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We (GML) have recently sent out completed designs (BOM, layouts and the prototype that wasn't stolen in Las Vegas) for quotes from several different manufacturers. Two of them either build in China, or have subassemblies built in China. The quality of manufacture, and the source of parts, are tightly specified.

The spread in prices from the top to the bottom is pretty astonishing. The low price was, of course, China by a factor of 1/3rd (not 33%, 68% less).

For now, we have decided not to go there for all of the understood reasons; underpaid, and often underaged, workers, not to mention the unreliability of data on working conditions and pay in Chinese factories.

At the same time our experience illuminates issues that we alone cannot hope to begin to address alone. And China, although most often singled out as the prime offender, is clearly not alone amongst nations in widely-supporting social and economic policies that make it incredibly attractive for the world to come to these shops for services.

What is so important here? Well, you'd have to conclude that currently the manufacture of most hardware is driven by price (and admittedly, although to a lesser extent, innovation). There are countless companies (and that one famous German one) that take advantage of this. Whether they are pocketing the difference or passing on all of the savings to the buyer is very hard to ascertain, but one is easily convinced that it's always a more profitable business when direct costs are lowered.

So what does everyone think? Would you decline to buy that hugely discounted Mackie rip-off mixer if it were demonstrated that kids were being driven to build it? Maybe that's extreme. But where would we draw the line?

George


George Massenburg

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I know that when my boss visited the plant in China that makes some of our stuff he was impressed with how slick it was. No kids on the line there, all machines.

I go back and forth on this one, on the one hand I personally know the guys who got laid off when some products went to China. On the other, anybody who denies that we are now globally interdependent will be out of business. It used to be that companies would build their plants in states that were more amenable to wages, benefits, insurance, laws, tax breaks, etc. It only goes to follow that when that cannot be had in the states, it moves elsewhere.

Obviously my opinion means exactly zip, I am a little cog in a large international corp. An international corp by definition operates on an international level.


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For us it's the sound. 2nd to will it break after 1 year, 3rd budget.

I would love to have (buy) some of your gear. I am a small commercial studio, see my site for more, and there are thousand like me out there. Producing and engineering full time, but not at a level of income that will get me a $4000 comp/lim or EQ. yet I am at a level that knows how to use it, and have clients that would warrent it.

I am right down the street from Manley, in Chino, CA, I know they are, or maybe were building some or all of your stuff. When I toured the place, I learn about what all goes into their products. Amazing and at an Audiophile level. maybe overboard? I don't know, I sure LOVE my Manley Mic Pre.

Why not have 2 levels, the high end you have now and a $1000 retail (B mark) version. Cutting corners by taking it down a level, from say, the super sealed military pots to more standard good quality or farming out the the metal work, anyway, you know what I mean.

How many $1000 units will you sell compared to your line card now?


Tim Dolbear
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You draw the line at the kids. If you can monitor the quality then why not the age of the workers, as well as the working conditions? Ok, I don't live in China, but the Philippines isn't any better really as far as labor salary is concerned. Now I understand the protests, but it is really hard for all you living in the US to understand life in this part of the world.

As low as the wages are, people still find it extremely difficult to find job openings. $150 a month minimum wage may sound absolutely pathetic to you, but that can support a whole family here. It may not be a great lifestyle, but they can at least survive. If they don't get that job, they either go back to the province, where there is no decent education for the kids, not to mention no decent hospitals, or end up doing odd jobs, if they're lucky to find any, that pays half that. And I'm talking about the college graduates here. I won't even start on the others.

Sorry GM, don't mean to rant on your thread, but I'm really sick of all this anti-china bullshit from people who have no clue what life is like on this side of the planet. If GML or Digidesign or anyone else would set up shop here you would be affecting so many lives, in a good way. Give us the jobs, make money and pass on the savings to the american people, whatever, we don't care, just give us the chance to make a living, which will give us the chance to later on move on to something better, and afterwards to something even better than that.


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I worked with a company that started with solely US manufacturing. As we grew it it became apparent that we needed to expand our production capabilities. China was the easy answer.

But....we were all concerned about crappy conditions, child labor ect... so we sent one of our guys over to actually , physically check out the conditions of the 3 plants we were negotiating with. There was a HUGE disparity in the different plants.

One was a total dump. Bad lighting, no windows, Horrible housing. Yes, most plants are staffed with people from the hills so they have to house AND feed them.

The other 2 were quite nice. We checked into the wage that was being paid to the workers and while it was a small number it was a livable wage.

There are still some plants with horrible conditions, that no one in good conscience could use, but they CAN be avoided with some upfront legwork.

They need to eat too, ya know.

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You're damned if you do, damned if you don't...

(I can't speak for the US from experience, but can't imagine the situation is any different from the UK)

On one hand high wage bills make it impossible to complete a product at a competitive RRP in the UK, but at the same time there’s a moral prerogative…

I can name various UK oems that have complete pcb assemblies made in the far-east, and then bolt the product together and test in the UK. If they were to build everything in the UK I personally think they’d either go out of business / definitely sell less product.

If a “sweatshop” doesn’t get your business they will from another less scrupulous company…

I recently watched a documentary about Nike’s factories in the far-east. Unless the programme was inaccurate, and “spin-doctored” (could be), it struck me that the Nike employees got a better deal than the other shoe manufacturers on account of Nike being able to pay higher wages and offer basic health benefits / sports facilities for employees etc. Employees interviewed at other plants stated their aim was to get a job at Nike for these reasons, even though Nike still only pay them $0.50 an hour, it’s better than the $0.20 a non-descript oem pays their workers.

I am developing a “b grade” version of one of my company’s products to enhance the price to distributor, even though I KNOW producing the product in China will enable us to sell the premium version at the same price as the “b grade”…

One other issue with China is that they can copy certain products, if you manufacture there you could be asking for a cheap replica to be built (btw, has anyone seen the fake Soundcraft and Shure products made in China? You would not believe the accuracy with which they are copied, very difficult to distinguish from the real item…). My legal people feel the product should be produced in the UK first, and then if it takes off we go to China, trouble is that for the RRP I reckon the customer will stomach, it’s virtually impossible to make it here and survive…

As long as you can prove child labour is not employed and there is security surrounding any protected technology I can’t see a real objection to Chinese manufactured goods, if you don’t employ them in a well-maintained facility someone else will. One concern is the possibility of “fake components”, I’ve seen fake transistors / resistor-packages etc, they work but not as well as the real Toshiba / Vishay etc product, and are very hard to distinguish from the real things, many firms I know have been saddled with tubes of fake components recently.

I guess another issue, bearing in mind China’s position on the world stage, is that of letting China study proprietary technology, maybe they could learn a thing or two about all those detector circuits in the 8900…

No easy answer here…

Regards,
Justin

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Raul, I think a lot of the real reason Americans and Europeans are against manufacturing being moved to China or the Phillippines is because it means Americans and Europeans will lose jobs. And one can NOT survive on that sort of job in America at least - there are people in some places who have a full time job making minimum wage but are homeless!

I am not at all against American companies doing business in other countries if we don't turn a blind eye to how the business is run - i.e. no child labor, reasonable health and safety conditions in the workplace, etc. However if we enforced those kind of conditions abroad the cost would go up. Of course, it wouldn't go up by 68%! So I refuse to believe, like George says, that a company can't still be profitable if they do business ethically. But most companies (particularly public companies) will not take any responsibility for the consequences of their actions. A company will move in, make an entire city in another country dependent on it as an employer, only to later find some cheaper place to do business and move out, devastating the community. They even do that in the U.S., but abroad they get away with much more. But still, if one WANTED to run an ethical business abroad, one could.

George, what about doing what Fender Guitars did? They have separate American-made and Mexican-made guitars, and they let the consumers decide which ones they want. The guitars are identical in many ways, and therefore everyone assumed this idea would never work and everyone would buy the much cheaper Mexican versions, but both lines are thriving. Those who can't afford American-made Telecasters and Strats have a very nicely made, genuine Fender Tele or Strat that happens to have been made in Mexico and has a few cost cutting compromises in parts. Those who want the very finest in guitars with the stringent quality control, and/or who want to support American jobs, buy the American version. There are enough "guitar snobs" out there to support the line very well. Better yet, Fender didn't have to deceive anybody. They didn't simply start substituting cheaper parts or farming out manufacturing, trying to pretend the quality was the same and continuing to charge prices that were too high. They are honest about where the two lines diverge, have priced each line accordingly, and customers have really gone for both.

I bet that if GML did the same type of thing, you would have a similar result. Project studio owners like me would be really happy to have a "real" GML product at an affordable price and be helping economic development in another country (because we'd know you were doing things ethically over there). Bigger studios and serious "audio snobs" who actually have the cash, would still be willing to pay a premium for the more exacting quality and the "client prestige" factor, not to mention be helping to keep American jobs in America.

So that's my suggestion!

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There are a few different issues here.

1.) Modern production w/ concern for workers...VS...lousy QC and "sweat shops"...?

2.) Production price...VS...quality... VS...selling price.

3.) The "exporting of America"…VS…all/any reasons for increased profits.

I think all these need to be considered when the final product is in your hands...though it is difficult for the consumer to get answers to all these questions.

.I would think that when you are a manufacturer...you can and should get all the answers before making a decision from whom and how you product will find it's way into the consumers hands.


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This is a fascinating subject. Being in political science and MBA business classes right now give me a renewed interest in the subject, combined with an election year and a microscopic approach on the economy.

The US economy is sustaining a jobless attempt at stability, most of the jobs having moved overseas. I think it's safe to say that without jobs the US economy won't really have the capability to turn around. All we have to export is food (which we do have in abundance) and intellectual property (knowledge, music, movies, etc.) and we're starting to farm out intellectual assets abroad now, also. Indian engineers are good and only charge a fraction of the price and are very well educated.

I think that for the US to do a complete turnaround we're going to need to keep some jobs here and turn around our trade deficit. On the other hand, at a certain point if we let the manufacturing overseas balance out with out own then our economy will once again continue to improve, but that will be a while, and it doesn't look like there's a fair set of rules, so we're not all on the same playing field.

The whole issue of globalization is getting very interesting. At some point we, the US, are going to have to start playing in the global arena and looking at the size and population of Asia and recognize that assuredly we are a large, intelligent, and well defended country, but our power in the global community is decreasing with our declining respect.

In my opinion we would be interested in signing on to various global treaties (the Kyoto protocol, the ICC, etc.) and showing the world that we're interested in being a partner on the global scene. Then we can start looking at trade imbalance and start asking those countries some favors as well - like protection from child labor, environmental policy that will raise their costs of manufacturing, and minimum wage standards overseas. If we can get 3rd world countries to start putting the laws in place to protect environment and humanity like we have in our country then foreign goods prices will increase and the US will start getting manufacturing back. But I don't see 3rd world countries doing those sorts of things as long as they still see us as the uncooperative, manipulative bully in the football field of global politics.

So, George, it's a complicated question, and you are, unfortunately, one very small manufacturer in the global policy questions you are addressing. I wish you the best on figuring out what you think is best. And I wish our country the best on reconciling the damage we are doing on the global stage.

Nika.

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Isn't it ironic that my right-hand column is innundated with "worldwide manufacturing" and "establish direct operations quickly, easily ..." as I write this?

In my view there are only 2 real issues which drive the moral situation; 1. Jobs, 2. Consumer Cost.

One only needs to examine the U.S. own Wal-Mart phenomenon - and it is a phenomenon - to ponder the moral implications.

Wal-Mart comes to your town. Away go the shop-keepers. Why? "low, low prices". Do the locals harbor affinity for Sam the hardware store owner? Sure they do. But not enough to pay more for items in his store with Wal-Mart prices making him look like a price gouging Scrooge.

I'm in the minority, clearly. I don't shop at Wal-Mart because I don't like what they do to communities. I also don't like what they do to their suppliers, which drives a lot of the outsourcing of jobs and products when Wal-Mart demands lower wholesale prices.

It's a cycle, and one that leads to exactly where you are; how do I compete? Who will pay higher prices than they "have to". American people have shown that they will "buck their fuddy" at any given opportunity by voting their dollars to the low-price leader. The very same ones who lament the loss of "American Jobs" are standing in line at Wal-Mart with their wallets open. Meanwhile, Wal-Mart is putting price pressure on the supplier to drive costs down to the level that can ONLY be achieved by overseas manufacturing.

And they don't care.

Different industries, but same problem. Same effect.

Until and unless Consumer Cost takes a back seat to one's support for domestic economics, this spiral is here to stay. My belief is that the choice people will make is crystal clear. One needs only to look so far as the loca WM parking lot to confirm.

Kent

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Quote:
Originally posted by gm:
At the same time our experience illuminates issues that we alone cannot hope to begin to address alone. And China, although most often singled out as the prime offender, is clearly not alone amongst nations in widely-supporting social and economic policies that make it incredibly attractive for the world to come to these shops for services.

So what does everyone think? Would you decline to buy that hugely discounted Mackie rip-off mixer if it were demonstrated that kids were being driven to build it? Maybe that's extreme. But where would we draw the line?
I would say "Stay away from China".

The first problem you may find is quality control. Over 90% of recalled products in the USA come from China. Your small company couldn't stand a massive recall of racks because a cable they used may burst into flames.

Second: intellectual property. It's hard enough to keep your things being copied by Behringer. Imagine if you ship all the details to China, where most of the intellectual property piracy happens (the rest happens on Latin pop and christian productions).

Third: Even if you go anc check some nice foactories, it's not for sure that's the factory they are gonna use in the end. It's like sending weapons inspectors to Iraq.

I come form a third-world country as well, where the best dollar bills are made, and most of Levi's jeans (original and fake). I know how piracy developes. The very same factory that makes the original stuff has another facilty where they make the bogus ones at a higher profit.

Stand for your principles. You know that people buying your gear will stand by you.


"There's no right, there's no wrong. There's only popular opinion" Jeffrey Goines
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and 5 minutes after I posted ... along comes this notice from my own company. Public disclosure linked here. How very timely.

linky

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George,
If you're going to save a few thousand on COG I'd reccomend spending it on a visit to the Chinese factory you might use, seeing something in person often beats rumor and assumption.
Don't forget to take your Immodium.
Regards,
David Bock

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I can guarantee you that, if you make a product in China that doesn't cost much less than Avalon or Millennia or Manley, I'll say "screw you" and buy the American stuff instead.

I'd also advise you to avoid the Focusrite debacle: with some stuff made in China and some in the U.K., it's impossible to tell what's good and what's crap any more (without hearing it). So people like me simply say "screw them" and don't buy *any* of their products. I mean, they've screwed up their brand so badly that its affected resale value. What's the green line worth vs. the red line vs. the platinum line? And why is "platinum" the most worthless of all? Especially when my credit card company tells me that I'm very special by giving me a "platinum" card?

LOUD technologies does it right. They create new brand names to aid in the differentiation. I know that "Mackie" stands for a certain quality; "Tapco" stands for another; and "Onyx" means something else yet again. That's smart.

GML is a highly respected, easily understood brand. Create a new brand name for anything you make in China. Because, let me tell you, even if the product is identical, consumers are going to have different expectations for it.

Yes, in most consumer segments, 90% of end users won't care, but in high-end pro audio, your users are savvy and "Made in the U.S.A." has real value.

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Geez, I don't know, George.

The stuff you design is (forgive the term) 'boutique' gear, in that you do not compromise quality and reliability in order to compete for price. OK, everybody competes for price, but there will always be people who will want to buy your products regardless of cost.

The lower strata of the audio marketplace is much more willing to trade off quality and reliability for cost, allowing them to compete against the likes of, well, a company that starts with 'B'.

One must always choose carefully the trade offs that are necessary.

I certainly don't want to be supporting places (like many of the Pacific Rim manufacturers) that use children and prison inmates to do their work... But, on the other hand, if they weren't working, would they be able to eat each day?
Tough dilemna...

Globalization... Such idiocy!

Regards,
Phil

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Hmm - not a pretty picture:

Quote:
WestPoint Stevens Inc., one of the nation's largest makers of sheets, pillow cases and towels, will close two plants in the Georgia town of LaGrange, a loss of 550 jobs.

The plants will shut down March 9, the state Department of Labor announced yesterday.

The company, which was founded almost 200 years ago and is based in West Point, filed for bankruptcy last year citing high debt, a slumping economy and competition from low-cost rivals in China and Central America.
Certainly it looks like if we don't buy made in USA, that soon we will not be able to afford to anyway. Economics has some mean feedback loops if you get it pointed the wrong way.


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I'm much more reluctant to buy Made in China nowadays - but as a Lou Dobbs commentary in this weeks US News says - it's increasingly difficult to find Made in USA.

From your business perspective it may be a good idea to keep your top of the line, and create a new import line made in China.

Lee pointed out Fender Guitars, and Gibson has done it with Epiphone, so it may be something that can work for you.

Good luck!


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Quote:
Originally posted by gm:

For now, we have decided not to go there for all of the understood reasons; underpaid, and often underaged, workers, not to mention the unreliability of data on working conditions and pay in Chinese factories.

George
Thanks George for raising this issue. The ramifications are wider than simply lower price. I think people easily confuse price with value. When everything we consume - from microphones to TVs to sneakers to food to IBM software - comes from overseas, what does that say about us as a country? I'd rather pay a little more knowing that the money is staying in the US and feeding my neighbor and generating tax revenue and encouraging innovation, etc etc. Will the next great breakthrough in microphone design come from the chinese companies shaving pennies? I don't think so.

My neighbor runs a great independent pro-audio shop and he lamments that he's gotta pay more wholesale for certain products than the Guitar Center center can sell for retail. What happens when independent shops like his - which provides professional-level service and advice - go under?

That our government fixed things so imports are virtually guarenteed to underprice American-made goods and encourage companies to put American workers out of work is a heinous crime.


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Adapt or die...

We best realize that the world is now more than ever one market place. I think many people are hypocritical about this issue. Anit-China is a cop out. Don't dump on a country for trying to better itself within the world market. Any violations could just as easily be found in this country. I'm sure there are people here who buy ther clothes at Target, the same brands you could by elsewhere only lower priced. The cat is out of the bag and as a manufacturer you have to adapt. I think Lee said it best by offering both products. If you all think the quailty is bad for non US made products just take a look at low priced guitars these days. Their light years ahead of where they were ten years ago. Sorry to rant..I work for an International brand and my wife is Chinese...go figure


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I reckon Lee Flier has hit the nail on the head. The high-end range gets built by hand in the US, and the "discount" range in China. As long as precautions are taken I can't see there being any "ethical" problems as such, and would argue that a more affordable GML range would be definitely ethical in bringing the designs within reach of a greater number of studios.

There could be an intellectual property risk manufacturing in the far-east, but that's a risk any outsourced work can run, not to mention the fact that if a firm really wanted to copy something they could buy a current model and reverse engineer anyway.

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I think Rode has done the opposite George - they started out by importing from China and repackaging but now I gather it's all made here in aussieland. Quality control is the main reason I gather.

I must say I find it interesting that a country so Anti-communist will toss it all out the window for the holy dollar.

cheers
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Hi George, Gang.

GM, your debacle is one which a fair number of mfgrs are facing. There is a more pressing and unavoidable approaching tsunami that we have not taken long and hard looks at.

Nika alludes to this in his post: The begenning of the end of the United States' decline in the world arena.

Maybe not today, but you have NO CHOICE but to seek overseas manufacturing. Take a good look at the people that work on the "line" at Manley/GML. Unless those people get retrained, they'll be out of luck. Still, you have no choice if you wish to realize a normal profit.

Yesterday, the focus was on textiles, low level assemblies, low end manufacturing.

Today, we are pulling our hair out over the rapidly sinking tech sector (while the labor pool stagnates).

Tomorrow, we'll be wondering how come we aren't generating any new patents, how come we dropped the ball on innovation, R&D.

Until we start shipping executive level jobs overseas (legal, financial), nobody's gonna say wait-a-fucking-minit!

It's not a "political" issue, nor is it a purely finanacial issue. Is a blend of a whole bunch of things, being underscored by the fact that there are now (and for the last 20 years) better alternatives to american manufacturing, american R& D, ...and the american greenback.

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FWIW, I wear Levi's 501 jeans. Not GAP, no Wrangler, not anything else but Levi's 501's. The only question in my world is "black" or "blue". I don't know where they make Levi's 501 jeans, more importantly, I don't care where they make Levi's 501 jeans... I know they're comfortable, I know how they're gonna shrink [I don't do "pre-washed"], I know I'm gonna get 5 to 7 years out of them, and where they're gonna wear out first. That's all I care about.

FWIW, our firm pimps GML. I know where GML stuff comes from for the last couple years, I don't know where it came from before, and frankly, I don't care. I know what the stuff is going to sound like in a given application, I have a pretty damn good idea what sounds within the context of the music I'm working on will be positively impacted by the use of GML product. I know I'm gonna have a hardworking, useful, reliable, hi-class sounding unit for many years to come. That's all I care about. I know George, he's not a piece of shit [ad hominum comment deleted by moderator], he designs great product, and I know we can rely on that product.

Currently, GML product is made in Chino, CA at the Manley factory. I know EveAnna... she's good people. The stuff is made well there, I like that it's made well. If it could be made as well in the PRC as it could be made in Chino, then I for one would like to see it be made in the PRC as the stuff is too good to only get to the hands of the "elite" who can afford such things. If it can't be made in the PRC better than it's being made in Chino... then the manufacture should stay in Chino IMNTLBFHO...

I mean I know I don't get a vote on this (nor do I want a vote on this)... but to me, quality is issue #1; knowing that our firm isn't supporting scumbag motherfuckers is issue #2; cost is issue #3 [as if more units are sold we may make less per unit, but more overall], and there is no issue #4. Could the boards be built in the PRC with final testing and assembly done in Chino and still net a similar, yet less expensive result? I have no idea... but it could be a happy medium if it could. Are the Chinese capable of doing good board work... I don't know about that... I've seen some seriously mediocre work come from the PRC... but maybe I haven't seen work being done in the right plant.

On the "political" side of all this... do I really care if they're using child labor? No, not really. I worked in a factory when I was 13... I think it builds character. Do I care that they're "exploiting their workers"? Define "exploitation"... every record deal I've ever seen had to do with the "exploitation" of musical product... for many, that's not a bad thing. Are the workers compensated properly... who the fuck am I to judge. That's more of a global debate than I'm qualified to address. As someone pointed out... better they're working for shit money than not working at all... I can't say I disagree, I can't say I agree... I can say that it's for more educated minds than mine to debate... which I guess takes us back to the old native American proverb... give a man a fish and he'll eat for a day, teach a man to fish and he'll leave you the fuck alone and go fishing.


Fletcher
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I've gotten quotes for sub-assemblies and construction that were 1/5 the price (including freight) of our local sourcing. Our volume just wasn't enough to justify the jump to offshore manufacturing.

The guy who owns Jay Turser Guitars does it well. He bought the factories producing his guitars, employs independent oversight, an visits China a few times a year. As a result, he gets guitars which he can sell for half the price of an equivalent imported Fender, of quality as high or higher.

OTOH, my girlfriend's ex-company imported teak furniture from Indonesia. Things were going great until three shipping containers full of new furniture had to be rejected because of quality problems, and the company had to be closed.

I agree that Lee has it right. Make a line specifically designed for the lower price point, manufacture it in China balancing low cost with high quality, and you will have a winner.

Now, do I buy a car made by a Japanese company in Indiana, or a car from a US company manufactured in Singapore...

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Quote:
Originally posted by yo yo mixi mix:
George,
If you're going to save a few thousand on COG I'd reccomend spending it on a visit to the Chinese factory you might use, seeing something in person often beats rumor and assumption.
Don't forget to take your Immodium.
Regards,
David Bock
But by all means, try the steamed duck hearts.

I want to echo one poster's sentiments that it is not easy to make moral generalizations about another country. There are incredibly poor areas of China where people are starved for jobs, and for that matter, starving. People are leaving the countryside and flocking to the cities in the hopes of finding anything at all that will improve their station in life. As could happen anywhere, and certainly happens in our own country, certain people are exploiting this misfortune to their own ends.

In spite of the often torturous quality of our own public school system, the idea of child labor is abhorrent to us. However, when the choice is starvation, undernourishment or a life devoid of any opportunities or comforts at all, then what opportunities are offered need to be reevaluated.

I've only been to Beijing once but am in the process of doing some music business over thee soon, and I think it comes to this. In terms of real value, I'd estimate that when you take a dollar away from an American worker you are giving 4 dollars to the replacement Chinese worker (or hiring 4 times as many workers). So in terms of "doing good", your money is having 4 times greater positive effect on somebody's life. The rub is that it's a Chinese life and not an American one. This being a free country, I think you have the right to decide for yourself where you want your money to go. My point is that I believe that money spent in China has a net positive effect on their people, despite the inevitable abuses to the system.

-R

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Quote:
Originally posted by yo yo mixi mix:
George,
If you're going to save a few thousand on COG I'd reccomend spending it on a visit to the Chinese factory you might use, seeing something in person often beats rumor and assumption.
Don't forget to take your Immodium.
Regards,
David Bock
But by all means, try the steamed duck hearts.

I want to echo one poster's sentiments that it is not easy to make moral generalizations about another country. There are incredibly poor areas of China where people are starved for jobs, and for that matter, starving. People are leaving the countryside and flocking to the cities in the hopes of finding anything at all that will improve their station in life. As could happen anywhere, and certainly happens in our own country, certain people are exploiting this misfortune to their own ends.

In spite of the often torturous quality of our own public school system, the idea of child labor is abhorrent to us. However, when the choice is starvation, undernourishment or a life devoid of any opportunities or comforts at all, then what opportunities are offered need to be reevaluated.

I've only been to Beijing once but am in the process of doing some music business over thee soon, and I think it comes to this. In terms of real value, I'd estimate that when you take a dollar away from an American worker you are giving 4 dollars to the replacement Chinese worker (or hiring 4 times as many workers). So in terms of "doing good", your money is having 4 times greater positive effect on somebody's life. The rub is that it's a Chinese life and not an American one. This being a free country, I think you have the right to decide for yourself where you want your money to go. My point is that I believe that money spent in China has a net positive effect on their people, despite the inevitable abuses to the system.

-R

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First, is your product price sensitive? Or is it more like a Rolls Royce, where price is not the primary concern? Isn't quality the prmary concern of users of your product? If so, then attempting to compete on price does not make sense.

Second, when you look at that 68 percent cost saving, how does it translate into the products final price, after you figue in all the late nite phone calls, shipping bottlenecks and so on. If that 68 percent is only the difference of paying 16 bucks vs 48 bucks, but you have now added a whole additional level of complexity and hassle, ie costs which are really not adequately accounted for, then any purported saving is totally illusory. Great examples of how stupid cost-accounting methods and mistakes can lead to bad results, including the loss of entire lines of business and industries, are detailed in a book entitled "Relevance Lost" published by the Harvard Business School. Despite the topic, I found this book extremely helpful. I think you should give "Relevance Lost" a read.

Third, damage to name and image.
Even if you give it another name, it will still create confusion in people's minds and have unaccounted for consequences. No cost-accounting system will adequately address this kind of loss.

Fourth, QC issues and Recall Costs.
With all the evidence pointing to the potential for mass recalls and cheating on quality in a foreign factory, whose spoken language and distance makes it difficult, if not impossible, for you to control, how much are now you saving when you factor in these sorts of contingencies? Will you be willing to go there on a frequent basis or examine the production run each time it comes off the line? How will you insure that forged components are not substituted? Now how much are you saving on costs? Think of this like the games the old record company pirates played, "tell em you ran 5,000 and make 25,000 records and sell them out the back door."

Fifth, see if you can contact economist Craig Roberts at the Hoover Institution, or read some of his writing or rebroadcasts of his C-Span pannel discussion, he has a lot to say about "Amercia's Race to the Bottom" and the that "America is rapidly becoming a Third World Country."

Sixth, some of the rationale for using cheap labor "because it's good for them" is suprisingly similar to that adanceded by slave owners to justify that pecuilar, and immoral, instituion during the American Civil War.

Seventh, Future Trade Laws.
Given, the loss of jobs, both in the blue and white-collar sectors, I would anticipate future legislation designed to stem America's race to the bottom. And when that happens, those so-called cost savings may seem trivial. Esp. if they slap a big import tax on it.

Hope this helps. \:\)

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That's a tough issue George.

Obviously, I am not going to be for the exploitation of people... but if you can insure that isn't going to happen, Lee and Tim's suggestion of an "entry level line" makes some sense. I'd brand it a bit differently to differentiate it from the upper level GML stuff though - make it absolutely clear as to which is which.

Your stuff IS high end - heck, it DEFINES it - which somewhat limits your market. And at that level, people KNOW what you have to offer. OTOH, many project and home recordists have never heard your stuff... and a budget version could certainly give them an introduction and help establish a little owner loyalty as they move up the ranks... at which point they can spring for the "real" GML stuff. And in the meantime, it helps your company stick around. I can think of few things sadder than the thought of GML not being around anymore due to the proliferation of cheap gear - and people who don't know the difference - drying up your market to the point where it's no longer worth the hassle to you to continue.

So yes, if you can do both lines, and make sure the QA and ethical issues are properly dealt with AND market them appropriately, I'd suggest going that direction.

Life's a PITA sometimes, isn't it? \:\(

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BTW, "where I'd draw the line" is if I knew the company was 1) stealing designs, 2) using slave labor or underage labor or not paying the appropriately well for the society in which they live 3) if the quality assurance sucked.

Of course, if the product sonically sucked, none of the above would even come into consideration - I'd pass on it even before considering any of the above.

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what do you call slave labor?
what would you consider slave labor?

how low must minimum wage be to be considered slave labor?

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