Well, that sucked.

[ramonajim]

Just had to tell a good guy who's done 20+ years of good work for this company that his position is moving to Shenzhen.

[TX76513]

Suks - so probably taking him out for Chinese lunch is bad idea?

[BobK]

One of these days, somebody is going to figure out how to build those things in this country for a reasonable cost and we'll quit having to do move jobs there. Drop a modern plant in KY. We have the staff, the transportation and a good central location.
I feel for ya Jim, but more for the guy who is watching his job leave.

[ramonajim]

Originally Posted by BobK

One of these days, somebody is going to figure out how to build those things in this country for a reasonable cost and we'll quit having to do move jobs there. Drop a modern plant in KY. We have the staff, the transportation and a good central location.
I feel for ya Jim, but more for the guy who is watching his job leave.

Biggest problem in your equation Bob is that labor cost often isn't the killer. The engineers I'm hiring in Shenzhen (and Guadalajara) really aren't that much cheaper than their US counterparts, and direct labor cost makes up a tiny fraction of the high tech products we build.

It's all about supply chain. 80%+ (by cost) of the components used originate in Asia. Buying them locally can remove 15% to 30% of the materials cost from our products.

And believe me - my sympathies are entirely with that guy (and the 83 others in his shoes), not myself.

[Carleton Hughes]

Nobody ever said business had a soul. All of us who are successful have had to sacrifice some ethics and feeling, make some moral compromises we have to live with. It's unavoidable if you wish to succeed.

[strelnik]

Originally Posted by Carleton Hughes

Nobody ever said business had a soul. All of us who are successful have had to sacrifice some ethics and feeling, make some moral compromises we have to live with. It's unavoidable if you wish to succeed.

Speak for yourself. I have not sacrificed " some ethics and feeling, make some moral compromises we have to live with. "

I have had bosses who took bribes, but that doesn't mean I did. I have not sacrificed ethics..
I spent 17 years working as a American productivity/industrial/process engineer/consultant dealing daily with product, systems and processes.

We can make it here, despite dirt cheap labor, unfair competition and local content issues.

What I have found is that most entrepreneurs lack the smarts/savvy or the guts or the planning/recruiting skills to do what must be done to succeed.

And you must be innovative to succeed as well.

[aklim]

Originally Posted by Carleton Hughes

Nobody ever said business had a soul. All of us who are successful have had to sacrifice some ethics and feeling, make some moral compromises we have to live with. It's unavoidable if you wish to succeed.

Who ever said business has to have a soul except one that will draw customers in? On my end, I'm not impressed by the "$X of ever sale goes to the ABC foundation.". Thanx but no thanx. Give me a price break and I can send it myself. I expect a business to maximize profit. You want a soul, go to a religious or charitable organization.

[panZZer]

Originally Posted by Carleton Hughes

Nobody ever said business had a soul. All of us who are successful have had to sacrifice some ethics and feeling, make some moral compromises we have to live with. It's unavoidable if you wish to succeed.

In life there is fair.........................

It's at the fairgrounds every October, for the most part--thats the only fair in life.

[pj67coll]

Originally Posted by ramonajim

Biggest problem in your equation Bob is that labor cost often isn't the killer. The engineers I'm hiring in Shenzhen (and Guadalajara) really aren't that much cheaper than their US counterparts, and direct labor cost makes up a tiny fraction of the high tech products we build.

It's all about supply chain. 80%+ (by cost) of the components used originate in Asia. Buying them locally can remove 15% to 30% of the materials cost from our products.

And believe me - my sympathies are entirely with that guy (and the 83 others in his shoes), not myself.

So in fact labor costs are the issue as 80%+ by cost of your components are not made in the US but in China. No doubt because it's too expensive to make them here.

- Peter.

[aklim]

Originally Posted by ramonajim

Biggest problem in your equation Bob is that labor cost often isn't the killer. The engineers I'm hiring in Shenzhen (and Guadalajara) really aren't that much cheaper than their US counterparts, and direct labor cost makes up a tiny fraction of the high tech products we build.

Maybe in engineering? IDK. We have found. in say labor stuff like bagging animal feed, it is automated here and have a few people but it is cheaper to send it to China in a bulk container and have several guys scoop it out, weigh it, bring it to the sewing machine, label it, etc, etc. Then there is the fact that you can get away with a lot more over there. Just curious about the engineer. Are you talking base wages only or total compensation package?

[Mistress]

Originally Posted by BobK

One of these days, somebody is going to figure out how to build those things in this country for a reasonable cost and we'll quit having to do move jobs there. Drop a modern plant in KY. We have the staff, the transportation and a good central location.
I feel for ya Jim, but more for the guy who is watching his job leave.

Your absolutely right. I hear there is lots of space in Michigan..

[TX76513]

It is a very tough battle. The economic differential between 2 countries makes it almost impossible to make a good argument to E Management. We have outsourced quite a bit to MX and Central America. If we keep the work is US we can't be competitive with pricing and its not just two or three points difference its almost 60 points less expensive to oursource.

[SwampYankee]

Originally Posted by ramonajim

Just had to tell a good guy who's done 20+ years of good work for this company that his position is moving to Shenzhen.

Damn, that's gotta suck. I've had to fire good people who just weren't capable or reliable and that was hard enough.

[Jim H]

Originally Posted by ramonajim

Just had to tell a good guy who's done 20+ years of good work for this company that his position is moving to Shenzhen.

Now, make him happy and tell him that you will keep him on. He's done 20+ years of good work, so you might be able find something else for him to do. You know how hard he works, try retraining him.

[ramonajim]

Originally Posted by Jim H

Now, make him happy and tell him that you will keep him on. He's done 20+ years of good work, so you might be able find something else for him to do. You know how hard he works, try retraining him.

If only it were that simple. All of operations (manufacturing engineering, supply chain, etc) is being relocated to low cost regions. In our case, there aren't going to be any jobs left in the high cost regions that don't require advanced degrees + extensive experience (R&D). Upskilling to that extent isn't practically possible.

Originally Posted by Kuan

What position was it if you don't mind my asking?

Manufacturing Engineer

Originally Posted by pj67coll

So in fact labor costs are the issue as 80%+ by cost of your components are not made in the US but in China. No doubt because it's too expensive to make them here.

An oversimplification I'm afraid. How many micro-pennies do you suppose cover direct labor cost of a $0.002 resistor? Even more important, there are very few direct labor cost pennies in the $1,500 FPGA's we drop multiples of on some of our circuit boards.