America’s largest tool company couldn’t make a wrench in America
wsj.com
wsj.com
Who wants to be a millwright? Or a production engineer? To build a factory, you need both. Once you've built the factory, you don't need most of them them any more. It's a job with high layoff potential. Top pay is maybe $125K.
You need people who've built your kind of factory before. Here, they need people who've built mechanized hot forging shops. Since few of those are built in the US each year, there's no pool of such people.
Stanley, the company, had forgotten how to build a plant like that. They relied on the equipment manufacturer, and perhaps some consultants. That didn't work out.
It takes a long time to get a good factory going from a cold start. It took Airbus 21 years before they made a good airplane. It took Tesla 15 years from start to significant production volume.
>It took Airbus 21 years before they made a good airplane. It took Tesla 15 years from start to significant production volume.
Extrapolating from complexity it would only take a few months at worse to make a factory producting drop forged box end wrenches.
Physical products are hard. Automating them means you've screwed up half a million times and have a lot of cash to even do it.
(Perhaps a business case of “on-shoring makes sense if everything is automated!” that failed to account for the challenges of opening a fully-automated facility)
Now get this, someone could say "we're going to do it with AI from day one!" Blow 40million, to contractors because ew who wants to own their production, and fail. Black box technologies and contractors have different risks entirely.
There's a lot of reasons why attempting to revive thirty year old practices to still be profitable is more than a challenge. Hence why they failed.
The explanations make no sense in the article. Automating heat treatment is computationally expensive? What the hell are they talking about? The guy who is doing the heat treatment is not doing computation!
Wait I guess I do buy it...
That Beta wrench factory wouldn't be hard for someone in the industry to stand up. It's is fairly low tech, little automation, and 95% off the shelf machines. Even the two possibly custom machines I saw in that video are built out of off the shelf components.
This really isn't rocket science. You have a list of operations needed to make the product. You take that list and turn into machines, and time it takes to do each operation. If this is slower than your target time per part, you increase the number of machines on that operation (see all the tumblers in the wrench video).
The US has many cities with deep industrial expertise. The US and China are roughly manufacturing output peers, even though the US has 1/5 the population.
I know someone who stood up a production line in the US for some of the most complex pieces of metal ever made, involving hundreds of machine cells, (more many nations have made nuclear reactors than make this thing), and the production line side is something that's just isn't that hard. The planning is work sure, but it stuff that's been done before bazillions of times before.
Standing up a manufacturing line is far less risky than creating new software - assuming you've got experienced people doing it.
I am curious what this legendary machined part referring to is though....?
Ultra silent propellers for submarines most probably.
which makes all the difference.
The military is willing to pay at a rate that civilians will not.
This may very well be the trap that they fell into though - at $90 million that implies that they went head-first into scale and automation where actually it can sometimes be better to aim for something less automated as a version 1.0 (humans are more flexible than machinery)
I'm not sure why I didn't like your comment but I think its because you're just hand waving the article away without responding to it at all?
You take that list and turn into machines, and time it takes to do each operation.
The article states they had trouble getting the expensive machines running, how do you respond to that? I mean, if the USA does posses all this expert manufacturing knowledge, then sure this wouldn't have been an insurmountable problem?
To be fair, maybe the articles title would be better off "The USA couldn't workout how to build wrenches at an affordable price?", it sounds like the bean counters at Stanley had enough?
Anyway, what's sad IMO is that when I was younger, I remember everyones disappointment that all the Stanley tools, and similar brands started making tools in China and it just seemed horrible and it kind of was, the tools sucked. Now, many Chinese tools seem quite good. Kind of idiotic that needs to be thrown away again and the USA has to figure out how to make good tools again...
If I had to guess what the root cause was, the talent is there, but due to the current class structure of the US, nobody wanted to listen to the line machinists, grey-beards, and engineers (because they're dirty poors who didn't make it big via psychopathy so they must be dumb) so instead they listened to McKinsey or whoever they hired to actually run the project.
I remember stories from my father about being an engineer at a big manufacturing facility. The culture was engineers were the people who did math all day, but if you actually wanted something done, ultimately you took your drawings down to the floor and found the longest, grayest beard you could and bent the knee until they agreed to make everything actually work.
Fast forward to my first manufacturing job, I was tasked to improve a process, so I went out on the shop floor, started talking to the line guys, and then was promptly scolded by another engineer who told me, and I quote, "they're just manufacturing guys, don't give them enough rope to hang themselves with".
If America doesn't have the management capabilities, experience and maturity to get a plant going, it doesn't matter about the tech or the engineers, it's not going to workout. This includes having managers of a certain caliber which a large firm would trust with hundreds of millions of dollars to spend on getting factories running.
I completely understand what you mean by the way and sympathize with your view.
I've spent considerable amount of time in Japan and other parts of Asia for business, they have plenty of people with plant management experience who would be able to organize an operation like this. Japan, for example, has off shored a lot, but not everything. Not by a long shot.
America has triple downed on ignoring experts to maintain order, pay people less, and saving money short term.
When an American company hires 10,000 people it's to bolster numbers or slow competition. When an Japanese company does it's because they need workers long term. When an American company lays off 10,000 people it's because their profitability has changed or the dream wasn't realized. Meanwhile a German company doesn't lay off it's people because it plans to succeed long term and it knows it can't replace it's people, and long term it's more expensive to retrain them.
US employment laws are partially to blame, but most of American industry is a pump and dump...
This is him:
https://en.m.wikipedia.org/wiki/W._Edwards_Deming
There is a an international TQM award named after him:
https://en.m.wikipedia.org/wiki/Deming_Prize
Many Japanese people have won the individual award.
Some people and organisations from other countries have won the individual and application awards, too, including from the USA and India.
There can be massive gulfs between the shop floor, engineering and management. In good companies those are bridgeable, in bad companies they are islands that exchange email.
If engineers and management can't be regularly found on the floor and if they don't know the names of at least the foremen then that's a good indication that a company is run in a way that is not compatible with top quality. I've worked with an architect in NL that made a ton of metal structures and he was also the best shop guy they had when they were still small. He came up with the basic ways to build the structures, built all the prototypes and then stepped back and let the real experts take over to scale it up. He knew his limits, as well as their strengths and the end result was a company that really went places. They use a combination of forgings and steel stock cut to length and the work they do is very complex. I don't think they would have been in business for long without managing this relationship between management, engineering and shop as well as they did.
I've seen one other company like that, more recently and they too did this to the best of their abilities. The pride at the quality of their work radiated out from everybody that worked there. It also makes me happy to work with such companies because the alternatives are nearly always painful to watch.
>Fast forward to my first manufacturing job, I was tasked to improve a process, so I went out on the shop floor, started talking to the line guys, and then was promptly scolded by another engineer who told me, and I quote, "they're just manufacturing guys, don't give them enough rope to hang themselves with".
That is a bad way to view things, from both directions.
The line guys definitely have good insights on how to improve things but sometimes their idea of improvement is to "make my job better at the expense of others" and they also often lack the overarching view so they will aim for a local maximum.
Saying that engineers are just doing math all day just relegate the job to a glorified excel data entry job. Engineers should be doing a lot more from documenting current conditions to looking at how to use new technology to improve the process.
That said, I agree that it looks like management did not listen to anyone in the factory.
For tools this is critical. The amount of force I can put on a wrench is such that a bad forging will break which will likely lead me to injure myself. But with a good quality wrench I will know I'm safe and will be confident to apply force close to the maximum of what such a wrench will be able to provide (limited by my strength and the length of the wrench as a multiplier resulting in substantial torque on the bolt or nut). Typically the way the bolt would fail is that it becomes semi liquid and this is a slow process so you have some warning to reduce pressure. But a forging that breaks will just snap and all of that force is released at once. Great way to hurt yourself.
So the quality of these forgings is very important and I'd much rather entrust my safety to the people that actually touch the metal than just to the engineers, who may be able to optimize for cost but who don't actually have much (sometimes no) shop experience.
Knowing how to make something in theory and actually making it in practice can be quite far apart, even on something as mundane as what ultimately is a chunk of metal.
When I started my research I thought for sure iRobot would be the best. They weren’t they were bested by RoboRock a chineese company.
I’m sure if given the choice B&D would have chosen spending $90 million on a working factory vs. a non producing factory.
Some Chinese tools are fine, but many of them are awful. I talk regularly with manufacturer types, even the raw materials(like steel or aluminum) that come from china can be super suspect.
It's basic economic warfare. China said "screw you, we will make okay enough things at a cheap price so your country loses all of its actual expertise and trades people work at call centers while manufacturing becomes entirely controlled by another country. We will do this at the cost of millions of our citizens for the greater good. Every design sent to us will be replicated and sold for less. Meanwhile we will send our young to your schools to get educated on how to do this better than you, half of PhD students are foreign nationals, and even if they stayed in the US there's no jobs".
Paying the piper in this regard is inevitable. As a country we encouraged everyone to take quick cost saving measures for decades. Germany and many other countries have not Basically our hope is we can cheaply wiggle free by "AI", and not hiring trained experts to do jobs with care and lower the costs by cutting regulations.
We sold every part of everything that mattered to get ahead short term not paying attention to the debt accrued.
businesses shifted to china in the name of pure profit. they closed their local factories and laid off their expert staffs due to short sightedness.
This is a massive problem, especially in industries where there isn't a whole lot of margin for error (say, aviation).
I doubt that very much.
You can doubt it all you want, but people are out there cutting corners like no tomorrow in pretty much every industry you can Imagine. Usually it's not the employees idea, but rather middle/upper management.
Some of the products people buy have basically never been tested. Yep. Even high end expensive equipment.
I'd say more but I'd rather not...
This is like saying "all you need for an AI startup is to buy a load of graphics cards": there's some details in there which matter and require specialists to get right in surprising non-obvious ways.
I agree with the comment below about this being mismanagement, though. Undoubtedly there are people who understand how to do this properly in the US, but they may not have found them or listened to them.
AI is still a problem under very active development, where the theory is still underdeveloped and the way forward is uncertain. You can throw a lot of money at it and it still may not work well enough.
Wrench manufacturing is a solved problem. We know what to make it from, how to design the parts, what tolerances are needed, how to make chunks of metal in that shape, etc. It's within the reach of a single decently successful youtuber: https://www.youtube.com/watch?v=3FK-0zximxo
The problem is less making the thing and more the commercial side of the operation: will it be cheap enough to compete? Will you be able to convince hardware stores to carry it?
To wit, the challenge isn't at the functional level, it's at the integration level. The individual elements are well understood, thoroughly developed and available at scale, but the integration for every factory is, on some level, going to have uniquely differentiated elements.
The scoping and management of that is where the challenge tends to sit.
It’s a low/moderate salary in Manhattan too, but no factories there.
So it seems unlikely that anyone would live in San Jose and work this job.
The median US salary in 2021 was about $70k [0]. I’m guessing factories are being built in less than median cost of living places so $120k is 1.7x the median, so pretty good.
[0] https://www.fool.com/the-ascent/research/average-us-income/
I thought the same thing until I sustained it for 14 years. It’s interesting how perspective changes with circumstances.
When I was in my 20s I remember saying “how do these old guys commute for 4 hours a day.” Then I hit my 30s and had kids and wanted good schools and whatnot, but my income didn’t jump. So I commuted for a long time. Happy I don’t do that any more.
https://toolguyd.com/milwaukee-usa-made-hand-tools-2023-upda...
https://toolguyd.com/milwaukee-usa-made-pliers-screwdrivers-... (prices)
I think this says more about how badly Craftsman has shat the bed and less about manufacturing in America.
Pittsburgh
Pittsburgh Pro
Quinn
Icon
Not everything is “good” but it’ll get the job done.
Where would you go to buy air compressor and accessories at retail but HF? Nobody caries them. I bought excellent standing air compressor at black Friday sale couple years ago!
Obviously one should use a high quality diamond bit for cutting the countertop in the first place, with proper dust control.
Power tools I look elsewhere but for hand tools and cabinets even their low-end stuff is great, or at least good.
That's very contrary to my experience. I have a lot of tools. Most of my hand tools are Craftsman from Sears back when they were around. Nearly all of them are very adequate quality for a non-professional (i.e. used only on weekends, not full time). Sears hasn't been around for a while but I still have all the tools, all work great.
I went through a phase of trying to save money and bought a lot of junk from HF. Nearly all of it was an exercise in frustration and I've thrown it all away in anger. Soft metal, bad tolerances, pure junk. The only HF tool I have left is a cement mixer. It's not great (the belt keeps popping off) but for my limited cement needs it's been tolerable.
TTI does this too: Ryobi (Good), Ridgid (Better), Milwaukee (Best).
Although cost reduction was a huge factor.
https://www.nytimes.com/2019/01/28/technology/iphones-apple-...
1. Even slightly cheaper labor matters at scale.
2. Lax environmental regulations make materials, disposal, and energy cheaper (which is really just dumping externalities on others).
3. China for one subsidizes its industries. Corporations can’t generally compete with governments, especially big ones with their own sovereign currency.
https://youtube.com/watch?v=iN8xhU6ChRI&pp=ygUSV2t1ayB3aGF0I...
Apropos Milwaukee: I had one of their circular saws which dropped from a roof that I was working on and I thought for sure it's a goner. Climbed down, not a mark on it, still dead straight. It must have landed very fortunately but still that was quite the drop. and you'd at least expect some impact damage. There was a scratch on it, but that may well have been there from before the drop and it didn't look like anything to do with impact.
Uncle bumblef*ck always does the drop test, because it's quite realistic, especially for tools used on a ladder.
His teardowns are always fun: https://www.youtube.com/watch?v=IbfNzt0UMGc
I was an avid watcher of him for a few years until he went off the deep-end with covid and backing the canadian caravan. If he's gone back to what he was good at(teardowns of tools with explanations of the materials and manufacturing choices) I might start watching him again
A surprising number of Canucks went down this rabbit hole, effectively losing years of their lives to these two movements and destroying their social networks and familial bonds.
One Canadian I knew cried for hours every day thinking her vaccinated extended family members were going to die. But hey, every date she listed as when I would die due to vaccine has passed and I'm still alive and healthy! So is her family, much of which is estranged from her now :c
Canada built a much tighter COVID vaccination verification and retail enforcement system than the USA. Vertical integration, few gray zones and such made those who opted out feel like the walls were closing in, as your province's health authority knew your vaccine status, restaurant demanded a valid, ID matching government supplied QR Code to allow seating, and the government was willing and able to enforce the law.
Comparatively, COVID restrictions were created state by state in the USA, and it was such a spotty patchwork that many who opted not to vaccinate lived much more normal lives than their counterparts in Canada.
Much like the universal Canadian deployment of tap and pay, present and pay (the credit/debit card never leaves your hand ever at restaurants or stores), PIN entry for all transactions that would require a signature in the USA, Canada is able to move faster and implement more effectively than the USA.
https://m.youtube.com/watch?v=IeYVyhhHY-Y
I really enjoyed how he red circled sub clauses of the sentences he think are important and ignores the rest of the sentence in other videos.
The guy is legitimately impressive at understanding how tools work and the manufacturing put into them, but he’s an asshole when it comes to dealing with society at large
Edit:
Really sells it that he fucks up the tooling on his cnc mill while giving a rant about freedom. This was during his “I can’t actually run a cnc mill yet but am learning how phase” but he was leaning on his previous expertise to sell his opinion on the caravan
I don't know how you can in one sentence refer to it as a "conspiracy theory" then in the next describe a massive in-the-open conspiracy to coerce people to get vaccinated against their will. Which prior to covid would have been considered a gross violation of medical ethics.
Now reports and studies are coming out showing the Canadian govt and many other govts way over reacted to COVID.
https://www.independent.co.uk/news/uk/politics/covid-lockdow...
https://www.telegraph.co.uk/news/2023/06/22/chris-whitty-sci...
I just didn’t enjoy him enough to deal with him going on a giant rant about how covid wasn’t real and the government was suppressing him from his god given right to breathe on us all.
I checked through his YouTube channel now and he seemed to have calmed down but I am not concerned about dropping him again if he goes crazy conspiracy theorist for his YouTube channel income once more. And that’s without counting how many videos he had showing off his basic chicken rearing or fucking around and failing at cnc milling
I guess if you're a more sensitive, tow the line type you may have been put off.
https://www.independent.co.uk/news/uk/politics/covid-lockdow...
https://www.telegraph.co.uk/news/2023/06/22/chris-whitty-sci...
Your articles aren’t convincing me anymore that these were crazies. The second article for instance isn’t scientists saying lock downs weren’t needed but that it wasn’t scientists, and that committee of medical scientists in particular, role to be making wide sweeping changes to society. A completely reasonable position that doesn’t change whether or not lockdowns were needed
Thats called the democratic process.
Case in point: I still have a DeWalt drill from 2009's that is still on its original set of batteries. But a hammerdrill I bought for a renovation in 2015 died after moderate use just outside of the warranty and after taking it apart I realized this wasn't an accident but just crappy manufacturing. The mechanism was so delicate it should have never been greenlit and the materials used were sub-standard.
Mine went under in Sandy. Still works. I once accidentally ran my old pipe handled hole hog on 240V for a few seconds. That thing also fell from ceiling height down sideways onto concrete, broke the rear handle, bent the hole saw but it kept working. That is a scary drill.
My only gripe with Milwaukee is their corded power tools were redesigned with more plastic so they discontinued the parts for them. My Magnum needs a new brush holder and my screw gun needs a trigger.
I really want their mag drill but too rich for my blood so I bought an import that is meh but does the job.
That thing will fling you into the next room and break both arms while doing it without even breaking a sweat.
> The danger lies not in the machine itself but in the user's failure to envision the full consequences of the instructions he gives to it.
Another brand I still like after many years is Makita, I've yet to have something made by them break from normal use. DeWalt has lost the plot, they are no longer worth the premium price. And with Bosch it's hit-and-miss you have to do a lot of online reading before making the call on one of their tools. They are very efficient in their use of materials and sometimes they can be too efficient and deliver a tool that isn't up to snuff. But they are always price competitive.
That being said, even the cordless ones have an absurd amount of power. At my work we use them to send a 3-flute, 1 1/4" auger bit about 5 feet straight through Douglas Fir (drilling concealed electrical wiring chutes in columns). I've seen them roll a 10' 8x8 (~150 lbs) across the sawhorses when someone forgot to clamp it before drilling.
The loan described here sucks but seems similar to buying everything on a credit card and as a new tradesperson 19% is probably as good a loan as you’ll get without a credit history.
These tool loans certainly aren't going out to people that have already rolled the bus on a Capital One $300 credit line credit card.
Certainly a good idea to shop around but it’s hard to get a $5000 loan with no credit and no collateral.
What I found odd is that I rarely see these tools for sale used. I expect they’d be valuable, but I guess they just get bought up before hitting eBay or Craigslist.
Sorry to burst your bubble. Manufacturing pliers and screwdrivers is a joke when compared to, as an example, manufacturing a cordless drill, battery packs, charger and accessories.
We cannot do ANY of that in the US.
Something like this:
https://www.homedepot.com/p/Milwaukee-M12-12V-Lithium-Ion-Co...
Nope. Can't do it.
Not unless you are willing to play $500 for it, or much more.
Let's put it this way: If you take the time to create a detailed list of every component, material and process required to manufacture and deliver that product, you will quickly discover that NONE OF IT is made in the US.
In business terms, the supply chain for the manufacturing of such products is long and very expensive, because it isn't local.
Guess where you'd have to buy all the components from? China.
A corollary is that you cannot make this product for less (or even the same) than what it costs to make it in China. Impossible, even if the factories existed.
While people love to talk about "Buy American" there's a huge gaping hole between those who virtue-signal with bumper-stickers and flags and the much smaller group who actually practice --to the extent possible-- what they preach.
BTW, I have attended trade shows where Chinese OEM manufacturers showcase products they make, including tools. To put it in simple terms, anyone can sign a deal with any of these manufacturers and have a line of quality hand and power tools with their own brand and logo. You go to these conferences and can actually talk to and buy from the very companies who are making tools for the top brands in the US and Europe.
Worth mentioning that one can also go to pharma manufacturing and trade shows in China and discuss bespoke bulk synthesis deals and leave with free sample bags of uncapsuled high grade perscription drugs with a "to US patient on US soil" value of tens of thousands of US dollars.
But a reminder that this didn't happen by accident. Capital went in search of cheap labor, to increase profits. The cheap(er) labor wasn't in the USA.
We let capital do this. We loosened capital flow rules, we loosened profit repatriation rules, we reduced or eliminated tariffs.
That's not to say that Chinese/Asian companies would never have gotten good at doing this on their own. But the situation we are actually is not really a result of their excellence and/or costs - it's because we elected political representatives who allowed the capital class to fuck us over, and so they did.
Now we can say the price reduction wasn't worth it and the bang for buck has actually gotten worse as we've made more things more accessible. That the cost of everything being cheaper is that we have to buy more of it, creating more waste, contributing more to climate change, etc.
But ultimately globalization and the move to manufacturing in China HAS contributed to a huge amount of prosperity world wide as geographies that would've never been able to afford certain devices, tools, or even just entertainment before, have been able to.
In North America, and maybe Europe, the share of worker wages has decreased to the benefit of the elite, but World-wide prosperity has increased DRAMATICALLY in the decades of "globalism" and "neoliberalism"
BILLIONS of people escaped poverty worldwide in exchange for the millions that entered it in the US.
Unfortunately it's not clear what the next step for those billions is. It's certainly not the path that the US and Europe went through for their post-industrial and post-war boom. But what is it instead? It's uncertain and unwritten.
At this point the existential threat to the majority of humanity isn't a lack of clean drinking water, vaccinations, and upward mobility opportunity. It's climate, heat waves, flood, and all the effects that affect everyone across class divides (except the 0.01% in their mountain bunkers)
Yes, we've done a lot to reduce poverty in many parts of the world. There is a (relatively) furious argument going on, however, about the role of capitalist corporations in that process.
In the west, we seem committed to destroying our gains in public health currently. Really incredible times to be living in.
I tend towards the idea that the benefits are often worth having, but that the costs shouldn't be externalised onto the workers in question, and therefore regard corporation tax being used to fund redistribution/welfare programs to be justifiable on a market basis as a pigouvian tax as well as justifiable from basic morality.
That the cost of everything being cheaper is that
we have to buy more of it, creating more waste
https://en.wikipedia.org/wiki/Durable_good
Using the economists' definition of "durable goods" I would say that for the most part, quality has improved. Cars last 2-3x longer these days. Computers have been "fast enough" for a while and can last 10+ years. Perhaps professional tools have taken a nosedive but my low-end Ryobi tools last essentially forever with light household weekend usage.
Not a "durable good", but cheap clothing also feels way more reliable. Cheap synthetic or cotton/synthetic blends are now comfortable and breathable (which is a relatively new development) and last pretty much forever.
Some things have gotten anecdotally worse. Everybody says that large household appliances like refrigerators, washers, and dryers have really taken a nosedive in quality and/or repairability. It certainly feels true but, I don't know what the actual numbers might say.
But I don't know, man. Affordable crap from 2023 actually feels better than the affordable crap I remember from 1983 or 1993. It certainly doesn't feel worse.
Throw in a dash of "Learn to code" too.
Maybe one day we can sit down and talk about how shitty it is but not until we stop playing Team Red vs Team Blue
How?
We let capital do this [...]
we elected political representatives who
allowed the capital class to fuck us over
Short-term, "fuck the future" profit making is what capitalism encourages. Executives are judged quarterly and yearly, not rewarded for long-term thinking.
Same with our system of government. Relatively short terms for elected officials and the "endless campaign" have some benefits but essentially rule out any sort of coherent future-focused long-term thinking.
This is what our system was designed to do. Any other kind of behavior is anomalous.
Again, I apologize if I'm interpreting you unfairly. I'm ranting at the system, really.
Judging based on quarterly results is a peculiarly American version of capitalism, and one that has a lot to do with publicly traded companies rather than private ones (which are still capitalist entities in a capitalist system, but subject to quite different incentives and pressures).
I don't think it's accurate to say our "system was designed" to do this sort of thing, if only because 50-90 years, it didn't do this sort of thing. It has mutated and/or the wiggle room within it has been discovered.
Now, capitalism can still be totally wrong or even almost entirely wrong, quite independently of whether "we allowed free capital flow, profit repatriation, no labor movement, etc." is also a terrible long term plan given capitalism.
one that has a lot to do with publicly traded
companies rather than private ones
I can think of a few examples but my perception is that this is rare enough to essentially disregard... but, I could well be wrong.
Even if a private company does such a thing, it would almost always be via some kind of financing, right? Which creates its own sort of short-term pressure even if it's not as psychotically ADHD as the pressure exerted by Wall Street.
I don't think it's accurate to say our "system was designed"
to do this sort of thing,
But it was designed for rapid and almost entirely unfettered economic growth. Given that, what other outcome was possible?
if only because 50-90 years [ago] it didn't do this sort of thing.
Ask the Germans :) Anyway, you issue bonds, instead of stocks. You control the term, the "market" tells you the cost. And its a fixed cost. Or you take out a loan, again with fixed interest. You control the parameters as much as anyone else. Or you issue restricted shares, to convince capital owners willing to make a longer term bet to play with you. They have to be in it for the long haul, since they can't sell the shares based on some 1st, 2nd or 3rd order belief about the company value.
I don't think it was "designed" at all. It evolves subject to various pressures and interests. And since Reagan or slightly before, most of the pressures from citizens (as opposed to customers) have been lifted/ameliorated. Same with pressures from employees. True, we did somewhat increase the pressure from environmental concerns. But at some point, people noticed that extracting value, instead of creating value, was a pathway to riches, and that's where a lot of the big bucks are made these days.
Say people who:
- Are typing on computers that would not exist without capitalism
- Using an an internet that would not exist without capitalism
- Using phones that would not exist without capitalism
- Wearing clothes that would not exist without capitalism
- Living in homes that would not exist without capitalism
- Using furniture that would not exist without capitalism
- Enjoying entertainment that would not exist without capitalism
- Buying food that would not exist without capitalism
- Benefiting from medicine that would not exist without capitalism
- Living lives that would not exist without capitalism
- etc.
No? Well, then, be an example and get rid of all the things you benefit from that came as a result of dirty-filthy capitalism. Be a role model for others. There's a huge difference between talking about virtue and having it. It's easy to not like capitalism while using your laptop while sipping a latte at Starbucks.
You seem to believe that innovation, and perhaps even production, requires a system in which the investment of capital in a limited liability enterprise is disproportionately the beneficiary of profit compared to the investment of labor or IP (that's all the capitalism consists of).
The things you list above are the product of science, art, curiosity, imagination, ambition, empathy, and hope. All of which can exist (and flourish) without or without capitalism.
Perhaps you make the mistake of thinking that capitalism somehow means "free markets" or "entrepeneurial culture". It does not. Those ideas are orthogonal to it, and can exist with it or without it. They can exist with or without worked-owned co-operatives. They can exist with or without state owned enterprises. They can exist with or without publicly traded shared-based ownership.
- You can dislike capitalism but currently have insurmountable obstacles preventing you from moving somewhere else
- You can dislike capitalism but accept that it is currently something like the least-bad economic system
- You can like capitalism in general but criticize it and recognize its inherent flaws
- You can like capitalism in general and criticize a particular implementation of it
Well, then, be an example and get rid of all the
things you benefit from that came as a result of
dirty-filthy capitalism
TTI(Milwaukee, Ryobi, Ridgid) is, IMO, the best at what they do. SBD basically relies on old brand names with a dash of patriotism to exist. Even Chervon(Flex, Skil, Ego) outclasses them these days where they compete.
I tried the new Craftsman V20 kits that came out, and every single tool was problematic. I felt like they were basically just ripping off nostalgic people with garbage old stock. Ryobi and Skil, on the other hand, make stellar tools at a lower cost.
When you move manufacturing overseas, you’re not just eliminating jobs: you are eliminating knowledge.
There's quite a lot to know, and the speed of learning is limited. Answers to advanced questions which you are ready to provide must be met by the actual questions from the student, which must first form in their head as a result of processing the previous servings of knowledge.
Also, we teach thousands of years of experience in mathematics within the scope of 10-20 years.
The problem isn't that you can't teach 20 years of experience in a year - you can. The problem is that this knowledge isn't stored anywhere that's easily accessible and that makes propagation next to impossible.
There's stuff like weapons where the knowhow is truly gone. So the DoD has to reverse engineer the remaining artifacts and attempt to recreate the entire stack.
Tim Cook is one of the highest compensated CEOs in the world. In his best years he’s paid something like $100M all-in.
Apple has around 165,000 employees. Dividing up half his salary amongst them would be about $300 each.
If you can cherry pick, then I can too. Rivian's CEO made $422,140,679 in 2021, and they have 14,122 employees, so half that salary divided by number of employees comes out to $14,946 per employee. Not a bad bump in pay especially if you're in a factory putting together car parts.
The CEO of "Lucid Group, Inc." made $565,591,512 in 2021 and they had 7,200 employees, so the figure there is $39,277 per employee. Trust me, Peter Rawlinson will do just fine making only $282,795,756 per year.
The CEO of "Bright Health Group, Inc." makes $180,813,849 per year and they employ 1500 people - split in half and distributed to the employees they would get a pay bump of $60,271 per year.
So yeah. You can cherry-pick all you want, but the fact is that CEO pay is too damned high, and it's no wonder people don't want to go slave away in factories making a few dollars while the CEOs can afford 3 mega yachts and 12 vacation homes.
Re: Bright Health Group, similarly a one-time incentive grant which will likely end up around $0 given the firm’s struggles.
I’m not claiming all CEO pay is wise, of course. But “take 50% of CEO pay and redistribute it to the workers” wouldn’t move any needles.
Satya Nadella can surely afford a few nice yachts at this point, but in aggregate Microsoft handed out $7.5 billion(!!) in stock to its employees last year. His $55M was a drop in the bucket, and given what he’s done for those employees’ stock over the past decade I’d think they’d consider pay like that a bargain at twice the price.
Possibly the current approaches to AI can be used in these areas. But I'm afraid we're very much not there yet.
Manufacturing is really hard. Getting good at it requires a lot of hands-on experience. China (and Japan before them) didn't just Xerox a bunch of American knowledge and become world-class manufacturing economies overnight; it took decades of investment and hard work to build up a skills base. If America wants to reverse the decline of their manufacturing sector, it'll take an equally determined effort.
Sorry, what? What are you saying knowledge is, then?
As many experienced people will tell you, Murphy's law is a bitch.
> understanding of or information about a subject that you get by experience or study, either known by one person or by people generally
https://dictionary.cambridge.org/dictionary/english/knowledg...
So if I don't know something by experiencing it or studying it, what other way is there? Skills and understanding fall under those two.
For example, as a builder, you'd quickly understand two pieces of wood are the same, that's something which requires skills to work around, not just knowledge. Maybe it's better to say applied knowledge?
Recently I've moved areas, and the type of cedar I get here is a little bit different to the type of cedar I get out west. It feels different to work with, and it's a bit of an art not to damage it. My previous knowledge didn't really prepare me for this.
As a machinist, I rely a great deal on intuition. I can hear a bad cut across the room. I couldn't tell you exactly what it is that I'm listening for, but I can tell just by sound that a cutting insert is worn out or that the feeds and speeds aren't quite right. When I look at a drawing to plan out a sequence of cutting operations, I'm balancing dozens of parameters and thousands of subtle factors to achieve a suitable compromise between material removal rate, process stability, tool wear, energy consumption, precision and complexity. I can teach you all of the facts that I'm weighing up, but I can't fully explain all of the heuristics and instincts that guide that process of optimisation.
Essentially all production machining is done with automated CNC machines, but most apprentices still start out learning on manually-operated machines. There are things you learn by standing at a machine and turning the handwheels that nobody knows how to teach.
So now we build a shiny new factory, but are we getting the best and brightest from our now-competition to help us get it up and running? Of course not.
The expertise of offshoring is often a one way street, and once the people that knew are gone they are gone. It takes a few years to get a factory running well from scratch without the kind of experience and domain knowledge that can’t be obtained from education alone.
It’s hardly turnkey. Every process has its idiosyncratic interactions with other processes, whether it is variability in feedstocks, interactive variability in various product stages, getting the bugs worked out of a newly installed machine, buggy intersystem comms, structural vibration of the factory structure itself, process timing to deal with those vibration issues, etc etc etc etc.
The overall system complexity of even a modest modern factory is orders of magnitude above say, 1940s style manufacturing which is what most people visualise when they think of a factory.
Nevertheless, even with all the blueprints at their disposal, early American-manufactured 75s were inferior to their French counterparts. It took a personal visit of the senior French engineers in the US plants to correct various subtle flaws in the manufacturing process.
Experience counts.
Arguably, nowadays, with cheap recording devices everywhere, it is easier than before to produce comprehensive documentation even for such activities that are hard to write down.
Precisely right. And, contrary to what uninformed commenters are saying, that knowledge and experience is lost over time and is incredibly difficult to get back. Even worse, we don't know that knowledge and experience for the manufacturing for a number of modern technologies.
It benefited colluding elites that struck the political agreements to make it happen. It also helped expand a more consumerist society by making a wider range of products accessible to the masses.
But it was never a blueprint for sustainable, long term, globalization (which is in principle a good thing). The colluding elites turned on each other and became geopolitical adversaries (It turns out its not such a great idea to outsource both brain and muscle function to the tiger chasing you)
The financially overextended consumers realized that ever increasing consumption is neither economically viable nor does it ensure a balanced and fulfilled life. And underneath it all a struggling biosphere is sending the increasingly not-so-subtle message that we are nearing a precipice.
Its not clear what will be the successor "scheme". Malgovernance is the norm. Ideally you'd want to take the lessons of this failed large scale social engineering experiment on board. Ensure that economies are built stably, from the bottom up, with "middle class" being the bulk of the wealth distribution, a full range of capacities, adapted to the local environment etc.
Its not clear though that there is anybody that feels the need to learn.
Probably less bad than being condemned in medieval living conditions but not an excuse for not thinking about genuinely better ways. The shape of humam economy (eg whether unequal, stratified, slave labor based or more or less egalitarian) is an entirely cultural choice.
Honestly, your stance is not only irrational, but even immoral.
Widespread abuse and exploitation of people by people would not possible if the beneficiaries were not extremely skillful to rationalize their self-serving ideologies.
On the other hand, said workers in the third world country that has seen their conditions and prosperity get better will only want their conditions to get even better. This is what happened in the first world. A company preventing that is immoral.
1: own in the sense the place that contributed (schools, taxes, stable political system) to their growth to a point that they have wealth and expertise to invest in other countries.
Except that it is now a satellite country of Russia and the relations of the West with Russia are at the worst point in 40 years or so.
Trying to detach from China in order to create a new failure point in Belarus does not seem very wise.
Guess what? Taiwan got really good at making both. So in the tool community, you have lots of comparisons drawn between the US and Taiwan and China, with the narrative that as far as Asian manufactured tools, the "good stuff" comes out of Taiwan, and the not-usually-as-good out of China.
There's a similar narrative on bike frames. The interesting thing is that Taiwan didn't just get good at steel bike frames, but on the aluminum and carbon fiber successors as well.
I would frankly rather Craftsman be a sustainable brand manufactured out of Taiwan with a warranty and continuity of product to back it, but unfortunately the collapse of Sears and the subsequent trading of the Craftsman label has made it more of a liability.
Then in the 80s Japan got very good at manufacturing. And they got expensive as a result. So cheap manufacturing moved to Taiwan, and "Made in Taiwan" became the mark of garbage.
Now Taiwan has become a very good manufacturer, but it's expensive, so cheap manufacturing moved to China.
And now high-end Japanese brands outsource their manufacturing to...China.
Asianometry https://www.youtube.com/watch?v=rlnri95UAW4
If the business had goals of being sustainable and reasonably profitable, and was run with strong operational guidance, it could have been successful.
Manufacturing is a lost art and many other such areas are quickly becoming lost art as the people who know how to do things get older and retire. I find not many young people, and I'm not even that old, want to actually learn from older workers and would rather try and re-invent the wheel every time.
> Nick Pinchuk, CEO of Snap-on, another premium brand, said that in 2010 the company’s U.S. factories had a roughly 100-to-1 ratio of workers to robots. Today it’s 8 to 1, but the gradual transition helped the company identify the optimal roles for humans and machines, he said.
It's as unfair as big American internet companies having access to other countries. This destroyed local businesses
Back when we were forced to buy Made in America tools, manufactures were able to get away with charging us as much as they wanted, and they were very greedy!
Thanks to China, inflation adjusted tool prices have dropped by at least 75%.
And Chinese quality is good enough for the Snap-On name!
https://tiremeetsroad.com/2019/09/15/harbor-freight-daytona-...
When we use a coupon or shop on Black Friday, we’re being smart, frugal purchasers. When companies do the equivalent, what are they doing?
I’m pretty sure this is (put very simply), how it always worked until globalization was sold as a good idea. It’s funny how democracy attempted to trickle down into materialism - as in we think it’s our god damn right to own whatever we want at the lowest possible cost regardless of its effects.
Today? Who wants a tool, they live in places where they can't even keep more than the tiniest assortment of tools, and they use them infrequently enough for them to be more of a burden than an asset.
If such people do not want tools, they sure as hell don't want expensive, high quality tools. Those are like the cheap ones, but they cost more and you cry more when you lose them moving to the next apartment. And if no one wants high quality tools...
Well, no one's going to bother to sell them.
If I'm honest, it's a little bit of what you say and the two effects play off on each other as it spirals down into the void.
In this case, tool lending libraries are a great solution. You can see if there is one near you at:
They don't exactly go around telling us that it's cementing centralisation of large corporations, leveraging slave/cheap labour as much as possible until caught while reducing local opportunities and knowledge, environmental impact of mass packaging and supply chains, bringing wonderful tax avoidance opportunities and flouting quality controls and regulations.
But of course, blame the consumer, because it was sold with full warnings but they didn't listen ..
Remember the TPP and how it was it was an amazing deal that Trump was an idiot to walk away from? Who was telling you that and why?
The trash cans at Walmart say "made in USA" because shipping giant pieces of empty plastic across the ocean isn't economical.
Because, I'm a consumer, who needs a screwdriver maybe every 3 years. I don't care if it's lower quality because i never do more than tighten the hinges on my door frame.
Instead of spending $20 on a top of the line screwdriver, I can spend $3 and it still does everything I need it to.
Capitalism is completely incompatible with economy and environmentalism.
When you are working you want wages as high as possible. When you are shopping you implicitly want others wages as low as possible.
Almost everything in economics is a paradox like that because it’s a machine made of feedback loops and control systems. A standard control system has something pushing one way and something else pushing the other way.
Maybe I'm splitting hairs here, but this isn't true stated like this. I'm surely not representative of most shoppers, but I don't want wages lower, I want the actual workers to get the largest cut of what I spend. Higher ups are salaried and have a guaranteed stable income which is not anything like an hourly wage. Lowering prices by simply cutting bonuses to people who already have a stable income is not at all the same as wanting hourly employees to take pay cuts to make your junk cheaper.
To be clear: I tip well when I eat out. My irritation at the system is not something I take out on the people serving my food.
C suite people are often overpaid but this is still usually a small cost center for a really big company, and most consumer products are made by large companies. Also those inflated compensation packages often include a bunch of stock and other non-cash compensation.
Tarrifs are crude but very effective centrally planned price signals.
A modern proponent is Ha-Joon Chang, particularly in his books Kicking Away the Ladder and Bad Samaterians.
<https://en.wikipedia.org/wiki/American_School_(economics)>
<https://en.wikipedia.org/wiki/Ha-Joon_Chang#Kicking_Away_the...>
"Some" investment is a gross understatement.
Manufacturing is highly skilled work. This project failed because they simply did not have enough people involved who understood the forging process; they tried to build an automated system to perform a process that they did not fully understand. Making metal into shapes involves a near-infinite array of subtleties, nuances and gotchas; automating that work requires a deep understanding of all those edge cases. HN readers should be able to draw clear parallels with the failure modes of large software projects.
The fundamental bottleneck in any effort to reshore manufacturing is the supply of skilled labor. Skilled American manufacturing workers are retiring faster than they are entering the workplace. We are plugging the gap with automation, but that only gets you so far, as this example illustrates. Reversing that decline will take a generation or two, because there's a chicken-and-egg problem. Good manufacturing workers need years of on-the-job experience, but the number of manufacturing jobs is limited by the lack of skilled workers to fill the vacancies that already exist.
"America first" is a jingoistic slogan that devalues the manufacturing workforce. China did an incredible job of creating a world-class manufacturing economy. Cheap labor was an important stepping stone towards that, but it's no longer the decisive factor. If you don't respect your rivals, you can't understand how to compete. American manufacturing has a network effects problem and there's no quick or easy solution to that.
https://toolguyd.com/milwaukee-usa-made-pliers-screwdrivers-...
"Executives said at Stanley’s May 2019 investor day that the factory would be in production in 18 months. Former employees said that timetable, thrown off by the pandemic, meant the system wasn’t properly tested before being brought up to scale. "
Consequently:
"By then, Stanley had already announced it was divesting its security business, its oil-and-gas unit and a door-making division in a bid to become a more focused company. An earnings call in July 2022 revealed that the core tool business had suffered a sudden drop in demand after the boom times of the pandemic."
The article is about an attempt to onshore the wrenches for a low-price tools brand. Those wrenches are currently made in a labour-intensive process by low-cost Chinese labour. If they use USA labour they'll have to charge premium tool prices and consumers won't go for it. So they tried to automate. Yes, reducing the need for American labour, but not because they wanted to charge premium prices for the result.
Interestingly, even the machines required to bring manufacturing back to America aren't made in America.
Why are Chinese willing to do labor for low-cost while Americans are "unwilling/uninterested" in such labor?
> These days, China's labor costs are only 4% cheaper than those in the U.S. when productivity is factored in, according to Oxford Economics.
https://money.cnn.com/2016/03/17/news/economy/china-cheap-la....
So once you realize the company is using the excuse (lying?) about the labor excuse, then you have to wonder what the real reason is.
Especially after their disaster of a 2022 (which was directly the result of supply chain problems in... Drum roll please... China).
Good opinion piece: https://seekingalpha.com/article/4547012-stanley-black-and-d...
More information: https://www.logisticsmgmt.com/article/global_labor_rates_chi...
But there’s also more than just labor cost. In my experience: when we ask a Chinese manufacturer about something they don’t have the capability to do, they’ll come back with subcontracting options from the factory down the road who can do it. There’s so much manufacturing capability concentrated in a small number of places that every process option is on the table. But in North America, it’s a very different story. Everything is so spread out so your options are dramatically more limited unless you want to be shipping parts across the country.
I’m not saying NA-based manufacturing is bad: the org I work for still does most stuff here for agility, communication, and security reasons. But it’s not cheap.
Opinions are my own.
Which is why the auto industry grew up in the Great Lakes in general and southeastern Michigan in particular: there were so many different machine shops that you could find someone to make almost any imaginable part and just order the quantity needed without having to worry about making something like the River Rouge plant that took in raw materials and spat out cars.
PCB lines are nasty and noxious.
But is it completely false? Or does that 4% statistic also suffer from an over generalization based on very broad averages that can have extreme fluctuations when individual, specific cases are considered?
This isn't true though.
Excuse me, but what? The Craftsman brand historically was a consumer premium brand, priced midway between tradesmen premium brands like Snap-On and consumer "hardware store cheap tools" -- Craftsman was never a low-price brand. Craftsman used to stand for quality, with a lifetime no-questions-asked guarantee wherein, if the tool fails for any reason, it will be replaced. Period. No questions asked, no receipt required. Quality. And men proudly used their father's or grandfather's tools.
I remember well when Craftsman moved hand tool manufacturing from USA to China. Clearly cost of production was lower, but prices didn't change. The company could pocket the difference... and that's just how it went, at least until the consumer wised up and realized what was happening : a quiet substitution of Chinese-made cheap products but keeping yesterday's premium price. Cheap tool at top-dollar price. Tradesmen are not fools -- they know when their tools are not holding up, and they're being cheated. So the consumer rightly felt cheated and abandoned the brand.
Sears broke the contract, and quickly lost the trust. In just a few years, they destroyed one of the most trusted brands which took 100 years to build. The brand was sold off, and now it's just another meaningless string of letters. Today, Sears is dead and gone, for many reasons just like this. Good riddance.
What actually happened: Sears got rolled up with KMart, eventually went out of business. Sears house brands like Craftsman and Kenmore (home appliances) were sold off during the fire sale at the end. Ironically, Sears was the Amazon of the early 1900s but became too invested in big mall stores. When the ecommerce boom hit, Sears had just closed down their catalog division.
> Lampert is a self-proclaimed supporter of free market economics and is a fan of libertarian writer Ayn Rand.
Big surprise there.
From another article:
> As Sears blew through its dwindling cash reserves, Lampert’s hedge fund made loans to the company money that were backed by the company’s assets, including real estate balances on Sears credit cards. That made him Sears’ largest creditor: Sears owes him at least $1.3 billion.
How is this even legal?
This means people bring in 25, or 50 year old worn down tools, and Craftsman replaces them for free. While having to pay modern material and labor costs to replace a tool that was bought 25-50 years before. If that happens too much, it becomes a huge liability on the company. Hopefully the person walking in to replace a damaged or worn hammer or screwdriver decides to buy a set of wrenches while standing there, making it an upsell for Craftsman, but likely it didn't happen enough to keep them viable.
The cost of the replacement is marketing at some point; replacing a obviously abused tool may be a technical loss but you've a customer for life; unless you betray them as Craftsman did (which is why people are still so heated about it twenty years later).
Makes sense that fairly paid labor is going to result in more expensive products that the end consumer will likely pass over if it's lacking in quality. And many consumers don't shop with these issues in mind. If they're on a tight budget and just need to fix something, lowest price may be their only priority. Tough problem to address from all angles.
That's where the regulators are supposed to step in by setting the rules that both Corporation A and Corporation B are forced to follow, if they want to access the market.
Except, they won't because the elites are perfectly fine with the status quo, and the regular people seem to care more about pronouns and plastic straws, than being able to afford a decent lifestyle.
I don’t want regulators to force rules on lifetime warranty, sales methods, tolerances and material specifications and the like. The latter is where the tool truck brands are often winning for demanding users of tools.
Currently we have draconian emissions rules domestically, and a complete blind eye when it comes to any offshore production.
I think just like everything evolves capitalism needs to evolve too. “We need capitalism 2.0”Profit cannot be the sole focus. We need to shift to capitalism with a heavy bent on sustainability. Sustainable profits, sustainable for the community it serves in etc. we live in an evolved society where we curb our raw instincts for the general good. There used to be a time when all humans simply acted on their r as emotion and instincts and from that we evolved on. Same need to happen with how we organize and structure our economies and businesses.
The easy (and wrong) answer to why this is happening is that capitalism ruins everything. The actual answer is that most people don't need or want tools and will not pay the premium for good new tools.
China can make exceptionally high-quality tools, you just have to design it well and pay for it.
You can't tell me those couldn't be made in the USA at a premium of $49 per unit. You could literally pay $50/hr, produce only one unit per hour, and still come out even.
The outsourcing arguments are lazy and outdated. Companies screwed up outsourcing it all, and the US is unable to regain its foothold. Labor costs are negligible here, even if US were twice the price.