Giant moves

[Tizeye]

Don't think this is P&R...but Giant moving production, particularly US production, out of China to diversify.

https://www.msn.com/en-us/money/companies/worlds-top-bicycle-maker-says-the-era-of-made-in-china-is-over/ar-AAD16jD?ocid=spartandhp

 

[donkpow]

The move makes sense. Too much uncertainty over in  China. Even before the recent "trade war".  Low cost trinkets are another thing entirely.

[Tizeye]

Spoiler

 

 

The other factor, while Shimano is a Japanese company their bicycling (and fishing) manufacturing factories are primarily in China. That is part of the reason they could undercut Campanello  and SRAM with special deals to manufacturers like Giant. After all, if your manufacturing of components are in the same country or city, transportation costs combined with the lower labor costs is a significant advantage supporting the special deal.

[dinneR ★]

1 hour ago, Tizeye said:

  Reveal hidden contents

 

 

The other factor, while Shimano is a Japanese company their bicycling (and fishing) manufacturing factories are primarily in China. That is part of the reason they could undercut Campanello  and SRAM with special deals to manufacturers like Giant. After all, if your manufacturing of components are in the same country or city, transportation costs combined with the lower labor costs is a significant advantage supporting the special deal.

Sram makes stuff in Taiwan and China.

I've noticed some companies have moved production out of China to Europe like Romania and Hungary. This happened years ago. Mavic, Rossi, Sidi. They are probably always assessing production costs and quality.

[ChrisL]

4 hours ago, dennis said:

Sram makes stuff in Taiwan and China.

I've noticed some companies have moved production out of China to Europe like Romania and Hungary. This happened years ago. Mavic, Rossi, Sidi. They are probably always assessing production costs and quality.

Campagnolo did the same several years ago.  I wonder if Eastern Europe will become a bigger player in manufacturing given the current climate.

[Razors Edge ★]

If I were a manufacturer, the ONLY reason I would be in China would be because of the cost savings.  If I could figure out how to do the same stuff for nearly the same cost, I would avoid China like the plague.  They are a ruthless country. It ain't easy, though, moving to other low cost countries due to those smaller and poorer countries' general lack of things a place like China is able to offer.

[donkpow]

16 hours ago, Razors Edge said:

They are a ruthless country.

I bought an off brand trailer "Made in China". It looks exactly like another trailer except the cost is less than half. When I got the trailer, I had to do a lot of detail work on it to get it to function correctly and to fix some little items. I suspect the trailer I have is a quality control reject that made it into the market. Basically, the QC reject product is competing directly with the product of the company that contracted the production run and set the QC standards.

[Razors Edge ★]

2 hours ago, donkpow said:

I bought an off brand trailer "Made in China". It looks exactly like another trailer except the cost is less than half. When I got the trailer, I had to do a lot of detail work on it to get it to function correctly and to fix some little items. I suspect the trailer I have is a quality control reject that made it into the market. Basically, the QC reject product is competing directly with the product of the company that contracted the production run and set the QC standards.

Yeah - there are a lot of stories about things like this happening in China.  Some are true, some false, some a gray area.  It is sort of what drives the black market for knock-offs since the claim that the knock-off is built on the same assembly line as the real ones.  They can claim "just as good" and some folks will bite.

Can you imagine being an engineering company that manufactures in China and knowing that it is only a matter of time until the Chinese government completely steals your whole process and trade secrets?  WTF would you ever make that compromise??? I actually think CEOs who go the route of locating sensitive manufacturing to China should be held accountable - either in the stock market & board room and/or in the courts. Dollar decisions - often in the form of higher pay for the CEOs and upper mgmt - are actually often them being complicit with theft from the shareholders but the crime not "realized" until years later.

[donkpow]

3 hours ago, Razors Edge said:

Dollar decisions ...

Are heavily weighted with the factor of time. China hasn't constructed a society where this kind of thing is properly flushed out. We got our Western financial culture primarily from the Europeans.

[ChrisL]

My wife made an interesting comment last night that made me think of this thread.  

She works for a firm that makes safety products for the food & warehouse industry and they recently switched production to Central America.

They are evaluating the new products vs those made in China and feel they are getting a comparable product that is less expensive.   They were looking for new partners due to the potential tariffs and regardless of the trade climate with China are switching.

[Razors Edge ★]

18 minutes ago, ChrisL said:

My wife made an interesting comment last night that made me think of this thread.  

She works for a firm that makes safety products for the food & warehouse industry and they recently switched production to Central America.

They are evaluating the new products vs those made in China and feel they are getting a comparable product that is less expensive.   They were looking for new partners due to the potential tariffs and regardless of the trade climate with China are switching.

It makes sense to diversify the supply chain, and to not place all one's eggs in a single basket.  Protecting intellectual property just by itself is a great reason for many companies to avoid China, but sometimes the allure of cheap labor & manufacturing or of opening the Chinese market blinds them into thinking they'll be fine.  Which they are...until China knocks off all their stuff and starts selling it as their own for less. Or gives it to their own local companies to allow them to skip spending any money on their own R&D.  

Sure, that stuff can happen in Vietnam or Ecuador or Kenya, but realistically, that's not going to or it would be punished.

I think the challenge is that the US and corporations have lapsed into a very short term view of the world where immediate profit is king, while China is able to play the long game and exploit our short-term "gains" into potentially horrific long term losses.