Reply #9: You are not going to do what the article is suggesting [View All]

[kcwayne]

with a 50 year old Bergmaster and a milling machine made in 1973.
These guys have a sophisticated CNC milling center and 3D CAD software packages and computers. Their investment in this gear is easily 1 million, unless they bought it at auction from some other company that was liquidating.

Sure, you can set up a low tech shop with used equipment and join the list of shops that are chasing low volume/low margin work. And you will get underbid by companies everywhere in the race to the bottom.

The companies that reside in places like Mexico and China that don't have to worry about getting fined when they dump their solvents into the river, or pay workman's comp, or carry liability insurance will cut your price and eat you alive.

Your customers come to you and say, "I can get it for .37 a part in Chihuahua, you need to get your price down to no more than .50 a part to make it worthwhile for us". And at .50 a part, you lose money so you walk away, or go bankrupt hoping the customer will eventually give you projects that you do make money on.

It's not that there is no market for someone willing to play in the race to the bottom where labor and legislation is the only bargaining chip. But that is not a prospect that will create leveragable economies that add employment and wealth to a nation.

The article was suggesting that by increasing the capitalization and technological sophistication you can reverse the trend that is making manufacturing in general an evaporating enterprise in the US. My take is that the shade tree machine shops just don't get started as often, and when they do, they go out of business a whole lot faster.