Post by Lawrence D'OliveiroPost by bad sectorYou don't even have to be a nationalist, motherboards and gpu's (some
research, automated printed circuit production and little more) costing
$1000 up are well within domestic margins as it is.
Why is Taiwan the world capital for computer hardware? Because the
Government had the foresight to support private investment in hardware
manufacturing back in the 1980s, which didn’t fully pay off for close to
another decade. But when it did pay off, it effectively killed off most PC
hardware manufacturing in the US and elsewhere.
Who in the US is going to take the risk of such a long-term investment?
They weren’t capable then, they’re even less capable now. You don’t even
believe in the idea that Government can be helpful to businesses, as
opposed to being an obstacle to them.
Labor cost is an input.
Some of the materials for domestic production, would be turnkey systems.
For example, a solder tunnel is a turnkey system. There can be a lot of
automation on some parts of the process. But test and integration is
an issue. (Asus might have a thousand women sitting at tables, doing test.
we don't have a thousand women sitting at tables doing that in North America.)
And anyone who has been remotely near one of our factories,
knows what a zoo it is inside. Every factory is a zoo. Even the
Asus factory will be a zoo. It's the nature of the beast.
Foxconn has 500,000 employees.
And to give you some idea how the two countries differ, to do a certain
repair procedure here (down the street from us), cost $1000. That operation
is only suited to a prototype PCB (cost is too high for any other purpose).
In Taiwan, the same procedure costs $25. Why ? well one of the reasons,
is the Taiwan dude doing them, is doing one after another, all day. He never stops.
Our local shop, he is paid to sit on his hands all week, and he does about
one a week. This means we could do better, with volume, but ultimately,
the pay rate of the two dudes is different. Not by much, but different.
The pay scale of a skilled tech worker in the foreign countries has risen
since we started offshoring. But it's still profitable to use them.
Not all the workers are skilled. The untrained ones are cheaper.
Some jobs need knowledgeable staff. There are still a lot of
humans that need *constant* supervision (why it is a zoo!).
Everyone has to pull on the oars in the same direction.
Our workers don't always do that.
If you automate everything (like Musk tried to do), the cost is high
for the equipment, and the profit from your little operation, has
to pay off that equipment. The equipment has to be programmed.
The maintenance staff to keep everything running, those are skilled
individuals. And on any given day, there can be a work stoppage
until some code or script is fixed up. In essence, the robots
are just as dumb, as some of the people they replaced. One thing
humans can do, is for trivial issues, they can work around the issue
until the root cause is resolved. Robots won't be doing it that way.
And no, don't say the word AI :-)
*******
What I didn't mention, is we have none of the humans discussed above.
We have no skilled workers. Once their jobs were offshored, they
became Uber drivers and UPS delivery people. They're not coming back.
we don't have enough professors with the right backgrounds, to
teach a new generation of people. There is a long period
of rebuilding the industry.
For example, years ago here, I could stop a guy on the street
and ask him if he could solder, and he probably could.
If I did that today, the teenager watching TikTok vids
on his phone would look up and say "what is solder?".
We're devoid of a certain kind of individual. Only some
places have clusters of tech workers now.
Consider a conversation I had with an HR person once, over a beer.
we were joking about something, and she tells me "when the resumes
come in, if a tech worker has been out of work for a year, I just
throw out their resume". She didn't read the resume, to find out
what skills she is throwing away. That gives you some idea, of the opinion
of HR to the state of the tech workers. Even if there were old farts
sitting around typing posts to USENEt, you would not hire them, because...
their resume was already thrown in the garbage :-) None of you
should be particularly surprised by this. Seeing the barrier yet ?
Seeing how difficult it is to bootstrap anything ? That's why my
estimate is, it would take twenty years effort to even get close
to rebuilding an industry. No business man is that patient. Sorry.
Paul
