[Spridgets] Chinese Manufacturers

[Ron Soave]

Anyone go to the KIC at Road America yesterday and see the Fiat engined Speedwell Sprite? End of LBC content...

I have closely dealt with China as a manufacturer on a somewhat small basis (I have never sent one job to China, I will say). It does not matter what you specify - you go to China because you mass produce. When you mass produce, you cannot inspect every unit, no matter how sophisticated your inspection equipment. You have to do lot testing. This means you operate under the assumption of 6 sigma process control, and if 1 is good, they're all good. It doesn't always (ever?) work out. You can get hurt big time (the same thing can happen in Detroit or Tokyo, by the way...read the newspapers). Something like a one-off or limited volume run where you can watch closely and control quality (insert guitar here), you actually pull off good quality, but without the economic benefit. 

Companies (some real big ones) are starting to pull out of China because of cost and quality. Cost is rising because the workers starting to get a whiff of capitalism and demanding higher pay. Also the government is no longer valuing their currency to the value of a dollar. China's political stability is risky, which makes it a tough place to consider for long term investment in currencies. Our debt (thank you Barry O for really putting it into the stratosphere) endangers the dollar as being used as the standard in International trade deals, but it still is - NOT the Yuan. Does this mean the jobs are coming back to the US? A few, yes. Most, not yet. The economic balance is so delicate it is incredible, or it would be very simple to just provide economic incentive to do business here. I could get very inappropriately political right now, but we need an administration that actually likes US businesses, especially small entrepreneurial ones, and uses smart
 enough guys to figure out that balance. They're out there, but I digress.

China is starting to outsource to Vietnam and Laos to address the cost issue. Very complex stuff that can't get solved in an email. 

Too hot to LBC, and I really need to finish the last hour of prep for Joliet race next weekend - 

Ron