[Coco] off-topic, space program

[David Hazelton]

jdaggett at gate.net wrote:

> David
> 
> I used to work for Motorola and in the division I was in, by the mid 90's all our 
> PCBs except for prototypes were from Sinagapore or Taiwan. One help was 
> that several products were able to use 2 sided boards. By 1998 we were 
> using mainland China PCB vendors. Many of the components were sourced 
> out of Asia for plastics and speakers and transducers along with some other 
> IC's. Resistors/caps/inductors came from the standard like AVX, Kemet and 
> so forth. They have facilities all over the world. 
> 
> Motorola now has no manufactureing in the US. All is second sourced or is 
> done in Mexico and China. Motorola now has design centers in China and 
> about 20 billion dollars invested into China. Yes there are still the Jabil, 
> Flextrtonics and other manufacturers. But for them to stay alive now they 
> need to either be partly in defense and into medical/biomedical segments. 
> Consumer electronics is not a money maker here. 
> 
> I agree on the quality from China is not up to speed. They are not used to 
> doing business the western way. They are  gaining experience yearly though. 
> With teh movement to China yes transportation costs become more than 
> labor. The beauty of China is that their Yuan is pegged to our dollar. So as 
> the US dollar floats to others, the exchange rate bwteen the US and China 
> remains somewhat constant. That is a nice feature for US companies. 
> 
> it is all part of globalization. When you ultimately look at wher einthe world is 
> the largest potential for gropwth in consumerism , the US is just not the palce 
> anymore not is Europe. China and India are the two areas that can sustain 
> 10% or more growth for the next 20 years. That is where the money is to be 
> made and that is where everyone will end up.
> 
> james
> 
> 
I will agree with you on Consumer electronics, where profit margins are 
in the 3 to 5 percent range.  Government work is profitless (too much 
red tape), It just brings in equipment that is used to make a profit. 
Where jabil, Sanmina, Flextronics make their 40% profit margins are with 
high-end equipment.  The Servers, Routers, telecommunication, 
Specialized equipment.  Things that are expected to last 10 years, but 
the companies want you to replace every 3.  This is not the Dlink and 
the Linksys equipment that will last 10 years, but is built in China.

If you look at these companies you will see that IBM manufacturing in 
China is now Sanmina-SCI and the likes. A lot of the memory companies in 
Asia are either partly owned or fully owned by such companies.  One 
reason for this is that companies couldn't pay for the services that the 
contract manufacturing firms were providing, but they needed to keep 
inventories up.  First in Europe than elsewhere, the Contract 
Manufacturing was settling the bills by taking over the companies 
plants.  The Company keeps the their inventory comming and the Contract 
Manufacturing company can now use the same plant to make competitors 
products.  At one time I saw Nokia, Motorola and Qualcomm Cell phones 
being built at one plant that was originally a Qualcomm plant.

The problem came, when no one needed any inventory and all the plants 
had to find work to stay open.  I worked for a company that went from 9 
plants to 110 in 6 years, I think there have about 75 active now.

While I was there, I saw a growth in PCB sales from all the companies 
that went for the cheaper PCB boards in Asia and found out they were 
scrapping more than building.  As more electronics are placed between 
the layers of the boards the more costly that had become.  They came 
back to save money.


Just my experience

~David Hazelton