A 127 year old US industry collapses under Chinas weight

[Ronkh]

Alcoa aluminum

A 127-year-old US industry collapses under China's weight

[craigdt]

Local Alcoa plant here seems to be struggling. I didn`t read the article, but I think they spun off their finished aluminum business to keep the 2 entities separate. Wouldn`t surprise me if they sold off the struggling half before too long.

[Tpr1634]

America is next ?

[RTexasF]

I`m glad I`m old and hopefully won`t see the total collapse of American industry.

[Lonnie]

Rohnk:
Thanks for sharing the article on Alcoa. While this may seem an innocuous "blip" on the metals commodities and associated business news, it is a much bigger signal of recent developments in the economy. While no one will admit that lower energy prices(IE, oil in particular) are a factor in this decline, it also tells me how much our American economy has and is changing. Having worked in the engineering field that deals with manufacturing (paper converting, food processing, and packaging machinery), it is sad and troubling to see the loss of good American jobs to overseas competition.
I will contend that the way to build a country`s wealth is to have some natural or grown commodity or man-made product or service that outside countries want and pay for. America had this economic advantage for many years from its inception as a nation to the mid 1970`s. What has changed is that the largest (former) third-world countries (India and China) have "caught up" to this idea and have effectively "leveraged" their costs (labor) and taken advantage of the world markets and economic conditions. They have been able to do this because of their cost of living and standard of living. I doubt that many Indians or Chinese have a $20,000 new car loan, a $150,000 house mortgage, two children in higher education with college student loans of $35,000, attend a professional sport venue once a month, eat out 2 or 3 times a week, have heath insurance that cost $400 premiums for a family of 4, pay 25% of their gross income for all levels of government taxes, or put 3% toward a 401K retirement account. All these costs for the standard of living we enjoy in America come with a price. Unfortunately, large debts and trade deficits with countries we do business with are NOT ways to build wealth within a nation. One does not need to be an educated economist to know that when we spend more than what we make or sell, we go broke, and eventually the lender owns what we once had OR someone else pays for losses we incurred.

We can rant and rave all we want about this subject and some wonder why this is even a topic for discussion within a forum that is dedicated to car-care detailing. My point is that we as nation are in financial trouble and there will come a day of economic reckoning. While no one likes to hear or believe it, nor am I a "prophet" by any sense of the word, it will affect us all and we are just beginning to see that. Ask any American worker who has lost their good job to overseas competition.

I offer no answers to this dilemma. Much of it will be determined by how we as individuals choose to spend our money, what we consider important in life and society (like, should professional athletes and entertainers make (alot) more than teachers or nurses?), and who we elect to public offices at all levels of government. It`s up to you to make the right choices.

[Ronkh]

I put this under car guy discussion and not in off topic because it directly affects us as "car guys". How much aluminum is there in/on our cars.........?

As you said Lonnie, we need to make good choices. My opinion is that the more manufacturing jobs we lose as well as the industry facilities that go down, the less secure we are. Not only financially secure, but security as far as a viable independent nation. Part of our success in world war two, was that we had the manufacturing infrastructure in place. So re-tooling was relatively quick. The labor force was skilled and caring.

We need to become competitive again.

[Bunky]

The strong dollar is not helping either.

However, I do not think even if taxes were dropped, it would change the basic differential between wages.

You have countries paying $3 an hour and unless productivity/automation is involved there is too much gap to prevent a cost first, country second CEO to move jobs offshore over time to show continual improvement in profits. It is just a matter of time.

We do need to keep an industrial base especially when our potential enemies are providing so much of our goods. China and other countries also hold a lot of our debt.

[Lonnie]

Ronkh:
In order for us (meaning Americans) to become competitive, as stated in my previous post, consumers, both foreign and domestic, need to want and buy a countries goods and services. The concept of "Buy American", while a great idea and beneficial for all of us in the United States, is somewhat idealistic at best. Even within our car-care industry, I bought and own foreign-made products, like car-care polishes and waxes (Germany and Great Britain), microfiber towels (Korea and China) , either because they are "superior" to those made in America (at least in my opinion) or they simply are not produced in the USA (who makes high-quality microfiber towels in America?). Even the much-heralded and sought-after Rupes Bigfoot is made in Italy and Griot`s BOSS polishers are made in China. Who makes a quality polisher in the USA? Cyclo is (or was) the only one I know of (Not sure of DeWalt). Milwaukee Tool (from my home state) was back in the late 70`s and 80`s.

Think about it. The shoes and most of the shirts you wear today are made overseas somewhere today. Those used to be Made in America by American workers. I have large automotive mechanic Sear Craftsmen tool set I bought with my first paychecks that was made in America 39 year ago. Try buying a Matco, SK Dresser, or Snap-on Tool set today and see how much it cost. Even shoes. Buy a good pair of Red Wings made in Minnesota and they are easily double what a Chinese-made equivalent is. Try buying USA made TV today. American-made TV company names like Zenith, RCA, Phillco, Sylvania, Curtiss-Packard, Magavox have either disappeared or are shells of their former selves. Zenith`s company slogan (IE hashtag in modern-speak) was, "The quality goes in before the name goes on."

So when you say, "competitive" I am not sure how to accomplish that except to have the consumer buy the product or service and get them at a price that they believe is fair, and of value for the quality of that good or service. The real question is "Can America compete in a global economy?" With the number of American manufacturing companies that have gone out of business, or relocated their manufacturing overseas to remain in business (IE, out-sourced), I think the answer is self-evident. Can we change this trend? Absolutely!! But we are going to need to re-evaluate what is "important" in society and the standard of living we have become accustomed to and expect. Ask anyone who lives in Greece. They are beginning to understand what the term "Austerity" means to them and the impingement it has on their lifestyle. We as Americans would do well to learn from that recent economic experience.

[Ronkh]

Al and Lonnie,

IMHO, first we need to become competitive...... It` not the $3.00/hr labor cost overseas that`s necessarily killing us. GDP of those countries and the goods and services the citizens can buy are on par with their monetary system. America has the highest corporate tax in the world, then on top of that FICA, and the assorted other taxes/fees/regulations. We are at least 30% "behind the 8 ball" so to speak, before our goods go anywhere. We tax and regulate our business off shore or out of business.

Perpetual motion doesn`t work. Government doesn`t create long term jobs, they`ll run out of $$$. Government needs to make an environment conducive to business.

Lonnie, your analogy to Greece was spot on.

[Bunky]

Ron, I completely agree we tax reform but for larger manufacturing aspects I do not think it will really help in the long run. The tax reform to me is to help the smaller sized businesses. I do think the company paid of social security should be dropped and this leads to modifying the social security.

[Lonnie]

Al and Lonnie,

IMHO, first we need to become competitive...... It` not the $3.00/hr labor cost overseas that`s necessarily killing us. GDP of those countries and the goods and services the citizens can buy are on par with their monetary system. America has the highest corporate tax in the world, then on top of that FICA, and the assorted other taxes/fees/regulations. We are at least 30% "behind the 8 ball" so to speak, before our goods go anywhere. We tax and regulate our business off shore or out of business.

Perpetual motion doesn`t work. Government doesn`t create long term jobs, they`ll run out of $$$. Government needs to make an environment conducive to business.

Lonnie, your analogy to Greece was spot on.

I do believe that those making more should pay more in taxes. I have long advocated a balanced-budget at the federal level. Local and state governments do it because they do not have the means to "print" (IE, create) money, also know as fiat (NO, not the car company) money. Our federal government have done this since the inception of the Federal Reserve system and as long as everyone believes that a printed dollar is worth a dollar, the system works. It has generated the economic condition called inflation, which gives the false impression of increasing a country`s wealth, again as long as your wages or income keep up to the cost of living expenses within that country. For many workers who have lost a good-paying job and accepted a new one at a lesser wage than before, inflation now means that they may not be able to buy a new car, or move to a different house, or worse, be unable to meet their current house mortgage payments or to buy health insurance, or have to start withdrawing funds from a retirement account to keep up with their current "perceived" standard of living.

A balanced federal budget sounds like a great idea, until you realize that taking 1 trillion dollars out of the economy would create economic chaos and collapse. Federal dollars spent on equipment and products for the military would mean lost jobs and hence wages. Reduced benefit payouts to those individuals who are dependent on them would impact all aspects of society. So how do you make up for that? Either you spend less on goods and services OR you raise taxes. And to me, the only way to raise taxes are on those individuals (individuals also means corporations as a Supreme Court ruling made recently) who make more. Examples are having no FICA limits on earned income. Is it fair? Again that decision is to be made by our elected federal officials. But what federal official is going to propose taxation legislation on the very individuals who gave them money for their campaign to get elected!? It would be political suicide!.

So here we are, at a cross-roads in our country`s economic dilemma and upcoming federal government election. As previously stated, each of us as voting and spending American citizens have choices to make how this will all turn out. Changes will come, for good or for bad. It may not be palatable to us as individuals for our own personal financial situation, but we WILL need to make those decision one way or another. I would "dislike" a foreign entity to decide that for me, hence, my reference to the Greek austerity situation.

[Ronkh]

Ron, I completely agree we tax reform but for larger manufacturing aspects I do not think it will really help in the long run. The tax reform to me is to help the smaller sized businesses. I do think the company paid of social security should be dropped and this leads to modifying the social security.

Again, my opinion......

All of it helps. We need an environment that`s conducive to doing business, not disincentives. Larger companies are running away, leaving the burden on small business.
Our military has to buy bullets from Israel, whatever is left from our "Space Program" is buying machined parts from China and other countries. Not only are we giving away our $$$, but our national security as well.

But it`s also more than just tax/regulation reform, we need to get people off their butts and back to work. Not just pencil pushers or entitlements. To quote a line from Caddy Shack, "The world needs ditch diggers too." Too many people see no honor in doing a honest days work, for an honest days pay.........

[Lonnie]

Again, my opinion......

All of it helps. We need an environment that`s conducive to doing business, not disincentives. Larger companies are running away, leaving the burden on small business.
Our military has to buy bullets from Israel, whatever is left from our "Space Program" is buying machined parts from China and other countries. Not only are we giving away our $$$, but our national security as well.

But it`s also more than just tax/regulation reform, we need to get people off their butts and back to work. Not just pencil pushers or entitlements. To quote a line from Caddy Shack, "The world needs ditch diggers too." Too many people see no honor in doing a honest days work, for an honest days pay.........

I vote for Ronhk! Rohnk for President!!!
Your campaign slogan could be " A clean detailed car in every driveway!" [Just saying... and, NO, I do not want to be your running mate for Vice-President: Captain Obvious for VP., (UNLESS you can get me some more vehicles to detail!)]

[512detail]

sad news

that used to be the Only American made part on a Lamborghini Murcielago (the wheels)

[Ronkh]

I vote for Ronhk! Rohnk for President!!!
Your campaign slogan could be " A clean detailed car in every driveway!" [Just saying... and, NO, I do not want to be your running mate for Vice-President: Captain Obvious for VP., (UNLESS you can get me some more vehicles to detail!)]

I got more skeletons in my closet than Bill & Hillary, and am less of a diplomat with my words than The Donald.

Hey, mebbe I could win............