Plastics News is constantly running news of the U.S. companies entering joint ventures all over the world in the quest for lower-cost labor markets. The story is always the same: When you move into a market with low wages, you find low-skilled workers. When you take advantage of low wages, you suffer bad quality because these folks have never been in the plastics industry.
Initially, the low-cost labor and “inspecting quality in” mentality offset the shipping time and costs. But the improvement in skill and rise in the labor costs neutralize the savings. This is why the folks who moved to the Pacific Rim are now moving to China.
Like a knight seeking the Holy Grail, when success destroys the low-wage labor base, the never-ending quest begins again, and Plastics News gets another flurry of press releases about plant openings and ventures in another section of the globe, and more people are left with skills but no job.
So why not build the factory of the future where the folks buy the products it makes? Volvo's labor costs are probably the highest in the world, but Volvo has lights-out assembly lines for its cars. Do you hear about it opening plants elsewhere for lower wages?
Equipment suppliers shipping to these Third World ventures aren't even in the Third World. They are in the United States and Europe. If we put future factories in the United States and Europe, we'll employ more folks building the automation for them. As a side benefit, these workers will buy the products that are made. Think about it, unless your mentality is only your next quarter's bonus. But then again, you are the ones busy writing the press releases.