Quote:
Originally Posted by Botnst
What happened to the foreign competition? They must either reduce mfr costs or increase the product value such that the $1,000 price differential is reasonable to the consumer. How do they do that? Cutting mfr costs and innovation. They produce a better car, cheaper.
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And how do you reduce mfg. costs? You cut the wages and benefits of your employees or you reduce the size of your workforce.
Cost's for product components are sourced competitivly and efficently, many parts are outsourced from offshore suppliers. There is not alot to room reduce costs there.
Assembly lines are engineered for high productivity to eliminate needless motions. Maybe some tweeking can help, but the results are minimal.
Inventories are tightly controlled by MRP software and practices, vastly reducing overstocking of components and finished goods, thus freeing up stagnant capital and reducing overhead costs.
Very easy to say reduce mfg. costs, but almost impossible to do when your business is running at 95% efficency already. There always room for some improvement, but not enough to make a huge difference.
Too use the example of Huffy bikes, the domestic employess were making
$11/hr, barely enought to support a single individual, and certainly not overly compensated. How can we Americans compete against the China labor market paying .30 cents hour? Reducing mfg. costs would only be a drop in a bucket compared to the cost of labor savings in China.
Sure the company see a windfall in profits for the execs. and shareholders, but they don't really manufacture a good damn thing, and are basicly just a import, design and marketing company.
Unless the American worker is willing to work for .50 cents an hour, we will never be able to compete competivley with 3rd world labor markets, no matter how much you reduce costs.