We Have Met the Enemy and He Is Us!

Like Pogo, the famous swamp creature of Walt Kelley’s comic strip of the same name, we may have met the enemy and found that he is us!

I was watching a report last week on The Fox News Channel (yeah, I’m one of THEM) about the bowling industry in America– or rather, what USED to be the bowling industry in America. At one time, almost all of the bowling equipment sold in the US (balls, pins, machines, shoes, uniforms, bowling alley furniture, etc.) was made by either AMF or Brunswick.  But when NAFTA was passed in the 1990’s, the factories went to Mexico to take advantage of the cheap labor market.  Why?

Because American bowlers were demanding cheaper and cheaper gear, and it could not be produced in the States with our higher standard of living (and attending wage base).  So the Mexicans celebrated as they inherited hundreds of millions of dollars’ worth of factories, development, and expertise.  There were fiestas down south as plants closed up north, and several small US towns hat depended on AMF and Brunswick were decimated.

But now the Mexicans are singing the “Bye Bye Birdie” song because the manufacturers (still mostly owned by Americans) are moving their plants to someplace where the labor is even cheaper– yes, China.

I find it ironic as it can be that our friends to the south, who celebrated their big wins with NAFTA-inspired migrators like AMF and Brunswick are now in the same state of shock our workers were 16 years ago.

Why?  For the same damned reason as it was in the early 90’s– American bowlers want their goodies STILL cheaper.

I’m going to reap a lot of flak for what I am about to say, so before you hit me with your flame thrower, read the entire

blog carefully.  I am a patron of Walmart.  I like Walmart.  They have been generally good for America, especially in the smaller towns were they set up shop.  But there is a downside to Walmart– and it is what I call the “Walmart mentality.”  It’s the mindset that cheaper is ALWAYS better, that somehow it has become an American right to have the best of all goods at the cheapest possible price.

The result?  Someone off shore makes a knock-off of  a high-quality US product (or, sometimes, a poor-quality one, as Detroit knows only too well) and sells it for 25% less than the US product, usually at Walmart (and similar discount chains– it’s not just a Walmart issue).  So what does the American manufacturer do?  Try to match prices and keep the quality up (sometimes an impossible task), so they either have to beat the bat snot out of their employees for concessions to stay “competitive” or they must move out of the country to where labor is cheap.

It began 50 years ago.  First shoes went offsore.  I grew up in a small town in the Midwest that had, among other things, a shoe factory, owned by the Brown Shoe Company.  I worked there one summer while in high school. At one time, it employed about 400 people, making shoes that Americans built, Americans wanted, and Americans wore.  Then someone– I don’t know who– maybe the Italians, maybe the Fillipinos, or Indonesians– began making equally good shoes (or better ones) at a lower price.  Brown tried to keep up by cost cutting, but it was not enough, and eventually Brown outsourced all its shoes to off-shore factories.  Today, Brown is still in business as an American company, but the shoes are not built here any more.  Because Americans wanted it cheaper, faster, cheaper.

Then television sets left the American landscape.  Do you remember when RCA, Magnavox, Philco, Emerson, Motorola and others were built here?  I do.  They are all built in Asia now.  And they are darned good sets too!  But again, we clamored for cheaper, faster, cheaper.  And we got it.

Steel mills followed soon thereafter.  Then cameras.  Then computers.

We demanded it cheaper, and we got it.   But at what price?

What does the future hold for us?  I have heard it said that information technology is the new steel mill for America, that we have a huge lead in that area and that we can leverage that for wealth.

But not for long.  We’ll lose that lead to cheaper, faster, cheaper soon too.

Gee whiz, I sound pessimistic on this, don’t I?  But have I missed it?  Am I wrong?

The English art critic and essayist John Ruskin said it so well over 100 years ago:

“It’s unwise to pay too much. But it’s worse to pay too little. When you pay too much, you lose a little money, that is all. When you pay too little, you sometimes lose everything because the thing you bought was incapable of doing the thing it was bought to do.

The common law of business balance prohibits paying a little and getting a lot. It can’t be done. If you deal with the lowest bidder, it is well to add something for the risk you run. And if you do that, you will have enough to pay for something better.

There is hardly anything in the world that someone can’t make a little worse and sell a little cheaper and people who consider price alone are this man’s lawful prey.”

Can product quality and superior salesmanship save the United States from its plunge down the world’s economic toilet? I hope so!  I’m betting on it!  But we have our work cut out for us!