[TowerTalk] AES SK

Sat Jul 9 15:55:34 EDT 2016

That's a bit simplistic.  I spent over 30 years working for a huge North 
American based semiconductor company, and there were a variety of 
reasons we ended up moving most manufacturing elsewhere.  Labor cost was 
certainly one of them, but rarely the deciding factor.  Others included:

1.  Availability of trained engineers.  Places like China and India have 
a far greater pool of highly skilled and dedicated engineers, and 
engineers in the U.S. tended to think of manufacturing as being 
"unglamorous."

2.  Proximity to local markets.  As the world economy became more 
global, being able to be closer to your customer had tremendous 
advantages in terms of customer relationships and cycle time reductions, 
not to mention trade (many countries lower tax rates for local content) 
and currency issues.

3.  Bureaucracy and overhead issues.  At one point we wanted to 
significantly expand a wafer fab locally, but were told by the city that 
it would take at least 18 months simply to get the approvals for it ... 
in spite of the fact that we had already proposed every safety and 
environmental upgrade imaginable for it.  Markets don't wait for that 
kind of crap, and we ended up having to build the fab offshore where 
some other entity actually wanted it.

Other industries faced different issues ... tax burdens in the U.S., 
ridiculous union requirements (much less of an issue now, of course, at 
least in most places), availability of raw materials, etc.  The problem 
as many of us recognized even back then was that once such manufacturing 
migrations begin they are very difficult to curb.  How many colleges and 
universities in North America offer engineering courses specifically 
geared toward manufacturing?  Damn few, if any.  In Asia they are 
everywhere. Compare tax rates.  Compare transportation costs to major 
markets (North America is no longer the only one).

The list of reasons why such "big box" products are built elsewhere is 
almost endless, and while it may be convenient to blame the 
manufacturers for that it is simply scapegoating. Consumers who tend to 
buy the cheapest available product regardless of quality (and they are 
still the majority, to which I can attest having worked for a while at a 
big box store) share the blame, as do most other elements of the 
economic system that ignored cost and efficiency in favor of other 
factors.   I'd even bet that your own investment funds lie with 
companies that make as much profit as possible, as opposed to some 
company that tried to fight the system by paying higher wages, paying 
higher taxes, training it's own engineers, paying higher transportation 
costs ... etc, etc, etc.

Manufacturers mostly follow ... they don't really lead the parade.  I 
can say with great experience that moving manufacturing offshore is one 
of the riskiest, most traumatic actions a manufacturer can take.  It 
doesn't happen without significant outside pressure from one place or 
another.

73,

Dave  AB7E

On 7/7/2016 8:56 AM, Kelly Taylor wrote:
> A funny, though harrowing, tale of everything that’s wrong with the two dominant North American first-world economies:
>
> https://www.youtube.com/watch?v=pKv6RcXa2UI <https://www.youtube.com/watch?v=pKv6RcXa2UI>
>
> “Oh Big Box Mart, what have you sold to me? We used to be your customers, now we’re your employees.”
>
> The pigeons of off-shore labour have come home to roost, and we’re seeing increasing examples of the folly every day.
>
> 73, kelly, ve4xt,
>
>
>
>
>
>> On Jul 7, 2016, at 10:43 AM, ScottW3TX <scottw3tx at verizon.net> wrote:
>>
>> Most brick and mortar stores run on very thin profit margins that are
>> getting squeezed smaller and smaller in this new economy shift. Costs
>> (especially health insurance, regulatory, and base services to keep the
>> doors open), are going up at 8 to 12% per year. Meanwhile competition does
>> not allow for the final seller of products or service to raise prices.
>> There are no longer excess profits in smaller businesses to fund owner and
>> employee retirement plans. Therefore there is rarely any "goodwill" or
>> "blue-sky" value in the sale. Just inventory (if it is sellable) and real
>> estate.
>>
>> The bigger picture is what will happen to amateur radio sales companies?
>> The trend is that the smaller, niche companies are either closing down or
>> selling to the two dominant buyers.
>>
>> Is such consolidation good for the future of amateur radio?
>>
>> What happens when MFJ or DXE go up for sale?  Most likely the only
>> potential buyers will be publicly traded companies that have less interest
>> in the customer than the current stake-holders that are active amateur
>> radio operators themselves.  And will there even be a buy when one factors
>> in the demographics?
>>
>> When I took my 13 year old son to the DX Dinner at Dayton this year he was
>> probably the youngest person there. I was probably the second youngest
>> (49).
>>
>> Unless amateur radio quickly and effectively figures out how to connect
>> itself into the STEM and Programming wave I fear that Nathan and I will be
>> the only guys at the DX Dinner someday.
>>
>> At least he and I will have darn good antennas :)
>>
>> 73, Scott W3TX
>>
>>
>>
>> On 7/7/16 11:24 AM, "Alan NV8A" <nv8a at charter.net> wrote:
>>
>>> I have been surprised at the number of local businesses that are simply
>>> shut down when the owner decides to retire: they have a "going out of
>>> business sale," and that's it. I would have expected them to sell the
>>> business -- with its "good will" -- as a going concern.
>>>
>>> 73
>>>
>>> Alan NV8A
>>>
>>>
>>> On 07/07/2016 07:21 AM, Chuck Gooden wrote:
>>>> I would of expected that, the company would be up for sale to someone
>>>> that would be interested in keeping ham radio alive.  So I am waiting
>>>> until I see an official notice.
>>>>
>>>> Chuck Gooden N9QBT
>>>>
>>>>
>>>> On 7/6/2016 4:57 PM, K7LXC--- via TowerTalk wrote:
>>>>> I just got an email from the sales manager of AES  that they're
>>>>> closing the
>>>>> doors at the end of the month. Hard to believe since  they used to be
>>>>> one
>>>>> of two 800 pound gorillas in the ham market. Apparently  stuff happens.
>>>
>>>
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