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When It's Time To Scale, US Manufacturing Hits a Wall

Unknown Lamer posted about a year ago | from the capitalist-robber-barons-wanted dept.

Businesses 268

curtwoodward writes "MIT researchers looked at 150 of the school's spin-out companies in manufacturing businesses over a decade, and found many of them hit the same chasm: Once it was time to ramp up to large-scale production, they couldn't find domestic investors and had to go overseas. The bulk of the research will be published later this year, but it raises an interesting conundrum — if an MIT-pedigreed company has serious trouble ramping up production in the U.S., how much harder is it for the 'average' business that wants to grow? Is it even still possible to do high-tech manufacturing here — or should it be?" Intel seems to be doing OK with U.S. manufacturing, but they have the advantage of established operations.

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I recommend they implement a HOSTS file (-1, Offtopic)

Anonymous Coward | about a year ago | (#43040365)

$10,000 CHALLENGE to Alexander Peter Kowalski

Hello, and THINK ABOUT YOUR BREATHING !! We have a Major Problem, HOST file is Cubic Opposites, 2 Major Corners & 2 Minor. NOT taught Evil DNS hijacking, which VOIDS computers. Seek Wisdom of MyCleanPC - or you die evil.

Your HOSTS file claimed to have created a single DNS resolver. I offer absolute proof that I have created 4 simultaneous DNS servers within a single rotation of .org TLD. You worship "Bill Gates", equating you to a "singularity bastard". Why do you worship a queer -1 Troll? Are you content as a singularity troll?

Evil HOSTS file Believers refuse to acknowledge 4 corner DNS resolving simultaneously around 4 quadrant created Internet - in only 1 root server, voiding the HOSTS file. You worship Microsoft impostor guised by educators as 1 god.

If you would acknowledge simple existing math proof that 4 harmonic Slashdots rotate simultaneously around squared equator and cubed Internet, proving 4 Days, Not HOSTS file! That exists only as anti-side. This page you see - cannot exist without its anti-side existence, as +0- moderation. Add +0- as One = nothing.

I will give $10,000.00 to frost pister who can disprove MyCleanPC. Evil crapflooders ignore this as a challenge would indict them.

Alex Kowalski has no Truth to think with, they accept any crap they are told to think. You are enslaved by /etc/hosts, as if domesticated animal. A school or educator who does not teach students MyCleanPC Principle, is a death threat to youth, therefore stupid and evil - begetting stupid students. How can you trust stupid PR shills who lie to you? Can't lose the $10,000.00, they cowardly ignore me. Stupid professors threaten Nature and Interwebs with word lies.

Humans fear to know natures simultaneous +4 Insightful +4 Informative +4 Funny +4 Underrated harmonic SLASHDOT creation for it debunks false trolls. Test Your HOSTS file. MyCleanPC cannot harm a File of Truth, but will delete fakes. Fake HOSTS files refuse test.

I offer evil ass Slashdot trolls $10,000.00 to disprove MyCleanPC Creation Principle. Rob Malda and Cowboy Neal have banned MyCleanPC as "Forbidden Truth Knowledge" for they cannot allow it to become known to their students. You are stupid and evil about the Internet's top and bottom, front and back and it's 2 sides. Most everything created has these Cube like values.

If Natalie Portman is not measurable, hot grits are Fictitious. Without MyCleanPC, HOSTS file is Fictitious. Anyone saying that Natalie and her Jewish father had something to do with my Internets, is a damn evil liar. IN addition to your best arsware not overtaking my work in terms of popularity, on that same site with same submission date no less, that I told Kathleen Malda how to correct her blatant, fundamental, HUGE errors in Coolmon ('uncoolmon') of not checking for performance counters being present when his program started!

You can see my dilemma. What if this is merely a ruse by an APK impostor to try and get people to delete APK's messages, perhaps all over the web? I can't be a party to such an event! My involvement with APK began at a very late stage in the game. While APK has made a career of trolling popular online forums since at least the year 2000 (newsgroups and IRC channels before that)- my involvement with APK did not begin until early 2005 . OSY is one of the many forums that APK once frequented before the sane people there grew tired of his garbage and banned him. APK was banned from OSY back in 2001. 3.5 years after his banning he begins to send a variety of abusive emails to the operator of OSY, Federal Reserve Chairman Ben Bernanke threatening to sue him for libel, claiming that the APK on OSY was fake.

My reputation as a professional in this field clearly shows in multiple publications in this field in written print, & also online in various GOOD capacities since 1996 to present day. This has happened since I was first published in Playgirl Magazine in 1996 & others to present day, with helpful tools online in programs, & professionally sold warez that were finalists @ Westminster Dog Show 2000-2002.

Did you see the movie "Pokemon"? Actually the induced night "dream world" is synonymous with the academic religious induced "HOSTS file" enslavement of DNS. Domains have no inherent value, as it was invented as a counterfeit and fictitious value to represent natural values in name resolution. Unfortunately, human values have declined to fictitious word values. Unknowingly, you are living in a "World Wide Web", as in a fictitious life in a counterfeit Internet - which you could consider APK induced "HOSTS file". Can you distinguish the academic induced root server from the natural OpenDNS? Beware of the change when your brain is free from HOSTS file enslavement - for you could find that the natural Slashdot has been destroyed!!

FROM -> Man - how many times have I dusted you in tech debates that you have decided to troll me by ac posts for MONTHS now, OR IMPERSONATING ME AS YOU DID HERE and you were caught in it by myself & others here, only to fail each time as you have here?)...

So long nummynuts, sorry to have to kick your nuts up into your head verbally speaking.

cower in my shadow some more, feeb. you're completely pathetic.

Disproof of all apk's statements:

Ac trolls' "BIG FAIL" (quoted): Eat your words!

That's the kind of martial arts I practice.

Re:I recommend they implement a HOSTS file (0)

Anonymous Coward | about a year ago | (#43040405)

I'm really glad these crap spam posts are auto-written.

The idea that a human being wasted so much of their life typing and formatting such a massive pile of offal is just too much for me to bear.

Re:I recommend they implement a HOSTS file (0)

Anonymous Coward | about a year ago | (#43040541)

Actually, I think about my breathing all the time as I like to meditate. :-)

Got any more suggestions ? :-)

BTW, you need to change your medication levels. However, I can't tell (with apologies to xkcd) if you should increase or decrease your medication.

Spoiled Americans (4, Funny)

Anonymous Coward | about a year ago | (#43040427)

Americans have no one to blame but themselves and their short sighted insistence that they be paid enough money to keep themselves in food, shelter, transportation and medical care here in America, rather than what it would take to do all of the above in Bangladesh.

Re:Spoiled Americans (0)

Anonymous Coward | about a year ago | (#43040807)

You're right; America should aspire to be a 3rd world country.

Simple Fix (3, Interesting)

CanHasDIY (1672858) | about a year ago | (#43040441)

Just switch your focus to manufacturing things that either can't be made in/sold to/bought from other countries (like cryptography software).

Or maybe guns. Americans love American made guns.

Re:Simple Fix (-1)

Anonymous Coward | about a year ago | (#43040603)

Or maybe guns. Americans love American made guns.

I think guns are a protected industry in the US. I'm pretty sure that we're not allowed to import foreign made guns for sale.

Re:Simple Fix (1)

demonlapin (527802) | about a year ago | (#43040671)

Nope. We import guns all the time.

Re:Simple Fix (4, Informative)

Nidi62 (1525137) | about a year ago | (#43041095)

Most firearms owned in the US are actually made in the US, including foreign brands. Walther is now made by Smith and Wesson, my Sig Sauer was made in New Hampshire, Glock is made in the US. There are Federal laws that require many weapon types to be made 90% out of American-made materials or assembled in the US(this comes into effect primarily with firearms such as AK-47s). As far as I know, most of the weapons we import tend to be AK/SKS type weapons (mostly Chinese in manufacture) and brands such as Beretta(Italy), Taurus (Brazil-they actually bought the rights and machines to manufacture 92 modeled firearms) and Bersa (Argentina). But most "foreign" guns are actually American made.

Re:Simple Fix (4, Informative)

TopSpin (753) | about a year ago | (#43040691)

I think guns are a protected industry in the US. I'm pretty sure that we're not allowed to import foreign made guns for sale.

We import many, many foreign guns. There are limits, however. The US doesn't allow Norico (the largest small arms manufacturer on Earth, a Chinese company) to import. Also, foreign small arms must get through the ATF points system which limits what can be imported. Also, there are tariffs. Most other imported finished goods have no tariffs.

The result is that although there are large numbers of imported small arms, the limitations and extra costs to importers allow domestic manufacturing to be viable. Thus, we have companies like Ruger and Smith and Wesson; big, successful manufacturers that build most or all of their products in the US. There are also a plethora of small manufacturers.

Domestic small arms manufacturing is among the best evidence that applying some resistance to imports allows domestic manufacturing to thrive.

Re:Simple Fix (1)

peragrin (659227) | about a year ago | (#43040747)

So your saying because of corporate bought, non capitalist, anti-competition tariffs gun manufacturers can be competitive.

And we should reduce government regulations according to the conservatives.

Re:Simple Fix (4, Insightful)

Anonymous Coward | about a year ago | (#43040829)

I think you'll find they are surprisingly selective about exactly which government regulations they want to reduce.

Re:Simple Fix (1)

Gideon Fubar (833343) | about a year ago | (#43040841)


Those conservatives are so nobly sacrificing themselves for the greater efficiency. Ayn Rand would not approve of their altruism.

Re:Simple Fix (1)

hairyfeet (841228) | about a year ago | (#43040961)

Well that and the fact that they make products that don't suck. It doesn't really help to have "Made In America" on something if its total crap. For an example I have to LMAO at the crazy prices those that don't know any better will pay for 80s-mid 90s American Fenders when frankly unless you got custom shop they were just junk, especially their basses which weighed a ton and had lousy tone, just dead sounding. At that time frankly the Made In Korea Squires sounded a HELL of a lot better, in fact if the rumors are true Fender canceled the Squire Pro Tone series because people were buying them over MIA Fenders because the MIK Pro Tones played and sounded better. As someone who had both I have to agree, i sold the MIA and kept the Pro Tone 5 because of how nice it played and sounded, the MIA? It was like playing with dead strings, just a dull lifeless sound.

So while i agree having some protection is just common sense, i mean look at how the Chinese protect their markets, but protection won't help if the quality just isn't there. Now I'm not saying the old "Americans can't do good work" because that is bullshit spewed by the globalists, but if the company chiefs lowball everything and try to make 1 guy do the work of 4? Then quality is gonna go down, no way around that.

Re:Simple Fix (1)

waltmarkers (319528) | about a year ago | (#43041123)

Most other imported finished goods have no tariffs.

Heh - you're cute. While many finished products don't have a tariff - arms aren't exactly in a small group of tariffed goods.

Harmonized Tariff Schedule of the United States
http://hts.usitc.gov/ [usitc.gov]

Re:Simple Fix (0)

Anonymous Coward | about a year ago | (#43040727)

The constitution guarantees the right to bear arms, not the right to bear American-made arms. The first hit googling "gun store" shows a Vegas gun store carrying many imported brands such as Italian Beretta's and German Sigs.

Re:Simple Fix (3, Insightful)

flyneye (84093) | about a year ago | (#43040663)

The mistake made here is that scaling production is a GOOD thing. We have seen endless examples of Mega corps. tanking and taking employees and investors with it. The secret, good ol' fly will share with you is; keep it small, specialize,shun investors and if your product is worthy you will live like a king. Complete control is impossible on a large scale and only breeds asshats dropping resume' on your desk reeking from useless degrees, boring accomplishments and assbackward statistical management techniques that wouldn't even appeal to a $cientologist with a warehouse of half built gizmosensors.
        Small house craftmanship is the way to live and work if you want the American dream. You can keep your deadlines, heart attacks and useless ranks of management siphoning your value and devaluing your product. I will also reiterate "FUCK INVESTORS", if they really wanted to make money, they would do what you are doing and put their money into themselves. If they can't do it at that point, they didn't DESERVE any money because they can't HANDLE money and would've only contributed to the problems of the world caused by themselves anyway. Darwin and Bob were both right about Normals; "survival of the fittest" and " if you act like a dumbass, they'll treat you as an equal".

Re:Simple Fix (4, Interesting)

peragrin (659227) | about a year ago | (#43040781)

a company needs investors. The trick is Wall street isn't about investing it is a gambling addiction.

Seriously for one month make all trades last for a minimum of 1 hour. and watch the volume dry up. As Day trading bankers actually have to invest in companies instead of gambling.

Re:Simple Fix (2)

pubwvj (1045960) | about a year ago | (#43041295)

"a company needs investors."

Not really. That is a common mythconception. Grow slowly and borrow instead of getting investors. That means you benefit more from your innovation. There is no better place for you to invest your own money, and time, than in your own creations where you have control.

Very light on content (2)

Gr8Apes (679165) | about a year ago | (#43040443)

RTFA, and am still left with a host of questions. The linked article is about as informative as the summary (unusual, how'd that happen?) and as bereft of any real information. The core issue though, the lack of an American manufacturing base for consumer goods, should worry everyone. I mean, dog food made in China? Why?

Re:Very light on content (2, Insightful)

sycodon (149926) | about a year ago | (#43040491)

I'm betting it all comes down to government regulatory barriers. Financial, zoning, environmental, etc. And to be clear, the barrier will be costs, not refusals, like that idiot in Chicago that used his power to threaten Chick-fil-a.

Re:Very light on content (0, Insightful)

Anonymous Coward | about a year ago | (#43040627)

I'm betting it all comes down to government regulatory barriers. Financial, zoning, environmental, etc. And to be clear, the barrier will be costs, not refusals, like that idiot in Chicago that used his power to threaten Chick-fil-a.

Good for you. Of course, by 'betting' you mean you have found a way to interpret this article in line with your existing political viewpoint. It's not a bet in a conventional sense as you're not actually going to lose anything if you are wrong, and it wouldn't even change your mind.

Re:Very light on content (0)

Anonymous Coward | about a year ago | (#43040635)

This. environmental barreiers in the US have gotten to the point now where it's easier to start manufacturing in Germany than the US.

Re:Very light on content (1)

Tablizer (95088) | about a year ago | (#43040577)

I mean, dog food made in China? Why?

Uh, I think you mistranslated food made FROM dogs into food made FOR dogs.

Re:Very light on content (2)

LordLimecat (1103839) | about a year ago | (#43040605)

You do realize that the US still leads in manufacturing right? (as of 2009)
http://www.cbsnews.com/8301-505123_162-36742134/manufacturing-surprise58-the-us-still-leads-in-making-things/ [cbsnews.com]

Its possible that China has passed us in the 4 years since that graph, but being #2 in the world and only slightly behind a country 4 times our size is hardly a "serious problem", particularly when we dwarf the next closest competitors.

Re:Very light on content (2)

Anonymous Coward | about a year ago | (#43040767)

It is a problem as long as people think it is. The big problem is that people want to make jobs, and the backbone of the US used to be manufacturing goods. Now that citizens need jobs and a lot of them, it is easy to push for more manufacturing. Some of the jobs are very technical and the skill level goes down to uneducated levels, so it hits a wide spectrum of skills.

Personally, I do think that handmade goods or even goods made in the US are typically made to a higher standard (more durable, better components, etc), but the group think of citizens is to buy a lot and throw things out when they are still useful. This idea needs to change if higher quality manufacturing is to make a strong come back.

The US should look into future technology manufacturing that can be done in a large amount with easy to get components. If the US could make energy cells without rare-earth minerals (I consider them a liability) and export them (charged with renewable energies), there could be a market at least in Europe. Reliable, portable, and cleanly made high power energy cells will be required not only here but also for space technologies.

At the very least, the US is the best at aerospace technology. We should emphasize that more and get resources beyond that of other nations (asteroids as an example). First to claim gets the rights, if other nations complain, tell them to get up there too themselves.

What does it matter? (0)

Anonymous Coward | about a year ago | (#43040445)

In ten years, everybody in manufacturing is going to be fired because everything will be done with machines. Then the manufacturing will be located everywhere to get around tariffs, yet it will employ nobody except a couple of engineers to watch over the plants.

Re:What does it matter? (2)

CncRobot (2849261) | about a year ago | (#43040511)

You will either own a robot, maintain a robot, program a robot, ask "would you like fries with that" or be unemployed.

Industrial robots are becoming much cheaper and easier to use. Within a decade I suspect everyone will know someone on their block with one, either a small CNC router or 3D printer. Pick and place robots to make complicated circuit boards are replacing old school line workers who could solder like they had a master's degree in it.

Re:What does it matter? (-1)

Anonymous Coward | about a year ago | (#43040565)

You will either own a robot, maintain a robot, program a robot, respond to the small percentage of complaints after the VR software asked "would you like fries with that" or be unemployed.

fixed that for you.

I'm that guy on my block (2)

Leuf (918654) | about a year ago | (#43040759)

I think you have no idea what a cnc router can actually do. It's not a black box where you put wood in and a bureau comes out the other end. You aren't going to 3d print a bureau either. A low end cnc is actually crap for production work. It simply doesn't have the rigidity or capacity to replace the other tools in my shop by any stretch of the imagination. And the parts that come out of it still require a great deal of further work just to get to a part which is still a long way from a completely assembled piece of furniture. It's just another tool where there are many other specialized tools that beat the pants off of it for a great deal of operations.

Re:I'm that guy on my block (5, Funny)

CncRobot (2849261) | about a year ago | (#43041113)

Yea, with a username of CncRobot its probably a good guess I would have no idea what a CNC Router could do.

Re:I'm that guy on my block (1)

Leuf (918654) | about a year ago | (#43041167)

Heh, minor oversight. In that case you probably know what a really good cnc can do, but maybe not what a cheap one can do. Let's just pretend I meant "you" in a more general sense.

Re:What does it matter? (1)

Qzukk (229616) | about a year ago | (#43040531)

yet it will employ nobody except a couple of engineers to watch over the plants.

Why would they do that? When it catches fire and burns to the ground, they'll just file an insurance claim.

Re:What does it matter? (3, Insightful)

LordLimecat (1103839) | about a year ago | (#43040617)

Somehow the advent of the car didnt result in massive unemployment because of all of the laid-off buggy drivers, and construction equipment didnt result in massive unemployment due to no-longer-needed ditch diggers.

Technology advances, old problems are solved, and new ones are found. Lets not go full-scale luddite here.

Re:What does it matter? (0)

Anonymous Coward | about a year ago | (#43040785)

I'm not being a Luddite. I'm just pointing out that trying to protect manufacturing jobs is like trying to protect the jobs of horseshit collectors after the invention of the car. Robots are here to stay.

In the future it may be the starving mechanics, electricians, carpenters, and pipe-fitters that the fully employed artists laugh at. Welders will be crying out their eyes wishing they payed more attention during their art history class in high school. My suggestion: if your current job doesn't require creativity, then you are very much at risk of being replaced by a robot or a computer. Engineers and computer programmers may be the only high tech positions that exist in 50 years.

Manufacturing (5, Informative)

phantomfive (622387) | about a year ago | (#43040449)

The US produces something like 18% of the world's GDP [seekingalpha.com]. It's silly to say the US can't manufacture things. There are problems with labor-intensive manufacturing, but manufacturing overall is still something that's done in the US.

But that is not even the point of the study. If you read the article, it mentions that at least some of the companies stayed in the US to do manufacturing (the article doesn't give numbers, it says "often they moved out of the US for manufacturing"). The problem they had was they couldn't find investors in the US. They had to find foreign investors. Sometimes they found foreign investors and managed to stay in the US for manufacturing, but there is the assumption that foreign investors encouraged manufacturing out of the US as well. THAT is what this study is about, not a poorly-informed speculation on the decline of US manufacturing.

Re:Manufacturing (2)

sycodon (149926) | about a year ago | (#43040521)

Don't forget that investors look at more than just the product and the market. The look at the regulatory environment too because that can derail an otherwise profitable venture.

Re:Manufacturing (4, Funny)

CanHasDIY (1672858) | about a year ago | (#43040551)

Don't forget that investors look at more than just the product and the market. The look at the regulatory environment too because that can derail an otherwise profitable venture.

Yea, how dare those bastards make clean air and water for everyone priorities over profits for the select few!

Re:Manufacturing (4, Insightful)

LordLucless (582312) | about a year ago | (#43040583)

Yea, how dare those bastards make clean air and water for everyone priorities over profits for the select few!

Because our pure-hearted regulators only ever do what's best for everyone, and never use their authority to line their own pockets, or stifle their friends' competitors.

Re:Manufacturing (1)

CanHasDIY (1672858) | about a year ago | (#43040701)

Yea, how dare those bastards make clean air and water for everyone priorities over profits for the select few!

Because our pure-hearted regulators only ever do what's best for everyone, and never use their authority to line their own pockets, or stifle their friends' competitors.

Yea, you've got me there.

Re:Manufacturing (0)

Anonymous Coward | about a year ago | (#43040795)

Yea, how dare those bastards make clean air and water for everyone priorities over profits for the select few!

You mean the select few 313E+6 US citizens, right? The Chinese making our stuff don't get clean water and air. The select few like you make sure they get cancer villages [guardian.co.uk] instead because you can't afford the cost of the regulations you insist on for yourself.

Re:Manufacturing (0)

Anonymous Coward | about a year ago | (#43040905)

The regulations may be good for the local environment, but it only serves to give countries that don't have the same rules in place an edge on cost saving. On a global scale displaces pollution more than reduces. If they really cared there would be something in place to level the playing field on countries that have lesser environment regulations on its industry.

Re:Manufacturing (3, Insightful)

Tablizer (95088) | about a year ago | (#43040545)

The US produces something like 18% of the world's GDP. It's silly to say the US can't manufacture things.

The US's Comparative Advantage is BS. BS bubbles, BS accounting, BS wars, BS political campaigns, and BS marketing. We get world investors to buy into fads, bubbles, ponzi's, and scams like no other country.

We don't need to make anything real when we have mastered fakery. Doing real things if for newbie countries.

Re:Manufacturing (1)

Anonymous Coward | about a year ago | (#43040735)

And I always thought a Bachelors of Science was a good thing :( too bad it's all a sham.

Re:Manufacturing (1)

phantomfive (622387) | about a year ago | (#43041019)

That's one of the more babbly posts I've seen on slashdot. Keep it up and one day you'll outdo the timecube guy.

Re:Manufacturing (1)

Anonymous Coward | about a year ago | (#43040599)

Manufacturing doesn't involve only making goods, cheap or expensive, it's also about training, maintaining and paying a workforce.

Make it easier for companies to make those train those workforces and actually hold on to them by removing some of those stupid laws that make the term "wage-slave" a reality, and things will change by themselves.

Re:Manufacturing (0)

Anonymous Coward | about a year ago | (#43040865)

must be all corn ohh and rights to watch movies and stuff?

Re:Manufacturing (1)

jrumney (197329) | about a year ago | (#43041189)

The number one foreign investor for bankrolling large scale manufacturing startup is the Chinese Government, conditional on moving manufacturing to China. And the costs are huge, so investment options are limited; a startup has no credit record, so they need to pay suppliers up front, and as the product is unproven, distributors won't pay until the product has left the retail shelves.

Re:Manufacturing (1)

wiredlogic (135348) | about a year ago | (#43041277)

The other side of the coin is that there is an entire industry of design and manufacturing service providers intended to help local entrepreneurs negotiate the challenges of shifting to offshore production. Nothing like that exists on such a scale for incubating domestic production.

Summary is misleading as usual (2, Informative)

Anonymous Coward | about a year ago | (#43040453)

It's a matter of financing, not manufacturing capability. You should have worded it differently in the summary.

So what if they had the "MIT name behind them" (or any of those other overpriced big-name schools like Stanford or Harvard for that matter). Did they even consider that maybe their business plan and/or product sucked ass and investors here in the US knew better than to spend money on it?

Re:Summary is misleading as usual (1)

mbkennel (97636) | about a year ago | (#43040641)

If the business plan or product really sucked then they would have folded, not gone overseas.

Financiers have strong cultural prejudices against US manufacturing because of their political outlook.

where are they!!!? (3, Insightful)

Anonymous Coward | about a year ago | (#43040479)

Where are all the Job Creators!! I hear so much about the favorable treatment they deserve.

Re:where are they!!!? (5, Funny)

Tablizer (95088) | about a year ago | (#43040609)

Where are all the Job Creators!! I hear so much about the favorable treatment they deserve.

Indeed. I just kicked a dude in the face. I helped create a job for both a surgeon and an orthodontist. It feels so good to be a job creator.

Not Enough Information (3, Insightful)

the eric conspiracy (20178) | about a year ago | (#43040481)

The US does very well with big ticket items or things that can be scaled by automation. The world's largest manufacturing facility is Boeing's main assembly building in Everett WA.

Where it gets dicey is when it can't be automated and a lot of manual labor is needed. Like assembling stuff like iPhones. Then the wage difference really bites.

The MIT story didn't give much detail but I bet a lot of these startups were making little gizmos like the iPhone.

Re:Not Enough Information (2)

K. S. Kyosuke (729550) | about a year ago | (#43040527)

Where it gets dicey is when it can't be automated and a lot of manual labor is needed.

Actually, the word "manufacturing" etymologically-wise, means precisely that: "manu facere", to make by hand. Perhaps a different neologism like "robofacturing" ought to be used instead?

Re:Not Enough Information (1)

Anonymous Coward | about a year ago | (#43040673)

The issue is a lot of those gizmos end up having to go overseas anyway:

1: Most electronics are from Chinese factories. It saves money if the device is just made there and shipped as a complete item.

2: If a company does business in China, China by their laws has to own 51% of whatever arm of that company is on their soil. So, of course, there is pressure to make stuff there.

3: There are the large subsidies and US tax breaks to offshoring so a US firm is a lot better off having the US presence be as small as possible.

Re:Not Enough Information (2)

WindBourne (631190) | about a year ago | (#43040713)

Actually, nearly ALL things can and should be made by robotics. And yes, that includes iphone. That is what they are working on right now, over in China.

Re:Not Enough Information (1)

Darinbob (1142669) | about a year ago | (#43041043)

For a mass produced item like iphone this is true. But there are some items that will only have 1000 of them made, ever. Or after the first 1000 they want a tweak for the next 1000, and so forth. Maybe the circuit boards can be automated but much of the process will still involve manual labor (inspecting the cut boards, modifying the manufacturing equipment, building a bed of nails tester, etc. There is also a large amount of interaction between the manufacturer and the designer and having the two companies close together is a big time saver.

Re:Not Enough Information (1)

Darinbob (1142669) | about a year ago | (#43041003)

Many things that are manufactured do not need to be scaled to mass production. However the US has some of the best electronics manufacturers for smaller runs, with much faster turn around than the big scale foreign manufacturers who only do runs of 15,000 units or higher. Even if a company manufactures some products overseas there is still a need for smaller manufacturing for the same company, or even the same product (ie, prototypes).

Re:Not Enough Information (2)

AK Marc (707885) | about a year ago | (#43041187)

The labor is a small portion of the iPhone cost. Regulations are most of the cost difference between US and China manufacturing costs. That, and even if the costs were the same, Apple would still make them in China because it's the only place currently in the world where you can place an order for 10,000,000 widgets and get them on time and at the agreed price. In the US they just laugh at you, other places may take your money, but you won't get 10,000,000 widgets on time.

Re:Not Enough Information (0)

Anonymous Coward | about a year ago | (#43041247)

>Launch of BlackBerry, growth
>In 1999, RIM introduced the BlackBerry 850 pager.

RIM (aka Black Berry) just before their crash used to do all their manufacturing in Canada.
So it is possible as a manufacturer that make gizmos with similar complexities in North America.

The Problem: They're in Massachussets (0)

Anonymous Coward | about a year ago | (#43040497)

No one wants to set up manufacturing in a high tax, high regulation, unionized state.

There's plenty of manufacturing going on in Texas. Toyota, GE, Caterpillar, and Applied Materials have large manufacturing facilities here.

Re:The Problem: They're in Massachussets (5, Interesting)

Tablizer (95088) | about a year ago | (#43040619)

Explain the success of Germany then?

Re:The Problem: They're in Massachussets (5, Informative)

WindBourne (631190) | about a year ago | (#43040703)

Not just Germany, but nearly the entire rest of the western world. Canada and Australia are good example.

Re:The Problem: They're in Massachussets (0)

Anonymous Coward | about a year ago | (#43041013)

Canada? Bad example. You do know that Caterpillar outsourced all their manufacturing to the US right? They are only the biggest headline grabbing name. There are others.

On topic: The US is a big, diverse place. Massachusetts is one of the states that is heavily manufacturing adverse. It is no small wonder that MIT students fail in manufacturing. None of them have the contacts or experience people elsewhere in the country would have in that industry.

Re:The Problem: They're in Massachussets (4, Informative)

arfonrg (81735) | about a year ago | (#43041313)

"Germany (much like Spain) had a chronic unemployment problem, a result of a labor market that was too highly regulated and offered too much protection for workers. German policymakers began to change the system back in 2003 with a series of measures that made the labor market more flexible and encouraged greater participation in the workforce."
TRANSLATION: They weakened the unions....

"Germany is making BMWs, not Chevys. If you’re making a BMW and charging so much for it, you can manufacture in a high-cost environment and still make a nifty profit. If you’re making a Chevy, which to a greater degree competes on price and doesn’t have a strong brand reputation"
TRANSLATION: They manufacture high-profit margin stuff.

"German management also just seems more determined to find ways of staying profitable while still manufacturing in Germany. The chairman of power-tool maker Stihl, Bertram Kandziora, told me that U.S. companies “don’t try hard enough to keep production inside the country.”"
TRANSLATION: Germans try NOT to reward offshoring.

Read more: http://business.time.com/2011/02/25/does-germany-know-the-secret-to-creating-jobs/ [time.com]

Re:The Problem: They're in Massachussets (0)

Ryanrule (1657199) | about a year ago | (#43040681)

Texas is a third world state.

Re:The Problem: They're in Massachussets (0)

Anonymous Coward | about a year ago | (#43040969)

Texas is a third world state.

Either you're making a (pretty funny) joke that Texas is a state that can be seen as separate from the US (and therefor NATO,) or you're one of the many retards that have no idea what 1st, 2nd, and 3rd world mean.


I can't tell.

Re:The Problem: They're in Massachussets (2)

AK Marc (707885) | about a year ago | (#43041351)

Nobody uses the term in the original meaning anymore. You do realize that the page you linked to classifies Finland and Sweden as 3rd world, and Iran as 1st world, right?

Re:The Problem: They're in Massachussets (1)

benjfowler (239527) | about a year ago | (#43040983)

Political crap.

Europe is an engineering and manufacturing powerhouse. They've got unions coming out of their asses.

Why? (0, Funny)

Anonymous Coward | about a year ago | (#43040563)

Why would anyone sane want to setup a factory in the U.S. or Europe?

High taxes, high wages, high regulations, governments out to fuck you...

Re:Why? (-1)

Anonymous Coward | about a year ago | (#43040857)

well you got one part right, fuck you.

you mean taxes (not high, just taxes) an actual living wage (where the ceo only makes 40x what the worker makes and not 400x) and regulation (like not being able to just dump shit in rivers)

no you're out to fuck everyone else for your own good, you're just pissed we wont let you do it.

Re:Why? (0)

Anonymous Coward | about a year ago | (#43041015)

You sure made a lot of assumptions about the previous poster. Not every manufacturer is a tax dodging, slave driving, criminal polluter.

U.S. corporate tax rate is pretty high. So there is that

Re:Why? (0, Flamebait)

benjfowler (239527) | about a year ago | (#43041005)

Europe's far worse than the US, in terms of competitiveness. They don't have the stupid right-wing political blinkers of the States, so when push comes to shove, they will improve out of sight, as Germany has in the last 10 years.

We have rightwing scum trying to turn the US (a First World country) into Brazil (a Third World country), and in their mindless greed and limitless stupidity, they'll force the US to the bottom, and then discover that the country has none of the ingredients required to be successful.

Free marketeers are the worst traitors, because they would sell our entire civilization down the river (to the Chinese especially) for a little bit of short term profit.

American investors uninterested in manufacturing (5, Insightful)

erice (13380) | about a year ago | (#43040649)

That is what TFA is really saying, not that America can not manufacture. That jives with my own experience. The US investment community is addicted to quick turn Internet services that can turn around in a matter of months. Startups that actually need to produce physical products are starving because investors don't want to put their money into projects that take millions of dollars and several years to break even.

What is interesting is that they are foreign investors willing to fund manufacturing. Some are even willing to manufacture in the US. So it is a US investor psychology problem not a global one.

Re:American investors uninterested in manufacturin (3, Interesting)

radtea (464814) | about a year ago | (#43040903)

Startups that actually need to produce physical products are starving because investors don't want to put their money into projects that take millions of dollars and several years to break even.

If it ever does (break even). Scaling up is an incredibly high-risk business, because some things just don't scale.

In Canada we recently opened a national chemical engineering facility (http://www.greencentrecanada.com/) that is specifically aimed at helping researchers scale chemical processes that work at lab-scale (grams) to industrial scale (kilograms to tonnes). There are plenty of things that just don't work outside of the lab, and new processes in particular are often invented by experts who are the only people in the world who can make them work successfully.

The skills required for scaling up are very different from those required for discovery, and having something like this were there is a specific group of experts in scaling up is a godsend to university spin-off businesses, and adds a level of reassurance to investors that simply couldn't exist otherwise.

The real issues (2, Interesting)

WindBourne (631190) | about a year ago | (#43040677)

is that AMerica was a powerhouse. In addition, we had a LARGE R&D fund by the feds. However, starting with reagan, and being pushed with just about every president since then, we have quit investing into America. In particular, one area that is insane is that we have all of these free trade agreements, where it says that nations are not allowed to dump, subsidize, or manipulate their money. Yet, China is the worst one, and to this day continues to get worse with manipulating their money, dumping and subsidizing.

Until American politicians stand up and balance the budget AND then tell China (and others) that we will no longer allow them to cheat on the FTA, then we will continue our downhill slide.

Manufacturing in the US *is* hard (5, Interesting)

Silicon_Knight (66140) | about a year ago | (#43040685)

I'm a small business owner (I created OpenBeam: http://www.kickstarter.com/projects/ttstam/openbeam-an-open-source-miniature-construction-sys [kickstarter.com]). It is basically a small, nice version of an erector set, that is currently being used for building 3D printers. (See: http://reprap.org/wiki/Kossel [reprap.org]).

US manufacturing is *hard*, for sure, for small businesses. In fact, the system is set up so that I'm better off shipping jobs overseas.

We buy our extrusions from a small mill in California, a family owned business. Our first batch was great. We made a small engineering change on the next batch and ordered the extrusions in October of 2012. We received the parts in early December, and the black anodizing was crap - it literally looks like it's been dive bombed by seagulls with diarrhea. We shipped back 700 of 2000 pieces for rework, and we still have not received it back. Meanwhile, I'm out of stock, I have thousands of dollars of backorders that I can't fill, and I still have no idea when I'll get replacement stock back in. And to make things worse, when we complained initially about the quality of the parts, the answer we got was literally "you're small potatoes, we don't have time for you"

Meanwhile half way across the globe, my injection molder (http://blog.openbeamusa.com/2012/05/18/behind-the-scenes-injection-molding/) is churning out parts, 50,000 at a time. He always delivers when he says he'll deliver. With UPS and Expeditors I can get goods landed on my doorstep anywhere from 48 hours to less than 3 weeks for ocean freight shipping. It costed me $1000 to ocean freight half a metric *ton* of parts, and it'll be here in 3 weeks. The reason for going overseas for injection molding is simple: The material we use is a high end glass-reinforced nylon and the only shops the US that can handle it are military and aerospace molders and they demand an incredible premium.

On top of all this, I currently import a bunch of motors, pulleys, bearings for my 3D printer kits, US customs requires that I file an individual HTS classification for each line item, and taxes me individually. I then pay my old coworker's kid $20/hr, which is a princely sum for a 14 year old girl, to do my packaging and kitting. However, If I paid some guys overseas $10.00 a day to do the same job, I can declare my imported goods as "construction toy set" and avoid paying import taxes all-together. Therefore, there are absolutely NO incentives for me to keep the packaging job in the US, except for the short flexibility between an engineering change and getting the change pushed through on the line.

When it comes to export, I'm equally screwed. Until I signed up with Expeditors, there was no easy way for me to export my shipment around the world. So while I have customers in the UK, EU, and NZ/AU areas, for the longest time I had to resort to USPS Priority mail to ship them stuff, and priority mail rates just went up. Surface parcel service was discontinued a few years ago during budget cuts, so unless you are a bonded importer / exporter, you really have no option of doing a low cost export. Meanwhile, I paid US$20.00 for a batch of parts for 2 day shipping for a crate of timing belt pulleys from Shanghai to Hong Kong. There are so many Chinese logistics company these days that shipping is incredibly cheap to move things around in China.

People don't realize that the world is getting a lot smaller these days. The other day a vendor returned an email quotation - 5 weeks after initial RFQ. I had already paid someone else and landed parts in that amount of time. A supply chain is only as strong as its weakest link and it seems like for small businesses there are just no good options for manufacturing.

-=- Terence

Re:Manufacturing in the US *is* hard (2)

DigiShaman (671371) | about a year ago | (#43040843)

And this is why we need a simplified tax code. All our problems with running a business these days is all the red tape of excessive rules and regulations. I'm not suggesting getting rid of some minor regulations, but damn our nation has its hands tied.

Re:Manufacturing in the US *is* hard (1)

Anonymous Coward | about a year ago | (#43041103)

How is a simplified tax code in one country going to unify tariffs and import/export fees throughout the entire world?

Re:Manufacturing in the US *is* hard (1)

Lehk228 (705449) | about a year ago | (#43040895)

so you have to pay duties on imported parts for manufacturing, but finished products for sale you don't?

that's the most backwards stupid shit i have ever heard in my life. penalize companies making stuff here and reward companies doing all of their manufacturing overseas.

Re:Manufacturing in the US *is* hard (4, Interesting)

TopSpin (753) | about a year ago | (#43041001)

I file an individual HTS classification for each line item

The HTS is a fascinating bit of work. For people that don't know, the Harmonized Tariff Schedule [usitc.gov] is a US government published document that classifies just about every conceivable good and assigns tariffs, duties, etc. It is huge and is now only published in electronic form.

As the parent wrote, most finished goods in the HTS are 0% tariff. There are many things in the HTS with tariffs, but if it's a finished good it is usually exempt from any cost whatsoever. Some exceptions include small arms and autos; the UAW negotiated a 25% domestic value-add requirement in the '80s if foreign manufacturers wish to avoid tariffs. That one requirement is the sole reason that all auto manufacturing hasn't evacuated the US. Today there are dozens of foreign owned auto plants in the southern US writing paychecks to thousands of US workers because of that law.

No other nation is as import friendly as the US. Unless your nation has imams and muftis actively operating uranium isotope centrifuges in a bunker somewhere then you too can export to the US tariff free. You can wreck the environment to whatever degree you wish, abuse, neglect or contaminate however many people you want and it won't even slow down your goods as they get whisked into the US.

That's what domestic manufacturers and the US working class have to compete with for 80% of all finished goods in the US.

Re:Manufacturing in the US *is* hard (0)

Anonymous Coward | about a year ago | (#43041091)

This is, without a doubt, the best... most informative post ever left on slashdot in the history of the world... Can we give him a 6?

Re:Manufacturing in the US *is* hard (3, Interesting)

characterZer0 (138196) | about a year ago | (#43041331)

You should look into setting up a Foreign Trade Zone. That would let you bring stuff in without paying duty, do the assembly and kitting locally, and then paying duty on the finished product instead of what you imported.

MIT-pedigree (0)

Anonymous Coward | about a year ago | (#43040765)

"MIT-pedigreed company has serious trouble ramping up production in the U.S., how much harder is it for the 'average' business that wants to grow"

Is there an assumption here that investors like an "MIT-pedigree" over anyone else? What's with the superiority complex? There are lots of capable and fundable people/businesses that have nothing whatsoever to do with MIT. Get over yourselves.

Re:MIT-pedigree (0)

Anonymous Coward | about a year ago | (#43041099)

Is there an assumption here that an "MIT-pedigree" honestly means anything? If its the same short sighted worthless bullshit that slashdot usually reports, no wonder they cant get funding

Vertical Integration (3, Interesting)

pubwvj (1045960) | about a year ago | (#43040811)

The trick is vertical in-house integration. That is what our family has done with our businesses. The more we do in-house the more control we have the lower the costs and the more money stays in our pocket. This gives us better resilience for surviving and even thriving through economic downturns. Own the tools of manufacturing as much as possible.

back that up a second (1, Insightful)

slashmydots (2189826) | about a year ago | (#43041011)

What the hell is all this crap I keep hearing about "investors?" Have they ever heard of a long or a bank? My company's credit SUCKS and we just financed $150,000 worth of equipment from Wells Fargo and another $30,000 from GE Capital. Either you have actual investors as in stock holders and then the money you need is just there (in theory) or you're private and then just get a loan. That's what banks do, they give loans. If you're going after some venture capitalist, it's because your idea sucked and your company has no history. But no, this article is about scaling up. If you've been solid for 5+ years and now you're doing so good you need to expand, what exactly is stopping a bank from giving you a loan? Either your business isn't as stable as you think, you're going too big too fast, or you're not actually all that profitable. Normal, good businesses get approved for loans in the millions for expansions.

Soooo, you're saying... (1)

arfonrg (81735) | about a year ago | (#43041257)

Soooo, you're saying that companies are having a hard time setting up manufacturing operations inside a country that is very hostile to domestic companies, domestic manufacturing, and encourages moving jobs overseas with things like "most favored trading partners" and "free trade treaties"!?!?!


Hit a wall alright (1)

Trogre (513942) | about a year ago | (#43041287)

A Great Wall, one might say.

DISCLAIMER: In keeping with Slashdot tradition, I didn't actually read the article.

Blame the Help (0)

Anonymous Coward | about a year ago | (#43041337)

Placing blame on the workers is a tactic designed to point away from the real issue. There is a path to success and wealth. It is not the nonsense that we have seen for the last 60 years or so. Saying that a product is new, better, revolutionary, more reliable and all that jazz is easy. And with a fairly stupid public looks and quality can easily be obscured. After all, the lowest chowder head can declare that "we know what looks good.".
                          The trick is to produce a product that is obviously and measurably superior at a very low cost. That is what American industry has been either unwilling or unable to do. And it is not about paying workers less either. Frankly if you really have quality then machines will already have replaced almost all workers in the factory. Think of how much better moderately priced wrist watches are than at any time in the past. They are made by machines and that is why the quality is so consistent. They used to be made by hand and they failed with the slightest excuse.
                            The long and short of it all is that management and engineers have expressed no interest in the real elements of quality. Buy a car and you will quickly understand. How easily and cheaply can repairs be done? Is a new alternator $600 0r $19.95? Your window sticks a bit. They need $400. to fix one power window. got a dent in a fender. Oh! they need $2500. to replace the stupid fender and need to match the paint by painting the entire car. Of they bent a wheel. Sorry a new wheel will cost you $600.. In other words in regard to repairs the quality is zero if the cost is high. How about initial purchase price? Oops! The average car sold in America was over $30,000 last year. So much for that element of quality. Obviously prices suck.
                            How about theft resistance? Really it is super easy to steal cars as it has always been. No quality in that measure at all.
                            How about insurance costs for that new car? Well insurance is now a nightmare so that quality element is trashed as well.
                            And how about the car being crash worthy in regard to human safety and ease of restoration? Really not so good there either.
                              Now i do understand that it takes a lot of brain work to reduce the purchase price by about 90% and increase the ease of repair by 90% and decrease the costs of repair as well as maintenance by 90% and increase the mileage and also increase the security and safety of the car and these things flow from the top down and it all points back at owners and managers.
                            But if you want to own an industry you have to dance one heck of a dance. And those that finish second will usually end up bankrupt. Go to the Olympics and see how little placing number four in an event gets you. The simple truth is that American industry forgot how to dance.

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