Post #135,231
1/12/04 10:34:44 PM
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Re: "We can't even make our own damn pants"
Yes we can, but nobody is willing to buy them at the pricetags displayed by the retailer to cover their costs and give them some profit, let alone the costs and net profit of the workers, manufacturers, and the middlemen. Remember in the 1970s when the garment unions ran commercials as offshoring was just getting started, imploring customers "to look for the union label" so that you'd buy Made in USA clothing? People bought the cheaper imported clothes, and we all can see where our American manufacturing base is today because of it.
lincoln
"Windows XP has so many holes in its security that any reasonable user will conclude it was designed by the same German officer who created the prison compound in "Hogan's Heroes." - Andy Ihnatko, Chicago Sun-Times
[link|mailto:bconnors@ev1.net|contact me]
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Post #135,877
1/15/04 11:02:42 AM
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My last job was at a major shoe manufacturer...
And I would like to give you some real numbers to chew on. We domestically manufactured xbrand women's shoes for $2.47 a pair (including marketing costs). We retailed those shoes at $89.00 with the understanding that they would be discounted to about $59.00 per pair. It was still TOO EXPENSIVE to pay American non-union workers their average plant wage of $7.00 per hour. These last remaining factories were outsourced to China and Brazil. The cost per pair of the same shoe model (including shipping, tariff, etc...) - $2.41 per pair.
The company was bought out again when their stock dipped to new lows... Ad nauseum. American capitalism at it's finest. Really. Gordon Gecko is alive and well, thankyouverymuch.
Just a few thoughts,
Danno
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Post #135,879
1/15/04 11:11:04 AM
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Any thoughts on where the money goes?
It's my understanding that in retail prices roughly double from the store to the consumer. (There are exceptions, as I understand it, e.g. groceries.) The shoe company apparently isn't making a huge profit. Where's the money going?
$2.50 -> $80 is 5 doublings. Does it really pass through 4-5 companies before reaching the consumer?
Thanks.
Cheers,
Scott.
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Post #135,884
1/15/04 11:50:14 AM
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Re: Any thoughts on where the money goes?
This particular company thought that there wasn't enough margin in shoes and diversified into specialty retail and eyeglasses... :-0 . IOW, they pissed the money away. When the company was bought out the first time, they spun off the successful eyewear company. The whole crew of CIEIO's took a total of about $100,000,000.00 in parachutes and the restructuring blew untold hundreds of millions... The operating expenses of domestic manufacturing (COGS) brought the total price of the domestically manufactured shoe to about $4.20 (yes, I know I misled, sue me). Again, their margin was ridiculous. The premise that there wasn't enough margin in shoes to sustain a 110 year old shoe company was laughable. This particular place was just another textbook example of Boomer's cashing out their chips. If you want to look for a silver lining, perhaps when all is said and done, the government can buy the one remaining company in the US (after all mergers have occurred) and we can become a communist state.
Just a few thoughts,
Danno
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Post #135,893
1/15/04 12:54:44 PM
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Ah, US Shoe....
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Post #135,883
1/15/04 11:47:06 AM
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Oooohh...A whole $.06 savings!
And that's the difference between union scale and sweatshop wages?!?
Real Impressive! I'm sure the bean-counters' Business Case makes for sume riviting reading!
jb4
shrub\ufffdbish (Am., from shrub + rubbish, after the derisive name for America's 43 president; 2003) n. 1. a form of nonsensical political doubletalk wherein the speaker attempts to defend the indefensible by lying, obfuscation, or otherwise misstating that facts; GIBBERISH. 2. any of a collection of utterances from America's putative 43rd president. cf. BULLSHIT
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Post #135,885
1/15/04 11:53:37 AM
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Now, this is odd
Somebody (may be two or three of them) has the profit of 60 - 3 = 57 dollars per pair. And they are willing to change the whole process for extra 8 cents? What's wrong with that picture? If 8 cents matter to your company, where are the other 57 dollars?
--
"It\ufffds possible to build a reasonably prosperous society that invests in its people, doesn\ufffdt invade its neighbors, opposes Israel and stands up to America. (Just look at France.)"
-- James Lileks
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Post #135,890
1/15/04 12:06:26 PM
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It's called 'Executive Compensation'
[link|http://www.aaxnet.com|AAx]
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Post #135,904
1/15/04 1:54:42 PM
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Yeah, but what executive cares to increase his compensation
by 0.08/55 = 0.1 percen? At the cost of not wholly insignificant risk?
--
"It\ufffds possible to build a reasonably prosperous society that invests in its people, doesn\ufffdt invade its neighbors, opposes Israel and stands up to America. (Just look at France.)"
-- James Lileks
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Post #135,905
1/15/04 1:58:19 PM
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That risk is to the stockholders . .
. . sheep that they are. The saving may not seem too significant (and more was probably expected), but times a zillion pairs of shoes it still adds up, and that money goes entirely to the fabled "bottom line" where it can be skimmed. A penny saved is a penny to steal.
[link|http://www.aaxnet.com|AAx]
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Post #135,908
1/15/04 2:08:51 PM
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Well, I guess
someone getting (say) 400,000,000 compensation may care to actually _do_ something (as in "lift their finger") for lousy 400,000. Still, kinda hard to swallow.
--
"It\ufffds possible to build a reasonably prosperous society that invests in its people, doesn\ufffdt invade its neighbors, opposes Israel and stands up to America. (Just look at France.)"
-- James Lileks
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Post #135,906
1/15/04 2:00:05 PM
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How many pairs of shoes are we talking about.
1 million - 60k...not likely
10 million - 600k...you'll raise an eyebrow
50 million? - 3 million ... you'll be making powerpoints to the brass.
If you push something hard enough, it will fall over. Fudd's First Law of Opposition
It goes in, it must come out.Teslacle's Deviant to Fudd's Law
[link|mailto:bepatient@aol.com|BePatient]
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Post #135,909
1/15/04 2:12:48 PM
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Who has that profit, matters
Suppose that the manufacturer is in a very competitive market selling at $3.50, and the other levels of middle-men have better profit margins. In that case the 8 cent shift is a 16% improvement in company profits. 8 cents doesn't sound like a lot, but 16% makes shareholders notice.
If competition is really fierce and margins are tight (remember, this is the kind of market being pushed hard by Walmart, etc), then the gap could literally be between being profitable and not profitable. It doesn't matter how much profit people later in the business pipeline are making. If you can't negotiate prices where you personally make a profit, you go out of business. Period.
Cheers,
Ben
"good ideas and bad code build communities, the other three combinations do not"
- [link|http://archives.real-time.com/pipermail/cocoon-devel/2000-October/003023.html|Stefano Mazzocchi]
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Post #135,928
1/15/04 5:46:23 PM
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Right
The idea that things can't be made here because Americans are too expensive to employ is both ridiculous and destructive.
-drl
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