Magzy said:
I came across this Economist article that stated that at the current rate it will be cheaper to build things in the USA than China by 2015.
http://www.economist.com/node/18682182
Magzy,
Decent little article. Thanks for bring it to our attention. I've been saying this for several years now. Anyone who starts to understand energy use and production, as in "energy+raw resources=human commerce," understands this almost intuitively. Those who deny via wishful thinking that the energy that has built our current civilization is finite, and that we've gotten most of the low hanging fruit, can never make the right decisions because their equations are fatally flawed. The flaws of thinking that nature's resources are a function of past experiences that will sustain themselves without stewardship is human insanity, dangerous hubris.
Energy to transform those resources for human consumption is the first casualty that we face, and it's coming down on us like an avalanche. There are still plenty of mineral resources but they won't do us much good without the transforming energy. South America has more Lithium than China ever dreamed of, as well as rare earths and basic metal and mineral ores all over the Americas as well as huge deposits in Iceland. "It's the energy stupid."
Magzy said:
This means that if anyone is thinking of opening an ebike manufacturing enterprise should consider good ole USA.
Yes, but.... Think of what will be impacted first by tremendous increases in the costs of conventional energy which are inevitable in a very short time frame. It will be those products and resources that have the most bulk and weight. Shipping iron or aluminium ore to China for transformation into heavy products like cars, refrigerators and structural steel for shipment back to America will be a thing of the past within a decade. North American steel production is already rapidly rising and the rust belt will become again the shiny belt. It's not that most of the jobs lost in the old industry's flight will return because the newly returned industry will be ever more highly automated, but all that trickles back down from the middle, not the top.
The thing that makes e-bikes, or perhaps I should say light electric vehicles, so precious for our future, is their lightness and relatively less bulk, requiring far less energy to move, so those vehicles and their components will resist returning to our shores for awhile, and those things that do get made here will likely be the heavier components, like frames and batteries. In that light, the current administration's protection of our vehicle industry and R&D support for sustainable energy and battery tech looks pretty darned prescient. The higher the value v.s. weight and bulk, the less American manufacturers can compete for the time being. So i-pods and derailers are liable to stay where they are for now, while frames, dishwashers and batteries come home to roost.
As energy costs increase, supply chains contract, and that will rebound to our advantage, but only if we get a handle on our energy needs and costs and have enough smart folks left to take advantage (energy+education). An interesting little article about thermal solar power a month or so ago showed how the plants promoted by the maligned (by energy royalty pigs) Carter administration have now been paid for and are producing electricity at under 4 cents/kwh. Smart grid+much better battery tech+sustainable, if intermittent, energy+smart capital=a sustainable, cleaner, higher quality of life, though energy constrained, smaller future. Welcome to the "Great Contraction."
bigisland said:
This article is nonsense, Global manufacturing trends that have been forming for the last 30 years aren't going to change much by 2015
What is nonsense is the belief that tremendous increases in shipping costs won't happen and won't tilt the equation rapidly. As several have said, it has already started and it will only pick up steam as bunker fuel costs and overseas labor costs rise.
lester12483 said:
Great article! I have experienced this first hand with lithium battery suppliers.
I wont mention names but I had a battery supplier in China and it took 3-4 weeks to get my battery. Once I got it, if I had any issues or needed replacement that would take another month. This mostly due to strict customs control in China.
For nearly the same price I now have a very reliable American supplier that I can get a new battery in 1 week. Any issues and I can have a replacement in 1 week or less. No customs or shipping to worry about.
This is just one small example. Im sure there are other sectors experiencing something similar.
Lester,
Excellent, sharp story! The small examples really start to add up, don't they? Even though your new supplier is probably using Chinese cells, that will change as well, and the small examples get larger and more significant.
jetzki said:
Read the title and I actually scoffed. This will never happen, is anyone in America willing to work for 100usd per month? can factories in America get away with working 24hours a day, having their employees work 48 shifts? Do American staff even have the manufacturing experience?
jetski,
Scoff if you must, but small manufacturers like Lester aren't scoffing any more than the multinationals are. Do you think Honda would manufacture in America if Vietnam were ultimately cheaper? The cost targets are moving at light speed and shifting ever faster as diminishing resources put a crimp here and a crimp there. American workers are forced to take less and Chinese workers demand more until suddenly the landscape changes dramatically. With even more speed than they moved out, factories will move back to our neighborhoods. They will likely be smaller, more robotic, more interconnected than ever before as resource constraints and markets demand.
oldpiper said:
The important thing about these strikes is simply that they were allowed to happen. Beijing is not shutting them down at the first sign of impending protest.
I think 2015 is probably a pretty good estimate for some kind of worker parity in China, it's getting harder all the time to keep their working class isolated from the world. Time will tell.
Cameron,
As one old dude to another, very astute, another rapidly shifting target. A Chinese/American blogger I watch who spends as much time in the Far East as here, points out that our rapidly eroding democratic political system still draws educated Chinese to North America and Europe in droves, so the political system in China must adapt if they are not to dissolve into chaos eventually. However, if we continue to turn our political system over to the rich and powerful Lords of the Multinational Universe, the smart folks from any corner of the world will have less reason to cast their lot with us, even if their rulers remain backwards.
Magzy said:
It will save on those postage costs. Also, Because everyone sill be skint and Gas prices will be something like $10 /gallon there's a good oppotunity for any budding engineers to take the helm...
Exactly! Anyone who thinks that energy prices won't head for the moon is crazy wrong. Or they may be crazy right on the basis of our economy staying mired in recession/depression to keep the energy costs down. It's a very sticky wicket. How many more Asians can move around on a barrel of oil with 200 mpg scooters or electric scooters, than Americans can move around in 15mpg SUVs? Who's gonna win the bidding war for that barrel of oil?
