Saturday, March 26, 2011

Opportunity to recover American jobs?

Recent news following the earthquake and tsunami in Japan (March 2011) has produced interesting business impacts. The following comments are not "Japan bashing" but are intended to provoke Americans to reevaluate priorities in terms of their shopping and for businesses, their production priorities.
When the freighters full of cargo where struck by the tsunami, countless millions of dollars of merchandise (Televisions, DVD players, automobiles, etc) were lost. When the ports will clear and when ships will be available to transport the goods is anybody's guess. In the meantime, factories in Japan have either been destroyed or damaged with many being forced to suspend production due to either internal conditions or the conditions generated by the power and living conditions. Now reports are surfacing that other manufacturers in other locations are beginning to suffer from lack of parts and supplies made in Japan. The impact of this disaster continues to widen.
Some examples:
A) Apple Computer reports that the glue used to hold iPads together has been impacted by the Japan earthquake and tsunami. They are reportedly seeking to find alternative suppliers that meet their standards and requirements.
B) Ford Motor Company has instructed dealers to temporarily not take orders for certain shades of black and red as the colors are produced in Japan and, yep you guessed it, are not available for an indefinite time.
C) News reports that Toyota dealers have raised their prices on Prius vehicles due to a shortage of supply.
D) Various other electronic manufacturers have had to cut production and as a result prices on those items have risen (not necessarily as a decision in Japan but more by suppliers and distribution people here.

Now would seem a good time for American manufacturers to regain some of the market share they have lost to Japan. Why can we not make the glue for iPads? Why can we not make the paint for Ford (and other facilities as well)? Why do we not make electronics in this country? (The last television make in North America was Curtis Mathis, made in Canada, which went out of business years ago.

The root of the problem (if there is to be a singular source) can be found in American greed. Americans want the cheapest price for a product. On the surface, who doesn't want the best price? But the best price comes at a price itself. As we bought goods made overseas at cheaper prices, we lost our jobs and manufacturing facilities as we shipped our jobs overseas. A basic tenant was ignored - "When we export our jobs overseas, we import their poverty". We have continued to buy foreign products (when other countries make exporting our goods to them difficult if not impossible) at the cost of our economy and our jobs. We want cheap televisions and now no television is made in our country and so it goes for other goods.

Who has not heard somebody complain about tech support representative from another country that could not speak English well or drove them insane with the "thank you very much" and repetition of any and all information stated? Recent news reports indicate that the Philippines now have more American jobs than India (well known for its IT tech support for companies like Dell Computer).

The problem now is that we aren't getting the cheap prices we wanted! Although temporarily (maybe) as products made in Japan become scarcer, prices are going up. We are already at the mercy of the middle east for oil (with gas skyrocketing due to recent middle east turmoil) and now a large majority of our goods are going up in prices due to shortages in production in Japan. We wanted cheap DVD players and televisions but now the prices are going up because they come primarily form a country hit by a natural disaster.

Here is the question - Why can't our paint companies make the paint Ford needs or the glue Apple needs? Is it so unique that we can't make it or is the problem it can't be made as cheaply? One, we aren't going to continue to see prices from Japan at the levels we have had in the past. Second, considering the unemployment in this country, why can't we stimulate the economy by manufacturing here? The problem is a double whammy, corporations have to satisfy stockholders (and their own paychecks) by producing their products at the lowest possible price; and consumers demand the lowest possible price. Forgotten in this is the fact that when a company lays of employees, they lay off people who buy their product. When Ford lays off employees, they lay off people that buy and promote their product.

We can make the best televisions (or anything else) in the world. We could make great paints and glues. We have the technological know how we just need companies willing to step up and do it; and we need consumers who will buy home grow local products. Remember that the cheapness of many products made overseas is done on the backs (figuratively) and at the cost of the health and in some cases the lives (literally) of workers overseas who have to live and work in conditions we would never consider or permit by law. Recently CNN carried a report about the 1911 NEW York Triangle fire that cost 146 lives due to working conditions. The question is, are well willing to make and buy at a fair price or will we continue to export out jobs, import their poverty, and buy at the cheapest price (and sometimes quality - ref drywall, dog food, etc. from the far east). WE CAN DO IT. WILL WE?

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