R COVID pricing premiums receding?

[sandm]

Back to boats and the Covid economy, we drove between Kingman and Albuquerque today on I40, and I counted 15 different types of used boats on transports, and at least 30 new boats (tooners and bass boats) all headed westbound. I think the used market is still hot.

cousin traded his tige in at prestige in boise on a new one. they have had the same 3 used tiges and 2 skiers boats for 2 months now. his has seen a 3k reduction in price.
if you are priced at the low end I think stuff is still selling but if you are still trying to capitalize on the market that was here this summer and priced stupidly like prestige's tiges/moombas, the market is dead-considering the time of the year.. if I were shopping right now, I'd jump on a crazy deal if it popped up but otherwise I'd sit it out until spring and see what happens to some of the covid purchases. most of what's for sale on onlyinboards are still priced like it was summer and they are sitting.

[sandm]

Trust me if I could find an I-Phone made in Dayton Ohio, I would buy it.

except that once you figure out the bloated union contract making them and the profit margins needed, that same $1200 iphone xxxx would cost 4k and no one would buy it.
we have become so used to cheap consumables that if the us were to dictate all made in america our economy would collapse. everyone wants it cheap and now. doesn't matter where it comes from nor how long it'll last....

[larry_arizona]

About 17 years ago I was working for a US automotive supplier that was starting a Chinese joint venture just at the advent of moving manufacturing there.

After 11 months of seeing the unethical behavior of the Chinese JV, I flew home from that China trip and resigned immediately.

Myself and a couple friends challenged each other to avoid buying anything Chinese for 30 days regardless of increases cost.

We all failed the 30 day challenge, it literally could not be done.

17 years later, it’s only worse.

I will say my current company was aggressively moving our supplier base out of China, honestly one of the most rewarding experiences of my career for the past 18 months.

Sadly, several of these supplier moves back to the US are on hold pending the 1st qtr of 2021.

My guess is they are going back to China.


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[jcarter20]

except that once you figure out the bloated union contract making them and the profit margins needed, that same $1200 iphone xxxx would cost 4k and no one would buy it.
we have become so used to cheap consumables that if the us were to dictate all made in america our economy would collapse. everyone wants it cheap and now. doesn't matter where it comes from nor how long it'll last....

Exactly why things like I-phones fall into the
category of “we don’t have a choice”. Maybe the government should incentivize business to stay in the US. Oh wait, we were starting to do that....My guess is the reason Larry’s company has plans to move manufacturing back to the US on hold are because of the outcome of the recent election results.... sorry, that is an entirely new rabbit hole.


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[Zog]

Exactly why things like I-phones fall into the
category of “we don’t have a choice”. Maybe the government should incentivize business to stay in the US. Oh wait, we were starting to do that....My guess is the reason Larry’s company has plans to move manufacturing back to the US on hold are because of the outcome of the recent election results.... sorry, that is an entirely new rabbit hole.

Having visited the factories in China where mobile phones are made, we cannot do it here without a massive move to robotic production. They are housing massive numbers of people to manufacture all kinds of devices on the factory sites. The ability to scale up manufacturing is unbelievably quick for these devices. I visited one plant several times and was able to see how quickly they moved. In January there were about 7,000 employees onsite. When I went back in May, they had 29,000 people working in the facility. There was a line of people out the front gate with newly minted engineering degrees and resumes in hand. I asked the owner what their ultimate plans were for the site and was told they planned on 130,000 by the end of the year. When I spoke with them in October, they had 89,000 people onsite. I would challenge you to find any city in America that could support a factory with even 89,000 employees. People are no longer willing to relocate to new places for new opportunities.

That doesn't even speak to the differences in environmental regulations, safety regulations, utility costs, etc. Though nominally nearly the same, the provincial governments in China are willing to bend over backwards to accommodate expanded production. Gradually things have tightened up though, which has led to increases in costs for these facilities.

China is already pushing to increase robotic production. Eventually it will lead to the same point we need to be at now. We could do the same with the right investment, but the idea that people need to be making things persists and prevents government investment in improved production methods.

[jcarter20]

Having visited the factories in China where mobile phones are made, we cannot do it here without a massive move to robotic production. They are housing massive numbers of people to manufacture all kinds of devices on the factory sites. The ability to scale up manufacturing is unbelievably quick for these devices. I visited one plant several times and was able to see how quickly they moved. In January there were about 7,000 employees onsite. When I went back in May, they had 29,000 people working in the facility. There was a line of people out the front gate with newly minted engineering degrees and resumes in hand. I asked the owner what their ultimate plans were for the site and was told they planned on 130,000 by the end of the year. When I spoke with them in October, they had 89,000 people onsite. I would challenge you to find any city in America that could support a factory with even 89,000 employees. People are no longer willing to relocate to new places for new opportunities.

That doesn't even speak to the differences in environmental regulations, safety regulations, utility costs, etc. Though nominally nearly the same, the provincial governments in China are willing to bend over backwards to accommodate expanded production. Gradually things have tightened up though, which has led to increases in costs for these facilities.

China is already pushing to increase robotic production. Eventually it will lead to the same point we need to be at now. We could do the same with the right investment, but the idea that people need to be making things persists and prevents government investment in improved production methods.

I was being sarcastic on the I-phone thing. Certainly not suggesting that is an overnight process. However, we need to incentivize business to stay here in the states. Not push it away. All I am saying is if you give me a choice to buy a basketball made in the USA for $15 vs. one made in China for $10, I pay the extra $5 every time. I would not pay $4k for an I-phone vs. $1k for one made in China. Some things aren’t realistic.


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[sandm]

However, we need to incentivize business to stay here in the states.

incentivize is a dangerous word.
personally not a fan of gov't stepping in to incent something to happen. that basketball has a price difference of $5 but now that you're offering incentives to be made here that difference is now $8 since somewhere along the way we are paying more in taxes for that incent for the business.
a company should be able to put together a product to show a profit without freebies and if they can't, they either haven't done a good job building up the value proposition OR their product is too expensive to begin with. maybe I missed it but capitalism conversations back in high school economics didn't discuss incentives but more how to create a product that people want at a price people are willing to pay.

as zog mentions we have become a nation of consumers, not builders and to try and change that now with our appetite for cheap foreign goods would cost way too much in incentives to change.

[Isaguel]

Regarding this idea that gov't can somehow influence businesses to stay anywhere is the dream doled out by politicians. The main driver of businesses decisions and investments boils down to good o'l capitalism. Whether you like it or not, or are willing to accept it or not. And there is very little any Gov't can do. We, every individual citizen, are the ones who by our actions and choices effect our economy. To bring it down to the simplest denominator, if you're a venture capitalist with a million dollars to invest and you get 2 propositions, 1) you can invest your money in a Tennis shoe factory in China who pays workers 1$/hr, no O/T, no payed leave, no health premiums, workmen's comp nor disability, or any of the worker protections we Americans hold dear. And you have an abundance of workers who will clock in 14 hr/days to maintain high productivity or 2) a Factory in Seattle which pays 15$/hr, O/T, C/T laws, OSHA, Health, disability, WM Comp, and retirement contributions and other worker protections. On the one you get 20% ROI on the second you get 5% ROI. Where do you think the capitalist will go? That's rhetorical.
There is no Gov't intervention that will fix that disparity in competition. In order to make American mfg affordable, how many Americans would be willing to work at a Nike factory for 5-6$/hr?. So how do we fix that? Gov't incentives to companies to keep mfg here, payed with the average worker tax dollars?. I think, rather than just saying the Gov't is going to fix this, the problem is far more complex and nuanced than we are willing to accept. We want to boil it down to a simple matter of Gov't intervention. I agree also with Sandman. Capitalism ensures success if you can make a product that meets a need, can be produced reliably to ensure a profit to reinvest and grow and be price competitive in a free marketplace. Adding tariffs only makes my products more expensive at the till. In essence a tax, using my dollars to finance an empty act of political posturing. So, should we maybe subsidize mfg companies that stay in US? Sure, they'll take the money that Gov't doles out and then still move mfg to where they can make it less expensive. This is not any Gov'ts fault and there is little any Gov't can do. It's the natural progression of capitalism at its purest form. We ignore these uncomfortable truths and yet we do not want to compromise in our lifestyle. And Gov't wants to keep appeasing us so they spend to create the illusion that everything is going well. That's why we're over 27T$ in debt and growing, even Pre-COVID debt rose to 23T. We want to maintain our QOL and that is very expensive. Someone has to pay for it, and someone will, we just keep pushing it off to our kids and grandkids to deal with and Gov't and politicians are more than happy to keep borrowing and maintain that illusion so they can hang on to power and their nice cushy jobs in Washington and keep their hold on power.

[rhouse181]

I spent the first 10 years of my professional life in management consulting performing industry benchmarking studies for petrochemical producers across the globe. I've traveled to every nook / cranny of this world visiting manufacturing facilities and every region does things differently to remain competitive in a ever more cutthroat economic environment. Each strategy has it's trade offs, benefits, and consequences... it's hard to say what approach is right or wrong.

My experiences in China are my absolute least favorite and I have no desire to waste another minute of my life over there, but you have to maintain some level of respect for their complete "send it" to become the manufacturing engine of the global economy. They have achieved so much in such a sort period of time.

America will never become a manufacturing hub again. Ultimately Americans are lazy and entitled... there are far more people in this world that are willing to make great personal sacrifices for a manufacturing job making small wages in some shitty ass factory. Sure we will continue to produce bespoke / complicated things, but not the mundane things that are most relevant to daily life.

Subsidies and incentives just make uncompetitive business practices justifiable for executives, boards, and shareholders at the expense of higher value added spending that government could undertake... how about paving some roads and making sure our bridges don't collapse before saving the business of your ol B-school buddy that is now non-competitive against overseas alternatives.

[sandm]

America will never become a manufacturing hub again. Ultimately Americans are lazy and entitled... .

rhouse, agree 100% and especially this statement. we need to stop worrying about where jobs are going and start figuring out what jobs are left and how to train our lazy kids(18-30) to do them.
on kids, over the last 3 years, I interview well north of 250 candidates a year. I hire and lose about 60 a year. heck, even in the pandemic 5 in the last 15 days. single biggest reason people don't work for me is attendance-and most of my hires are in the 18-30 range as my work is physically demanding. I always say I would not hire me to do my work. kids today are LAZY AF. granted my work isn't glamorous or easy but it's a solid paycheck and GREAT insurance. I can work with anyone on the production front and have a lot of patience for those that try but you have to show up for work.
I blame parents today and most of them are just as bad. my old man would have beat my ass if I did some of the things kids do today but parents today just don't care. every week I am amazed at the new things I deal with.

and isaguel, your last statement on someone's kids having to pay for it... some will say I'm nuts and sad but I'm glad I never chose to bring kids into this world as I see the US is sliding down a dark hole and your kids' kids are in for an interesting ride.


ok, back to subsidies and incentives...
think about this while paying your taxes this year.... boating just had a record year. all will attest to that. builders have sold out build slots and can't produce fast enough. part of your stipend going to the gov't wound up in skiers choice bank account for the PPP program(they are not alone). granted not in manufacturing and don't live in tennessee so not sure on the impact and don't know if it was ultimately used or not but with a record year for toy sales..
https://projects.propublica.org/coro...=skiers+choice
ya I know it's a political website but data is data.