This past year his costs were around 9 million, and his sales were around 10 million.

 

So his "profit" not including his tax liabilities were around a million dollars.

 

This coming year his costs are projected to significantly increase as raw materials are increasing, as well as healthcare and whatever new taxes he will be burdened with.

 

But, he has a option. He found a location that will be much lower production costs, and the only issue is travel time as it takes a while to get product from new location to existing customers... But, the time isn't really an issue as the product has a long shelf life, it would just mean changing the purchasing procedure to fit the new plan.

 

If he changes to the new location his costs will only be around 5 million for 10 million worth of sales. So his profit will skyrocket.

 

 

Should he move production to the new location?

IB4 "GOTCHA! YOU SUPPORT OUTSOURCING BAWWWWWW!"

 

Mexico isn't that cheap... I would guess mexico would be around 7.5 million in costs...

 

I'm talking about China, they are actively trying to get all the business they can to move there, and the cost of business is insanely low...

 

 

Hey, we keep hearing what a "global partner" we are now...

 

Almost all manufacturing business you see in America has this same opportunity offered to them, and until we all realize that other countries don't demonize business... We will continue to have massive unemployment. As companies make choices that affect their bottom line.

 

 

Just how much of the money you worked for should you be allowed to keep?

and the cost of business is insanely low...

And the reasons for the "cost of business" being very low in China vs. attempting production and assembly within the U.S. has a lot more to do with workplace safety regulation, cost of living, available unskilled labor and fair-wage regulation than it does some base assumption of "Well, taxes."

 

other countries don't demonize business...

If you consider the above things, like regulating fair wages and decent working conditions, to be "demonizing business," then yes, I suppose we do.

 

 

Anytime I hear some complain about outsourcing, my first question to them is whether or not they shop at WalMart. If their answer is yes, I ignore anything else they say. The problem is, people truly want more for less. They are no longer concerned with quality, it's quantity.  People want to be able to buy a 42" HD LCD TV for an insanely cheap price. Doesnt matter that it will probably stop working in 4-5 years as they will just buy a new one.

 

Actually what is ironic is the way they complain USING computers that were made in china... with data sent out over routers made in china, through other computers also made in china, onto the displays that were made in china, and then landing on their made in china desk, while they tweet on their made in china cell phones, and watching their made in china tvs...

 

All the while complaining about how bad China treats their employees.

 

lol.

 

 

Regarding Feapers original post,  it is hard to discuss without knowing the nature of the business. Are the regulations due to safety considerations or other? Raw material costs are going to be nearly the same no matter where you go, so it must be something fairly labor intensive as this is where most of the money is save via labor costs. A machine costs the same essentially to operate whether it's here or there, people are the main variable. Also, when you take quality into consideration, the savings aren't always there. I have seen numerious companies actually bring their production back to the U.S. after having horrendous quality debacles from foreign made sources.

 

They complain about things not being made as they were when they were kids, yet it was people there age who decided to move everything over there and make everything cheap.

 

I just find it funny when people say stuff like that, when its there generation that made it that way.

 

 

I don't recall complaining about it. You were the one who set up the hypothetical of outsourcing, and I simply brought up the fact that outsourcing has more to do with the conditions of the country doing the cheap production and less to do with OMG TAXES. 

I just don't think it should be done that way here, as far as the living and working conditions go.

But hey, that's capitalism. Supply and demand can suck sometimes, but that is how it works. 

This. You won't hear me defend the practices of modern labor unions.

Also, it has to do with shifting economy. The U.S. just isn't a manufacturing-first economy anymore, or at least one that is making the same products we used to, however, the labor unions see fit to try and keep us that way. 

The economy, in the words of Roland from Gilead, has moved on.  

 

Of which, their largest customer was GM, so GM balked and said they wouldn't pay the new price...

 

AK said they have to charge that new price as their costs went up, and GM can either pay the new prices for their steel or find a new supplier.

 

(AK steel is one of the largest remaining flat steel plants in the country)

 

GM cancelled their contract with AK steel and started buying steel from Asia... Watch as they (GM) start having rust problems again with this development.

 

 

 

Or, crazy as it may sound, find something to screw nuts and bolts onto that people will actually buy and the economy wants. 

Imagine if we pumped some money into R&D for improved wind/solar/tidal energy sources. All that stuff has to get made by somebody. 

 

 

It is NEVER the unions fault...

 

AMIRITE!

 

actually, what I have read it is the cost of the pension plan for the retiree's that has the most economic impact because of the changes brought by Obamacare.

 

as covered in this article.

 

http://www.businessweek.com/news/2010-03-23/ak-steel-sees-31-million-charge-from-new-health-law-update1-.html - http://www.businessweek.com/news/2010-03-23/ak-steel-sees-31-million-charge-from-new-health-law-update1-.html

 

Not to mention, if that anecdote is indeed true, it proves two things stated in this thread correct: 1) Outsourcing has more to do with working standards, and 2) Capitalism can suck sometimes, but if you're going to subscribe to it, you take the good with the bad, like outsourced steel at a cheaper price. 

 

 

Except wind/solar/tidal energy is a economic failure no matter how much R&D you throw at it... Maybe if we spent billions it would cost less?

 

• Conventional coal power: $78.10
• Onshore wind: $149.30
• Offshore wind: $191.10
• Thermal solar: $256.60
• Photo-voltaic solar: $396.10

And at one point in time, personal computers cost five-digits. Funny enough, the more things are researched and developed, and the more demand goes up for them, the lower the price tends to get over time. 

Not to mention the added benefits from both the ethical side - acting in a more conservative manner environmentally - and the cost-benefit side, which is the fact you can actively predict your energy costs for decades. 

And, as has been said (And going back to the point of the thread) as demand for things like wind/solar/tidal goes up, the country that gets to pumping the R&D first and starts hitting the goldmine is going to look for manufacturing. 

Them's jobs. 

Am I the only one who is drinking the cool-aid and would love to have a wind turbine near my house that I could watch?  

 

 

No, I am with you on this... I have actually looked into it...

 

 

Family owns a few farms in Iowa, and we have the option to install wind turbines.  There are a few problems surrounding turbines though, and I do not know whether they are with the turbines themselves or the companies surrounding the industry.  For instance, if you opt to have a wind turbine installed on your plot of land (in this case we'll use land currently set as farm land) it will screw up that current plot as your machines won't be able to as efficiently harvest your crop.  This isn't so much a problem as the next; after you have your turbine installed, the company who would manage it can choose to never use it due to poor wind conditions for it's particular location.  Now you have a huge, million dollar investment, sitting in the middle of your corn field that isn't even being used because the company who installed it decided it wasn't worth their time anymore.