Is China Headed for a Breakup Just Like The Soviet Union’s?
The Wall Street Journal article “The Coming Chinese Crackup” by Dr. David Shambaugh, a leading expert on China, forecasts that China may be heading towards the same political breakup the Soviet Union experienced in 1991 under Mikhail Gorbachev. “China-watchers have been on high alert for telltale signs of regime decay and decline ever since the regime’s near-death experience in Tiananmen Square in 1989. Since then, several seasoned Sinologists... Read More
An Avoidable Manufacturing Failure?
Google announced in May that it has decided to close its Motorola Moto X smartphone plant. The Texas plant has been in operation for one year. Its smartphones will be manufactured in China and Brazil. One goal for this plant was to “…challenge conventional wisdom that manufacturing in the U.S. is too expensive.” But unit quarterly sales were so low that economies of scale could not be realized. Keeping manufacturing operations in this country... Read More
Fixing General Motors
Even well-run manufacturing companies periodically have product quality problems. The lifeblood of a manufacturing company is controlling its costs. Quality problems increase costs and ultimately reduce sales. As such, successful chief executive officers pay attention to product quality costs and causes which are readily available in monthly financial and operating reports. Reports that the General Motors’ CEO and senior officers did not have knowledge... Read More
Avoiding a Common Manufacturing Problem
Otis Elevator’s costly move of its Mexican plant to its South Carolina plant is a common problem in manufacturing. Sadly it is an elementary, “Manufacturing 101”, process that seasoned manufacturing managers know how to avoid. Contrary to Otis’ reasoning that “…it was trying to do too much”. The principal cause was most likely that the “manufacturing fundamentals” were not accurate. This would include inaccurate bills of material... Read More
Is China’s decline permanent?
News reports are replete with China’s struggles and decline. China’s past success is frequently labeled a “Bubble” with the question – Is it bursting? Yes, China is in decline. But not just due to negative Global economic struggles. China has entrenched problems that are contributing to its decline. Are these problems intractable? Following are significant but an incomplete list of its problems: ● Manufacturing processes and systems are... Read More
Miyamoto Musashi, “The Book of Five Rings”
There are several revered authorities whose management principles result in businesses becoming and continuing to be successful. Two of the most famous: Peter Drucker and the legendary Sun Tzu. Peter Drucker is the eminent author of 39 management books and is considered the “father of modern management”. Sun Tzu is the author of “The Art of War”. He was China’s first professional General. Prior to Sun Tzu’s leadership, armies in China... Read More
Mexico vs. China. Which is the Better Plant Location?
The question of whether Mexico is a better place to manufacture a product versus China seems to come up frequently. A recent Los Angeles Times article combined with my experiences in closing a USA plant and building a new plant in Shanghai are the sources for the following: Since 2000, the 3,700 Mexican Maquiladoras have declined to 3,200 with a loss of over 250,000 jobs. Most have relocated to China. These include operations of Hasbro, Sanyo... Read More
Outsourcing from China – Avoiding this Horror Story
A recent article in Manufacturing News described the outsourcing horror story that has engulfed Fellowes Inc. The large paper shredder manufacturer has suffered a significant loss in China. A Chinese joint venture partner stole Fellowes Inc.’s proprietary assets and forced the operation into bankruptcy. The estimated cost is valued at a $100 million. Now the former Chinese partner is planning on entering the shredder business independently,... Read More
General Motors – Industry Leader?
Regardless of various company officials and politicians assurances that General Motors Company’s rescue is a success, several facts cast a cloud over its viability: ● Its products are not cost competitive. Hourly union labor costs are too high at approximately $58 per hour. Its USA based Asian competitors have lower labor costs. Two are at $40 per hour – a significant 31% difference. In this recessionary economic climate the recent union contract... Read More
Can Manufacturing Return to the USA?
The need to move USA manufacturing operations to competitive economic climates, has been essential for a Company’s survival. This exodus to a number of foreign countries, mainly to China and Mexico, has had a negative impact on the USA – its economy, median incomes, standards of living. Today, New Balance Inc. is a rather unique exception to the migration trend. For more than twenty years, this successful Boston manufacturer of athletic... Read More
