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To: Will88
Let me give a dirty little secret here - it's not the higher wages paid to American workers that is killing our manufacturing it's the union mentality low productivity and massive overhead from government regulations, mandates and taxes that is killing jobs and re investment in America's domestic manufacturing base.

BS. Some of the first manufacturing jobs to leave the US were in industries with little unionization such as textiles, apparel, furniture and other light manufacturing. The textile industry is almost gone from the US while there is significant auto parts and assembly work still done here.

I think facts would show that heavily unionized industries in the US have lost fewer jobs due to relocation to cheap labor nations than non-unionized industries.


America and Europe have lost much of the touch labor intensive and hard to automate job functions to third world sweat shops.

Most of those jobs have been lost for 30 years when automation was not advanced enough to be economically practice.

Times have changed and with proper capitol investment many jobs can be brought back to the United States, especially if we team up with low cost labor places such as Mexico to off load the more labor intensive, not automatable job functions while still keeping as much American domestic labor content as possible.

Done properly, the concept works really well.

That was the original intent of NAFTA , but NAFTA has been perverted by Open Borders supporters and politicians paid off to sell out American workers with bad interpretations and implementations of NAFTA

No offense, but I do this for a living and have built cost models where the direct labor costs for a product were only a small fraction of the sales price and increasing the direct wage rate for production labor from Mexico levels to wages reasonable for American workers only changed the selling price by an insignificant factor - until all the stunningly costly overhead multipliers were factored in.

It was not the workers take home wages that were the deal killer, it was added overheads and low productivity that prevented the massive overhead costs from being spread over more production units that killed the deal.

This was especially the case when the manufacturing required significant capitol investment on the part of the manufacture and all of the massive list of disincentives that business owners must deal with kick in.

Sorry if this does not fit into your world view, but it is the case for many, but not all, business cases for deciding on domestic or off.

Being a production manager for large American manufacturer can be a surreal, Kafkaesque experience and a demoralizing exercise in frustration.

It is especially so in the case we see here - Rexnord bearings.

A modern, high tech bearing manufacturing facility is a capitol intensive investment with a high degree of automation requiring a smaller but highly skilled, trained and educated workforce. As such, it should be an excellent business case for domestic production

But setting up a new high tech, automated bearing production facility is a huge capitol investment so the major disincentives for investing in American production kick in and bearing production often requires operations such as plating and coating lines and the use of cutting fluids which American environmental and SHEA regulations have made deal killers from just a cost and and approval time basis alone, not to mention the long laundry list of other obstacles and concerns .

Bearing production should be an area where American workers should be able to compete economically, as they do in other high cost to manufacture locals such as Germany. The fact that Rexnord has chosen to relocate is ominous in this regard and should be a cause for grave concern for Americans .

One reason for Rexnord's departure is to be closer to the majority of it's it's customer base in Mexico that has been relocated from the United States, which should be a cause for grave concern for Americans.

16 posted on 10/17/2016 11:09:00 AM PDT by rdcbn ("There is no means of avoiding a final collapse of a boom brought about by credit expansion. The alt)
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To: rdcbn
Times have changed and with proper capitol investment many jobs can be brought back to the United States, especially if we team up with low cost labor places such as Mexico to off load the more labor intensive, not automatable job functions while still keeping as much American domestic labor content as possible.

A problem is, the more automated factories are also being established in cheap labor nations. Your notion is the same as all those who told us twenty or thirty years ago that we shouldn't be concerned about the loss of all those manufacturing jobs. Americans would be retrained for the high-tech, high-paying jobs of the future. But the new high-tech jobs were mostly located in cheap labor nations as are the new, more automated factories.

We've had threads at FR about how, already, of US families in 20% of them no member is employed. Other studies show that 20% of US heads of household are on one or more of the government's, means tested poverty programs. We now spend more than a trillion per year on those poverty programs. That's the 'payoff' for all these trade policies that have been forced on Americans in the past. - And that's also indicative that our real unemployment rate is around 20%.

As long as US firms can produce in cheap labor nations and send their output to the US for sale with little or no tariff, the giant sucking sound will continue and even increase. You're just parroting the latest BS schemes that promise to address the problem, but will not because the cost of direct labor and the labor contained in factory inputs is so much cheaper compared to the US.

18 posted on 10/17/2016 12:07:30 PM PDT by Will88
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