Gross Mismanagement Part III: Buyers

02/15/2012

Just before the great depression in 1929 then president, Herbert Hoover, said that "With America's high standard of living, we cannot successfully compete against foreign producers because of low foreign wages and a low cost of production." In spite of these dire predictions America survived the depression and went on to compete and simultaneously out-manufacture Germany, Italy, and Japan to win World War II. That same over-paid labor force generated enough profit to not only finance the rebuilding of Europe and Japan, but to also protect them during the Cold War. These achievements were topped-off by creating an economy that became the envy of the world.

It has taken globalization and rampant greed to create the impression that Hoover's prediction was valid. It is estimated that at its peak in 2003 the plastics industry employed 1.4 million people in approximately 25,000 companies. Starting in the 1990s there was a major increase in the number of U.S. Original Equipment Manufacturers who moved the product of their molds, plastic components, and products to low-labor rate countries around the world. Some injection molders followed their OEM customers offshore. Others went out of business, were absorbed by larger companies, or transformed themselves into the flexible, lean and mean suppliers their customer claimed to want. By 2010 direct plastics industry employment was reduced to around 876,000 in just over 16,600 facilities.(1)...
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