On Sun, 15 Jun 2008 16:32:17 -0700, Jay in the Mojave
wrote:

|james wrote:
| On Sat, 14 Jun 2008 19:20:37 -0700, Jay in the Mojave
| wrote:
|
| |I would think that there maybe a slight difference between the over seas
| |and state side manufacture costs. I wounder what that really are with
| |todays manufacturing with smt ect?!?!?
| |----------------
|
| What overseas manufacturing buys you often is tax shelters. What
| foreign countries have done over the past forty years is offer tarrif
| free zones just to get companies to establish manufacturing centers in
| their country. In the 70's Malaysia offered US and Japanese companies
| ten year tarrif free zones. So a company could go into that country
| and manufacture using local labor and not have to pay tarrifs for
| exportig piece parts of finished goods.
|
| During the 90's that started to change. Instead many countries started
| requiring local content in the manufacture of goods sold within thier
| country. That has forced US as well as European and Japanese companies
| to do piece part manufacturing, source local manufactured asemblies
| or do final assembly in the destination counrty.
|
| I remember sitting at a dinner with a VP of the company I used to work
| for and he maid the comment that we were running out of "Stable" third
| world countries to move manufacturing to. That comment was made in
| 1979!!!!!!!! After China and India, where do they go to? Not a lot
| left in the world.
|
| james
|
|Hello james:
|
|Ok great points there!
|
|There must be some sort of cost relief to have major companies invest
|major dollars in over seas manufacturing. It blows me away why we just
|can't do this manufacturing work here in the USA. With the technologies
|of today we surly can make circuit boards and such here.
|-----------

Oh we can. There is also one other point to make. The cost of shipping
is now becoming a major uncontrolable cost item. When oil was a steady
price and not the constant fluxuation it currently experiences,
transprotation costs could easily be budgeted for and spread across
piece part costs as well as total cost. Today it is not wise to source
parts in one part of the world, ship them to the US and then ship them
back. For the China and Asia markets that would eat into profits.
Transportation costs are now as major a issue as labor.

|I have to travel once and while and have to use Delta Airlines, I talk
|to people in India to make traveling plans. Now that has to cost some
|big bucks to buy and install a major communications network all the way
|over to India to save on labor. I would love to know what that all cost
|and is saving.
|-------------

In business captal assets are amoritized over three years. You get to
write a good portion off your taxes to install capital equiptment to
do manufacturing or even IT. After three years that equiptment hs no
book value.


|I just bought a new expensive water cooler, as I putting on a new roof.
|This cooler cost almost $1400.00 the company Adbieo Air is making big
|money on this rally expensive sheet metal cooler. It is made in Mexico,
|I'll bet they had it made, assembled, and painted there. But they sure
|didn't pay no $1400.00 for it. Makes me think I am in the wrong business.
|---------------

Thanks to NAFTA. Trade across the boder with Mexico has little or no
tarrifs. I would not be at all surprised that the Mexican company is
not a subsidary of Japanese or US company. NAFTA allowed forgein
companies to setup shop in Mexico and ship across the border to avoid
traiffs from their home country.

james