I was talking to a friend of mine last night about where she works. The company she works for is a rather large, publicly traded company that manufactures various items for the healthcare field. One thing she’s had to do is watch as component production is being sent away from Ohio to factories in Mexico and China (mainly China.)
Now, I’m as much a free trader as anyone. I do think having free trade will help everyone in the long run. But one of her complaints about the factory in China is that they do not produce the quality of items needed to manufacture the items they assemble here in the U.S. So there’s a percentage of the items that have to be rejected. The problem she noted is that you just can’t get money back from China (for their rejected product)…what they offered is a slightly larger production for the same price. So basically you’ll get more crappy items from them in the hopes that the increase in sheer numbers will make enough product that meets standards.
It’s a problem that I see becoming worse, not just her company specifically, but in general. Her company is already suffering as their sales projections are down to what they were three years ago. The company’s stock is taking a beating too – in an era of rising prices and the Dow flirting with an all-time high, their shares are down almost 35% from their 52-week high. While they manufacture a product that should be very popular, I wonder perhaps if people have noticed the lack of quality in their product and begun to shy away from it.
I’ll set aside my mistrust of China as a trading partner for the moment to argue along another avenue. Consider the true cost of cheap and unskilled labor. Unskilled labor is fine for making and doing many simple things. But when you have a product that depends both on stability of structure and electronic components working properly, perhaps a little higher skill level is demanded.
We talked about her looking for a new car. One that she’s not going to consider was one that she drove for awhile, and that was a Kia. She just didn’t think Korean cars were made as well, but there were design elements she did like in them. I also have some experience with Kia, but my car was a Ford Festiva (which Kia actually made under the Ford name.) For the first 50,000 miles we loved that car – in fact my wife and I bought another one used as a second car when my old Chevy Sprint gave out. She drove the white one (an ’89) we bought used and I drove the red one (an ’88) that we bought new.
But the last 49,500 miles I had that Festiva were really hard on it. Three times the plastic door handles broke. The mechanism holding the driver’s side mirror in place broke after I bumped it one too many times walking by. The gasketing on the sunroof got loose and soon the handle broke. Brakes and muffler rusted out. I will say that the engine and transmission were fairly decent in it but it got to a point where the car wouldn’t start on damp and cool days. Plenty of those on Ohio.
I understand that it was a relatively inexpensive car. But one would think that a company wanted to have a product that was made inexpensively, but well. (By the way, we traded the other Festiva in for a Jeep Cherokee. Bought it new in 1994, my stepdaughter finally totaled it a year ago. Not her fault, it was the deer’s. The Jeep was falling apart as well, but the car was over 160,000 miles.)
It seems to me that sometimes we as consumers have become way too driven by price. In and of itself, that’s not a bad thing, but cheap needs to be good too. How many of you have had a product made by a company that you associated with quality and you end up throwing it out after two years because it’s stopped working? And how many times was it “Made in China”? Sometimes you don’t have a lot of choice, but do you ever stop and think why that is?
Let’s go back and examine the case of my friend. Somewhere along the line, the buyers and beancounters at her company found that it was cheaper for a plant in China to make their components and ship them across the Pacific than it was to make them in Ohio or even another state. Obviously, it was a price-driven thing. But it seems like the quality of the work suffers. Honestly, a worker in China is most likely not very educated or skilled with the exception of making whatever widgets the state-backed factory is putting out.
More importantly, what incentive does this factory have to create a quality product? They know that a Chinese worker is going to take his meager wages and not complain, for fear that either another willing worker will come along, or worse, he might be sent to a labor camp and work at the point of a gun. So it’s obvious that they can supply Americans with all the cheap products they’ll ever want to buy (and do, like it or not.) All Americans seem to want is a cheap product – almost so cheap that they don’t care about tossing it out a couple years later, then buying yet another one and the cycle starts over. It used to be called “planned obsolescence”, now it’s called “modern life.”
So where are the craftsmen? Unfortunately, they don’t seem to exist here either. The work ethic isn’t being handed down from generation to generation like it once was. Seeing a man who loves his craft is more and more rare. Seeing a man who has no compunction with putting in an honest day’s effort and working hard to move up the ladder of success is rarer still. Today’s workplace is more in line with the Dilbert Principle.
Now, I’m not tooting my own horn here, but I do take some pride in my work. It’s discouraging to me to see a contractor mess it up. It really pisses me off when it’s my fault, like I forgot a dimension someplace. We do look out for each other’s work at my company, but sometimes there’s things overlooked. I do get lectured from time to time about checking over stuff and not guessing or using “standard” details. So I learn a bit every so often.
I just wish that people would do more of that in the stuff they buy. Not just big ticket items like cars, but some of the little stuff. Your TV should last more than 5 years. That digital camera you buy for $99 – if it doesn’t work in a year, you can go out and buy a new one, just pay attention to who made it and where it was made. Don’t repeat the same mistakes if you can.
Ford used to say “Quality is Job 1.” It seems like a hollow slogan sometimes when yet another of their cars is recalled. The other thing I noticed in the news lately is that when Saturns were first made, they were considered one of the better quality cars in America, and their plant was noted for its culture and not being like every other car plant. But GM recently decided to pull the plug on one of the plant’s assembly lines anyway.
My last observation is this. Once again, imagine the Chinese factory. It runs constantly, belching out who-knows-what types of pollutants, unencumbered by such things as safety regulations and minimum wage laws. Obviously, the American factory that is shuttered won’t pollute, nor will they see any workers injured on the job. But their minimum wage is now zero as they have closed due to foreign competition – a Chinese factory that can’t match theirs in the quality of work, but kills them in price.
But if we could free ourselves from the shackles of excessive regulation and put an attitude back in the American people that values quality as much as price, perhaps we can find an entrepreneur willing to work hard and get his hands dirty in restoring a valuable company name. Maybe we can get back workers who give a damn about the things they make, won’t accept any less than the best, and are genuinely pissed off when they find out what they made was defective. But making an honest mistake would be grounds for the company to be more careful with the products they make, not grounds for a lawsuit-happy trial lawyer to encourage a few people who claim to be harmed by the product to make their attempt at winning life’s lottery and extorting millions out of the company (of course, the shyster gets his cut too!)
Recently, some unions dropped out of the AFL-CIO and formed what they termed the “Change to Win Coalition.” I hope one of the changes that they make is being a little more willing to work with corporations on getting some of the onerous regulations the labor movement has sponsored and created off the books so we can change to win. I know we can compete with the cheap Chinese if Americans can promise quality and prove why it’s better to be good than cheap.