Is Western Manufacturing Becoming a Paradoxical Term?

Is the West really prepared to allow most of its manufacturing jobs to migrate to low wage countries? Will the capitalist free market model be allowed to prevail at the expense of a carefully constructed skills, knowledge and infrastructure that has taken generations to build?

Globalisation has enabled low wage countries to gain unprecedented access to Western markets with Western companies often spearheading the movement by setting up manufacturing bases there to enable them to continue to compete.

Globalisation however is an economic doctrine and makes no differentiation between different styles of governance. The West has been quick to trump up the incredible short term economic advantages that have arisen, but is sufficient attention being paid to the rapid changes that are beginning to unfold and their long-term implications?

In Western democratic society, business and politics don’t usually make good bedfellows. So how do Western styles of business with their short-term investment cycles contrast with command and control styles of government that work far closer with business and have long-term investment cycles?

Is the West going to realize that in their haste to implement their global capitalist dream they have taken short-term profits but surrendered their place in the world economy? Is Western manufacturing going to be going the same way as Western religion?

Maybe it’s time to pay greater attention to the implications of globalisation?

We recently saw a beautifully made dining room setting in the window of our local furniture factory showroom and went inside to enquire further. The construction was rock solid, and obviously built to last a lifetime! We looked at the price tag for the heavy wooden table and 8 chairs and instinctively felt how much the materials and labour would be to build such a set. We talked to the manufacturer/craftsman and discussed details. After measuring it up we returned home to see if it was going to fit. Feeling that it may not be quite right, the owner came to our home and gave us final advice. The end result is that we paid a fair price for a quality setting that will in turn provide a lifetime of service.

Several weeks later we were reading the newspaper and saw what appeared to be similar looking furniture offered at less than half the price. Our hearts sank at the thought of having paid so much. However the more we considered the various factors behind our decision the more we felt satisfied with our purchase. Why?

  • Our local manufacturer makes top quality furniture for a fair price. His efforts should be recognised and he be fairly compensated for his years of training and craftsmanship?

  • The hardwood timber used was undoubtedly of highest quality harvested from locally grown environmentally sustainable milling operations. We could rest assured that this was not made from non-sustainable rainforest cut timbers and we were not contributing to the problem.

  • We know that the timber is fully seasoned and only highest quality glues are used throughout and it will remain stable and strong. In short we are satisfied by the craftsman’s methods and he fully warrants his product.

  • The furniture was especially constructed to fit our room size and taste.

The forces of globalisation are changing the world so rapidly that it not possible for small factories as described to compete on a purely financial basis. What we may have to grow accustomed is a two-tier system whereby specialty value added items are locally manufactured and mass-produced items are sourced from low wage countries. It is difficult however to look at what is currently unfolding in the Western world and view these wholesale changes taking place as good. It must also be realized that low wage countries will not restrict their practices to low value manufacturing, as even the professional services such as IT, accountancy, surgery, dentistry etc will face severe competition in this new global market.

If we surrender to the forces of pure economics then sooner rather than later we’ll wake up to find that the Western world will cease to manufacture anything of substance and we’ve become one giant Wal-Mart! Just look at the container ships coming into our ports each day loaded down with imported goods then see them leaving empty.

Remember the once mighty “Roman Empire”.

Perreaux Products