Although China has proven to be a sometimes worthwhile partner for manufacturing, they are so obsessed with protecting domestic business that any company wishing to make money there better watch its back. And its wallet.
From Slashdot, we have this article on the tactics the Chinese government used to import, then copy, the high-speed rail technology of companies like Siemens. They are utterly unashamed; the mission from day one was to steal foreign designs and produce them domestically, then begin to compete with foreign companies.
And a pretty smart guy who analyzes Chinese economic data thinks that their internal markets are about to collapse.
The short version: If you try and sell in China, they’ll steal your designs, and then won’t buy anything 😦
Ford Motor Co is showing record profits after refusing government bail-out money. This highlights the importance of signaling; GM and Chrysler customers got the signal that “we’d better take the money, since we’re not sure what our future holds, who knows if we’ll be here tomorrow?”
But Ford’s decision to refuse the bailout money and aggressively re-trench sent the message, “we’re serious about improving our business and our products to win back your confidence”.
Ford won this game.
Fantastic article in the LA Times by the former CEO of Ducati North America, describing the death spiral of the US powersports industry. Short version: Harley Davidson’s baby boomer demographic is aging out of the market, and the sportbike business is so critically dependent on consumer credit that they couldn’t finance bikes once the credit business collapsed.
A commenter on another blog came up with this note in response to questions about broadening competition in education.
If the government had been producing food for the last 150 years, it would be argued by almost everyone that the market could not provide food. The poor wouldn’t be able to buy any food (because the price of private alternatives then available would be so high); the profit motive would tend to corrupt food production, and on and on. Where would people even be able to buy food if the government was no longer running silos? No one would be able to produce, it would be argued, the one variety of bread, the one available meat, and the 3 fruits.
This interesting piece on the manufacturing costs of the iPhone 4 reveals that 60% of the price at the register goes to Apple, AT&T, and other companies involved in the design and marketing of the device, and not even 2% of the price – $6.54 – goes to the manufacturing labor cost.
Every day, you’ll read stories in US newspapers lamenting the lack of “quality” manufacturing jobs. The reason these jobs are disappearing is not because we’re outsourcing to other countries. They’re disappearing because they are not needed — US manufacturing output reached an all-time high before the 2008 recession, even as the manufacturing labor force continued to recede. US employees are making more money on the creative side in design, development, technology implementation and marketing of products.