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Costs "Forcing" US Firms Out of China
May 1, 2008

AFP: Costs driving US manufacturing firms out of China: AmCham

"Forcing" is a strange word to use. It's really a business choice, one way or another. Chasing cheap labor... that's a choice. Chasing it to the next state or country is also a choice companies make.

"For manufacturers, the seemingly endless supply of low-cost unskilled labour may be approaching its limits," Norwell Coquillard, chairman of AmCham in Shanghai, told reporters at a briefing to launch their annual white paper.

It's a shame that so many companies prize "unskilled" labor. It reminds me of when I worked at GM and employees lamented "they said they hired me for my back and my arms, not my brains."

"...It added that 74 percent of companies were either profitable or very profitable in China"

So 26% can't be profitable, even with low-cost labor. How are companies like that going to be successful anywhere?

I wonder if China will promote Lean thinking as a way of maintaining their manufacturing base? Live by cheap labor, die by cheap labor, otherwise.

Posted by Mark Graban on May 1, 2008 | Comments (0)