Revell Monogram: No more U.S. production plants.

The reason why many companies do shift factories are not just because of cheap labour, but often the labour overseas is more skilled/geared for that task.

Another reason they might have to increase retail prices by lets say 10%~20% while keeping the plants in the USA, but can keep the same retail price and quality by moving production overseas.
Not many people would like to see a 10~20% increase on their hobbies, and if the sales drop due to increased retail prices than said US worker will still be out of a job as the company goes bust or is bought by anothe international maker anyway.

Another reason might be global distribution, it might be cheaper, faster and more practical to ship from lets say Taiwan worldwide than from Port X in the states.

It can be for a variety of reasons.

From personal experience I have seen what can happen if a company moves manufacturing to China, Kaiyodo did a few years ago and the quality & packaging of their Resin kits improved many-fold.

I believe that the correct term is "low cost" labor and not "cheap" labor. Major companies do have certain quality standards and will definitely not sacrifice the quality of their products. With the advent of trade globalization, companies have gained access to a vast pool of resources around the world giving them more options to improve productivity, quality and increase profitability.

If companies can find the same skills in other countries for a lower price then such companies would definitely look into its options. It is unfortunately sad for those who would be affected by the movements of such companies but it is a reality that we need to accept and learn to live with.

Twenty years ago, the Philippines has become the new destination of global companies in search for low cost labor. Now, however, other labor markets are emerging such as China and Vietnam offering even lower labor costs. It is starting to hurt us, too. But as I have said it is a reality that we should accept. And we should learn to find ways to make our selves competitive again.

Sad news indeed. At least the company still exists as a corporate entity and plans to produce kits.

This is rather sad news...However Im not really suprised. While I try to buy American when and if I can(Which is hard to do in this hobby)others refuse to pay a premium for US made products anymore. Each company has to weigh its decisions on where its Labor Force will be individually based on sound business practises and not on the needs/desire of a few...As Ed said at least they are still with us...
On a side note I wonder how this will affect kit cost with any import fees for the US? Or will it? Im sure it will, just hope it isnt to significant of a change.

I can't help but wonder when, not if, the day comes that there will be very little manufacturing of goods in the US! Is the standard of living Americans have come to expect creating the global climate whereby jobs of all types continue to flee offshore to other countries, eager to improve their own living standards? Can we blame other countries for trying to emulate the US standard of living? Even if it means losing jobs?

Thoughts to mull over!

Glenn

The high cost of domestic manufacturing is one big reason why the U.S. economy is shifting quickly to service industries. Economic theory doesn't care about hurt feelings or national solidarity. It's all about the bottom line...

Mark

I have to agree with the going out of country because of labor costs. My uncle makes jewelry an has a plant in China refining the materials mined here in the US. He does it due to low-cost labor and it is actually cheaper to ship from China to other places outside the US. The laborers in Asian countries get paid less but their committment to their employer supercedes the American worker by far. We are money hungry and they just hungry. People in China get about 250 a month and that just about pays for their food.

In my opinion It has to be inexpensive labor which also includes zero benifits to entice companys to make these moves. The opinion made by MadModelFactory concerning skilled labor overseas, I have to respectfully disagree. The United States has the most skilled and experienced labor force in the world. When a company moves mfg. to Mexico, overseas or any where else in the world, they generally provide training for the new work force. The training is done by our skilled labor . In closing this is a one world economy or close to it and unfortunitly it's also reality of which we have no control.

crownover.

From my experience working on 3 continents and living in asia I can tell you that:
a.) The USA has not got the most skilled and experienced workforce
b.) DO NOT understimate the quality and dedication of non-us laborers
Nothing wrong with feeling patriotic, but the facts are against you here sorry to say.

Dwight Ta-ala had it quiet right that the manufacturing centres keep shifting worldwide as they prosper and try to get more service-orientated.
So far not many people have asked themselves where those centres will lie in the future when everyone tries to work in a service orientated society and live a first world standard.

China has a huge dedicated and skilled work-force and they will become the next Japan, South Korea or Taiwan when it comes to manufacturing and inventing new stuff.

Problem is that these days everybody wants to buy cheap, live in a big house, drive a fuel guzzling SUV, work in an office reading e-mail all-day, etc. All this costs and thus the demands for higher salaries, medical aid, etc.
This is what drives the companies to look for overseas labour to keep the prices down and the goods flying of the shelf.

How many young people today will choose to work at a steel-plant, supermarket (long-term), plumber, etc for a few $$ an hour when they can sit in an office sipping Starbucks and chatting up the sexy secretary.
Thus blue-collar workers become more in demand, specialised and naturally will ask for higher wages driving the end-product price higher.

Remember that next time you call a service desk at Dell or Microsoft you are most likely speaking to someone in India or similar.

I too, am saddened to see Revell-Monogram leave the U.S., but also understand the economics. However, I also noticed in the Jan '04 issue that the prices of kits from them have increased. If the quality of the kits improve I can live with that as H&T prices are high compared to R-M. Over the last few months I've noticed that many of thier line was OOP which seemed to indicate a major change. As to them not getting rid of the old molds, that's great, but why keep them here and not where they can be produced?

MadModelFactory

I do agree with many of your points. But the facts of past history tells the story here. The American work force invented and progressed modern mfg to what it is today . The modern World Started with American ideas and inventions 100 years ago with the first successful aircraft flight all the way to the modern day space shuttle. With these ideas and inventions came mfg processes which are in use today around the World. These skilled and experienced people are either still envolved in American work enviroment or have past there skill down from generation to generation. As far as my exprience in the work world I believe Americans have the most skilled and experienced work force today.
If you think I underestimate non-us labor your mistaken. I have seen to many jobs leave America to underestimate any culture after all they have been trained by the United States skilled and experienced work force.

crownover.

Don't want to start a fight, but you are GRAVELY mistaken and show a lot of ignorance.
Here are some examples of inventions that were not created by americans.
Petrol, Steam & Jet Engines
DVD,CD and MPEG Formats
LCD's
Radar
Medical achievements
and so on.
The USA relied a lot on European/German scientists & Asian inventions after WW II to win as an example the space race and so on.
Are you aware that Japan had a working plane years before the wright brothers but the project failed due to fundings.
Heck, even your famous and louded Zippo lighter uses an Austrian patent(check the Zippo website for info).

As for your so great advancement in manufacturing, ever heard the terms "Muda" and many other JAPANESE terms/concepts that are widely used and implemented in your so called US factories, ask anybody that works for a Car plant in the states and he will know those terms.
Or watch Discovery channel where they run progams on those topics.

I am finished with this topic.

I do have high regard for the American people. After all, it is them through the Thomasites who started the re-education of the Philippine people at the start of the 20th Century. Not that we are uneducated, actually we are under the 333 years of Spanish Regime. However I believe that a lot of other people around the world possess skills and talents that are comparable or even superior to that of Americans. The Japanese for example are well known for their great craftsmanship, the Chinese for their early inventions, the Europeans for their artistic talents, the Russians, too for a lot of things. I think that it would be unfair to disregard these facts. We no longer live in a world bound by oceans and seas or even culture and I think we need to realize this.

Even as we speak now, we live using technology invented/developed not only in the US but from around the world.

Trivia:

1.) G.E. did not invent the flourescent light. A Filipino did with a family name Flores. He sold the patent to G.E. because he has no money to fund the production.

2.) The lunar rover used during the first moon landings was designed my a Filipino working for NASA. His name was Ed San Juan.

3.) Touch tone dialing was invented by a Filipino, too. This enables us to send fax and eventually connect to the internet.

Just a piece of my mind.

QUOTE: The American work force invented and progressed modern mfg to what it is today . The modern World Started with American ideas and inventions 100 years ago with the first successful aircraft flight all the way to the modern day space shuttle. With these ideas and inventions came mfg processes which are in use today around the World.

Hey crownover,

Didn't they teach you about the Industrial Revolution in American schools?

I'm sure the company knows what it is doing and I'm no expert in the field of global business or economics. I remember how easily I was able to get replacement parts from R-M. I hope this continues.

What worries me is the unjust conditions people work in overseas. I hope R-M has no intention to make kits in a sweat shop. I would like to hear from the company that this is the case.

Well, i look at the bright side...
Their HQ is now in my town!

This thread has been very educational for me. If I were CEO of Revell Monogram I would probably do the same if the continued existance of the company were at risk. I just have to feel sorry for Americans who have been pushed out of work. But in this day of free trade and a global economy, I think this trend will continue until American labor is willing to work for much less. But as MadModelFactory pointed out, it may not be that simple. It can cost less to distribute from other areas. And I'm sure there are a myriad of other reasons why companies establish themselves overseas.

But anyway, if this thread continues much further I hope we can dwell less on whose labor force is more skilled or who were the real founders of modern industry and more on what the changes in Revell Monogram will mean to the modeler and perhaps some off-topic banter on free-trade and globalization.

DJ

As for what the future will hold I guess nobody will be able to tell just yet as we don't know the reasons for the decision.

I just hope they will not discontinue the 1/96 U.S.S. Constitution. Planning on building that and Heller's 1/100 HMS Victory next Summer. I have a table/cabinet that I plan to display the models on. The two scales are very close so you get a pretty good idea of how they looked relative to each other.

DJ

Hey dj, I have both of those kits, Sounds like a great idea of a double display. All I have to do is build 'em.

The skill I hope continues to increase is not the workforce but the guys (and gals) who build the kits after they leave the factory.

The industrial revolution. Let me see does Henry Ford, Thomas Edison, Orville and wilbur, Alexander Graham Bell just to name a few sound familiar. All inventors during the American Industiral Revolution. This is an example of a very long list. How many of you drive a car, talk on a telephone or, light a room with a light bulb ? All these ideas have been refined over the past 100 years and have deep roots in the American culture. As far as being ignorant all I can say is name calling should not be part of any conversation. All it does is make the name caller less creditable.

I am also finished with this topic.

QUOTE: All these ideas have been refined over the past 100 years and have deep roots in the American culture.

Nobody is denying the roots in american culture, but you guys aren't the only ones that made inventions that changed and shaped the world. In many case you took only existing ideas and fashioned something new from them.
A lot of those refinements & inventions came from technology/ideas/concepts that came from outside the USA.

Unless of course you belief that the telegraph had no influence on the Bells Telephone or that Henry Ford invented the automobile and internal combustion engine.
Edison didn't invent the light-bulb he took an existing design perfected it and made it work, that I think was the premise for his whole business and most of his inventions were based on bought ideas & designs.

Remember that the patent holder is often not the inventor or creator of the item, but the person that could afford to pay for its development and production.

Yes, they made great contribution and revolutionised some ideas nobody is denying that.
BTW, we weren't talking about the American industrial revolution, but the other one.

QUOTE: As far as being ignorant all I can say is name calling should not be part of any conversation. All it does is make the name caller less creditable.

So is telling people we are the BEST. BTW, I made my statement because you seem to lack vital data or information and thus your views appear to be slanted and skewed.
It was not a personal attack.

Trivia:

The Industrial Revolution was said to have started in Western Europe in about the year 1700 or the start of the Eighteenth Century. It is the period when the application of power-driven machinery to manufacturing as substitute to man or animal power was instituted.

In the eighteenth century all of western Europe began to industrialize rapidly, but in England the process was most highly accelerated. Soon, this move towards industrialization started to spread towards Russia and other parts of Europe.

And so it could be said that the Industrial Revolution started in Europe.

QUOTE: Remember that the patent holder is often not the inventor or creator of the item, but the person that could afford to pay for its development and production.

Actually, this is not quite true. The inventor by law holds the patent, but the rights to its use are assigned to the company that paid for the development work. I hold several patents myself, but the company for which I work gains the benefit. Some places in Europe (France, for example) the inventor is also entitled to a percentage of the benefits. However, in America, I was paid the sum of $5 by my company for the rights to each patent. (That is fair, they have paid my salary all these years, and they pay for all the technical equipment I use.)

Moving on....

The down side of having a zillion products to choose from at China-Mart, all at very low prices, and all virtually the same, is that American manufacturers have to move manufacturing somewhere else to stay in business. Like it or not, we are riding a tiger by the ears, and we dare not drop off.

I work for a mining company. New mining permits are nearly impossible to get these days. Our steel customers are looking at 5-15 years max before they close, permanently. Period. Some of our bulk commodity business is cheaper to have shipped from China than we can deliver from 25 miles away. Basically, in a global economy, the US worker cannot expect vastly higher wages except in those areas were we have technology or expertise that is worth the ten to twenty fold higher cost of labor.

What does that mean to modelers? We will probably continue to have relatively cheap kits in the future, likely with less diversity in subject, yet of reasonably high quality. We will also have less money to buy them with. If demand falls off as hobbyists age, then the price of plastic will likely rise to approximately the level of resin.

As far as the US vs the world argument goes, all I can say is that the US has been very good at adapting ideas from other places, and at combining different approaches from far and wide to forge innovative solutions. We have invented and discovered a vast amount. However, can anyone seriously doubt that those inventions and discoveries would not have been made elsewhere anyway, and at nearly the same time? Well, OK. Maybe the world would have had to live without pro football....

Edison was a theif, a tyrant, a bully, a pirate and a sadistic torturer of animals. Most of his patent work was stolen from people he had working for him. Including Nikolai Tesla. Someone that we should all be aware of as he invented the radio controlled model. A boat he demonstrated in Madison Square garden in 1898.

As for the animal cruelty, in order to discredit Tesla's discovery and application of AC current, Edison paid children to bring him neighborhood animals that he electrocuted to show the "inherant dangers" of AC. When this wasn't enough, he sent an assistant out into the countryside to electrocute farmers cows and such to further demonstrate his point.

Unlike Edison, Tesla was an original thinker whose ideas typically had no precedent in science. Today many of his "crack pot" theories are being tested and proven by modern science. Theories that Edison tried and succeeded in ridiculing Tesla for. Maybe had he been more interested in productivity and american industrial success and helped Tesla (whom he screwed over after Tesla helped him with his DC power problem) we would have had fluorescent lights, radar, energy beam weapons, radio telescopes, and voice radio years sooner than there "invention" dates. All things that Tesla had working and Edison spent a great deal of time suppressing. (Marconi simply sent a signal....Resla did it 10 years earlier. In 1943 the Supreme Court rendered Marconi's patent invalid and credited Tesla)

As for the increasing loss of American business, we have become a nation of consumers, not manufacturers. We are so bogged down by laws, rules, compensations, unions, maximum amount of profit for the least amount of work that in order for us to stay competative we have been relegated to end users, paper pushers and desk jockeys. I see it in my business all the time. The garment industry has moved most of its mfrg. off shore. Why should they pay a Union worker $22/hr to work a section of an assembly line, when they can pay a whole line the same wage? In many cases, the quality of american goods is surpassed by foreign standards. Or more money can be spent on manuf. processes to keep quality up rather than on wages for workers. Sad but necessary.

As for prices going down...don't bet on it. Would you take a pay cut if you found a way to increase your profit? Decrease your overhead and work less? Its all relative. And it is a dominoe effect. The next time that minimum wage worker starts grumbling about how little he's making at his 5 hour a day job, while he's living in mom and dad's house, driving their car, eating their groceries and wants a pay increase, thump him for me. Because that corporate magnate that owns the fast food restaurant he's working for isn't going to take a pay decrease for jr. He'll just up his prices to compensate. Meaning in the circuitous route of economics you'll pay more for that 1/35 scale kit in the end.

I agree on both sides of your arguments. I've never fancied the jingoistic idea of "If it ain't american, it sucks!" We are but a partner in progress with other countries that are doing their part to make us all benefit. Helk I'd be happy if kit prices stayed the same or only slightly went up. I wouldn't even dream to think that they may go down. THat will take more than moving it off shore.

Sorry guys, my soap box.

Mike

ChemMan.

Thanks, for your nice post. not sure about the exact patent laws, but I think they vary quiet a bit between countries.

Anyhuh, the following site is a treasure trove about inventions and their History. Very nice site and easy to navigate.

http://inventors.about.com/cs/timelines/index.htm?PM=ss15_inventors

it goes very detailed into who invented what and also often lists more than one inventor like the Elisha Gray vs Alexander Graham Bell dispute.
Also giving detailed biographies of the Inventors.

Back to topic:

From what I hear from the Model Makers out here they seem to suffer from a lack of new designs to base Kits on i.e. new Planes, Tanks, etc.
Also they complain that companies are less likely now to hand out licences for new Kits than a few years back, some citing possible industrial espionage (racing, etc).

Yes, they could do more variants of existing models, but I think that the market would be rather small as it would be enthusiast orientated.

I'm soaking up this information like a sponge. Very interesting posts.

The way I see it, in the near-term, U.S. labor will suffer. But in theory, free trade and globalization should benefit the worldwide economy in the long run. Perhaps eventually things should even out for all?

Also wondering if a new market for models will come about in these countries where foreign investment is happening. The people may not me making much money, but they are making more money than they were before. Perhaps a new generation of model builders will be born in the developing world where there is more money than there was before?

DJ

I guess from a model standpoint it should be interesting to see the evolution of kits as these small developing countries start to produce kits. Much like what is happening in Eastern Europe now. The quality is slowly but surely going up. As manufacturers retool and are exposed to the quality that is out there and go after this market. Its an open field these days and should be interesting to watch.

Mike

The model railway companies went through the same thing over the last 15 years.

The result has been much improved models, at the same prices as previously, which in turn have lead to increased profits for the companies concerned. This money has been re-invested leading to a plethora of new models, often of the less sought after peices of equipment.

From a modellers perspective great. Not so hot from the UK worker's perspective, but I work in IT where much of the support work is now performed by companies in India. It's happening everywhere.

As for the Industrial Revolution can I just put this one to bed by stating that it started in Great Britain in the 1700s, everything after that is merely a continuation of the process started by the likes of Thomas Telford et al.

The revolution isn't finished yet!

Karl