The Chinese ship plenty of glass to NA. The weight is of no consequence since freight is charged per volume (40' container, 20' container). Typically a 40 ft container from China to NY State is about $3600-$4200 depending on the Logistics Company and time of year. Many of the Condo's in Toronto, Canada (condo capital of the world) are faced with Chinese glass. Glass is typically compromised when it is not packed or stored correctly. It is actually quite durable and is shipped from all over the world. A good example is the glass Apple used for its new campus, it came from Germany.
I think the problem here is "Just in Time" delivery to the Auto Manufacturers. It takes about 12 days on the water and another 5 on rail to reach the rust belt or east coast. So that is probably why they decided to start producing in the USA so they can meet tighter production and delivery schedules and take shipping lines/ports out of the equation.
From back when I was working in that industry, I was told we couldn't really compete on price with China. They were trying to get glass from China because it was cheaper than what we could make in our own float plants. We were trying to compete on quality, that is to say, delivering less broken or damaged glass.
That said, you're right--I don't remember too much trouble shipping raw glass. It was just coated in Lucite and the first sheet is always a write-off. We had more trouble when people had packs fall when trying to load them into the gantry every so often, though broken sheets were quite a pain to deal with sometimes more from a safety perspective, when the crane can't get suction on it to drop it and it's too big to safely handle.
You're right, the article didn't mention difficulties shipping glass. It did mention that they wanted to be close to their customers though. I'm not really sure that your detail would have added anything as the article wasn't really about glass manufacturing. It could have been added with one or two sentences though.
In context to the article, my point is that Fuyao is a poor example.
The author makes it seem like Fuyao's decision to build in Ohio is part of a larger trend across verticals, when in reality the nature of the glass industry demands Fuyao building local to suppliers.
They setup the factory in US because of the heavy taxes back in China. The chairman mentioned in the article gave a detailed talk touching this subject at the end of 2016 and he claimed that it is cheaper to operate in US once taxes are all factored in.
Yes, it still does get shipped a lot of places though.
For example,"float glass" is not manufactured in New Zealand - no windows have been made there for 25 years, every single one is imported.
It seems that at the scale these plants operate, it's not economic to run one for a country of 4.5 million people (with a first world minimum wage) without tariffs or subsidies.
Out of curiosity, is it a common practice to require foreign companies opening American branches to have a "predominantly American management corps"?
I always assumed that multi-national companies tend to send executives from their headquarters for strategic decision making, and only hire local managers for execution.
And the factory is set up by the Chinese company. It would be an understandable demand to insists on local management if the Chinese bought the already existing local operation. But for a brand new operation it's a weird thing to ask.
>Such lapses are common in the brutally competitive auto parts industry... but they can easily lead to amputation or even death.
This is exactly why these regulations need to exist and be enforced as strictly and evenhandedly as possible. If they didn't exist, your competitors will implement any measure, including ones that compromise worker safety, to undercut your prices. Market forces will attempt to shape this industry to be the leanest it can possibly be.
Capitalism can grind fungible labor into a literal pulp if it is allowed.
Yep. Lack of regulation can affect more than just the employees. If that plant can pollute like they do in China - everyone in that city would all have a negative impact. The Republican administration believes regulation is bad and must be removed. It's a shame what people would believe in the name of 'jobs'.
It's somewhat surprising for the NYT to put forward the proposition that ethnocentrism and disregard for worker safety is a part of Chinese culture, but I guess I'll take their new wokeness as a sign of progress.
I think it's worth pointing out that this appears to be mainly Chinese culture from the mainland. Chinese from other areas like Hong Kong and Taiwan seem to be completely different. When I visited Taipei I was pleasantly surprised to see how polite these people were, they lined up in queues to board their subway!
Taiwanese people love queueing. Queueing for the train, queueing waiting for the bus, and - of course - queueing around the block to wait to eat at a 'famous' restaurant (:
oh, then they should visit the mainland and start queuing for a licence plate in Shanghai - 18 months waiting time on average, $15k cost. crazy? They can also renounce their ROC citizenship and start queuing for an apartment in Beijing or Shanghai, 60 months to become eligible and $1m to get a 2bedroom one next to a noisy main road in an area traditionally considered as poor neighbourhood.
It's not so much culture as regulatory environment. Chinese labor laws are more lax, or at least more laxly enforced. Things are done pretty differently in the American Midwest, with its history of labor organizing.
China is a gigantic investor in the USA. Whenever you hear the term "trade deficit" that the US has to China, there is an identical amount in "investment surplus" that the US gets from China.
That investment is everywhere - in our stock market, in our government debt, in our real estate and in our Ohio Windshield plants.
Every time you buy an iPhone, you're handing China hundreds of dollars which they then invest in America.
We very literally gave them a Windshield plant in exchange for consumer goods.
> China is a gigantic investor in the USA. Whenever you hear the term "trade deficit" that the US has to China, there is an identical amount in "investment surplus" that the US gets from China.
This is a bit of an oversimplification of how balance of payments resolves itself. For instance, their central bank (PBOC) has the largest FX reserves in the world. When we buy things from China, the seller can either keep USD to invest/purchase something in the US, or can buy CNY. To keep the CNY from appreciating too much and making Chinese exports uncompetitive, the PBOC sells CNY and buys those USD. They in turn use some of the proceeds to purchase US Treasuries. However they do this not because they want to invest in the US, but because they want to hedge inflation. So yes, your comment is true-ish, and global trade is an amazing thing, but it's a bit misleading to say every dollar sent abroad returns to "invest in America" in the typical sense that most people/HN commenters think of investing.
The author of your link keeps repeating that things will balance simply because they will balance. That sounds like "what I say is true because I say it is true." Is there proof of this beyond the author's mere assertions?
Also, the author says we pay for stuff that turns into capital for them. They use that capital to create more businesses or own more stuff here. That doesn't sound like it's going to balance for the U.S.. It sounds more like they'll progressively have more ownership, market share, and revenues over time.
I suppose you could look at it in the classical economic sense. I give you $1 because I value it less than a cheeseburger. You give me a cheeseburger because you value it less than a $1.
I don't think that means things even out between US and China. But I do think it means things even out overall. We may "lose" with China and "win" with others. But ultimately, as long as people are spending their own money (as they want to spend it) I can't see how a trade deficit/surplus will ever affect them.
It's a good point. Economics as practiced today is very "transactional" vs looking at the long term.
It's pretty obvious that we've morphed into a poorer country over the last 30 years. We've also shifted our thinking about prosperity from employment to GDP.
Also there's no concept of nationalism in modern economics, and many advocates for the current way of doing stuff inject revisionist social agendas to the mix. (I.e. Why should Westerners be privileged?)
" But ultimately, as long as people are spending their own money (as they want to spend it) I can't see how a trade deficit/surplus will ever affect them."
Long-term, risk avoidance is a weakness in people. They'd be spending it thinking of one result with another, worse one on the way. That's a way it might happen.
It's basically: Stuff+Investments sent = Stuff+Investments received
Think about it this way: China sends the US an iPhone, and the US sends dollars (paper / numbers on a screen) in return. China put a lot of work into the iPhones... what did they get? They got the opportunity to buy stuff in America with dollars! What do they want to buy? They could buy stuff, like airplanes and software, or they can buy factories.
And yes, when they buy American investment products, they will (or hope to) receive more back in the future. When you buy a productive asset, or save money, you expect to receive more back in the future. So when you sell that productive asset, you give up that future benefit for a smaller benefit today.
> China sends the US an iPhone, and the US sends dollars (paper / numbers on a screen) in return. China put a lot of work into the iPhones... what did they get? They got the opportunity to buy stuff in America with dollars!
This makes it sound like every dollar from the US finds it's way "back home".
China has been doing a lot of investing in other places like Africa, and China. Where does that money come from? Not Africa and China I suspect.
You've got your order reversed. China uses it's currency to buy investments in Africa. The Africans now have a bunch of Chinese currency, and clearly, they are going to do something with it. Most likely they will use it to buy consumer goods made in China. Thus creating a trade deficit that's exactly equal to the investment surplus.
There's nothing mysterious or sinister about the balance of payments. It's a mathematical and accounting tautology. I suggest spending some time reading about it from a good source, if you're still skeptical.
Of course the net exchange of money within the global economy must net to zero, but that's a very different thing than saying that the $ the US sends to China in exchange for manufactured goods must either be used to purchase US goods or invest in the US, as was the initial claim.
True, it partially breaks down as the US dollar is a de facto international reserve currency. Since so many countries will accept US dollars for their exports, a portion of that cash can keep circulating around outside the US.
ultimately, only place you can ultimately spend american dollars is in america. Some spent indirectly do find its way back to america, some stay out and circulate for a very long time, but imagine a scenario where america collapses (suddenly for an unknown reason). Will countries that used to take american dollars as a form of payment continue to accept it? I'd say no.
Therefore, money spent by china in africa in the form of american dollars will ulimately be re-used to purchase american goods.
Not necessarily. There are a lot of countries in which merchants are perfectly happy to take dollars over the local currency. Over the years there are countries that completely abandoned their local currency in favor of the US dollar (e.g. Ecuador) until they could get their own currency sorted.
I am glad that in some countries there is still an ethos of standing up for your own citizens. I couldn't imagine any action being taken against a Chinese company for discriminatory hiring practices in New Zealand or Australia, where such discrimination is rampant, not only in employment but also in real estate.
You are going to have to provide some references to support such an outlandish statement (of pro-Chinese discrimination being prevalent). Unless you mean that real estate agencies employ Chinese people to sell to Chinese people?
I dunno. Reading this article left a bad taste in my mouth. It wasn't the Chinese that turned a large portion of industrial America into a rusty meth-infused wasteland, yet it is the Chinese that are opening these factories. I applaud a desire to maintain safety standards, but if it wasn't for Fuyao, there wouldn't be anyone to unionize, you know?
So, that's what all it comes down to I guess. Like, be happy because there are jobs in the first place or unionise, make them accountable for all kinds of regulations and give them a hard time?
Maybe the Chinese or perhaps anyone wouldn't have invested in the first place if they think they can not generate enough profits to sustain, so giving an easy pass for safety standards or any regulations would encourage this.
Over the long-term, the way Americans are fighting Communism is by introducing capital to modernize China which in turn should raise a middle class and cause them to evaluate capitalism on its merits. This is part of that struggle, and an attempt to avoid a bloody war if China were to decide on rapidly modernizing like Japan did pre-WW2. So I'd say China can take their trade and their factories and shove it, but that wouldn't be playing the culture war card.
The Chinese expect to open plants here and run them in the same subjugated way they do in China because that's their culture. They view the US as something to conquer. What they're going to realize very quickly is that this endeavor is a lot like trying to herd cockroaches who know how to use gunpowder. Before you know it, they've laid traps you don't even know about in the walls.
Trump's a warning shot across the bow of foreign powers and the establishment that the American public aren't going to put up with the lack of a social contract and continuous exploitation forever. He's not going to get a lot done, but that's part of the point; he's showing them that there are repercussions to economic warfare and subjugation.
I doubt the plant is going to be there in a few years. They are going to deal with everything from EEOC lawsuits to unions being unreasonable because of the way promotions are done. They won't be able to shake that. Period. The only way to shake a union is to shut down long enough everyone leaves or treat people well enough they don't feel the need.
> Over the long-term, the way Americans are fighting Communism is by introducing capital to modernize China
Fighting communism? That's rich. Do you think the ability for corporations to cut costs in half while keeping sales constant might have just a little to do with it?
> if China were to decide on rapidly modernizing like Japan did pre-WW2.
Holy cow....without American corporations going over and teaching them how to do it, there's no way China could have modernized as quickly as they have. Everyone now is in the position of having to hope China will be a benevolent leader of the world, because it's almost inevitable at this point that they will surpass the US by a very wide margin.
> Trump's a warning shot across the bow of foreign powers and the establishment that the American public aren't going to put up with the lack of a social contract and continuous exploitation forever. He's not going to get a lot done, but that's part of the point; he's showing them that there are repercussions to economic warfare and subjugation.
Trump's movement is being put down as efficiently as the Occupy Wall Street and Bernie Sanders movements were put down, and the exploitation of Americans with their full compliance will continue. He's not going to accomplish anything.
So destroying America's manufacturing potential in everything from textiles, to electronics and heavy industries was all part of a scorched-earth secretive plan to fight Communism in China?
I drive past this plant on occasion, and I think it's been a generally positive impact on the area. It was kind of sad when the old GM plant shut down and sat empty for several years.
"Fuyao faces [...] a lawsuit by a former manager who says he was let go in part because he is not Chinese."
Somehow the opposite scenario could sound absurd in China. Imagine "General Motors in China faces a lawsuit by a former manager who says he was let go in part because he is not white."
I'm not implying anything. I'm just pointing out that for some reason, that scenario could sound absurd, even if irrationally so. It might not have to do with differences of the judicial systems, but with differences in value and prejudice between the two cultures.
Those jobs were historically there to begin with, then tooling + process + jobs were shipped overseas because that was cheaper, the resulting trade surplus made it possible for the Chinese to ship the factory back to the United States.
The big question then is can they remain profitable in the long run if they do things the US way, and if they can why couldn't the same plant be owned and operated by Americans?
Ask a bunch of American investors to help with your glass plant in Ohio. They will suggest you call them back when you're ready to build the "Airbnb for Glass Factories."
"and if they can why couldn't the same plant be owned and operated by Americans?"
You already know the answer to that. It's why they shipped the jobs overseas in the first place. In many cases, the workers even keep voting for the kinds of people that do it. I especially found it amusing that Trump was appealing as a capitalist to workers whose jobs were lost due to capitalism like this. Many of these areas are self-defeating. Not all but many.
This is also true. They were foolish to vote for the kind of person who left them jobless. They thought it wise to vote for the only person promising them something. The latter happened because they're too superficial: most districts vote out the honest, well-performing folks early. That superficial "he-said-she-said" stuff is what they need to stop doing the most.
> They were foolish to vote for the kind of person who left them jobless.
Clinton's policies would've left them just as jobless (by way of her supporting the TPP, finishing off those crippled by NAFTA, which was a project of Clinton's husband during his presidential stint). When in doubt, vote for the person who says they'll burn everything down, which appears to be on schedule.
I think it's worth noting that there's a big gap in the perception of NAFTA (and its ilk) and their actual consequences.
In terms of actual consequences NAFTA has had almost no effect on the US economy, either positive or negative: a 2003 CBO report found that it had increased the US's GDP by only a few billion dollars[1].
Different sides have presented job loss and gain in different industries over the last 20 years as evidence of enormous failure or success, but the reality is that the 20+ million growth in overall employment since NAFTA has probably been normal economic growth.
The real benefits of agreements like NAFTA for the US are geopolitical stability and economic dominance - Mexico is asymmetrically dependent upon us for trade, and that dependency has been central to their willingness to cooperate in border migration and drug policing efforts (which are arguably terrible uses of power, but are good examples of the influence brought by trade). The TPP presents (or presented) similar opportunities in Asia.
I don't reject the claim that people feel disenfranchised by trade agreements, or that the industrial-service shift has harmed millions of previously middle-class Americans. However, trade agreements can't be blamed for either of those: the first is a political talking point, and the second is unavoidable in a developed country with a chronic aversion to new job training and safety nets for workers.
> In terms of actual consequences NAFTA has had almost no effect on the US economy, either positive or negative: a 2003 CBO report found that it had increased the US's GDP by only a few billion dollars[1].
Compared to speculation as to what the economy would have been without NAFTA.
> The real benefits of agreements like NAFTA for the US are geopolitical stability and economic dominance
Which the US didn't have before? If anything, the US is far less dominant now.
> The TPP presents (or presented) similar opportunities in Asia.
Asia is eating the US's lunch without China even being competitive at the top of the value chain, which isn't too far away. When they achieve that, things will start to deteriorate even more rapidly.
> Compared to speculation as to what the economy would have been without NAFTA.
Sure, but it's just that: speculation. The reality is that the economy and jobs market have both grown, with no aid or detriment from NAFTA.
> Which the US didn't have before? If anything, the US is far less dominant now.
In terms of our relationships with Mexico and Canada? We're 50% of Mexico's imports [1], and 54% of Canada's [2].
I can't really dispute the feeling that we're less dominant. All I can say is that agreements like NAFTA and TPP are designed and refined with US economic interests in mind. When we leave the negotiating table, we lose our primary chance at advantageous trade agreements.
> Asia is eating the US's lunch without China even being competitive at the top of the value chain, which isn't too far away. When they achieve that, things will start to deteriorate even more rapidly.
If this is true, then trade agreements are especially vital. Developing economies need investment, and they're going to get it one way or another.
> Sure, but it's just that: speculation. The reality is that the economy and jobs market have both grown, with no aid or detriment from NAFTA.
No effect whatsoever, the outcome with or without NAFTA would have been identical, to the penny? How might you know this?
> If this is true, then trade agreements are especially vital.
Before China entered the WTO it was a 3rd world country, now it is challenging for #1 position economically and before too long technologically. They are eating everyone's lunch because of trade agreements. This isn't to say they don't deserve this position, in many ways they do (hard work), but they also got decades of free technology research gifted to them.
> No effect whatsoever, the outcome with or without NAFTA would have been identical, to the penny? How might you know this?
I'm saying that there's consensus that NAFTA's economic impact on the US has been minor. It might be the case that the US's GDP would have risen by 0.1% per year without NAFTA. However, at that scale, it's just a spending game. From a purely political perspective, what's more valuable: a 0.1% annual increase in GDP, or economic control over the only two countries that share your border?
> Mexico is asymmetrically dependent upon us for trade
Bingo. All other Latin American countries grew at a decent clip in the past 20 years (5-15% per annum) versus Mexico's 1-3% over the same period of time. Mexican wheat and corn industries have been decimated by American products so they've turned to high-price exports instead.
At least we get cheap Mexican avocados for our toast.
Yes. Maybe I should say that these are positive statements about trade agreements, not claims that trade agreements produce good outcomes for all parties. The War on Drugs is a perfect example of how we've used our trade dominance to shape Mexico's domestic policy to the detriment of tens of thousands of their citizens (not to mention our own).
NAFTA went into force under Clinton, but was negotiated by Bush. By the time Clinton came around, it was a done deal waiting for congressional approval. Bush tried to get it done before he left office, but ran out of time.
I'd like to point out that the DNC argued in a court room that it's totally within their right to pick their candidate while smoking cigars in a back room, votes be damned; nobody voted for that.
We could have voluntarily decided that, ‘Look, we’re gonna go into back rooms like they used to and smoke cigars and pick the candidate that way,’” Bruce Spiva, lawyer for the DNC, said during a court hearing in Carol Wilding, et al. v. DNC Services Corp
> They were foolish to vote for the kind of person who left them jobless.
What 'kind' of person are you referring to? I think you might be over-generalizing. Trump has long been opposed to outsourcing American jobs, reportedly.
In any case, we should differentiate between the actions of individual business owners, and the policy that establishes the playing field. For example, current US corporate tax policy creates a strong incentive for many businesses to keep their cash overseas, and not repatriate it and pay the tax. You can criticize each individual company that operates in this way, such as Apple, but if you want to fix the problem, you need to look to policy solutions like changing the tax law.
A person can be in favor of changing policy even while they optimize within the current policy framework. For example: a wealthy person might be in favor of a tax on the wealthy even as they personally employ all available techniques to reduce their tax burden; there is no contradiction. No rational citizen will pay higher tax than the code obligates.
Criticizing individuals who optimize their actions within the current policy framework isn't productive. We should expect everyone to operate according to the current policies, laws, and incentives -- and if we don't like those, then we should change them through the political process.
So even if you consider Trump as somehow in the same category as company owners who ship jobs overseas, the point that you shouldn't overlook Trump's stated policy objective to create jobs in the US and remove the incentives to ship them overseas.
"What 'kind' of person are you referring to? I think you might be over-generalizing. Trump has long been opposed to outsourcing American jobs, reportedly."
How many employees does he have overseas? And how much does he depend on overseas goods when generating his wealth or power despite local ones available? I have a guess on one aspect given he spends a lot of time on Twitter using a smartphone that isn't 100% American despite he and others here having ability to fund one. Decent reasons, too, if we're talking espionage.
The parent comment addressed this phenomenon, although in a different context:
> A person can be in favor of changing policy even while they optimize within the current policy framework. For example: a wealthy person might be in favor of a tax on the wealthy even as they personally employ all available techniques to reduce their tax burden; there is no contradiction. No rational citizen will pay higher tax than the code obligates.
If you manufacture in the US while all your competitors manufacture overseas, you will go bankrupt, and would largely lose the ability to advocate for returning manufacturing the the US. Whether Trump is being honest in his promises is beside the point.
He doesn't do manufacturing: he mainly does real estate. He also started with a pile of money. He wasn't going to go bankrupt for investing that money exclusively in local businesses (esp real estate). He just didn't care about local businesses: his personal wealth and influence goes up as he globalizes just like those he critiques.
Now, your argument can definitely apply to manufacturing. It's why I would disagree with Trump on something like that if cost is the main issue. It's not always as many U.S. manufacturing companies can attest. Even when needing cheap labor, there are countries other than China less likely to cause us trouble that we could invest in. Many U.S. companies do, too.
> He doesn't do manufacturing: he mainly does real estate
Sigh....if he buys all his materials/furniture/supplies in the US in operation of his real estate business. So yes it is hypocritical, but it is basically unavoidable at this stage of the game.
Have they passed one of those with a majority Democrat or Republican Congress? Or have they just "wanted" to levy import taxes? The actual legislation seems to favor globalization over protectionism. I think TPP showed more their true colors where they tried to expand globalization but including very, specific provisions to protect the profits of very, specific companies or groups of them here. Some of those companies were themselves helping do the deal. They didn't care about American jobs: just the profits of big companies that donated to them.
A corporate executive is assigned to help improve the efficiency of a small-town brewery in this comedy inspired by the Johnny Paycheck song. When the small town turns out to be his old hometown, however, the executive finds himself torn between his loyalties to his company and his old friends.
Do you know why manufacturing left America? It has nothing to do with costs. It has everything to do with regulations and attitudes.
If you want a manufacturing industry, workers WILL get killed on site. Workers WILL get cancer from dangerous chemicals. There's no free lunch. Everyone knows this, but somehow we care more about a high school dropout getting exposed to fumes in a factory than one that ODs on heroin because he has zero job prospects.
Either blue collar workers die at 65-70 after a lifetime of work related exposure, or they die at 30 due to drug overdose. Those are your 2 and only 2 choices.
Because at a certain point increasing safety regulation causes production under a regime to be less profitable than moving to another country with fewer safety rules. Regulators are usually not punished for destroying profit and are usually incentivized to choose safety over private profit.
Many glass mills need to be within a certain mile radius of the factories they supply because of this. NYT missed this in the article.