overseas manufacturing in developing countries

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yeah, that's smart.

at-zing-two-boards (darraghmac), Thursday, 6 October 2011 16:04 (3 years ago) Permalink

my company moved their manufacturing overseas to dongguan in the oughties. they built their factory to western standards as far as cleanliness and safety, with special accommodations to local customs, e.g. attached dormitories with a library. I've been there, it's a nice facility. it lowered the cost of manufacture greatly and our company would likely not be around right now if they hadn't made the move to reduce product costs. it also provided jobs for folks in china and contributed to the rising standard of living in the area. so it can be a win-win situation for everyone involved if the ones holding the purse strings act humanely.

the boy with the gorn at his side (Edward III), Thursday, 6 October 2011 16:20 (3 years ago) Permalink

everyone except those made redundant in the original country!

Tho tbh i think you have to be realistic about retention of manufacturing jobs in highly developed economies.

at-zing-two-boards (darraghmac), Thursday, 6 October 2011 16:22 (3 years ago) Permalink

sure i've said this before but there's a lot of irony in watching UK workers - clad head to toe in v. cheaply manufactured clothes mostly from Asia - campaigning against jobs going to people from other EU countries or manufacturing being sourced abroad. not calling anybody an idiot, i just think the realities of how a globalised economy works are lost on a lot of people

Dios mio! This kid is FUN to hit! (Noodle Vague), Thursday, 6 October 2011 16:26 (3 years ago) Permalink

it's an interesting dynamic, the balance btwn protectionism (bad) and 'buying local (good), between paying an unnecessary premium for goods made in rip-off ireland/britain (bad) vs paying a justifiable premium for higher quality/ethically sourced goods, and that stuff's pretty much the least of the micro-level stuff you could ponder on here

at-zing-two-boards (darraghmac), Thursday, 6 October 2011 16:32 (3 years ago) Permalink

course this is what you get for paying huge money to send every sod to university, suddenly every fucker's too good to be a binman and bang before you know it you're a high-cost economy wondering how come your 50k call centre job doesn't cover the rent innit brian

at-zing-two-boards (darraghmac), Thursday, 6 October 2011 16:35 (3 years ago) Permalink

there is some good news happening in China at least. thanks to anti-western sentiment, western companies who choose to deal in china often find it politically and thus economically advantageous to hold themselves to at least as high if not higher standard than local companies - to shield themselves from charges of exploitation by the locals.

I've also read (on blogs lol) that companies seeking to build new enterprises are encouraged to build not to what current standards are, but what the standards are likely to be in ten years, because in the long run it'll be cheaper to get it right the first time rather than keep on retrofitting everything to meet ratcheting standards.

still, a lot of cruel shit goes down behind those factory walls

dayo, Thursday, 6 October 2011 16:35 (3 years ago) Permalink

hah darragh we have (american focused) discussion of that in generation limbo: 20-somethings today, debt, unemployment, the questionable value of a college education

dayo, Thursday, 6 October 2011 16:35 (3 years ago) Permalink

everyone except those made redundant in the original country!

well, as I said, those ppl would've been out of work one way or the other, at least they received decent severance packages instead of showing up to a padlocked door one day (the fate of a lot of manufacturing folks in the area unfortunately)

the boy with the gorn at his side (Edward III), Thursday, 6 October 2011 16:36 (3 years ago) Permalink

ya i was following that thread early on, but tbh i dunno how comparable ireland's cod-third level sector is to anywhere else, given that we essentially created it on the fly in the past 15 years by treating educational standards like the weimar republic treated german gold reserves

at-zing-two-boards (darraghmac), Thursday, 6 October 2011 16:39 (3 years ago) Permalink

yeah it is strange to think about ireland as a country that has attracted a lot of foreign investment thanks to generous tax breaks and other perks. if you don't mind me asking, how has that played out on a local level? are people getting employed?

dayo, Thursday, 6 October 2011 16:41 (3 years ago) Permalink

strange for me as a damned yankee, I should say

dayo, Thursday, 6 October 2011 16:41 (3 years ago) Permalink

xp yeah ed, granted that's about as much as you can ask for. How's state support/aid for those losing jobs in those circumstances over there? They'd get a course in excel over here, three months later we'd put them down as accountants in our returns to the EU

at-zing-two-boards (darraghmac), Thursday, 6 October 2011 16:41 (3 years ago) Permalink

pleased to see this was online, it might interest you later on darragh

http://www.cvoice.org/CV3gibson.pdf

anarchist Tony Gibson's 1952 pamphlet "Who Will Do the Dirty Work?". not a set of theories to live by probably but a funny, interesting look at issues around low paid jobs, from an era before the "everybody goes to university boom"

Dios mio! This kid is FUN to hit! (Noodle Vague), Thursday, 6 October 2011 16:44 (3 years ago) Permalink

speaking as a dude that sells lots of imported stuff, part of the problem is that most of the super cheap products change factories constantly - its all a bidding thing done on a 6 month or sometimes less cycle. so i think its safe to assume that there isnt a lot of due diligence re: standards of employment. the vast majority of american companies that i deal with have no ownership or control of the factories that make their imported goods.

guh (jjjusten), Thursday, 6 October 2011 16:45 (3 years ago) Permalink

xp to dayo

Hoo boy. That's kind of a big one, y'know? We're holding on to our low corporation tax rate, and therefore a reasonable amount of manufacturing and low-grade white collar jobs for the moment, i guess. Our rapid growth happened at a stage that allowed us to shed total manufacturing dependence while myriad higher-qualified positions were available, so we're now very much a service-based economy- there's a lot of factors touted as to why we attracted the likes of google, microsoft, amazon etc who've all got their european hubs in dublin, but the ability to declare profits here @ 12% odd is a big one, which is why we traded everything but that when the IMF came calling. Poison chalice imo, but that's another thread.

at-zing-two-boards (darraghmac), Thursday, 6 October 2011 16:48 (3 years ago) Permalink

xp cheers nv, i've to study limited differentiation tonight to get my bro past his repeats but if i get a chance i'll catch that.

at-zing-two-boards (darraghmac), Thursday, 6 October 2011 16:54 (3 years ago) Permalink

Hey, guys! There are already some global labor standards in place for different industries. I don't know about any of them except printing/binding, but we haven't used any companies who don't comply with our chosen standard for maybe a decade. (I'll remember the name of the standards organization in a sec.)
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Well, there's a regulating body (International Standards Organization = ISO) who gives tests and visits plants to inspect conditions, and plants have to achieve certain standards, including health & safety, labor conditions, living conditions for on-site personnel, etc. If they don't pass them but the deviation is small, they get another chance in like the next 6 month period.

P much factories know that they're either within shooting distance of the rules, so they clean up a few areas of compliance and they're in, or they're not interested because their customers won't care.

But it's pretty uncool as a highly visible commercial enterprise NOT to care, like, I make books for children, so if child labor were being used to make them, that would be a) indefensible and b) terrible for business! For instance, Disney has one of the strongest sets of standards in the entire Asian manufacturing business; if a facility has been DISNEY-approved, you know you're safe to send work there.

― Octavia Butler's gonna be piiiiiiiiiiiiiiiiiiised (Laurel), Thursday, October 6, 2011 10:19 AM (2 hours ago) Bookmark

I have worked in QA for a US housewares company for almost 8 years now (almost all injection-molded plastic stuff with stainless steel, very little wood stuff and almost no textiles), and basically everything Laurel said reflects my experience.

We own none of the factories who produce our goods (almost all of them in China, most of those in Dongguan). We conduct third-party audits of all of them assessing labor practices, working conditions, bookkeeping practices etc. On top of that, most of the larger retailers who carry our products have their own labor standards for which they send in their OWN inspectors to look at the factories we work with. Obviously the factories know when they are gonna be audited and probably can sweep a lot of stuff under the carpet the day before or whatever, but we also visit all these places frequently to do routine QA inspections and our inspectors tend to keep a weather eye out when they are on-site.

Wages for factory workers in China have gone up a great deal and are still rising, but it's still difficult for these factories to retain them. Each holiday break, a huge percentage of workers stay in their hometowns and don't return (= right after each holiday the products are shitty because everyone on the line are noobs). Workers in China or at least in Dongguan and surrounding areas no longer feel they have to work in manuafacturing and are more liable to seek something better. To me, Jon Lewis, this is a good thing, even though to me, manager of QA inspections, it's a total headache.

Also, word on the street is that the government is pushing manufacturing out of its classic areas in order to recast these towns as more touristy and 21st century. So I expect more and more of our vendors to either 1. head to the next province over 2. go out of business.

Another thing to consider in this convo is the rising rising rising fuel cost of shipping manufactured goods from China to the U.S. There has to come a point when the labor savings no longer offsets the cost of shipment. This already happened to us with one product which was large yet lightweight-- we moved it to a factory in Philly.

Great thread BTW.

Axolotl with an Atlatl (Jon Lewis), Thursday, 6 October 2011 17:53 (3 years ago) Permalink

peak oil will be what saves us

dayo, Thursday, 6 October 2011 17:54 (3 years ago) Permalink

great post jon, btw

dayo, Thursday, 6 October 2011 17:55 (3 years ago) Permalink

thx but i forgot to say I have no idea what the state of play is in China garments & textiles manufacturing. Like, whether the old 'sweatshop' conditions have been systemically remediated at all. I suspect so?

Axolotl with an Atlatl (Jon Lewis), Thursday, 6 October 2011 17:57 (3 years ago) Permalink

i wd imagine it's harder for the old sweatshops to continue in the same way as long as more attractive jobs are competing for labour?

Dios mio! This kid is FUN to hit! (Noodle Vague), Thursday, 6 October 2011 17:58 (3 years ago) Permalink

willing to bet that workers probably still work 10-12 hours a day with mandatory overtime

dayo, Thursday, 6 October 2011 17:59 (3 years ago) Permalink

Um in our experience here, workers WANT to work overtime and the standardized labor regs won't allow them to.

Octavia Butler's gonna be piiiiiiiiiiiiiiiiiiised (Laurel), Thursday, 6 October 2011 18:00 (3 years ago) Permalink

oh, hm. I'm misremembering

dayo, Thursday, 6 October 2011 18:00 (3 years ago) Permalink

maybe some kind of shift-juggling where they don't get overtime

dayo, Thursday, 6 October 2011 18:01 (3 years ago) Permalink

I find it amusing when people consider Taiwan, Singapore or South Korea "developing countries".

citation needed (Steve Shasta), Thursday, 6 October 2011 18:01 (3 years ago) Permalink

esp when their cost of living is > the USA's.

citation needed (Steve Shasta), Thursday, 6 October 2011 18:01 (3 years ago) Permalink

I think some of that willingness to work what we consider inhumane hours is that people don't do these factory jobs for a long time, typically. They work for 6 mos or 12 mos or a couple of years, max, and then as jon said, travel back to the country for Chinese New Years (a month-long holiday for some factories) and don't come back.

Octavia Butler's gonna be piiiiiiiiiiiiiiiiiiised (Laurel), Thursday, 6 October 2011 18:02 (3 years ago) Permalink

shasta you're the first person to mention those countries itt

dayo, Thursday, 6 October 2011 18:03 (3 years ago) Permalink

to me what's hilarious is that even luxury companies manufacture their things in china - as if their profit margins weren't big enough already

dayo, Thursday, 6 October 2011 18:04 (3 years ago) Permalink

laurel I think notions of amount of hours considered to be inhumane is going to be informed as much by culture and necessity and willingness as much as by some objective limit of what we consider humane.

some of these workers make far more than they would otherwise at home by working in these factories, and want to maximize their pay as much as possible, maybe working 12, 14, 16 hours a day. in this respect, they are not very different than investment bankers or biglaw lawyers.

others, however, are not willing and maybe be compelled to. that is abuse.

dayo, Thursday, 6 October 2011 18:06 (3 years ago) Permalink

Laurel OTM... for the workers on the factory floor I think it's kind of like those insane fishing boats ppl work on for a summer (except minus the adventure, plus ping pong, and for 11 months instead of one season...)

Axolotl with an Atlatl (Jon Lewis), Thursday, 6 October 2011 18:09 (3 years ago) Permalink

re: 'even' luxury companies manufacturing in china- can't have 'too much' profit. the place i quit sold upmarket geegaws and knicknacks in posh homeware stores, has a big share of the outdoor pursuits clothing & equipment market, not low-margin stuff

at-zing-two-boards (darraghmac), Thursday, 6 October 2011 18:12 (3 years ago) Permalink

xpost yeah compulsory overtime is a whole different thing and of course there are different ways in which it can be 'compelled'.

another interesting wrinkle-- Chinese govt labor laws state that workers should be compensated by time worked whereas a lot of workers prefer to be compensated per finished piece.

Axolotl with an Atlatl (Jon Lewis), Thursday, 6 October 2011 18:13 (3 years ago) Permalink

i've worked on insane fishing boats for the summer too!

at-zing-two-boards (darraghmac), Thursday, 6 October 2011 18:14 (3 years ago) Permalink

whereas a lot of workers prefer to be compensated per finished piece

Wasn't this how Stalin did it?

What does one wear to a summery execution? Linen? (Michael White), Thursday, 6 October 2011 18:15 (3 years ago) Permalink

laurel I think notions of amount of hours considered to be inhumane is going to be informed as much by culture and necessity and willingness as much as by some objective limit of what we consider humane.

otm I consider 40 hour weeks inhumane considering how much money this country has

iatee, Thursday, 6 October 2011 18:16 (3 years ago) Permalink

laurel I think notions of amount of hours considered to be inhumane is going to be informed as much by culture and necessity and willingness as much as by some objective limit of what we consider humane.

The complaint I have heard is that the regs our plants are required to follow limit the work-day to a Western-standard value, ie 8 hours or no more than 10-hr shifts, 4 days a week, or something, and the workers are frustrated by not being allowed to put in more time. NB I have not spoken to the mainland China employees personally in Chinese without mgmt present so I cannot promise that this is their true opinion, but that's what I hear.

Octavia Butler's gonna be piiiiiiiiiiiiiiiiiiised (Laurel), Thursday, 6 October 2011 18:18 (3 years ago) Permalink

If fuel costs end up making container ships a relatively expensive way to ship things, the world is going to change in a massive, massive way.

TracerHandVEVO (Tracer Hand), Friday, 7 October 2011 09:42 (3 years ago) Permalink

that is the underlying concern of the suburbs thread and the energy thread and like a million other threads

dayo, Friday, 7 October 2011 10:19 (3 years ago) Permalink

I'm also wondering how much of it is actual worker feedback and how much of that is predatory bosses - "oh yeah, our workers want to work MORE!" *pockets money* xxp

dayo, Friday, 7 October 2011 10:26 (3 years ago) Permalink

A one-dollar rise in world oil prices leads to a 1 percent rise in trade transport costs. In terms of the marine and inland transport movement of a 40-foot container from Shanghai to Columbus, Ohio, the total transport cost was $3,000 when oil prices were $20 per barrel in the year 2000. Today at $140 per barrel, the cost is $8,000, and should oil prices rise to $200 per barrel transport cost would rise to $15,000 per FEU

http://www.marad.dot.gov/documents/Modal_Shift_Study_-_Technical_Report.pdf

!!

We may get our industry back, people!!

TracerHandVEVO (Tracer Hand), Friday, 7 October 2011 10:31 (3 years ago) Permalink

it's a definite possibility, though it's such a huge concept and so diametric to trends over the past 20+ years that it's hard to get your head around it.

Village blacksmith ftw

at-zing-two-boards (darraghmac), Friday, 7 October 2011 10:39 (3 years ago) Permalink

or what you said upthread, dayo, i.e. peak oil will save us

i.e. mommy will take the candy away

TracerHandVEVO (Tracer Hand), Friday, 7 October 2011 10:40 (3 years ago) Permalink

30 years ago you could ship a 40-foot container across the pacific for $3000

dayo, Friday, 7 October 2011 10:41 (3 years ago) Permalink

hmm can i say 'diametric' like that? To the grammar fiends thread

at-zing-two-boards (darraghmac), Friday, 7 October 2011 10:42 (3 years ago) Permalink

that report says that even in 2000 you could get a 40-foot container all the way across the pacific and up to columbus OH for $3000.

TracerHandVEVO (Tracer Hand), Friday, 7 October 2011 10:47 (3 years ago) Permalink

would be an interesting study imo- what effect, if any, has the ability to kick a ball in the street had on the cost of transoceanic goods transportation ?

at-zing-two-boards (darraghmac), Friday, 7 October 2011 10:53 (3 years ago) Permalink

oh sorry i didn't realize we were doing this

TracerHandVEVO (Tracer Hand), Friday, 7 October 2011 10:54 (3 years ago) Permalink


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