

Hold on to your American made Radio Flyers they'll be worth bucks soon! Get to those yard sales, buy and hold on to them.

[Moleman]

So now instead of playing with wagons, little kids will be assembling wagons. SAD

[non-anonymous]

Classy.

[GraniteStateConservative]

ping.

[brownsfan]

Chief executive Robert Pasin, whose grandfather started the company, said he did not believe the move would hurt customer loyalty.

I think this is someone who's out of touch. At least I hope he is out of touch. May Radio Flyer file Chapter 11 next year on this day to commemorate their 1 year anniversary of moving to China and becoming a CHINESE company.

[Calpernia]

[GreenLanternCorps]

Not everybody in China is a slave laborer. The cables I sell are mostly made in China. From what I have seen the western factories are usually decently run, and give the workers a lot better deal than the Red Chinese Gov't ones.

More to the point, if we didn't make the cables we sell in China, my company would have gone under years ago. And the 70 Americans it employs would be out on the street.

[Uncle George]

The "OUT OF WORK" American workers will now call these wagons "CHINA CLIPPERS"

[Investment Biker]

compare the pricing at toysrus for the radio flyer $89 on sale http://www.amazon.com/exec/obidos/tg/stores/detail/-/toys/B00000K1VR/qid=1080682656/sr=2-3/ref=sr_2_3/104-4769858-3546335

now compare it to homier china brand for $29 http://www.homier.com/itemdetail.asp?i=35866&browse=no

Now I can see buying american but I am going to buy american with the $60 plus tax I have left over.

[INSENSITIVE GUY]

Will soon be known as the "RICE FLYER".

[Monty22]

I know a reseller, and virtually everything has gone from American to Chinese in the last couple years.

The impact is devastating to the US economy.

[TXBSAFH]

I will do whatever I can to always buy American, and I NEVER buy Chicom.

[blackdog]

Are you kidding.....In China those things are prestigious transportation. The American version was crap anyhoo. There were other quality manufactured wagons much better. Not to mention that your local farm supply store sells bushings, bearings, shafts, pneumatic tires, tube steel, welding wire, and fasteners. The last wagon I made ran me about $62 including the full 1" thick hardwood lumber. It should last fifty years or until someone drives a piece of machinery over it.

My kids use them to haul feed or supplies out to livestock in the pastures. And of course to play......

[Investment Biker]

...The impact is devastating to the US economy....

There is no doubt that the importation of cheaper china goods has cause significant disruptions to the US economy, especially in manufacturing where wages relative to US are much cheaper in a place like China. But do not assume that the impact is bad. It is simply a little "creative destruction" as a famous economist once said. Now if I spend $29 on the china wagon then I still have $60 to spend in the US. Further, the China wagon company now has $29 that they can't spend anywhere but in the US. I really can't see the losses for the US other than the manufacturing jobs. These jobs are gone forever. But new jobs that service the $60 and the foreign $29 appear. Simply "creative destruction".

[q_an_a]

I live in a community with so many young children it is like something must be in the water for kids; yet not one has a wagon made by anybody and certainly not an RF.

Except for people pulling them on PBS antiques shows, you won't find them anywhere. Oh some nursery people still use them but even they have dropped that in most places for PLASTIC. The whole production staff is 45 people. It is a buggy whip product. Try video games instead.

[humblegunner]

What's your CB handle?
---------------------------------
DUH!

Radio Flyer

Well, I would if you'd just tell me what yer durn CB handle is!

[Asclepius]

Radio Flyer to move production of wagons to China

At least the quality may improve. Certainly the price will. A double benefit for consumers.

[Old Professer]

When ViseGrip goes, the country goes.

[Flyer]

Well, I would if you'd just tell me what yer durn CB handle is!

Who's on first?

[pt17]

Another example of a company with lazy and/or incompetent management. It's easier to ship their manufacturing problems offshore than it is to fix them.

[Rebelbase]

"We simply cannot continue to buy products we do not make. That economic model will NOT work indefinitely. It just won't work. However, who is listening (or reading)? Only those of us here who already agree? What a joke."

We'll just start a war to divert attention away from our troubles.

Do'h! The war will inevitably be with China, who we are arming everytime we shop at WalMart, etc.

[Rebelbase]

"At least the quality may improve."

What's your logic?

[chuckcam]

I won't buy your product now.

[Asclepius]

What's your logic?

Chinese firms generally have better quality control than American. It's no big secret.

[AngryJawa]

Chinese firms generally have better quality control than American. It's no big secret.

What's that? A dude with a keen eye and an AK-47 at the end of the production line?

[Rebelbase]

You think the same factory that has been producing Radio Flyers since Noah's day is inferior to a Chinese production facility making the same wagon?

[Rebelbase]

"AK-47 "

Speaking of, Norinco's suck compared to Russian and Eastern European manufactured.

[AngryJawa]

Norinco

Suprisingly enough, I hear their 1911's are a good bang for the buck. Then again, a ChiCom 1911 is just plain wrong.

[Asclepius]

What's that? A dude with a keen eye and an AK-47 at the end of the production line?

More likely a Harvard trained MBA who speaks five languages. Our Chinese brothers and sisters are not all barbarians, dude.

[Asclepius]

You think the same factory that has been producing Radio Flyers since Noah's day is inferior to a Chinese production facility making the same wagon?

If they haven't updated their production methods since Noah's day, then yes.

[Blue Scourge]

Cute...little red wagons made by the little red chinese...

[CasearianDaoist]

No, not in the macro ecconomic sense for the reason industries are sending engineering and design jobs over too. The "Creative Destruction" argument is spurious here because 1) you have not replaced this business with a new one and 2) the increases from the effcianes in capital allocation (note that this is is not a real productivity increase) will not be invested locally but in the the industrial and engineering facilities,staff and supply chains overseas.

This situation is due to artificial manipulations of purchasing power, FX and the like by governments, pseudo governments and extra-national enterprises. It is not to new modes of production or industries.

There is no reason at all to believe that those monies "saved" will necessarily find their way into new enterprises or jobs here.

There are two other fallacies here. First, the theory of "Creative Destruction" a priori implies that a new mode of production or a new industry forces replacement of the prior one that is being "destroyed." This is not the case here. It is putting the cart before the hours to say that we will move our factories overseas and then find a new model or business with which to replace them.

Buggy whip factories were destroyed by car factories. They did not move buggy whip factories overseas and the hit on the notion of building car factories with the "saved" monies. All you have done is move the business. Red Flyer was forced into this by trade policies, other infrastructure issues and political policies (some of which have nothing to do with commerce,) not some sort of "Creative Destruction" in the the classical economic sense of the term. It is a matter of trade relations,regulations, monetary policy and disparities in economic, social and political conditions across borders, nothing more.

The second fallacy is that those local monies to the buyer are "saved" due to lower prices. While it may be true in a micro economic sense in the Red Flyer case since we are talking about 90 employee and very little sophisticated engineering, it is not true in the macro sense that those monies would be "saved" in the long term because they would not be "earned" in the first place.

If we assume that the offshoring practice will be grow in scope and sector as time goes on, all, or least a quite substantial portion of meaningful middle class work other than direct sales and strategy will be sentsent oversea, or that competition to offshore wage earners deflates wages to a significant lower level. Thus the extra money is not earned so the extra money is not saved. What you really have is aggregation of capital oversea to the production and engineering facilities and staff, and in very few front office staff over here, and real wage and purchasing power deflation here. And it adds up as it percolates across whole swathes of highly integrated large scale manufacturing or technology service industries.

Even the local capital aggregation is deflated do to the price deflation and the shrinking pool of middle class buyers with any real purchasing power. In essence you have just not just much fewer middle class buyers but fewer millionaires too. So the industry that "creatively destroys" the offshored production is merely a luxury industry for the very rich here, but the "creative destruction" is indirect at best and the level of accumulation in aggregate is lower than it was before due to the fact that so much money is going oversea. And remember, it is deeply hard to repatriate that money given the overt and covert trade barriers in the market you have offshored too. In effect you have a transfer payment were a great portion of it remains in the forgien market.

It is important to note that the Ricardo/Smith notions of "Creative Destruction" and "Comparative Value" were predicated on the national state were supply chains and "value chains" were integrated at the level of the Nation State (and also their "colonies".) If we leave aside mercantile ans colonial examples, these sort in integrated global supply and value chains at the level that we are seeing now are a really new phenomena, and it is clear if applying the old theories have any more meaning than a purely metaphorical one.

At the very least, If my analysis is right and yours is wrong than we are in very deep trouble. If it is otherwise, then fine, but if not it will be quite hard to raise the cane up when it is in the field.

[CasearianDaoist]

"and it is clear if applying..."="and it is unclear if applying

[conservativefromGa]

another company to put on the sH## list

[AngryJawa]

Our Chinese brothers and sisters are not all barbarians, dude.

No, of course the Chinese people are not barbarians. But their government cornered the market on barbarism when they put down the Tiananmen protests. Let's not forget that the true Chinese beneficiaries of this factory shifting are many of the same animals that sent in the PLA.

[CasearianDaoist]

WHen I was a boy we had a large hill in a woods outside of the farm where we would ice up paths in the winter and ride one of these things down it. It was too rough for a sled.

It is a canary in a mine shaft. We really need a national debate and conclusion as to what we want to do about the disaster known as "globalism." This cannot go on much longer before something gives.

[Investment Biker]

I stand by my comments.

While it is true there is no innovation in technology that is bothering the manufacturers in the US it is also true that a rigid, cost fixed system is being destroyed. Now this system can not compete with a global system that seeks out lower costs. This is happening in many many industries not just manufacturing. They are creatively being destroyed by systems that are more flexible and lower cost. So when I refer to creative destruction you think buggy whips and I think rigid systems.

Further I never said that the local consumer "saves" the difference. I can't see that savings or spending makes any real difference. But there is still $60 left over from the consumers standpoint and they will spend on something that otherwise will not have a consumer with $60.

And last, from a macro sense the China factory now has their portion of the $29 to spend. Now where can they spend US dollars other than the US? So ultimately these dollars return either in investment or consumption in the products that we have an advantage in. So you can talk about "capital aggregation" and other complex economic terms but these are simple truths of the transaction. Rigid labor systems go the way of the buggy whip. We all benefit.