PILOT SPIN
Spin Zone => Spin Zone => Topic started by: Little Joe on April 01, 2016, 05:47:28 AM
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I have been thinking this same thing lately. I just think this country has too many good things going for it and that we really can do anything we set our minds to: All we need to do is get rid of the socialist mentality.
http://finance.yahoo.com/news/u-surpass-china-no-1-182043359.html
But if you ask actual manufacturing executives, they’re far more bullish on America’s future than many of its political leaders. On Thursday, professional services firm Deloitte teamed up with the Council on Competitiveness to release its 2016 Global Manufacturing Competitiveness Index, showing that the United States is the second most competitive manufacturing economy after China. What’s more, global manufacturing executives predict that by 2020, the United States will be the most competitive manufacturing economy in the world.
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Let's say I set up shop to manufacture shirts here in the U.S. and due to the labor costs, etc I have to charge $3.00 more per shirt. How many people will buy them?
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Let's say I set up shop to manufacture shirts here in the U.S. and due to the labor costs, etc I have to charge $3.00 more per shirt. How many people will buy them?
me for one
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Let's say I set up shop to manufacture shirts here in the U.S. and due to the labor costs, etc I have to charge $3.00 more per shirt. How many people will buy them?
If the quality is there you will get buyers. Not everyone shops price and with the deluge of Chinese/Mexican/Indian made products that are cheap and ultra low quality many (including myself) seek out the better items even if it cost more.
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Let's say I set up shop to manufacture shirts here in the U.S. and due to the labor costs, etc I have to charge $3.00 more per shirt. How many people will buy them?
Do you make a better shirt?
Will the lower transportation and logistical costs offset any of that labor cost?
Can you automate any part of it to save on labor?
What if we can get some tax reform to reduce your taxes (I know, fat chance!)
But if you can keep the price reasonable and the quality high, you will do ok with your shirts.
But I don't think making shirts is the type of manufacturing we necessarily need to bring back any way.
Just a thought, but I was looking into why there are no televisions made in America any more. The main reason is that in order to tag an item "Made in America", the majority of the parts that go into it need to be made here, and we don't make enough electronic components. I'd like to see us get back into that type of manufacturing, along with heavy equipment. But I think the tax structure is a bigger impediment these days than labor is.
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Let's say I set up shop to manufacture shirts here in the U.S. and due to the labor costs, etc I have to charge $3.00 more per shirt. How many people will buy them?
Me.
How much do "dress shoes" imported from China cost at box stores?
How much do Allen Edmond shoes cost?
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I have been thinking this same thing lately. I just think this country has too many good things going for it and that we really can do anything we set our minds to: All we need to do is get rid of the socialist mentality.
http://finance.yahoo.com/news/u-surpass-china-no-1-182043359.html
This is a good article, and is exactly what I'm hearing from my manufacturing clients.
Excluding food processing (which usually is necessarily domestic), I have manufacturing clients in the machine tooling, specialty metals, lawnmower and snowblower, injection molding, thermoforming, rotational molding, surgical equipment, chemical, paper and packaging products, packaging machinery, and a foundry. I'm sure I'm forgetting some. And all of these are in Wisconsin.
The death of US manufacturing had been greatly overstated.
These companies manufacture here because of a reliable workforce, quality and precision that you can't get in China, the need to be close to Tier 1 manufacturers, and raw material sources.
Those that have done some manufacturing in China are increasingly dissatisfied with quality, increasing costs, and corruption, including theft of intellectual property or trade secrets.
I'm also optimistic about US manufacturing, but that optimism is tempered by the resident at 1600 Pennsylvania Avenue. If we get another 4 or 8 years of the Obama recession, high regulations, unreasonable wage demands driven by class warfare, and a general malaise, we may be done.
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It's not just the resident of 1600 Pennsylvania Ave, but the 535 members of Congress that have been very complicit in promoting more regulations and lop sided trade agreements and bowing to their handlers. And that problem goes hand in hand with either the (D) or (R) behind their names.
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This is a good article, and is exactly what I'm hearing from my manufacturing clients.
Excluding food processing (which usually is necessarily domestic), I have manufacturing clients in the machine tooling, specialty metals, lawnmower and snowblower, injection molding, thermoforming, rotational molding, surgical equipment, chemical, paper and packaging products, packaging machinery, and a foundry. I'm sure I'm forgetting some. And all of these are in Wisconsin.
The death of US manufacturing had been greatly overstated.
These companies manufacture here because of a reliable workforce, quality and precision that you can't get in China, the need to be close to Tier 1 manufacturers, and raw material sources.
Those that have done some manufacturing in China are increasingly dissatisfied with quality, increasing costs, and corruption, including theft of intellectual property or trade secrets.
I'm also optimistic about US manufacturing, but that optimism is tempered by the resident at 1600 Pennsylvania Avenue. If we get another 4 or 8 years of the Obama recession, high regulations, unreasonable wage demands driven by class warfare, and a general malaise, we may be done.
That's why we all have to get behind the GOP candidate, regardless of whether it is Cruz, Trump or even Kasich.
Everyone gives Trump hell for not being specific, ie, HOW is he going to "Make America Great Again" That's easy. All he has to do is get the government out of the way. The government still has a role, but it isn't micromanaging through the tax code and punishing those that make a profit. And if they want to force American companies to deal with their over-reactionary environmental regulations, then they need to make damn sure our competitors have to play by the same rules, or they don't play in our sandbox.
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This is a good article, and is exactly what I'm hearing from my manufacturing clients.
Excluding food processing (which usually is necessarily domestic), I have manufacturing clients in the machine tooling, specialty metals, lawnmower and snowblower, injection molding, thermoforming, rotational molding, surgical equipment, chemical, paper and packaging products, packaging machinery, and a foundry. I'm sure I'm forgetting some. And all of these are in Wisconsin.
The death of US manufacturing had been greatly overstated.
These companies manufacture here because of a reliable workforce, quality and precision that you can't get in China, the need to be close to Tier 1 manufacturers, and raw material sources.
Those that have done some manufacturing in China are increasingly dissatisfied with quality, increasing costs, and corruption, including theft of intellectual property or trade secrets.
I'm also optimistic about US manufacturing, but that optimism is tempered by the resident at 1600 Pennsylvania Avenue. If we get another 4 or 8 years of the Obama recession, high regulations, unreasonable wage demands driven by class warfare, and a general malaise, we may be done.
Thanks for sharing that insight and perspective.
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No manufacturing in the US is alive and doing ok, but it is under attack from know nothing do gooders, regulatory hostility and a punitive tax system. Despite this, most manufacturers are surviving, but I worry about it.
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There will be more manufacturing returning to the US, but manufacturing jobs will not be coming back in any great number. New US factories will be highly automated. The field of robotics and AI is booming right now and accelerating and nearly all jobs performed in manufacturing plants can now be replaced with machines. This is the manufacturing that those executives are bullish on.
The other thing about this article is, US is moving up the ranking partly due to China moving down and not so much increased production in America. Smaller countries like Viet Nam, Thailand, Malaysia and others are taking manufacturing away from China.
These are good trends indeed, but we still have and will continue to have underemployment problems in this country.
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It's not just the resident of 1600 Pennsylvania Ave, but the 535 members of Congress that have been very complicit in promoting more regulations and lop sided trade agreements and bowing to their handlers. And that problem goes hand in hand with either the (D) or (R) behind their names.
True.
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They've discussed this on some of the tech shows.
The consensus it that Apple, let's say, would love to do more manufacturing here.
But if they suddenly need the glass on the new iPhone to be 10 microns thinner, only China has the infrastructure in place to have tens of millions of the new glass available in an acceptable time frame. It simply cannot currently be done in the US.
Chinese quality can be as good as it gets with proper systems in place, as we see with much of the electronics and computers we use. The US has some real catching up to do.
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They've discussed this on some of the tech shows.
The consensus it that Apple, let's say, would love to do more manufacturing here.
But if they suddenly need the glass on the new iPhone to me 10 microns thinner, only China has the infrastructure in place to have tens of millions of the new glass available in an acceptable time frame. It simply cannot currently be done in the US.
Chinese quality can be as good as it gets with proper systems in place, as we see with much of the electronics and computers we use. The US has some real catching up to do.
This is very true for anything electronic. The whole infrastructure for electronics manufacturing moved to Asia. Not only that, but a lot of tool and die making as well. At this point, something like a 100% American made TV set, or computer, or even automobile is impossible. Then there is the materials supply and sub component suppliers needed for large scale manufacturing. They don't exist here anymore, so high volume production of complex things here is also not possible.
We would have a very tough road ahead to go back to the manufacturing power house we once were. I'm sorry, but high taxes and federal regulations were not the major reason manufacturing went away here. Mismanaged American companies, very, very low labor rates in foreign countries and ultimately the American consumer that by and large doesn't give a crap where their stuff comes from. Those are the major culprits. Bad trade deals and the now passé conservative beliefs in "free trade" and "free markets" didn't help either.
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I'm very pro manufacturing as I've mentioned above. That being said, when I was looking for a free weight set a few years ago, I could not find one made in the US for any price.
I bought a 310# weight set made in China. It is unfathomable to me that shipping literal dead weight across the Pacific Ocean, and then trucking it across the country, could be cheaper than having steel weights made in Gary, Indiana or Pittsburgh, PA.
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I'm very pro manufacturing as I've mentioned above. That being said, when I was looking for a free weight set a few years ago, I could not find one made in the US for any price.
I bought a 310# weight set made in China. It is unfathomable to me that shipping literal dead weight across the Pacific Ocean, and then trucking it across the country, could be cheaper than having steel weights made in Gary, Indiana or Pittsburgh, PA.
(http://cdn.meme.am/instances/56075252.jpg)
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Let's say I set up shop to manufacture shirts here in the U.S. and due to the labor costs, etc I have to charge $3.00 more per shirt. How many people will buy them?
Sure all you have to do is get someone famous to let you put their name on it. Hell then you could charge $30 more and people would by it
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Sure all you have to do is get someone famous to let you put their name on it. Hell then you could charge $30 more and people would by it
Especially someone who says he hates NAFTA, GATT, and other trade agreements, but gets much of his clothing lines manufactured in Mexico and other third world nations.
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Especially someone who says he hates NAFTA, GATT, and other trade agreements, but gets much of his clothing lines manufactured in Mexico and other third world nations.
You see, Trump's policies don't apply to Trump's friends. I mean the fact that he uses illegal labour for his projects doesn't change the fact that he'll kick out everyone else's illegals.
In the same interview where he beclowned himself on abortion, this exchange went unnoticed:
Trump: I have, actually, believe it or not, I have a lot of friends that are Muslim and they call me. In most cases, they’re very rich Muslims.
Matthews: But do they get into the country?
Trump: Oh, they’ll come in.
So, he'll ban Muslims from coming into the country, except for his friends.
This man has not thought deeply on any policy that he espouses.
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The death of US manufacturing had been greatly overstated.
Absolutely, contrary to what many of the candidates may say.
These companies manufacture here because of a reliable workforce, quality and precision that you can't get in China, the need to be close to Tier 1 manufacturers, and raw material sources.
Those that have done some manufacturing in China are increasingly dissatisfied with quality, increasing costs, and corruption, including theft of intellectual property or trade secrets.
I'm also optimistic about US manufacturing, but that optimism is tempered by the resident at 1600 Pennsylvania Avenue. If we get another 4 or 8 years of the Obama recession, high regulations, unreasonable wage demands driven by class warfare, and a general malaise, we may be done.
Your personal expertise and experience far outweigh mine... so I have a couple of questions that probably aren't all that easy to answer. What is the Federal corporate income tax burden on a "small" business as compared to total receipts? I realize that there is no typical small business, but just trying to get a feeling for the magnitude of this tax burden. Say you were to have a small business of $500k total revenue, how much of that goes to Federal corporate tax. Is the percentage similar to say a $2000k business? Is this even answerable since business differ so much?
Gary
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We would have a very tough road ahead to go back to the manufacturing power house we once were. I'm sorry, but high taxes and federal regulations were not the major reason manufacturing went away here. Mismanaged American companies, very, very low labor rates in foreign countries and ultimately the American consumer that by and large doesn't give a crap where their stuff comes from. Those are the major culprits. Bad trade deals and the now passé conservative beliefs in "free trade" and "free markets" didn't help either.
I believe this to be pretty accurate.
Our customers AND competitors are now global. Some of our competitors have significant advantages in labor costs and government oversight. Very few have the advantage we have of intellectual ability, infrastructure, access to capital and political stability.
The American auto industry is a prime example, there were indeed big, but ponderous with bloated management and they made crappy cars in the 70's and 80's. Couldn't or wouldn't change and Honda, Toyota ate their lunch.
Gary
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The American auto industry is a prime example, there were indeed big, but ponderous with bloated management and they made crappy cars in the 70's and 80's. Couldn't or wouldn't change and Honda, Toyota ate their lunch.
Gary
The auto industry is a great example. GM, once the biggest employer in the world, once having 50% of the US market to themselves, once a "blue chip" investment standard, once "what was good for GM, was good for the country", became a cash cow. It was so solid and so stable, that everyone involved with the company treated it like a never ending resource for exploitation for their own personal gain.
The board of directors gave the CEOs big salaries that weren't performance based because they're all buddies. The CEOs in turn used the good name and good credit to try to expand into all kinds of things that had nothing to do with cars and leveraged the company to the hilt. The UAW hammered for more and more until worthless workers couldn't be fired, did sloppy work, made $70,000- $80,000 a year with full benefits for life and ultimately contributed to crappy product. Then there was the shareholders who expected a nice return no matter what happened in the market, or the world. This forced GM to make some pretty poor choices that led to short term profits, but long term disaster.
But why not?? GM will always be king, right?
Eventually GM the company found itself between a rock and hard place with very little room to maneuver. The result was a fragile company and severe loss of market share. Why did this happen? Nobody had much concern for GM the company, they only cared about GM the cash cow. Whatever they hell they were supposed to be doing didn't really matter as long as everybody got paid.
Eventually the cow collapsed. GM entered an aggravated spin and even the good people there that did give shit about the company and the product couldn't produce enough right rudder to break the spin. The crash was inevitable, all it needed for this to happen was a market crash.
GM was not alone. All the big "blue chip" companies in America have diminished, or failed for the same reason. I do sympathize with many that have done good things for GM in the past and really tried against all odds to right the ship. They sadly were just up against the juggernaut of personal greed that was working against them.
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You see, Trump's policies don't apply to Trump's friends. I mean the fact that he uses illegal labour for his projects doesn't change the fact that he'll kick out everyone else's illegals.
In the same interview where he beclowned himself on abortion, this exchange went unnoticed:So, he'll ban Muslims from coming into the country, except for his friends.
This man has not thought deeply on any policy that he espouses.
Hater! He's a political novice. He's just trying to make America great again. He'll be tough on Muslims, let me tell you something. Nobody will be tougher on Muslims than Trump.
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Speaking of GM...
A dive into GM’s filings with the Securities & Exchange Commission reveals that while the carmaker makes nearly all of its profits in the U.S., it pays virtually no U.S. federal, state or local taxes. The carmaker paid just $5 million in federal taxes last year, its SEC filings show. For its total federal, state and local bill, all in, it booked zero taxes, the filings show. Meantime, in 2015, GM paid more than $908 million in taxes to China, due to its profits from its joint ventures there, the filings show (see here:https://www.gm.com/content/dam/gm/en_us/english/Group4/InvestorsPDFDocuments/10-K.pdf Opens a New Window. ).
http://www.foxbusiness.com/markets/2016/03/31/wheres-presidential-debate-on-gms-crony-capitalism.html
What the hell...
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Absolutely, contrary to what many of the candidates may say.
Your personal expertise and experience far outweigh mine... so I have a couple of questions that probably aren't all that easy to answer. What is the Federal corporate income tax burden on a "small" business as compared to total receipts? I realize that there is no typical small business, but just trying to get a feeling for the magnitude of this tax burden. Say you were to have a small business of $500k total revenue, how much of that goes to Federal corporate tax. Is the percentage similar to say a $2000k business? Is this even answerable since business differ so much?
Gary
$500k total revenue is a very small business. Of the total, how much is net income? I don't deal with companies that small.
Most of my clients gross between $10mm and $250mm, and drop anywhere from $500k to $10mm to the bottom line. Sometimes they drop nothing to the bottom, and sometimes they incur losses.
Most of them operate as S corps or LLCs, so the income is taxed to them personally. On average, almost all of them are paying taxes at the highest marginal rate of 39.6%. If they're making more than $250k jointly, they are also paying an additional 3.8% on their investment income. They are also paying a Wisconsin marginal rate of 7.65%.
Add that up, and in Wisconsin they are paying anywhere from 47% to 51%, and that's before payroll or self-employment taxes.
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$500k total revenue is a very small business. Of the total, how much is net income? I don't deal with companies that small.
Most of my clients gross between $10mm and $250mm, and drop anywhere from $500k to $10mm to the bottom line. Sometimes they drop nothing to the bottom, and sometimes they incur losses.
Most of them operate as S corps or LLCs, so the income is taxed to them personally. On average, almost all of them are paying taxes at the highest marginal rate of 39.6%. If they're making more than $250k jointly, they are also paying an additional 3.8% on their investment income. They are also paying a Wisconsin marginal rate of 7.65%.
Add that up, and in Wisconsin they are paying anywhere from 47% to 51%, and that's before payroll or self-employment taxes.
Yet that is not a problem say the liberals, corporations should be happy to have them regulating and taxing them. >:(
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Speaking of GM...
http://www.foxbusiness.com/markets/2016/03/31/wheres-presidential-debate-on-gms-crony-capitalism.html
What the hell...
To quote one of hillary's staffers (when questioned about earmarks): "She played by the rules"
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Corporate profits just get passed to the consumer. People with a brain realize that.
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Speaking of GM...
http://www.foxbusiness.com/markets/2016/03/31/wheres-presidential-debate-on-gms-crony-capitalism.html
What the hell...
You do get how loopholes... I mean incentives work, right?
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When a president has the balls to impose the exact same trade barriers against our trading partners that they i,pose against US made products, the real culprit will start to disappear.
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When a president has the balls to impose the exact same trade barriers against our trading partners that they i,pose against US made products, the real culprit will start to disappear.
I can remember way back in the long, long ago, say four years or so, when conservatives believed that trade barriers were an artificial barrier to the wonders of the free market and therefore taboo. Now it seems all the vogue on both sides of the isle to propose them. Years ago I suggested trade restrictions that were much like the Europeans use and I was called, you guessed it, a socialist and a liberal.
My position hasn't changed though, I think we need to look at how countries like Germany regulate trade and consider it here. Germany still has a reasonable manufacturing base in spite of strong environmental regulations, trade unions and high taxes.
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I can remember way back in the long, long ago, say four years or so, when conservatives believed that trade barriers were an artificial barrier to the wonders of the free market and therefore taboo. Now it seems all the vogue on both sides of the isle to propose them. Years ago I suggested trade restrictions that were much like the Europeans use and I was called, you guessed it, a socialist and a liberal.
My position hasn't changed though, I think we need to look at how countries like Germany regulate trade and consider it here. Germany still has a reasonable manufacturing base in spite of strong environmental regulations, trade unions and high taxes.
It depends on which conservatives you're talking about. We are not a monolithic block. Some are for as free a trade as possible. Others like Pat Buchanan are very much protectionist.
That's an interesting question on Germany. I'd be interested in learning about more about their manufacturing base, which I consider more highly skilled.
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I've always enjoyed how the Democrats rail against tax loopholes (codified tax law) but will happily take advantage of them and when they had the chance did not get rid of any of them.
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I've always enjoyed how the Democrats rail against tax loopholes (codified tax law) but will happily take advantage of them and when they had the chance did not get rid of any of them.
I guess they didn't want to fix them, they wanted to keep them as an election issue... something to campaign on.