Global Production Collision

When first reviewing this blog I at first thought yes. I logically argued that if a product originated in American then it would be considered an American product. The same logic can be applied to Japanese products that are produced in American but were originally produced in Japan. It would be odd to hear someone say that Toyota was and American product just because it was produced here. I would argue that a product should be associated wins the rights of the product. For example the iPhone, Apple owns all the rights associated to this coveted product but it’s produced in China. Does this mean it’s a Chinese product? No, it just means in order to keep the cost low so a broad range of people can own the phone; Apple outsources the manufacturing of the product. However, according to the Bureau of Consumer Protection a product must meet the “all or virtually all” standard in order to be considered “ Made in the USA”, basically saying that all components must be produced in the US ( FTC, 1998, p.1).
Federal Trade Commission. (1998). Complying with the made in usa standard. Retrieved from website:http://business.ftc.gov/documents/bus03-complying-made-usa-standard

As we all have watched stocks globally take a downward spiral since the beginning of May due to worries about Europe’s debt troubles and China’s economic engine starts to slow, you cannot help but wonder where all this will end up. Global outsourcing has been around for some time, however with the instability of other countries economic status, companies must consider the safety of America and the products coming into our country. With turmoil abound, I believe more and more companies will bring their products back to America as a result of traveling to other countries and placing Americans in harms way is a considerable liability, as well as cost. At one time companies were outsourcing to China, as the video reports, now the cost is too great and the safety issues over the last few years has cost more money to correct. At one point economics and business make a full circle and eventually coming back to where they started. China is no longer the top dog for outsourcing; other choices are available such as Mexico and India. But in the end the companies must ask themselves the question: Is it more cost effective to outsource to countries where the economic stability is teetering or is it more effective to keep our business within the boundaries in North America where employees are safe and products are under safer regulatory guidelines? More and more, companies will chose to come back to America. Our economy is depending on it!

I would agree with the previous post by Nathan that if a product’s home base is in the United States and that is where the idea of the product originated it should be considered American. According to the New York Times article “When Factories Vanish, So Can Innovators”, American manufacturers are importing more and more of the components that go into their products, and that it has risen from 17 percent in 1997 to more than 25 percent currently. My question is if all manufacturing is being moved over sees what does that do for our economy? While prices for these products are lower and with our economy in its current state, it seems like a good thing, however it seems to me like a double edged sword in that lower prices equal fewer jobs. The article also brings up a great question as well, how can we continue to be competitive in R&D when we aren’t even making the stuff we currently innovate, example Apple and iPad? Or are innovation and manufacturing separate?
Uchitelle, Louis. (2011). When Factories Vanish, So Can Innovators. Retrieved from website: http://www.nytimes.com/2011/02/13/business/13every.html

I would like to argue on points of reciprocity when it falls under the area of free trade agreements. The problem occurs when there is a net loss. “In the first three quarters of 2009, the total number of cars manufactured by China’s five exporting manufacturers and exported to the European Union (EU) amounted to only 745 units, according to statistics released by European Automobile Manufacturers’ Association (ACEA), China Business News (CBN) reported Monday. (Quiang 2009). Unforunatly, there are too little examples of this happening. For most of the industries in China, companies operate on a positive trade surplus which hurt other countries looking to increase quotas. China also practices unfair exclusion and bias towards foreign direct investment and will only allow major companies to invest in a 50/50 joint venture. Until international trade becames more balanced. Countries will continue to lose jobs to outsourcing and will find themselves on the losing end.
Qiang, X. (2009). China’s automobiles struggling to enter eu market. Retrieved from website:http://www.chinadaily.com.cn/bizchina/2009-12/08/content_9140762.htm
Moore, M. (2009). China closes doors to european business. Retrieved from website:http://www.telegraph.co.uk/finance/china-business/6124973/China-closes-doors-to-European-businesses.html

It is clearly understood that the U.S. is not the manufacturing powerhouse it was 60 years ago. Also, globalization has made it nearly impossible to assume one hundred percent of parts can be manufactured and assembled in the U.S. alone. Instead, it would be best to agree that the country of origin should be where final assembly of the product takes place. Brendan Koerner (2011) recently stated, “Those that actually build tangible goods should no longer assume that “Made in the U.S.A.” is an unaffordable luxury” (p. 3). Consumers are willing to spend more for quality. Furthermore, U.S. manufacturers are taking a role of quality assurance in the global market. Even though not all of the components may have originated domestically, if final assembly and quality inspection is performed here, it should qualify as being “American Made.”
Koerner, B. I. (2011). COMING HOME. Saturday Evening Post, 283(5), 56-60.

Yes, I believe domestic products can be considered “American” when some components are made abroad, however one must consider two things: where the money goes when the product is purchased and the relative economic impact of that firm. How many jobs did the manufacturing and assembly generate in the United States? America doesn’t have unlimited natural resources, and it certainly doesn’t have an unlimited or inexpensive labor pool, therefore many firms must outsource certain aspects of production. The main objective for our economic leadership is for the US to do more exporting. A good example is GM’s entry into the Chinese market. This is a growing market that GM is going to take advantage of, which will be good for the US. Chinese people buying GM vehicles will support and create US jobs, whether some components are made abroad or not.

What shall we call alien products that Americans build and assemble in America? Many American firms choose to use sources of labor from other countries, therefore the door opens for foreign firms to come in and utilize the high skill of American labor. More and more foreign firms are off-shoring, near-sourcing and out-sourcing to the United States. Air Bus is due to open an assembly facility in Gulf Shores, Al, and VW is producing automobiles in a new state of the art facility in Chattanooga, Tn. Here these firms are tapping into a workforce that is statistically one of the most productive in the world. According to Chad Moutray, chief economist for the National Association of Manufacturers (NAM), “the U.S. has the most value added per worker than any other of the top ten economies in the world, which levels the playing field when competing against low-wage nations (Gray Construction, 2012)”. I would consider any product that incorporates American blood, sweat and tears in any form, “Made in America”.
Reference:
Gray Construction. (2012, Febuary 9th). Global Economic Crisis Driving Foreign Manufacturers to Reconsider the U.S. (Full Version). Retrieved July 3rd, 2012, from http://www.gray.com/news/blog/: http://www.gray.com/news/blog/2012/02/09/global-economic-crisis-driving-foreign-manufacturers-reconsider-us-full-version

I recently heard of a woman in California who blogged about only purchasing items that were “made in America”. I wondered, as this blog suggests, if she was using the term “made in America” as loosely as we do in today’s global market. John Schoen (2010) recently stated, “Today, an “American” car sold in Chicago may have rolled off an assembly line in Tennessee with parts made in a dozen different countries.” As the world continues to get smaller the imaginary line that defines exactly where a product is made will only continue to be blurred. For now, I believe that a domestic product can be considered American even when some of its components are made abroad, just as I would consider a Japanese product to still be “made in Japan” if a couple of its components were shipped in from China.
Schoen, J. (2010, March 15). Made in America rules are complex, confusing. Retrieved from website:http://www.msnbc.msn.com/id/35821593/ns/business-us_business/t/made-america-rules-are-complex-confusing/

I think that perception is reality. I think a good example of this would be the Pontiac Vibe. I would say that many of the Pontiac car owners perception was their car was made in America. The Pontiac Vibe was recalled when “Japan’s Toyota Motor Corp. announced Tuesday, Jan. 26, 2010 that it would halt sales of some of its top-selling models, to fix gas pedals that could stick and cause unintended acceleration”.(Avalos,2010). The Pontiac Vibe was a joint project between General Motors and Toyota.
I think globalizations impact on manufacturing really confuses customers. With the downsize in our economy from globalization, many customers don’t really care about where components come from. For example when I grew up, you would not be caught with toys or products with the sticker (Made in China). I really thing that today you would die before you found many toys or products not made in China. In the past, General Motors took the beating on quality; in today’s economy the Toyota brand took a beating.
References
Avalos, G. (2010, Jan 27). Toyota adds more vehicles to recall list, shifts into damage control. Oakland Tribune, pp. n/a. Retrieved from http://search.proquest.com/docview/352444956?accountid=41894

Initially, an individual could not clearly associate a product as domestic if it is not manufactured within the host nation. Having only the corporate head quarters domestically is not enough for the average blue collar worker. However, an article from Jim Mateja and Rick Popely from the Chicago Tribune raises an interesting point of view. The article shares vantage points about domestic and imported automobiles. Mateja and Popely supports the opening thought sharing that “the Ford Mustang has about 65 percent domestic content” (2006). They also acknowledge that many import companies have invested domestically within the United States providing needed jobs. The statistic that Mateja and Popely reveal though is that “Ford will employ 110,000 in the United States, while Toyota will have around 32,000” (2006). The article continues painting the picture “So would you rather buy a Toyota built in Kentucky by a company with 32,000 jobs…[or] from a company that supports 110,000 jobs in the US?” (2006).
Reference
Mateja, J. & Popely, R. (2006). Made in America? Hard to tell. Retrieved July 3, 2012 from http://www.boston.com/cars/news/articles/2006/09/24/made_in_america_hard_to_tell/

Because of globalization, a domestic product can be considered American although some of its components are made abroad. This would not have been the case about 40 years ago. Based on the Federal Trade Commission’s regulations related to “country of origin labeling”, the determination is made based on whether it is assembled in the United States and whether most of the costs incurred with its production are incurred here in the States. These rules were the result of an overhaul of the regulations in the late 1990s as globalization began to blur the lines. (Schoen, 2010, p. 1). It stands to reason that the determination should be based on where the economic benefit of production resides.
Schoen, J. W. (2010, March 15). Made in America’ rules are complex, confusing . MSNBC. Retrieved from http://msnbc.com

The paper focused on Apple’s management in its China plant. Unfortunately with the rise of Apple over the past several years many people have lost track of where and how their products is being made. To clarify my point, like many products most of the Apple products sold in the United States are manufactured in China. While many Apple fanatics still argue that Apple products are American, business analysts argue otherwise. According to Duhigg and Barboza, (2012) “Apple is not the only electronics company doing business within a troubling supply system. Bleak working conditions have been documented at factories manufacturing products for Dell, Hewlett-Packard, I.B.M., Lenovo, Motorola, Nokia, Sony, Toshiba and others” (para. 11) American companies across the country have now moved their entire production lines overseas. They not only lost their component production to overseas outsourcing, they have lost the entire line of production. This will only harm such companies in the future for releasing the access to their product to competing countries.
Reference
Duhigg, C. & Barboza, D. (2012, January 25). In China, human costs are built into an iPad. The New York Times. Retrieved from http://www.nytimes.com

More and more companies in America are relying on globalization to reduce the cost of production. The question is, if the product isn’t 100% made in America, can call it an American product? According to John Schoen’s article on msnbc.com, “A product that is “Made in America” has to be assembled, and most of the cost of making the product incurred, in the United States” (Schoen, 2010). As globalization becomes even more popular, I can see the Federal Trade Commission requiring production percentages to be labeled on the products. For example, when you buy clothing, it tells you how much is cotton, silk, etc. Why should be not be giving these other countries credit for their hard work?
Schoen, J. W. (2010, March 15). Made in America’s rules are complex, confusing. MSNBC. Retrieved from http://www.msnbc.msn.com/id/35821593/ns/business-us_business/t/made-america-rules-are-complex-confusing/

While reading this, the first though that came to mind was a series of news stories from ABC Nightly News during a series called “Made in America.” During that series, they noted that companies have started to bring jobs back to America because it is cheaper to do so. Overseas or outsourced workers were paid as little as 58 cents an hour. It has risen to $3.00 an hour and can rise as high as $6.00 by 2015. Companies now say that the productivity is not worth the rising labor cost and that American productivity is 4 times higher than overseas productivity (Muir, 2012). If manufacturing jobs are starting to come back “home”, then they can truly be called Made in America.
Resource
Muir, D. (2012, February 22). Companies Move Manufacturing Jobs Back to America. Retrieved from abcnews.com: http://abcnews.go.com/blogs/business/2012/02/companies-move-manufacturing-jobs-back-to-america/

Competitive advantage has compelled companies to utilize components made abroad in order to maximize efficiencies. Specialties have value. Products are no less American. But from an economic standpoint, it is unfortunate that companies utilize foreign components to achieve the highest possible quality at the lowest possible cost. Partnerships are vitally important when an interdependence is created. International trade law, job loss, dumbing down of workforce, import/export ratios, and particularly the decline of manufacturing all become relevant.
In 1950, more than 30% worked in manufacturing jobs. Today, less than 10% occupy those roles. A wealthier nation arose lessening the need for goods and increasing the need for services. The recession helped to reveal our nation’s weaknesses from over consumption/under investment (ex. housing bubble) to wage stagnation to labor force participation. One of the single-most significant developments is manufacturing deterioration which should call to question its role in economic recovery. America should not sit idly by watching China become the next superpower. Concentrated efforts on education , training and R&D are necessary for America to remain the largest economy in the world, among an increasing number of dominant players.
Chu, J. (2011). American Made? Retrieved from http://web.mit.edu/newsoffice/2011/manufacturing-event-pie-0916.html.

The idea of one product being made in one particular country continues to become more and more complicated. As industries continue to find new ways and new locations to operate business in a cheaper and/or better way, the identification of a specific country as the sole maker is less and less feasible. We must understand that many manufacturing jobs have been moved oversees. Many businesses are “moving their production facilities to nations that do not have such burdensome regulations or that fail to enforce the regulations that they have.” (Hill, 2011, p. 29) The answer to dealing with this situation may not be to try to create an equal playing field for all countries or to enact trade embargoes and barriers to control pricing but to understand what position you play in the best. This is what we have seen happening in the United States over the last several years and this is what countries like India have figured out and are taking advantage of now.
Hill, C. W. (2011). International Business: Competing in the global marketplace. University of Washington: McGraw-Hill/Irwin.

My place of employment follows The Buy American Act, which requires government procurements to come from domestic sources. In determining what American goods are, the place of mining, production, or manufacture is controlling. I have found that many times the domestic company we procure from will then outsource the work or buy their materials globally. According to Trey Denton, a Georgia Professor, it is hard to tell where things are manufactured, but even imported products, as they are sold in the U.S., contribute to jobs. Denton also said, “Each time they are bought and sold somebody’s making a profit, and that profit goes to supporting jobs.” While a product might not be a 100 percent made in America I do not think that disqualifies it from being American made.
References:
Luckey, J. (2009, March 13). Congressional Research Service. seia.org. Retrieved July 5, 2012, from http://www.seia.org/galleries/pdf/CRS_Report_-_The_Buy_American_Act_3.13.09.pdf
Georgia Southern Magazine. (n.d.). Georgia Southern University. Retrieved July 5, 2012, from http://news.georgiasouthern.edu/sites/gsm_spr12/?p=45

I fill that where the majority of the product is made is how to determine this. Others may have different opinions but if you think about American made you think of it being built and put together and functioning here. If something is built in Japan and then sold here it is Japan made not American made. If everything to a hair dryer is built in japan then put together here it is Japan made and American assembled. Even though an idea of something is made here in America I feel that it does not give it the right to be called American. “If we understand this globalizing economic paradigm as an epistemological system that sells freedoms to the public as the opportunity for new communicative choices, these new freedoms must be situated within a specific epistemological and technological economy with their own simultaneously material and discursive opportunities/ limitations” (Rice & Vastola, 2011, p.150). How we limit what we call something whether it be American or where ever made is really not important but more or less if it operates correctly and benefits the ones who produced it top to bottom.
Reference
Rice, J. A., & Vastola, M. (2011). Who needs critical agency?: Educational research and the rhetorical economy of globalization. Educational Philosophy & Theory, 43(2), 148-161. doi:10.1111/j.1469-5812.2009.00544.x

It matters not, to me personally, if all components of an American product have been made in the United States, or not, and this is why. Products that have the endorsement of being American products, whether partially or fully manufactured in the United States still do have the American standard of regulations and product safety attached to them. This makes all the difference. So final inspection in the United States, or final inspection in India is not a concern for me. I would like to think that more products could be manufactured closer to home, but that is just not as possible as it used to be.
The Global Organic Textile Standard is used at Cuddledown and China conforms to this standard.
According to Cuddledown, a company that makes bed and bath accessories, they outsource to China because the textile industry (which is labor intensive) has gone so far down in America that they can’t find quality materials. “We do not know of any mills in the United States that are weaving and finishing the high-quality fabrics that we use for sheets and comforter ensembles.”
Retrieved from: Cuddledown, Why are Some of your Products Made in China? http://www.cuddledown.com

Countries have become more and more depended on each other. We have seen how much truth there is to this over the last several years as the economic troubles of one country have impacted the economies of other countries. ” When other economies struggle, decreasing the disposable incomes and capital expenditures of those countries, the effects are often felt at home.” (2012) Because of this, we have to become more and more interested in what events take place in other countries. For example, if the economy in Germany collapses, the individuals of that country will not be able to afford to import goods from the United States. While we as Americans will always want more products to be made and exported from the United States, we must understand the economies of other countries and how they will impact our economy.
References
The Impact of International Economics. (2012). Investor Guide. Retrieved July 6, 2012, from http://www.investorguide.com

The definition of an “American-made” product will depend on who you ask. Is it made in America if the parts come from a different country and are put together in America? I believe yes. Others may say no. Some may say that all parts of a product must be manufactured in the United States and put together in the United States in order to be deemed an American-made product. The FTC explains that a product is all or virtually all made in America if ” the product’s final assembly or processing must take place in the U.S. The Commission then considers other factors, including how much of the product’s total manufacturing costs can be assigned to U.S. parts and processing, and how far removed any foreign content is from the finished product. In some instances, only a small portion of the total manufacturing costs are attributable to foreign processing, but that processing represents a significant amount of the product’s overall processing. The same could be true for some foreign parts. In these cases, the foreign content (processing or parts) is more than negligible, and, as a result, unqualified claims are inappropriate” (para 16). How feasible is this really? If you think about all the different products that are imported, how many things can truly be considered made in America by this definition? It all goes into how far in depth and technical you want to be about it. Many aspects of labor that are outsourced to different countries are done so due to some sort of cost lowering strategy. As Americans, we tend to want to buy things that are cheaper (not necessarily cheap, but if two products are deemed the same by the consumer, they are more than likely going to buy the one that is less expensive). This makes companies seek out opportunities to cut costs where they can, including importing materials from other countries that are needed to assemble their American product.
References
Complying with the Made in the USA Standard. Retrieved July 6, 2012 from http://business.ftc.gov/documents/bus03-complying-made-usa-standard

Made in America! What does that mean any more? Is assembled in America the same as made in America? Manufacturing is a shell of what it used to be. Both my parents where factory workers and it was a good job, it raised my sister and me. Now the factory is a vacant lot, nothing more than cracked cement and railroad tracks. While it seems we are becoming more of a service driven economy, some manufactures are still having growth. You might play your game with cars, I grew up using tractors. Growing up in a rural setting, I saw as many tractors as cars. All farmers have their brand loyalty. John Deere is a great example of American made pride that is rolling over the competition. “The company posts a record net income of $2.8 billion on record sales of $32 billion for the fiscal year ended Oct. 31st” (Bloomberg BusinessWeek). Don’t be mistaken, John Deere is a global company with nine global manufacturing sites. John Deer is growing into a global giant in farm machinery. In conclusion made in American does still matter. Apparently things do look better in Green!
References
Gruley, Bryan. & Singh, ShrutiDate (2012, July 9- July 15). Big Green Profit Machine. Bloomberg BusinessWeek.

Under a global economy it matters less about where a product is made and more about the quality and value the product brings to the consumer. Quality control is an important factor in retaining the customers a company convinces to purchase their product. With a growing landscape of competition as the world shrinks through technological advances, a company must deliver quality in order to keep a customer. Apple’s Ipod was developed in California but is assembled in places like China and Taiwan, among others. An article by Cars.com recently named the Toyota Camry as the “top American-made car.” In fact four of the top five spots were awarded to cars made by Toyota or Honda, traditionally considered foreign car manufacturers. The list measures the domestic parts content of the vehicle combined with the sales of the vehicle in the U.S. to compile the list. A company delivering quality while strategically manufacturing products worldwide will succeed in the global economy.
Mays, K. (July 2, 2012) The Cars.com American-Made Index. Cars.com. Retrieved on July 7, 2012, from http://www.cars.com/go/advice/Story.jsp?section=top&subject=ami&story=amMade0712&referer=&aff=national

I believe domestic products can be considered American when some components are made abroad. A product being mostly manufactured in the U.S. will help the American economy, and the cost of the product will be kept down if some of the components are made abroad. The Federal Trade Commission considers the product American if 75% of the manufacturing costs are from the United States. The Federal Trade Commission states that “It will not be considered a deceptive practice for a marketer to make an unqualified U.S. origin claim if, at the time it makes the claim, the marketer possesses and relies upon competent and reliable evidence that: (1) U.S. manufacturing costs constitute 75% of the total manufacturing costs for the product; and (2) the product was last substantially transformed in the United States.”(Federal Trade Commission, 2011).
Federal Trade Commission, (2011, 06) Examples of Applications, FTC proposed guides for the use of U.S. origin claims, Retrieved from: http://www.ftc.gov/opa/1997/05/examples.shtm

“Assembled in U.S.” is becoming a common terminology in automotive industry. Nowadays it is not easy to find products made by a single country. 2011 Japan earthquake disclosed the deep supply chain of components. Hundreds of semiconductors from the areas severely damaged caused the supply shortage not only to Japanese car manufactures but also to Ford, GM and Chrysler. Automakers described the supply base looked like a tree’s roots, spreading out further down the line.(1) Sub- or raw materials often have multiple countries of origin. A March 31 explosion at Evonik Industries in Germany damaged a factory that makes a key component in a nylon resin used to make a specialized plastic for auto fuel lines and brake lines.(2) Automakers in the U.S. and around the world could close car and truck plants as they run short of the materials.(2) This is one of examples to prove that supply chain is not formed by a single country, and so it is invalid to call “American.”
References:
(1) Greimel, H. (2012, March 12). Tsunami: The Aftermath. Automotive News, 48-52.
(2) KRISHER, T & DURBIN, D. (2012). PA12 Resin Shortage Following Evonik Factory Explosion Could Slow Car Production. Retrieved from http://www.huffingtonpost.com/2012/04/17/pa12-resin-shortage-auto-car-production_n_1430884.html

I would have to say that products should be associated with the company in which they are produced for. Many of the products that are globalized have various points and places where the actual manufacturing process takes place. However, I believe that the end result is products are produced and money is exchanged, at this point the money goes back to the company and nation of origin furthering their economy. Globalized manufacturing is only a way of increasing speed and value to the customer while keeping costs low for the manufacturer. So yes, American products should be considered American if the money ultimately comes back to the USA.

Jim Amos, CEO, accomplished author, and former Marine Corp Captain, argues in order to determine what products should be able to wear the Made of America label, one must consider who receives the earnings from the sale. He asks, “If the United States is the primary beneficiary of the sale, why should the seal of “made in the USA” not be used even if a minor percentage of the products is outsourced?” (Lapin, 2011) Tourists from all over the world visit Washington, D.C. for their monumental museums. Many of the souvenirs picked up by these visitors will have the label, “made in China.” According to Amos’s theory since the United States reaps the benefits of this sale it should be able to hold the “made in America” seal. I would need to know how Amos defines “minor percentage” in order to agree wholeheartedly, but if the percentage of the product outsourced were 25% or less then I would argue in favor of his theory.
Reference:
Lapin, N. (2011, May 29). Can “made in usa” survive in a global economy? should it?. USA Today. Retrieved on July 10, 2012 from http://www.usatoday.com/money/industries/manufacturing/2011-05-29-cnbc-made-in-america_n.htm

It’s a double-standard, I know. I would not want other countries staking claim on our products when we have contributed to its making. I think war could break out on determining who “reaps the benefit of the sale” and questions when equal percentages of the product are outsourced.

This is a tough one, only because it depends on what products we are talking about. “Researchers at the Federal Reserve Bank of San Francisco calculate that in 2010 goods labeled “Made in China” accounted for just 2.7% of U.S. personal-consumption expenditures on goods and services—all the things we buy in a given year, from cars to clothing to health care” (Bussey, 2012) .I agree that American ideas that are only manufacturing in foreign countries due to low cost is still an American product, but, again it depends on what type of product it is. Team USA recently received their uniforms and the tag read “Made in Chine”. I absolutely think this issue has created quite a controversy and I cannot disagree with all the outrage. I know that China can make clothes and uniforms much cheaper than the US but it seems a bit contradictory to have a team in the Olympics that is representing the USA but are wearing clothes that not even Americans got to stitch. So what is your opinion on the TEAM USA uniforms being made in China?
Bussey, J. (July 19, 2012). Does It Matter China Made the U.S. Olympic Uniforms?. The Wall Street Journal: The Business.