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**GordMay** · 15-10-2007, 10:31

NorthStar Yachts moves operations from Washington to China

NorthStar Yachts, which employed 60 workers on a 60,000sq ft facility outside of Kalama, Washington, has shuttered the facility and moved operations to mainland China. The yacht builder built yachts from 80ft-125ft (24.4m-38.1m) LOA at the Kalama yard.

Jerry Clark, the firm's owner and chief operations officer, said the move was for the company's survival. Clark said the yachts can be manufactured for about $2 million less in China with the same number of workers.

All but about 7 of their employees have been laid off.

More: News Roundup - Washington Ports Association

delmarrey · 15-10-2007, 11:49

If I had that much money, I'd pay the extra $2M. Of course, you could fill your tank a couple of times with that little discount.

Pretty soon the whole world is going to be flooded with nothing but chinese products, all because the labor is cheap and with their lack of concern for the quality of human life. Just think, if OSHA where to move to china

So, let's send OSHA to china

and see how cheap products become.

If you need parts or more products, china is going to have control. It's bad enough that the thruhull's are starting to have "made in china" stamped on them. Actually it's just a little gold sticker that comes off accidently.

I wonder why chinese cars haven't done well in the market??

But, so what! lets just keep filling our pocket$. And to H... with the rest of the worlds labor.

TaoJones · 15-10-2007, 12:13

NorthStar is hardly the first non-Chinese company, and certainly won't be the last, to move from a high-labor-cost environment to a low-labor-cost one. It comes with having a truly global economy, and is inevitable if an entity wishes to survive and compete.

World markets will be flooded with inexpensive Chinese cars, ultimately. I can easily recall when the first Japanese car commercial appeared on American television. It was Roy Rogers touting the benefits of "Datsun," now Nissan. Everyone I knew found this hilarious, and we all wondered who, in their right mind, would buy a foreign car.

Well, I don't need to go into detail on how that turned out.

When the South Koreans entered the American car market, people laughed again. Obviously, they've succeeded swimmingly.

To doubt that the Chinese will be able to produce and market a competitive automobile, or any other product, is to deny the historical record. The only question, in my mind, is whether they will share the Japanese devotion to producing products of the highest quality, and standing steadfastly behind them as a matter of honor.

Ultimately, the entrance of China and India into world markets will have a leveling effect on standards of living of working-class people throughout the world. In other words, Chinese and Indian standards of living will rise, while those of "advanced" industrial economies will decline.

Tilting at this windmill won't alter its inevitability.

TaoJones

ssullivan · 15-10-2007, 12:23

Wise words, Tao Jones.

On my end, I find it unfortunate that nobody is willing to step up to the plate and try to preserve our standing in the world, or allow a few dollars less profit to ensure the future of the country.

Greedy idiots, most Americans are... greedy, short sighted idiots who don't care about anything but themselves (not even their kids or grandkids).

TaoJones · 15-10-2007, 12:46

Quote:

Originally Posted by ssullivan

Wise words, Tao Jones.

On my end, I find it unfortunate that nobody is willing to step up to the plate and try to preserve our standing in the world, or allow a few dollars less profit to ensure the future of the country.

Greedy idiots, most Americans are... greedy, short sighted idiots who don't care about anything but themselves (not even their kids or grandkids).

Thanks, Sean.

I don't think it's a matter of greed, though, and our standing in the world, to me, is political, not economic. Repairing the world's perception of the US will probably take an ending of American military intervention, and a lot of concerted, positive outreach. It could take generations.

In my view, no one can do more than tend to their own individual survival. That will most likely bring small manufacturers to a realization similar to that of NorthStar.

To ask their employees to build a quality yacht and to do so for Chinese labor rates is simply a non-starter. Even if those workers could be persuaded that to do so would "help America," they could never be convinced that it was in their personal best interest, nor that of their children and grandchildren.

TaoJones

**Ex-Calif** · 15-10-2007, 17:07

Quote:

Originally Posted by TaoJones

Thanks, Sean.

To ask their employees to build a quality yacht and to do so for Chinese labor rates is simply a non-starter. Even if those workers could be persuaded that to do so would "help America," they could never be convinced that it was in their personal best interest, nor that of their children and grandchildren.

If, as a nation, you want to sell labor, you have to sell it cheaper than everyone else. Services that must be provided locally - doctor, fireman, policeman, etc. are protected from outsourcing but any manufacturing job can and will be outsourced as soon as volume matches the shipping costs or the labor spread is significant enough.

The only sustainable competitive advantage is invention. A nation that is at the leading edge of invention and stays there can sell its technology at a premium. This is where we still have a significant advantage.

However, the most alarming export that is being allowed to happen is outsourcing enginering and research to low cost centers. Our company has relocated significant amounts of engineering work to eastern europe. They have good engineers but they had zero knowledge of our technology. In order to make them productive we shipped massive amounts of know how to make the program viable.

Once you ship the technology you are sunk.

One thing that has been in the US military procurement laws is that the metal technologies - one of our biggest advantages - had to be 100% US sourced. You could by the raw materials but they had to be smelted in the US.

There is a huge lobbying effort underway by the corporations to get this turned over so they can send the crown jewels overseas.

How these companies are getting around technology export laws is beyond me.

shadow · 15-10-2007, 17:44

I agree that it is a shame that the US has gone down on many levels in the world's eyes. As tao was saying about the vast majority of stuff being exported to India and China. If I had to choose, I would choose Indian quality over China any day. I believe that everything should be put into context. For the most basic items like T-shirts, pants, spoons and other non-essential goods, China is great for making that type of stuff.

But for things that my life may be directly affected, I will always purchase items that I know are of top Quality. Cars, bikes, boats, etc.. Anything where my life may depend on the goods, I will always go for the European (German) cars, and the same for boats and a few OZ boats as well.

I will not risk my life just to save a few dollars. I am always happy to pay more for the top of the line products.

But I do believe that everyone does have their place to do their products and services, you as the consumer have to choose in which sector and for what products.

My .0002 cents

hellosailor · 15-10-2007, 18:59

It has been proven many times that with a dozen task maskers ("My name is Ming the Mericless, but YOU may call me " MISTER The Merciless") any Chinese company can be made to remain in complaince with US expectations. Well, except for that pesky law saying Chinese companies, like Brazilian ones, must be 51% Chinese owned.

If the supervisors and managers can do their job ("Hey, Cousin Cho, can you send me 50 barrels of something cheaper but with this label on it?" the product can certainly be fine. The problem is, the Chinese local, state, and national governments all pretty much believe "screw the gangin, all the wide-eyes really want is cheap, and they are beneath us anyway".

Till that changes? I say "Screw the Middle Kingdom" and I think I'll have the t-shirt made up to go with that.

**GordMay** · 16-10-2007, 02:24

Quote:

Originally Posted by Ex-Calif

... A nation that is at the leading edge of invention and stays there can sell its technology at a premium ...
... However, the most alarming export that is being allowed to happen is outsourcing enginering and research to low cost centers ...

Declining Interest in Engineering Studies at a Time of Increased Business Need
by Wayne C. Johnson

”... The number of engineering graduates at the bachelor’s level in the US peaked at around 80,000 per year in the mid 1980’s, then declined to about 65,000 per year until the end of the century (Engineering Workforce Commission 2004). The number of graduates is increasing again, but not yet keeping pace with employer’s needs. To put these numbers in global perspective, it is of interest to note that China currently has 3.7-million engineering students in its pipeline ...”

Goto: Declining Interest in Engineering Studies at

BambooSailor · 16-10-2007, 07:07

As I always say: country that puts entertainment ahead of education has no future. Just ask any teenager (or any American, for that matter) how many scientist they know vs. how many entertainers (actors, professional athletes and other parasites) and you get the picture. Something is wrong if university pays millions $$...$ to head coach but barely sustainable $ to its top scientists; if it is easier to get accepted to college based on your RBI than your GPA, if you make $100m/year for jerking a small ball to the hole with the stick, but $100k doing cancer research or even less if you educate new generation. Fortunately, we keep boats (almost) ready so if the house of cards collapses we can stay afloat

...

hellosailor · 16-10-2007, 07:52

Engineering was a bad career choice for a long time. Nothing was being spent domestically on infrastructure, repair, development...and engineers were being paid peanuts to start. So kids chose more lucrative careers in other fields, big surprise.

Now the wheel turns and the main source of engineers is "damned foreigners". OK, they earned it, we gave 'em the means to do it.

What scares me most are the problems that will occur from communications errors. It's bad enough that NASA tries to cover up the Martian shoot-down of our satellites by claiming NASA labs got their inches and millimeters mixed up.[g]

delmarrey · 16-10-2007, 10:09

Quote:

Originally Posted by Ex-Calif

If, as a nation, you want to sell labor, you have to sell it cheaper than everyone else. Services that must be provided locally - doctor, fireman, policeman, etc. are protected from outsourcing but any manufacturing job can and will be outsourced as soon as volume matches the shipping costs or the labor spread is significant enough.

Just to add, we not only lose the labor but maybe a majority of the income on products used for construction. e.g. fiberglass, resins, woods, electrical wiring, interior finishings. tooling and so on. Plus the taxes the government gets to charge for this stuff. So in reallity the government loses too.

It's not just the boat builder that's affected but the support businesses as well. Remember when they shut down a few military bases, the towns around them almost became ghost towns (for a while).

Therapy · 16-10-2007, 10:15

Don't mention how much the Chinese actually steal outright.
And have for a long time.
But we will not vote with our wallets at Wal-Mart will we?

**David M** · 21-10-2007, 15:04

So far the Chinese have not held up to Japanese standards having shipped poisonous pet food and children's toys containing lead paint amonst other occasionally inferior products. For the Japanese, the philosophy has been lets send our best products to our overseas markets. For the Chinese it has been lets see what we can get away with. Could this be the difference between an economy controlled by capitalists versus an economy controlled by communists?

I don't think the world needs to worry much longer about the Chinese taking over. Eventually the Chinese labor market will see how well the rest of the world is doing and demand higher wages....in addition to there being a labor shortage of highly skilled and educated workers necessary to support an advanced society. The control the communists have now over their economy will erode over time as the Chinese people start demanding individual freedoms and protections. This of course will cost money making China less competitive against other countries where workers have more rights.