harringtondav
Commander
- Joined
- May 26, 2018
- Messages
- 2,439
I think that may be on the way to happening organically (bringing manufacturing back to the NA continent). That may forge a new relationship with Mexico, which could be a good thing. Consumers, standards of living and pay scale will all have to adjust ... might be squaky for a while, but I think it could even out in time (and not to anything particularly bad).
I really hope 'on shoring' is an outcome of this thing. Especially for meds, med equipment and other critical products.
I was an Ops manager for Deere. And even though direct labor and benefits were a small % of our product costs, we beat the hell out of it. All overheads were calc'd as a % of direct labor. ...yea, I know. A 9th grade math student could see the problem with this.
Our supply management beat down supplier's margins to the bone, and pushed for more. Suppliers responded by going off shore. China mostly.
Labor intensive products like Nike shoes, clothing, etc. will probably stay in China for a long time. Engineered, low labor input products could look more lucrative back in N.A. Castings and metals also.
Consumers may whine, but their whine threshold will have increased once this hardship is behind them.