Wednesday, November 16, 2011

Give it Away, Now

I try to not let politics nor religion creep into these pages about music.  Music should be a happy, non-divisive place, and both politics and religion are often tools used for both . However, something needs to be said about making  musical goods in China...

There are any number of really good arguments of why musical equipment makers shouldn't do this: patriotism, putting Americans to work, we've heard them all.  But one I've haven't heard and have been thinking about is how the manufacturers are trading short-term profit for long-term longevity.

When a company has something produced offshore, they have to specify what they want made.  That often means the American firm has to teach the Chinese company how to make it, along with any proprietary technology that company specifically developed and used in manufacturing.  Now, the Chinese are long known for industrial espionage, outright stealing of American technology.  However, by manufacturing American goods using American technology for an artificially low price, industrial espionage becomes unnecessary.  That technology is handed over to the Chinese (and other countries as well), and the American manufacturer, in buying the cheaply-made good,  pays for the pleasure of giving away his secrets.

This idea wasn't dreamed up in a vacuum.  I spoke with a bass guitar manufacturer who glowingly told me how he straightened out mistakes made on the production line in a Chinese factory. That line made instruments for nearly every major manufacturer in the US.

Eventually, I believe the Chinese manufacturing bubble will burst.  American lawmakers and manufacturers seem to be slowly coming to their senses, so more and more things will begin to be made in the USA again.  But by then, the horse is out of the barn. The Chinese will have the technology, expertise, and brand new factories with which to make these same goods on their own, without the Americans at all.  And then the fun starts...

American manufacturers will see their goods duplicated and sold worldwide for about one-tenth the price they now charge.  Only in this scenario, the difference will be that American manufacturers won't see any profit at all, only the theft of their ideas marketed globally. I suspect they'll have one hell of a time surviving.

So, manufacturer, if you're looking for quick profits, make hay while the sun shines.  And buyer: know that you're a part of it. If you don't tell the manufacturers, either directly or by voting with your dollar, you're complicit. I recently refused delivery on a bass because it was made in China (the manufacturer's website, which I researched before purchase, said differently). Eventually I bought American.

There ain't no such thing as a free lunch. Never was, never will be.

Zebron and James