8bit

After watching the Simpson's episode on outsourcing and the constant news about GM's decline, can industry in the US survive long term? With IBM selling out their PC side to Lenovo I have my doubts?


imports



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domestic

SuAside

the field of focus will have to change. in essence, your economy is one of services anyway, rather than pure industry. your industry will have to see they have to focus on specialisation, innovation & quality, rather than mass production or heavy labor (it's obvious other countries can do that cheaper).

you could turn to protectionist measures, but that would kill you in the long term. however, if i were you i'd be a LOT more worried about the state of your national debt rather than the state of your national industry. GWB is doing his best to drive the US into the ground it seems, as he keeps piling debt onto debt. the dollar & the industry can still bear this for the moment, but eventually they'll crack if the US continue on their present course (especially since a lot of the dollar is in the hands of your economic 'rivals'. if they decide that it's been enough, they can easily freeze assets & incite a collapse.). that would mean the death of the dollar & a worldwide monetary crash (even though the Euro is strong, the whole world will suffer greatly).

PS: as for the comparison you made between both cars, it also illustrates very well why the USA's economy is one of waste & ineffiency and is responsible for 30% of the worlds polution while your population doesnt even represent 5% of the world... besides, i drive a Honda CB500 Naked. they really aint bad.

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8bit

That makes sense, but then I found out that UK sports shoe maker New Balance still makes its stuff in the UK, whereas Addidas and Dyson (vacuum cleaners) have relocated completely to S.East Asia, and yet the New Balance shoes aren't any more expensive than rival brands. That seems to go against the argument that you need to relocate to a deleoping country to stay cost competitive.

Ha, ha the old cars are for illustration only, using modern cars you could compare the Toyota Corolla and Chrysler Neon as small 4 cylinder cars. US gas guzzling cars are mostly history, except for big trucks & SUVs.

SuAside

and there are a LOT of those

as for the shoe thing? i'd guess that they probably did some big investments in mechanised production. made it less labour intensive by letting machines do most of the work.

also, Nike & consorts don't sell here in relation to what the production cost is, they sell at the price we're willing to pay.

for example a competition leather football costs them 10 dollars to manufacture & ship to the respective countries, but they sell them well over 50 euros overhere. that's more than 400% profit...

we rely on the open market competition to crack down on this, but all big brands prefer to keep the prices up. a pricewar would only hurt them all, so why bother?

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8bit

If you remember the Reebok "Pump" of the early 90s, that was $170, all just for a fashion shoe with an airbag in the sole that could be inflated! There was a huge profit margin on that, and it wasn't a very good shoe so it's popularity was shortlived.

Richard Branson believes in price wars, upset the existing competition with low prices and once he gets good market share he raises the prices. Then he sells it as an established business and its someone elses' problem. Same goes for that website that has just announced free downloads on all music, so it can rapidly expand its customer base. Gotta love capitalism, lol.