Labor issue: American Vs Chinese
The continuing economic slump has shaken the American industry that has led to considerable plant closings and unemployment. Many lines and assembly contracts have moved out of the country, and the usually accepted cause for this is the high cost of domestic labor. Jim McElroy, executive director of NEMI (Electronics Manufacturing Initiative) confirms this. He says that the migration to China is incredible in its speed and intensity. There has had been migrations before in the 1980s it was Japan, then to Mexico and Eastern Europe in the 1990s. Now there are people migrating productions just recently sent to Mexico, and Eastern Europe and to China. The long-term fear is that new product introduction; design and other functions may end up migrating, following volume manufacturing.
Respondents to an unofficial survey conducted confirmed Mr. McElroy’s apprehensions. The replies from the engineers "in the trenches" can be divided into two basic points of view. A number of respondents were of the opinion that the U.S. simply cannot vie with China on labor costs and that high volume electronics assembly on the North American continent will soon be a thing of the past. Moreover the understandable issue of labor costs, the reasons mentioned for production going out of the country were the comparative force of the dollar, relaxed or no environmental standards, tax advantages, and very gainful loans from host governments. Notably, no one recommended that domestic assemblers could be beaten on the strength of excellence or efficiency.
A slight majority of respondents, on the other hand, assumed that domestic assemblers could vie in the global market. A common subject in these responses was that there are still many convincing reasons to keep production in America. Francois Monette of Cogiscan wrote that many Overseas Electronics Markets of high.....
