Recently I came to the railroad crossing on the Lowell Park Road on the way to Dixon, Illinois. The gates were down, the red lights flashing and presently a long freight train came through heading west toward the Mississippi River. Every flatbed held a Chinese container, empty and heading back home to be refilled and shipped again.
Factories close, people are let go and the economy slumps. And the reason started with greed.
I worked for a Mattel company in Orange County, California in the early 1970s and I can recall that one Christmas there was a stevedore's strike that prevented the freighters from coming into the San Pedro docks. Mattel was going mad, realizing that if they couldn't get the ships in and unloaded in time for Christmas, their profits would slump.
And why were these ships loaded with Mattel toys? Because Mattel had found that they could have them made much cheaper in Japan than in the US. Some might call that good business for them to go overseas; I call it greed.
And later, when the Chinese came into the picture, Mattel had toys made there. . .which meant that if any other toy manufacturer wanted to compete, they would have to go to China too.
I am appalled, horrified by this but maybe, if I were in the manufacturing business, I would have done the same thing. I hope not, but making money becomes a terrible obsession sometimes.
The problem is that this going to China for the cheapies has had a reverse effect. As more companies have closed here and opened in China, the local economies have staggered and fallen. if that nut-and- bolt maker in Rockford has to close, the people he had working for him have to get other jobs or do with less. The result - and I see this every time I go to Rockford - street after street of vacant factories; which has meant a loss of the tax base, increase in crime and fewer city services.
It used to be I would refuse to buy anything made in China. I cannot do that anymore because to refuse Chinese goods would mean I wouldn't be able to buy a thing.
Friday, August 06, 2010
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9 comments:
The founder of Mattel agrees with you in part, Nelson. That strike caused them to falsify their records because they lost so much money:
"But the good times soon soured. Ruth [Handler] described the major mistake made by Mattel in her autobiography: “We should have stayed in the toy business, accepted a slower growth rate, and resisted the temptation to acquire so freely. Our organization was not really equipped to evaluate and control so many diverse companies, and our internal auditing capability was inadequate to ferret out the problems in advance.”
In 1970 Mattel’s plant in Mexico was destroyed by fire, which necessitated the cancellation of one-third of that year’s Christmas orders, and the following year a shipyard strike in the Far East cut off their toy supplies during their busiest season. . . For two years (1971 and 1972) Mattel issued false and misleading financial reports. . . Mattel’s stock plummeted and the Security and Exchange Commission (SEC) stepped in to investigate.
Ruth was indicted by a grand jury in 1978. She entered a no contest plea to the charges (false reporting to the SEC, fraud, and conspiracy) and was ordered to pay $57,000 in fines. Her 41-year sentence was suspended for a probation of five years, during which she was required to perform 500 hours per year of community service. Elliot, a product designer with no say in the day to day running of the company, was exonerated. The federal court ordered Mattel to restructure, while the firm’s bankers and creditors pressured the Handlers to resign. Shareholders then entered a series of class-action lawsuits. To settle, the Handlers turned over 2.5 million shares of their own stock, described by Ruth as “half of everything we’d worked for in the previous thirty years.” In 1980 the Handlers cashed in most of their remaining Mattel stock . . ."
So who else was greedy? The Longshoremen? Pensions, benefits? Stockholders? Customers who collect Barbies and Hot Wheels? The universities and insurance companies who had their pension and endowment funds invested in Mattel? If a company loses half its worth, where can it go but to Malaysia, China, Phillipines, or Guatemala to turn a profit for the stockholders? Or, it could just go out of business.
Some companies don't leave the country--they just move south like Watt Publishing. Or from Michigan to Delaware, home of the vice president. But no pressure.
Watt Publishing had offices in the south but their main office moved to Rockford, IL. from the little town from wence it sprang.Still in Il but not helping the home town much.
I am as disappoinnted as Nelson in the "made in China' thing. I too, try to avoid it but,alas,walk around Walmart,etc. and just try to find something that isn't. The while knowing that most of what you see will end up in a landfill in 12 or 18 months,that is equally despressing. And I am willing to pay more for US goods,but can't barely find them. Thoughtful piece, Nelson.
I live in Asia, faced the same problem. Our local products seem very difficult to compete with China's products. In my office, there is a joke.. may In China, people are working without paid, so the cost production is cheapest, and at the end the price of China's product is very cheap.
Some time when shopping at Wal-Mart, check the origin (not distributor) of the goods. Today I was pleasantly surprised that I could freshen the bathroom (rug, toilet seat cover) with Made in the USA "Mainstays" brand, but matching towels were made in Brazil. Then I needed an 8 x 8 glass baking dish and it was made by Anchor in the USA. Another item was made in Mexico and one in Canada (that's NAFTA at work).
I'm very fussy about anything like soap, meds, or food--product of USA or Canada. Yes, you can get cheaper, but after the pet food poisoning, I'm not taking chances. USDA props up our farmers--if we don't buy their products, we lose twice.
Many American companies have left China as their costs increased and our demand lessened and many of their workers are now unemployed and have no benefits. You see many more South American origin products, although not as good a quality as the Chinese produced.
I think one of the poultry magazines was in Arkansas before Watt moved to Rockford. In any case, MM used to be headquarters for more agricultural magazines than any other town, and those days are gone, and it wasn't China. Not sure it was greed, or if editorial staff and the owners want to live closer to city amenities.
I remember the time (about twenty years ago) when the major WalMart marketing strategy was to emphasize how many of their products were made in the U.S.A. WalMart, at that time had a fund with which they would help entrepeneurs develop manufacturing processess in America. How things change?
Murray sez:
The National Turkey Federation used to be headquartered in Mt. Morris also until they decided to move to Wash. D.C.
http://en.wikipedia.org/wiki/National_Turkey_Federation
Callmegreedy: Was it greed for the American poor to want new stuff rather than your cast offs, and the middle class to want high mpg cars, and everyone to want cheaper and faster computers?
Murray sez:
Get the union established over there and I'll guarantee that manufacturing will return to good ol' U.S.A. The unions can kill any business venture.
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