One (1) of the topics that is endlessly debated during this Prez election here in pivotal swing-state Ohio.....outsourcing of work that used to done by laborers in the U.S.A. In some cases, major corporations that used to manufacture in the states closed their plants and moved the work to China, etc. In some cases, products that used to be manufactured by American companies are now only manufactured by countries such as China, etc.
In the distribution business that this Bear is in, we have some products that we market, sell, and distribute that used to be American-made. These products are now only available from overseas. Our facility is receiving about five (5) to seven (7) 40-foot inbound containers of floor-loaded product, destined for customers all over the U.S. and Canada. .....and manufactured overseas.
When these products were manufactured in the states those companies doing the manufacturing all tried to reduce their costs and stay competitive with the Chinas of the world. Eventually, it didn't happen. Thousands upon thousands of Americans lost their jobs. Many would argue that it was a case of market realities, eventually weeding out the non-competitive.
This business is vital to my organization so we have no choice but to buy from China and the other far east suppliers. And now we are considering taking another product......one (1) of our best-selling products and the product that really started our company.....and moving all of the manufacturing to China. Our partner vendors there can make the products for us at a much less-costly rate, keeping our margins where they should be.
But.....and this is interesting.....another major local company that buys from us has basically told us that they only want "American Made". So, the net effect could shake out to be that we have to have multiple SKU inventories, to keep that major customer happy and to reduce our costs (overall) for the product.
And finally, in a week at work when all of this was shaking down, a friend of mine from Findlay, OH, tells me that 20% of the products that his company has outsourced to China are rejects.....basically greatly reducing or eliminating the margin improvement that was planned with the outsourcing.
If these two (2) instances I have personal contact with or knowledge of are hints at the beginning of a trend.....the next four (4) years is going to be VERY INTERESTING for either George W. Bush or John Kerry.
Won Chow Bear