|
Just to reinforce Charlie's comment about how cheap it is to ship something to/from China, a 40' high cube container, sailing from Shanghai to Rockford, IL (this includes the vessel, rail transportation, the trucking to your factory, and all duties and brokerage services) is under $5000.00. In comparison, it cost several thousands of dollars to ship a truckload of our fabricated metal products to Florida. Also, labor cost may not be a large cost in manufacturing model railroad items, but for metal fabrication, you can buy the product, ship it here, and your landed cost is usually half of what we can typically manufacture it for here. This is why Walmart is filled with Chinese manufactured goods. Most people aren't willing to pay a premium for something manufactured in the US.
Rich G. - 33 years in manufacturing supply chain/plant management
-----Original Message-----
From: 'Charlie Vlk' cvlk@comcast.net [CBQ] <CBQ@yahoogroups.com> To: CBQ <CBQ@yahoogroups.com> Sent: Fri, Oct 14, 2016 1:15 pm Subject: RE: [Bulk] [CBQ] Variation in the Grays in the Blackbird Scheme David-
My second career has been in the Model Railroad Industry for almost 25 years and I can assure you that the cost of labor is a relatively minor factor in the decision to manufacture overseas.
The existence of companies willing to do turnkey production of models is the primary reason…..
All Model Railroad “Corporations” are essentially small, family-owned type businesses and the wonderful range of products we have today is based on the ability for an entrepreneur to start a company importing trains to designs and specifications they develop as a sole proprietor perhaps growing to a few employees with very modest capital to go to one of several such companies in China and receive product without having to huge sums in infrastructure for what is a very low return on investment.
Would it be possible to establish open turnkey factories here in the United States? Theoretically, yes. But unless one had a deep well of private capital to purchase state-of-the-art machinery to produce tooling, mold plastic and produce diecast parts, make metal turnings, screws and other bits, create electric motors and circuit boards, set up painting and printing production equipment lines, make inserts, boxes, etc. and then do assembly, packing and shipping…no bank would loan funds for such a venture.
We are not “bitchen”, just giving informed insights into the current state of the Model Railroad Industry. All of us that work in the business would much prefer to work in a totally vertically integrated environment where problems could be solved in English by walking out the door down to the appropriate department and working it out instead of sending multiple volleys of emails back and forth and dealing with additional problems generated each time one is solved.
As a concrete example of why things aren’t made here…. A well-known manufacturer had a fairly automated production line established here. Various state and local social engineering regulations moved them to reduce their total workforce under a certain threshold in order not to add overhead costs to the product which could not be reasonably passed on in the price of the product. The move of the production machinery to China was certainly not in the millions of dollars (a couple of containers) and the control over production and costs has been a disaster for the company and has not benefited anyone including the consumer who has still seen “normal” price increases.
The notion that the Model Railroad Industry is comprised of big companies with exorbitant or even decent profit margins is off base… Dave has it right….I don’t know of anyone in the Model Railroad Industry that couldn’t be making more money at a real job….but most of us are in it because we like trains and it is, for us, a pleasant way to make a living.
Charlie Vlk
Railroad Model Resources
the manufactures spent a few million to send it to china, let em spend a few to bring it back. if one cannot buy into that quit bitchen
__._,_.___ Posted by: rgortowski@aol.com __,_._,___ |