In the World of Big Stuff, the US Still Rules

westlake writes "From Peoria, the WSJ a look at the giant trucks manufactured by Komatsu and Caterpillar. 'In certain areas — notably aircraft, industrial engines, excavators and railway and mining equipment — the U.S. exports far more than it imports. These industries produce relatively small numbers of very expensive goods, requiring specialized technology and labor. Their competitive advantage rests partly on expertise built by U.S. companies in making durable, high-tech weaponry and other equipment for the military — frequently applicable to other products.' It may surprise you to learn that Komatsu doesn't employee a single industrial robot. The quality of workmanship simply isn't there where it is needed."

Re:surely, you're joking

[Buminatrain]

Yeah I'm gonna have to disagree with this. I tend to think your friend is just more fond of his profit margins with Chinese goods. I have a "fallback" job with a construction company and mainly do plumbing when working there. In general we use Chinese materials but on government/military jobs we have to use US materials. I'll tell you now the difference is night and day in terms of quality, on top of prevailing wage it's a joy working these jobs just due to how much better the quality of the US stuff is.

Re:Super Value Goods

[mrbcs]

I worked as a welder-fitter at Komatsu Dresser in Cambridge Ontario a number of years ago. The "quality" issue is a red herring.

Robots haven't been invented that can fit a gusset plate made of 3/4" steel that doesn't quite fit right because a guy hand made it in a 500 ton press brake. The plates would have to be clamped, heated and hammered with a 10lb sledge hammer to fit properly.

We had about 20 - 35 ton trucks on the assembly line at any given time. There is simply no cost effective way to make a robot do the tasks that these guys were doing.

Re:Komatsu?

[AdamHaun]

Why Caterpiller and not coca-cola?

Your link answers that question: Caterpillar sells equipment that helps Israel illegally build settlements in Palestinian territory. Coca-Cola does not. The Palestinians' interests are pretty clear -- they want their own state. There's nothing abstract or symbolic about it.

Re:Super Value Goods

[mrbcs]

They could have used a press and die set up. That would cost upwards of 100 grand. Since they only made 20 units at a time, it's just not cost effective.... and you still don't need a robot.

Re:Komatsu?

[donscarletti]

Caterpiller armoured bulldozers are probably the most visible element of IDF retaliatory demolitions. When your product is being used to knock down the homes of civilians to flush out insurgents in the community then you shouldn't be dumbfounded when your PR takes a slide.

Lower volume is the real issue

[Grayhand]

It's impractical to build robots to make equipment that is made in the hundred of units and individual parts weighs in the tons. Humans are more flexible so it's easier for humans to do short runs and American workers have a fairly long history of doing this work. For China it's workers are one generation off the farm and it's one thing to slap two halves of an iPad together but a very different issue aligning 5 ton metal castings. Ultra heavy equipment is just shy of being one offs so it requires a much higher skill set which the US still excels at. This is nothing new. I remember reading decades ago about Russian Subs couldn't match the US for quiet operation because we had the only mills that could make the propellers for quiet running. The largest metal castings we did were for the turrets for WW II battle ships and even the US can't reproduce those now.

Re:surely, you're joking

[cheesybagel]

The 70s oil crisis helped. Suddenly cars with low fuel consumption became much more appealing. This is also why NSU, makers of Wankel engine cars, went under.

not big, important

[slashmydots]

If you pay half for construction equipment and it breaks within a month, that throws off the expensive estimate just a bit. Any cheap-manufacturing country does not offer sufficient quality for business use of quarter million dollar machinery. They make cheap, hastily designed stuff out of inferior materials to undercut everyone because that's what they do. They can't make a perfect machine because then they'd need a vast engineering infrastructure and high purity metal manufacturing and all that. That's primarily the US and not a whole lot more.

good quality is good strategy

[manu0601]

There are two ways of being competitive. The first one is to lower all costs, (and especially labor costs) and make a weak product cheaper than competitors. The second one is to make better products with high price.

The cut-all-costs approach has a problem: there is always someone in a poor country ready to work for lower wage. Being competitive this way means making workers poorer and poorer. And there are environmental issues: costs can be cut by wreaking the environment in countries where there is no regulation to protect it. And since the ecosystem is global, environmental issue created in poor countries will bite back rich countries later.

Cutting all costs to be competitive leads to social and environmental destruction. I am glad there are still some success stories of good products with high price. Of course I do not take for granted that the high-price product is driving up wages and environment preservation, but at least it is not incompatible with it.

Re:not big, important

[drinkypoo]

The only reason the US has an advantage in building these big machines is because they needed these big machines when there wasn't anybody else building them yet

That's just not true. The reason the US has an advantage in building these big machines is that we're good at building these big machines. We have the best of everything; the best raw materials, for example. And the biggest corporations which can spend the most money.

If China would suddenly need machines twice the size as the US builds, they'd soon be leaders in building big machines.

There is no such thing as machines twice the size as the US builds, because if someone wants a bigger machine, we'll build it. And China buys its heavy equipment from other countries, but now isn't buying any to speak of [wsj.com], because their building boom has gone bust and they have entire cities lying empty [bbc.co.uk] because their economic model does not permit the citizenry to have sufficient wealth to be able to inhabit them, and yet their government is not actually communist, and will therefore not simply place people into those cities based on merit.

Yes, most of China's economy revolves around cheap labour and low costs, that doesn't mean they don't have any highly skilled engineers or the ability to create top quality.

It's not that they don't have any highly skilled engineers, but they don't have the ability to create top quality because that is not their goal. The goal is always to maximize profit. This does not set them apart, of course, from most "American" companies, but if you take a look I think you'll find that the so-called American companies that don't give a shit about quality are having their shit made in China. They might as well be a Chinese company with an American sign. As well, if you consider the history of Chinese manufacturing, there is actually no evidence they have ever had great engineers. When they rip off a design they copy it so faithfully that it contains the original flaws, even obvious ones. This has been obvious for as long as industrial goods have been coming out of China. They might be technically capable of producing the highest quality product, but they appear to be culturally uninterested in doing so.