Great discussion here guys and gals... lots of great posts came in while my slow fingers typed this out but here is my buck 85 worth :)
That was very good, except I was talking about small shops.
It is real easy to look at corporations out there and complain... but to anyone who has attempted to start their own business... it is a royal PIA. Start up costs are high for most areas (especially in machining and manufacturing) and many times at the beginning companies eat huge losses. But once you break even and pay things off.... you make tons of cash. BUT... keep in mind you have to stay up on top too. A huge problem is like what stated.... profits are expected and dividends are expected...
There is the key "profits are Expected & dividends are expected.
So let me tell you how this works at the small shops that are
not on the stock market. I have seen auction notices for 3 years
for machine shops that I have known for 30 yrs & their 100K machines
go for 5K (if their lucky).
This is what I have seen (I own a machine shop). The buyer (from a
big company) request a quote on a job, the best price I can get
on material (steel/ aluminum / whatever) for the part is $100.00.
The machine work on that $100.00 material takes 10 hrs which is
quoted at $60.00 an hr. Now before you think that's outrageous
the machine tools (CNC) cost min 100K on up) & tools ain't cheap
either, a 1/2" end mill costs $10.00 & you might use many on that
job.
So the shop quotes $700.00 for the job/part complete. The buyer
at the big (wall street company) sends the quote to China. The
buyer calls back & says you lost the job as the quote from China
for the part total was.... $60.00. Just a little more that 1/2
of what your material cost in the USA. I have seen this over &
over again. Something ain't right here & shops are dying all
over the USA.
Yes the part from China will not be made from the correct material
& will not last long & may not work at all, in that case the PA
will have to call the shop that lost the job to "fix" the part.
Multiply this over & over shops.
But by that time the shop in the USA may be out of business &
the big company will be in another "quarter" for showing profit
in the stock market . It's all about instant paper profit.
We are losing our ability to make anything in the USA, thanks
to the "quarterly profit at any cost). Anybody think when we can't
make anything here that wallmart's prices will still be cheap?
