Sunday, May 03, 2015 07:55am
North Adams, MA now: 50 °   
Send news, tips, press releases and questions to info@iBerkshires.com
The Berkshires online guide to events, news and Berkshire County community information.
SIGN IN | REGISTER NOW   

Home About Archives RSS Feed
The Independent Investor: Cheap Doesn't Cut It Anymore
By Bill Schmick On: 03:38PM / Thursday December 13, 2012
Important
0
Interesting
0
Funny
0
Awesome
0
Infuriating
0
Ridiculous
1

In this brave new world of ours, it is no longer enough to simply offer the lowest cost product. Product innovation is now critical to a company's success. U.S. companies are discovering it is becoming harder to innovate when their manufacturing plants are half a world away.

Just look at the competition in hand-held devices, medical technology, and a plethora of other high-tech products, the highest sales go to the innovators with the most dependable products. But innovation doesn't stop there. Increasingly, even basic manufacturing products from wing nuts to autos are experiencing a transformation. Corporate teams of designers, engineers and workers on the assembly line find themselves collaborating like never before to produce a smaller, sleeker and more energy-efficient mouse trap, just like they did in the days of Henry Ford.

In order to do that, many companies are realizing that they need their manufacturing processes and factories closer to home. That realization is fueling an "insourcing" of jobs and manufacturing back to America. That's good news for the future of this country and its workforce.

Readers may recall my column, "Made in America Returns" back in June of this year. In that article, I attributed the renaissance in American manufacturing to lower energy and transportation costs here at home as well as the narrowing of labor costs between American workers and those unskilled workers of China and other emerging economies.

But that is not the entire story. A recent article in The Atlantic by Charles Fishman, titled "The Insourcing Boom," caught my eye. He chronicled the recent experiences of General Electric in transforming its defunct Appliance Park, Ky., manufacturing headquarters into today's cutting-edge producer of basic products like water heaters, refrigerators and dishwashers.

As a resident of Pittsfield, anything "GE" is of interest to me and my clients. Back in the day, Pittsfield was the headquarters of this red, white and blue manufacturing juggernaut. That is until Jack Welch, its former CEO, got it into his mind to ship most of our manufacturing jobs off to China and other cheap labor centers 30-some years ago. The same thing happened to Appliance Park. Both towns were devastated. Pittsfield is only now beginning to recover.

Appliance Park, on the other hand, is actually undergoing a revival of its original purpose, manufacturing American-made appliances, thanks to some recent discoveries by present GE management and its current CEO Jeffrey Immelt. After failing to sell the facility in 2008, management resolved to "make it work" at the huge six-factory complex. It soon realized that they could make highly efficient, higher-quality appliances here at home at a lower cost than could be produced elsewhere.

The key, as more and more companies are beginning to understand, to creating truly innovative products, regardless of their nature, at a reasonable price, is having all the pieces of the product creation puzzle in the same place. Over the past few decades that principle was lost and forgotten as U.S. companies rushed overseas to take advantage of cheap labor. In today's marketplace, however, cost is taking a back seat over quality and innovation; something more and more consumers are demanding and willing to pay for.

Input from those in the manufacturing process is becoming integral to engineering and designing a better, more competitive product. You can’t do that when your widget is being made on a Chinese or Indian factory floor in a different time zone, by workers who can't speak English. Although this trend should benefit our own workers, the question to ask is:

Is our workforce prepared for that challenge and opportunity?  In my next column we will address the issue of skilled workers, or the lack thereof, in America.

Bill Schmick is registered as an investment adviser representative with Berkshire Money Management. Bill’s forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquires to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.

 



0 Comments
     
News Headlines
Adams' Meczywor Homers for MCLA to Lift Blazers to Title Game
Local Man Rides Bike Across North America
BVB Launches 'Tourism Matters' Social Media Campaign
Adams' Meczywor Scores Winning Run for MCLA in Playoff Opener
Tourist Booth Volunteers Sought in North Adams
McCann Tech's Fuller Signs to Play Soccer at St. Rose
Cultural Pittsfield This Week: May 1-7
'Ugh': Lanesborough Wants Postal Service to Add 3 Letters
Kimball Farms Puts Evacuation Plans To The Test In Mock Event
Adams Town Meeting Members OK Rail Trail, Power Articles

Bill Schmick is registered as an investment advisor representative and portfolio manager with Berkshire Money Management (BMM), managing over $200 million for investors in the Berkshires. Bill’s forecasts and opinions are purely his own and do not necessarily represent the views of BMM. None of his commentary is or should be considered investment advice. Anyone seeking individualized investment advice should contact a qualified investment adviser. None of the information presented in this article is intended to be and should not be construed as an endorsement of BMM or a solicitation to become a client of BMM. The reader should not assume that any strategies, or specific investments discussed are employed, bought, sold or held by BMM. Direct your inquiries to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com Visit www.afewdollarsmore.com for more of Bill’s insights.

 

 

 



Categories:
@theMarket (168)
Independent Investor (225)
Archives:
April 2015 (8)
March 2015 (6)
February 2015 (7)
January 2015 (9)
December 2014 (7)
November 2014 (4)
October 2014 (9)
September 2014 (5)
August 2014 (7)
July 2014 (2)
June 2014 (6)
May 2014 (8)
Tags:
Economy Japan Stocks Jobs Congress Metals Rally Interest Rates Selloff Debt Ceiling Crisis Stock Market Retirement Europe Pullback Federal Reserve Housing Markets Stimulus Euro Banks Oil Fed Debt Deficit Election Taxes Currency Commodities Greece Europe Fiscal Cliff Bailout Recession Energy
Popular Entries:
The Independent Investor: Don't Fight the Fed
The Independent Investor: Understanding the Foreclosure Scandal
@theMarket: QE II Supports the Markets
The Independent Investor: Does Cash Mean Currencies?
@theMarket: Markets Are Going Higher
The Independent Investor: General Motors — Back to the Future
The Independent Investor: Will the Municipal Bond Massacre Continue?
@theMarket: Economy Sputters, Stocks Stutter
The Independent Investor: How Will Wall Street II Play on Main Street?
The Independent Investor: Why Are Interest Rates Rising?
Recent Entries:
The Independent Investor: Does Another Trade Pact Make Sense?
@theMarket: Buy on the News
The Independent Investor: Should You Manage That 401(k)?
@theMarket: Right Back Into the Range
The Independent Investor: Brazil Not For the Faint of Heart
@theMarket: Earnings on Deck
@theMarket: Will the Second Quarter Be Like the First?
The Independent Investor: How to Teach Your Kid to Become the Next Warren Buffet
@theMarket: The Fed Does It Again
The Independent Investor: Financial Challenges Facing Single Parents


View All
Humane Race 2015
Runners and walkers unaccompanied by dogs participated in...
Community Day Of Service 2015
Massachusetts College of Liberal Arts students and...
SB: Drury at Pittsfield
Allie Hunt went 2-for-2 with a triple and a sacrifice fly...
SB: Mt Greylock at McCann
Miranda Voller went 5-for-5 with a pair of triples to lead...
Baseball: HV at Pittsfield
Nassif struck out seven and allowed no hits in a 19-0-...
Lacrosse: HV at Mt Greylock
Liam Chenail scored five goals and added an assist to lead...
SB: Wahconah at Taconic
Taylor Farley hit a triple for the Wachonah softball team...
Baseball: Westfield at...
Westfield won over Taconic 4-0 Monday afternoon.
Baseball: Drury at Lenox
Logan Rumbolt and Kirby Bryce led the Drury baseball team...
Baseball: Westfield Voc @...
The McCann Tech baseball team hit their way to a 8-0 win...
SB: Mt Everett @ Lenox
The final score was Mount Everett 15 and Lenox 3
Berkshire County Invitational...
The boys 4-by-800 meter relay, a 3200-meter battle that...
SB: Mt Greylock @ Drury
The Drury softball team earned its first win of the season...
Touch A Truck 2015
Little kids got to play with big trucks - and school buses,...
Baseball: PHS @ Taconic
Fick finished with two strikeouts while allowing six hits...
Lacrosse: Monument @...
Sean Baruch scored four goals to lead the Pittsfield boys...
Humane Race 2015
Runners and walkers unaccompanied by dogs participated in...
Community Day Of Service 2015
Massachusetts College of Liberal Arts students and...
SB: Drury at Pittsfield
Allie Hunt went 2-for-2 with a triple and a sacrifice fly...
SB: Mt Greylock at McCann
Miranda Voller went 5-for-5 with a pair of triples to lead...
Baseball: HV at Pittsfield
Nassif struck out seven and allowed no hits in a 19-0-...
| Home | A & E | Business | Community News | Dining | Real Estate | Schools | Sports & Outdoors | Berkshires Weather | Weddings
Advertise | Recommend This Page | Help Contact Us | Privacy Policy| User Agreement
iBerkshires.com is owned and operated by: Boxcar Media 102 Main Street, North Adams, MA 01247 -- T. 413-663-3384 F.413-664-4251
© 2000 Boxcar Media LLC - All rights reserved