From: nelson_p@apollo.hp.com (Peter Nelson)
Subject: Re: Adios, Smith Corona
Date: Wed, 22 Jul 1992 16:09:18 GMT
Organization: Hewlett-Packard Corporation, Chelmsford, MA

In article <1992Jul22.144047.17337@tc.cornell.edu> shore@tc.cornell.edu writes:
>[]
>Smith Corona has announced that it's shutting the doors on
>its Cortland, NY plant and moving all of its manufacturing
>operations to Mexico.  There will be *no* typewriter
>manufacturing left in the U.S. after the move occurs.
>
>Thanks, George.


   Look, with all due respect to George (Bush, I assume) (and
   I'll leave it up to the readers to decide how much respect
   that should be . . . )

   Why blame him for this?!

   Sure he's a supporter of NAFTA, but NAFTA is not law, yet.

   Why not blame Smith Corona for still building typewriters
   and failing to adapt to new technologies during the last few
   decades when everybody with half a brain was getting into 
   computers and related products? 

   Or why not be happy that at least this way their engineering and
   marketing people (these are remaining in the US) still have jobs.
   If Smith Corona couldn't compete with cheaper-labor foreign compet-
   itors by doing this, then they ALL would be out of work.  

   Or why not accept the fact that we live in a world economy
   where higher-paid workers have to compete with workers in other
   nations making a 10th of what they do?   I mean what do you
   propose as a remedy?   Look at at the European computer and 
   semiconductor industries if you think trade barriers work.

   Lester Thurow believes that somewhat lowering standards of
   living in the high-wage nations are inevitable during the next 
   few decades as the world adjusts to new economic and technological
   realities and he believes that this process has already started
   in the US.  

   Modern industrial technology and its products are very portable
   compared to the 19th century.  Thurow claims that in the 19th 
   century a nation could be a major industrial only power if it had
   1.  Copious Raw Materials
   2.  Capital
   3.  Educated labor force
   4.  Communication and transporation infrastructure 
     
   . . . this pretty much meant North America and UK/Europe at that time.

   1.  Today this isn't true.  Japan, Hong Kong, Singapore, etc, have no
   native raw materials but modern transportation, and the nature of
   modern technology, which is more "technique" and "knowledge" based,
   reduces the importance of that and allows them to be industrial
   superpowers anyway.

   2.  Today we have international capital markets.  Thurow used an
   expensive, new, high-tech factory in Thailand (a capital-poor
   country) as an example of how you don't have to be a rich 
   nation to build expensive industrial capacity.  

   3.  All nations which are serious about their economic future are
   promoting education.  One thing the net.libertarians usually overlook
   is that all those nations out there beating the US in ETS studies
   are doing so with *state* -provided education.  (and doing so cheaper
   than us, to boot).   

   4.  You want communications infrastructure?  When you build your new
   factory in Thailand put up a satellite dish!   My company (HP) has a 
   very productive software engineering office in Bangalore, India, not
   a nation known for the most modern infrastructure.   We never have 
   any trouble doing shared-workstation debugging and similar tasks.
   Also, the products of modern technology can be abstract like the 
   description of a protein in biotech, the design of an aircraft wing, 
   software, illustrations for an advertising brochure, etc.  Or they
   can be small things which are not so raw-material intense such as
   IC's, which can be shipped by plane or truck rather than ships and 
   trains.   Look at the IC's in your computers there at Cornell and
   see where they're made:  Singapore, Maylasia, Mexico, El Salvador,
   etc. 



   Seriously, Melinda, did you just make that posting to rant,
   or do you have some proposal for a solution?    In a world economy
   labor may not be very portable, but jobs are.   There is no 
   efficiency or productivity -enhancing method or technology you
   can use in the US that they can't adopt just as easily in 
   Singapore, India, or Taiwan.     Personally I think you'll just
   have to deal with the fact that there's somebody in India or
   Mexico who can do your job just as well as you can for 1/10th
   the price.   I suppose you can hope that their standard of living
   (i.e., their wages and costs) grows to meet ours, but things don't
   happen *that* fast.  In a generation or two maybe that will fix
   things.  Until then, expect to see more US job losses.   


---peter


 



   
     
   
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