[Nosdeho]

Americans innovate in the face of adversity and gaps in the market. How much more before a factory is built in the great old USA? The biggest problem is the regulations and costs of labor. I am curious if there are any companies or a new business is starting to innovate?

 

[dashskullsasq]

Wait for it.. As a citizen of an european country with a minimun wage of ~$700 and the biggest productor in europe of bikes.. No one can compete with chinese in terms of cost, and without raw material, even worse..

 

[Nosdeho]

Wait for it.. As a citizen of an european country with a minimun wage of ~$700 and the biggest productor in europe of bikes.. No one can compete with chinese in terms of cost, and without raw material, even worse..

Eastern Europe is giving me hope. I am seeing some new manafacturing coming and it makes me happy. I am curious is labor costs can be reduced by using automation. I know it is a delicate precise operation even making a modern cassette.

 

[nhodge]

When Hell freezes over

 

[JackOfDiamonds]

Never. Our current situation was shaped by decades of policy. It would take at least 50 years of consistent, committed, and CORRECT industrial policy for that to happen. Outside of a few chosen sectors like agriculture, the US industrial policy is none of those 3 things.

 

[Nosdeho]

Good point about raw material, that part gets lost in the mix. American metal manafacturing companies don't see a point in ramping up production yet.

 

[Nosdeho]

Never. Our current situation was shaped by decades of policy. It would take at least 50 years of consistent, committed, and CORRECT industrial policy for that to happen. Outside of a few chosen sectors like agriculture, the US industrial policy is none of those 3 things.

Yeti and gorilla gravity are bucking the opinion that carbon frames cannot be made in USA.

 

[Mike Aswell]

There are other boutique manufacturer's you could point to in the US. However they really don't compete on price. But (IMO) part of their business model is embracing the fact that price isn't necessarily the only thing to compete on.

 

[dysfunction]

I can imagine the threads complaining about bike prices then. People (mostly) want cheap, and don't care how it becomes that way.

 

[iliketexmex]

Raw material is subsidized and not subject to environmental laws in the current leading manufacturing countries, wages are kept in check with permitting process and other types of laws that insulate companies from market forces in labor markets and do not protect workers. American politicians and business leaders happily took advantage of this and American consumers just bought the lowest cost, sinking to the lowest common denominator.

 

[Harold]

If shipping costs remain obscene, then manufacturers might start putting smaller factories in more places around the world to reduce shipping costs. but I think it would take some really sustained shipping issues for that kind of change to start looking attractive.

but as for the actual production costs (esp labor), I just don't see the economics being there to bring those factories stateside. they'd be more likely to go to Mexico.

I could potentially see the possibility of a small component manufacturer that's already in the US slowly expanding their capacity and their product range before I'd see one of the legacy companies moving big facilities here. Maybe someone like a Wolftooth choosing to make cassettes or something.

 

[chiefsilverback]

The biggest problem is the regulations and costs of labor.

A statement like that could get real political real fast, but on the latter point I remember reading an article about why Apple don't manufacture iPhone in the US.

TLDR the cost of labour really isn't that big of a factor, it might increase Apple's unit cost by $10 or $20. The fact that all the components are manufactured in Asia has a bigger impact on the most efficient place to manufacturer the handsets, but the biggest factor was the number of people employed in assembling iPhones.

Apparently there are only a handful of cities in the US that could provide the number of bodies (350,000) required to staff an iPhone manufacturing facility and that would require pretty much the entire working population of a given city to be employed at that one facility. Ignore that hurdle and you get to the fact that there simply aren't the skills in the US. Thousands of engineers, tool and die makers etc...

 

[Nosdeho]

There are other boutique manufacturer's you could point to in the US. However they really don't compete on price. But (IMO) part of their business model is embracing the fact that price isn't necessarily the only thing to compete on.

Buotique brands I get but GG is cutting cost drastically with their process. I am hopeful that some of the high end brands processes trickle down to techniques used in manafacturing companies similar to the Giant model. I appreciate the discussion, and await more good news out of eastern Europe.

 

[Schril]

Yeti and gorilla gravity are bucking the opinion that carbon frames cannot be made in USA.

Yeti?

 

[dysfunction]

I read a really good article about this last year in the HBR.

Here's the link, it's worth a read. It's complicated.

Bringing Manufacturing Back to the U.S. Is Easier Said Than Done

The shortages of critical medical supplies and everyday items that the U.S. is now experiencing during the pandemic is due to a fundamental shift to global manufacturing that will be hard to reverse. The result is a dependence on specialist suppliers, the loss of expertise to scale up...

hbr.org

 

[slimat99]

Much cheaper overseas labor cost would kill off domestic manufacturing by 2023. I for one will not pay more for domestic production. Even overseas stuff is overpriced. Before prices went through the roof I was all about spending a little more for domestic stuff, but those days are gone.

 

[jimglassford]

The buying public as a whole creates the market forces. "American," are price shoppers. We like to talk about and believe we look for quality. We talk ourselves into believing that the items built in Asia contain quality so we ignore all aspects and demand the lowest price. If a company in North America started manufacturing, as soon as the bottle neck of overseas is removed, the buying public will once again demand the cheapest source and that North American company will be history.

 

[Nosdeho]

A statement like that could get real political real fast, but on the latter point I remember reading an article about why Apple don't manufacture iPhone in the US.

TLDR the cost of labour really isn't that big of a factor, it might increase Apple's unit cost by $10 or $20. The fact that all the components are manufactured in Asia has a bigger impact on the most efficient place to manufacturer the handsets, but the biggest factor was the number of people employed in assembling iPhones.

Apparently there are only a handful of cities in the US that could provide the number of bodies (350,000) required to staff an iPhone manufacturing facility and that would require pretty much the entire working population of a given city to be employed at that one facility. Ignore that hurdle and you get to the fact that there simply aren't the skills in the US. Thousands of engineers, tool and die makers etc...

We already import people to the US for jobs in business like Disney and other major companies for temp labor. They are paid well and depending on who you talk to it is fair and equitable. I get the political part of the equation but building people up to give them an advantage further in life helps everyone. Also automation is coming along nicely to make as much of the process just supervised by a human. Tiawain's model to business should be copied just like most businesses follow the Toyota philosophy.

 

[dysfunction]

We import engineers, when there are existing engineers in the US who could fill the jobs but cost too much. (witnessed this first hand for over 20 years).

We like it cheap.

 

[Nosdeho]

Yeti?

Yes prove me wrong and I will eat my words but they are making frames in the USA.