Long Term Impact of Trade War on Woodworking Tool Prices

[packerguy®]

lol... dude put down the shovel.

Brownie, The part you are missing or ignoring is that graph is for "Industry" not retail 60 year old roll into rockler and get his $700 bandsaw on a sat in July. He is right from the standpoint about the type of factory to make mass produced retail stuff (everything that you buy at rockler/woodcraft machinery wise and 2/3rds of Grizzly) is gone, and most cities and regions wont let it back (after watching at the fall out of the rust belt in the 80's and 90's). Whats even more sad is Mexico and how screwed their government is. They could become the new China to the US in short order if the cartels didnt run the show. Hell much of central america too. Could change this half of the world if drugs wernt in the way.

I really dont think most understand what had truly happened to "manufacturing" in the US the past 25 years. Ive been looking at property for the past 2-1/2 years and seriously since the fall. There are a bunch of light industrial suites (think dock in back, office up front, 2500 sq ft ish) that were built in the mid 80's early 90's that are still zoned for that but are now for all intensive purposes quiet office space (insurance sales and such) and warehouse only. Try to find a building under 10K sqft but I digress. 

Not to mention the workforce to do anything like that is gone unless we import 20MM immigrants to do the jobs like Europe....oh wait

[RKMBrown©]

Brownie, The part you are missing or ignoring is that graph is for "Industry" not retail 60 year old roll into rockler and get his $700 bandsaw on a sat in July. He is right from the standpoint about the type of factory to make mass produced retail stuff (everything that you buy at rockler/woodcraft machinery wise and 2/3rds of Grizzly) is gone, and most cities and regions wont let it back (after watching at the fall out of the rust belt in the 80's and 90's). Whats even more sad is Mexico and how screwed their government is. They could become the new China to the US in short order if the cartels didnt run the show. Hell much of central america too. Could change this half of the world if drugs wernt in the way.

I really dont think most understand what had truly happened to "manufacturing" in the US the past 25 years. Ive been looking at property for the past 2-1/2 years and seriously since the fall. There are a bunch of light industrial suites (think dock in back, office up front, 2500 sq ft ish) that were built in the mid 80's early 90's that are still zoned for that but are now for all intensive purposes quiet office space (insurance sales and such) and warehouse only. Try to find a building under 10K sqft but I digress. 

Not to mention the workforce to do anything like that is gone unless we import 20MM immigrants to do the jobs like Europe....oh wait

Maybe it depends on the State and it's political landscape.

This probably explains my difference of opinion:


I've only lived in Texas and Florida.. so I'm not as familiar with the states at the bottom of ^ list. Texas Rose colored glasses I guess.

[handi]

The long term issue will be resolved by manufacturing moving to the next low cost location. 
This is the cycle. Those of us with a few years on remember when “Made in Japan” had many of the same negative connotations as “Made in China” does today. 

When Japanese workers began getting better pay and benefits and demanded better working conditions, manufacturing moved, First to Taiwan, then off to China since Taiwan was simply too small to become a primary source. 

India and Africa are both potential new ground as China’s workers begin making more and demanding more. I have even seen experts talking about Mexico as underdeveloped to the point of being an “offshoring” option. And Mexico has the advantage of proximity.

China is not our friend as a trading partner and while our economy is robust and theirs weakening, this is the best time to take some short term pain to settle issues like intellectual property rights and foreign access to their shores. Let the weak go to the wall.

[packerguy®]

Maybe it depends on the State and it's political landscape.

This probably explains my difference of opinion:


I've only lived in Texas and Florida.. so I'm not as familiar with the states at the bottom of ^ list. Texas Rose colored glasses I guess.

You sure like graphs. Thats the thing about statistics, you can mold the data to back up a given point of view. 

Fact is as long as the EPA is running nearly unchecked, uncle sam keeps using business as their personal piggybanks and laywers file suit at every turn because of this chemical or that exposure to something California says might cause cancer, we will NEVER see onshore manufacturing of retail woodworking machines because the profit margin vs risk makes it a suicide mission. Industrial machines, absolutely for a number of reasons will always be made here. I just dont think you can group them together and expect the line to be linear. 

Also, when talking about "manufacturing" be careful. Do you remember when during the GW Bush years they reclassified fast food workers as "assemblers" to beef up the bottom line number because of the mass exodus of real manufacturing jobs? Again...stats can be massaged.

[AHill]

I bought my Powermatic PM2000 with the 50" rails brand new for $2200 delivered in 2008.  Cheapest I could find a new one for sale today was $3700 not including delivery.  Yes, prices have gone up significantly, but they were going up quite a bit prior to the trade war.  Hard to tell what will happen now.  I don't think the trade war will have a long term effect.

[Handplanesandmore]

If you had 50 million to invest, would anyone of you go into machine manufacturing TODAY?

If yes, what was your payback period in your calculations?

This is a better analysis of what we are facing-
https://www.mckinsey.com/featured-insigh...ufacturing

Simon

[tomsteve]

 This resulted in lower tools prices and quality (both perceived and real) but on the upside also made it affordable for a lot of us to setup shop. 

is the lower quality a result of moving manufacturing overseas or a result of the companies allowing lower quality?

[Woodenfish]

In my area fifty million isn’t going to get you much. That’s a micro business. I worked at a local car dealership that cost $25 million to build and that’s with no inventory or parts. I can’t imagine what they pay each year in real estate taxes? Business profit on a good year was said to be 2%. We went many years in the red and were sold twice. The original business partnership was the number one in the area and among the top in the nation.

[Handplanesandmore]

In my area fifty million isn’t going to get you much. That’s a micro business.

You highlighted my point. Who would be interested in investing 500 million in starting up a new consumer manufacturing business, with so many uncertainties? If I see TV manufacturing coming back, there might be some hope that woodworking machinery manufacturing would be revived. Long-term tariffs will be passed onto consumers, or will result in importers moving their sources or production to other Asian countries like Vietnam, if not Mexico. Call me a pessimist.

Simon

[RKMBrown©]

You highlighted my point. Who would be interested in investing 500 million in starting up a new consumer manufacturing business, with so many uncertainties? If I see TV manufacturing coming back, there might be some hope that woodworking machinery manufacturing would be revived. Long-term tariffs will be passed onto consumers, or will result in importers moving their sources or production to other Asian countries like Vietnam, if not Mexico. Call me a pessimist.

Simon

Yeah cause no chance in hell a guy like trump could get elected.