
Clothing Manufacturing May Be Moving Back to West from Asia - jseliger
https://www.bloomberg.com/opinion/articles/2018-10-19/clothing-manufacturing-may-be-moving-back-to-west-from-asia
======
latchkey
Living in Vietnam, I don't believe this article for a second. Clothing
manufacturing is unbelievably massive here. It isn't going anywhere anytime
soon.

Clothing is a commodity item, even if it takes a week or a month to ship to
the US, it does not matter. If you need it faster, raise the prices (or take a
hit on the massive retail markup) and ship it faster (air vs. boat).

Having also built a successful print on demand business, we did all our
printing in the US because the customers were in the US and the shipping times
would have been too great because of the on-demand nature.

The garments themselves come from other countries. Notably, the people
creating the designs and buying the FB ads, which target US consumers, are in
SE Asia (mostly in Vietnam). Only people in the US will pay $25+ for a t-shirt
that costs $1 to $4 to produce.

~~~
SkyMarshal
_> Only people in the US will pay $25+ for a t-shirt that costs $1 to $4 to
produce._

As a Westerner this drives me nuts about about buying clothes. Every time I
buy any article of clothing I feel it right in the sphincter, getting ripped
off 10x - 100x. Is there any way for folks in NA/Europe/etc to get clothes at
or near cost?

~~~
topmonk
Why don't you buy clothes from a thrift store? Maybe you (or maybe not...)
don't want to look like a hobo.

Why does wearing clothes from a thrift store make you look like a hobo?
Because they are so cheap, people with very little money can buy them.

That is why clothes are so expensive. They, to a certain degree, flaunt your
wealth, or at least show that you probably aren't a hobo. This is pretty
important to people, or no one would pay so much for clothes.

~~~
ed_balls
I have a dozen black t-shirts from Primark for about 2.50£ per t-shirt.

> Why don't you buy clothes from a thrift store?

It will drive the price up and hurt people with very little money.

~~~
jeromegv
Not really, donation clothing is skyrocketing (because people consume more and
more clothing from cheap brands like H&M) and stores like Value Village or
Good Will can't actually accept every piece of clothing donated to them. Lots
of it end up on cargos back to Africa or Asia. Buy from thrift stores, this is
a good thing and good for environment.

------
fatjokes
I get the vibe that Bloomberg (the news) is very supportive of the trade war
in the sense that all the related headlines I've seen seem to emphasize the
positives to America and the negatives to China. Too lazy to dig up references
right now. By comparison, the NYTimes seems more balanced. Am I wrong?

~~~
le_clochard
In the contrary, being a business journal, BBL must remain accurate in
reporting and analysis of business. Biased business reporting will directly
impact reader trust, this revenues.

~~~
eesmith
I've heard this argument before, though with respect to the WSJ.

I don't really believe it. There is still a bias because "reader trust"
depends on what the readers want to read, yes?

That is, most of the readers of Bloomberg, and of the WSJ, are - to use
Marxian terms - aligned with the interests of capital owners, and not workers.

Labor is an important part of business, yes?

Yet a look at the Bloomberg home page shows no mention of union or worker
rights issues. The word "worker" exists in the headline link "Jaguar's New
Evoque Rides to Rescue of UK Workers" but the actual article is titled "Jaguar
Land Rover's New Evoque SUV Rides to Rescue of U.K. Plant Amid Brexit Pinch",
with no mention of workers.

Why would Bloomberg cover more about the labor aspect of business if its
readers don't want to know more about it, or are actively against it?

~~~
ancorevard
I’ve seen many stories in Bloomberg about Marxism through the proxy of
Venezuaela’s marxist policies.

So far, it doesn’t seem like marxist ideologies are good for the common
workers in that country either.

~~~
eesmith
Ummm, 'Marxian' as the term for the critique of capitalism is not the same as
'Marxism' the political philosophy. See
[https://en.wikipedia.org/wiki/Marxian_economics](https://en.wikipedia.org/wiki/Marxian_economics)

Do you not find the terms "capital owners" and "workers"/"labor" to be
relevant?

------
scarface74
Clothes manufacturing may move back to the US.

But it will be automated.

[http://softwearautomation.com/](http://softwearautomation.com/)

~~~
cenal
As will manufacturing in Asia.

~~~
polskibus
In this case logistics cost will be more important, so factories closer to
customers will win business

~~~
ksec
I don't think logistics or even storage were ever a large percentage in cost /
unit. The highest two is rent, staff in retail, and marketing.

Although the idea of Online Retailing were suppose to save on this, in reality
it is merely moving the Rental cost to last mile delivery.... which is also
expensive.

~~~
thenanyu
A huge source of inefficiency is time to market. Fashion moves quickly and
boats are not quick. Air freight is expensive, diving up unit prices.

------
pluma
So in summary, manufacturing is coming back but the jobs aren't?

This trend was entirely predictable. Cheap human labor becomes expensive and
unreliable at scale so it's only a stopgap until automation becomes affordable
enough. Cutting delivery times and transportation costs helps shift the
balance. Scandals and improving quality of life (i.e. workers become more
expensive as labor laws improve, production becoming more expensive as
environmental laws improve) also helped.

It's the end goal for Uber, so why should labor-intensive factory jobs be any
different? As soon as automation becomes more profitable than human labor the
jobs will be gone.

~~~
PeterisP
For many industries automation is possible and affordable, but it's held back
by the fact that you still can find places where manual labor is cheaper than
dirt. As the quality of life rises worldwide and decent workers have better
options than working for a handful of rice, we'll get mass automation.

Not because of automation getting cheaper (though that's happening as well)
but because of labor costs rising closer to living wages.

------
mtgx
One of the most positive things to come out of advanced automation in
manufacturing will be the decentralization of manufacturing and countries
being able to make most of the products themselves again, instead of buying
them all from China.

Hopefully this will be just as true for chip and device making in the future,
as then it should become much more difficult even for China to force companies
to implement backdoors in the products they sell abroad. Because once those
companies are discovered it would be game over for them.

~~~
ksec
I think that is only possible for Clothes, Plants / Vegetables. Chip Fab are
highly specialised, and only leading edge are from Intel, Samsung and TSMC.

~~~
epicureanideal
As the benefit to each next generation of chips becomes lower and lower
though, that might not matter as much to some countries as independence. For
example, I've read that Russia manufactures some of its own computer chips for
military purposes where it doesn't trust imported chips.

If any country wanted to, I'm guessing they could manufacture CPUs that
would've been top of the line 10 years ago, and honestly, for most
applications that would be good enough.

It also might be that individual countries would manufacture chips for certain
applications, and then they could buy the "world's top of the line" from
Intel, Samsung, and TSMC just for high end business or gaming machines, which
is a smaller market than the total market for all tablets, phones, IOT
devices, etc.

------
sytelus
TLDR;

This mainly affects luxury clothing items for which “Made in ...” label
matters more. The fashion is becoming ultra fast as trends are set by items on
Instagram and 30 day bulk shipping from China doesn’t cut it. The term is
“nearshoreing” because it is cheaper to produce in Mexico for US market and in
Turkey for German market. Still, US and Germany themselves not an option
because they are 17% and 144% more expensive respectively. China is responding
by opening factories in places like Ethiopia.

~~~
b_tterc_p
Would China opening businesses outside of China due much to help the Chinese
economy? I would assume most of the gain will flow to the local economy and
the 1% Chinese elite

~~~
kazinator
Perhaps in the form of whatever that 1% manages to spend at home rather than
abroad, and whatever they can't hide from the local taxes.

------
m23khan
I can see nations such as India and Bangladesh getting into trade agreements
with Western Governments to ensure them of continued quota in order to keep
their masses employed and their economy intact. China is going to get screwed
over severely for sure.

India, being darling of free World will get this 'special status' definitely
so reality would be, clothes made in West + India and Bangladesh.

~~~
techie128
> India, being darling of free World...

Please explain how exactly is India "darling of the free world"?

------
virmundi
I'm curious about logistics in general. If the US rebuild its train system, by
expanding it, would it make more economic sense to have production centered
here? Could the US transport clothing from say, Indianapolis, to EU member
states more efficiently, cleanly than China's proposed rail/road system?

~~~
mikeash
The US freight rail system is already excellent. This fact is often missed in
the periodic “American trains suck so hard” pieces because it’s not visible to
the average person the way passenger service is.

~~~
virmundi
Thank you for replying. Do we have the infrastructure to compete with large
shipping vessels? Part of my curiosity is the switch over that supposed to
happen soon in diesel fuel. If the price of fuel increases, will it make
manufacturing in a central continent preferable?

~~~
mikeash
I’m far from an expert, but it seems that ships win on price pretty strongly:

[https://www.maritime-executive.com/editorials/comparing-
mari...](https://www.maritime-executive.com/editorials/comparing-maritime-
versus-railway-transportation-costs)

Apparently it’s considerably cheaper to ship coast to coast by sea even though
it’s a lot farther. Rail’s big advantage there is speed.

Fuel costs would hit both, but I don’t know which one would suffer more. In
theory, rail could become independent of fuel costs by using electricity, but
I don’t think electric trains are cost effective over such distances.

------
est
> Delivery to big Western markets takes about 30 days by sea

Or 12 days by Sino-Europe rail.

It's expensive though.

~~~
mrweasel
There where an article a few month back, from Norway I believe, where someone
claimed that by raising shipping cost just slightly the saving by having
certain products manufactured in China would be completely negated. The cost
increase could be emission taxes on container ships.

The take away seemed to be that right now China is very depended on keeping
shipping costs low for a large number of goods. Otherwise they are no longer
able to compete on price.

~~~
est
That's the whole point of globalization.

Back in Medieval period, the Ottoman empires taxed the hell out of silk road,
so Europe countries had to find alternative sea routes to India and China.

------
preommr
Doesn't really help much if most of it is coming back to the west to be
automated.

~~~
choward
Why would you say that? Automation is a good thing for humanity and it's a lot
more efficient than shipping from China.

What doesn't it help? Is this a "jobs" argument?

~~~
FranzFerdiNaN
Under capitalism automation is not really a good thing for humanity. Loads of
middle class jobs disappeared due to it, leaving millions with lower wages and
a more insecure life.

But automation is good for the average HN reader I guess, for now. One day it
will come for them too.

~~~
dmichulke
A thought experiment: What would happen if we remove all "automated" things
like factories, robots, cars.

We'd have lots of things to do, labor shortages everywhere. But would you
think the median worker would be better off?

And wouldn't you think that in the 18th century the automation of manual work
through factories should have resulted in huge unemployment today?

You need to reconcile these thoughts with your claims before you dismiss
automation.

My own take is: "Automation" leads to lower prices for everyone. In a sense,
automation is the thing that increases your purchasing power by letting you
buy more (of the automated good) for the same money. It's not a wage increase
but its effect is the same for the good/service automated.

And yes, a manual worker might lose his job, but all others + all coming
generations and there included his personal offspring will benefit from that.
Now what's better in the long run?

~~~
benj111
The great thing about automation is that it allows us to make so much more
with each unit of labour, so we can afford so much stuff. The downside of
automation is that we have to keep on buying more stuff so that everyone has a
job, and to keep the wheels turning.

Automation of all those jobs in the 18th century did lead to everyone getting
better off and that was good because most people didn't have enough. Today (in
the west at least) most people have enough. There's a limit to how much stuff
you can buy, money is increasingly directed into property etc. And the jobs
are becoming increasing less useful (service jobs growth, marketing job growth
v traditional blue collar, white collar job stagnation / shrinkage).

To continue your thought experiment. What is everything were automated? No one
would have a job to buy anything. I guess that's where the basic income crowd
is coming from. Its unclear how you get from here to there though.

