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Cessna In China  
User currently offlineWarRI1 From United States of America, joined Sep 2007, 9292 posts, RR: 12
Posted (7 years 2 weeks 4 days 14 hours ago) and read 3274 times:

I was reading the Providence Journal today(SundayDec.9) and there was an article about Cessna and their decision to build the (Skycatcher) in China. If this is old news, I apologize now. What I love about these announcements is the reasoning for the (Outsourcing of more jobs to a foreign country). 1. 40% cheaper to build, hard to argue with that one unless you are a US worker somewhere in the chain of manufacture which has historically taken place in the US. 2. The Chinese by virtue of 40% cheaper production cost, by some miracle also become able to outdo the US worker in quality or at least equal the US worker according to Mr. Campbell CEO. I would like to know how that is possible and what studies has he been looking at to arrive at that conclusion, I guess they are better at this than Boeing with the 787. What does this say about the training and quality of the aircraft produced by Cessna in the US. all these years?. What does this say about the US worker? I guess that by reducing costs by 40% Cessna has achieved a great break through in training and quality and I am almost certain profits. Mr. Campbell also mentions the Chinese opportunity for Cessna to be involved when the Chinese start building larger aircraft in the future. In Mr. Campbells world Cheap labor equals higher quality, amazing is it not?















5


It is better to die on your feet, than live on your knees.
24 replies: All unread, jump to last
 
User currently offlineCitationJet From United States of America, joined Mar 2003, 2469 posts, RR: 3
Reply 1, posted (7 years 2 weeks 4 days 14 hours ago) and read 3248 times:

Cessna Chooses China's Shenyang Aircraft Corporation as Manufacturing Partner for Model 162 SkyCatcher

Beijing, November 28, 2007 -- Cessna Aircraft Company, a Textron Inc. (NYSE: TXT) company, will partner with Shenyang Aircraft Corporation (SAC) to manufacture the new Model 162 SkyCatcher light sport aircraft (LSA). SAC is a subsidiary of China Aviation Industry Corporation I (AVIC I), which is a government-owned consortium of aircraft manufacturers.
The company made the announcement today during a signing ceremony at the Great Hall of the People in Beijing.
"The LSA market demands the latest avionics, safety and reliability, light-weight equipment and a competitive price tag," said Cessna Chairman, President and CEO Jack J. Pelton. "Our solution is to partner with SAC, a company with excellent facilities, state-of-the-art technologies and a workforce highly experienced in aircraft manufacturing. SkyCatcher customers will get an advanced design, high-quality workmanship and world-class product support, all at an affordable price from Cessna, a brand known and trusted worldwide."
Cessna will design the aircraft and handle American Society for Testing and Materials (ASTM) compliance work, as well as provide on-site personnel to oversee manufacturing, quality assurance and technical design. SAC will be responsible for assembling the SkyCatcher.
"SAC greatly values the cooperation with Cessna, and sees Cessna as a significant partner in the general aviation segment. Since the start of the cooperation between the two companies that began in 2003, a good foundation has been established," said Chairman and President, Mr. Luo Yang of SAC. "The communications and exchange of visits between the management of our two companies have strengthened the trust and understanding, which leads to today's signing of the Model 162 contract, making SAC the sole source supplier of this great airplane."
President, Mr. Lin Zouming of AVIC I added, "With the continual economic growth in China and the changes in China's policies for the general aviation industry, AVIC I has placed strategic importance on general aviation development and will strongly support and promote the business."
Founded in 1951, SAC is a civilian and military aircraft manufacturer with 16,000 employees in Shenyang, China. Boeing, Airbus, Bombardier, Spirit AeroSystems and Singapore Aerospace are just a few of SAC's clients.
"Through decades of joint production ventures and sub-assembly ventures with the industry's top manufacturers, SAC has emerged as the premier aircraft enterprise in China," Pelton said. "That experience and their outstanding facilities and production capabilities make them the perfect partner for us on the SkyCatcher program."
Cessna unveiled a proof-of-concept aircraft in July 2006 to gauge market response, then announced in July 2007 that it would proceed with development of a light sport aircraft, dubbed the Cessna 162 SkyCatcher. An introductory price of $109,500 USD will hold for the first 1,000 orders and then increase to $111,500 USD. Orders have already approached 900.
The SkyCatcher features an exclusive Garmin glass cockpit - the G300 - and a Teledyne Continental O-200D 100-horsepower engine designed specifically for the LSA. The aircraft will cruise at speeds up to 118 knots and will have a maximum range of 470 nautical miles. It will be capable of Visual Flight Rules/Day/Night operations.
The aircraft has a maximum gross weight of 1,320 pounds, a service ceiling of 15,500 feet, a useful load of 490 pounds and a usable fuel load of 24 gallons. Its cabin width at shoulder height is 44.25 inches, and two cabin entry doors and forward pivoting seats give access to a 12.5 cubic-foot baggage compartment. The SkyCatcher has tricycle landing gear with a castering nose wheel and standard dual toe-actuated disc brakes.
The aluminum aircraft will meet ASTM standard F2245 for light sport aircraft. First flight of the prototype SkyCatcher is set for the first half of 2008 and deliveries are expected to begin in the second half of 2009. Cessna expects to produce up to 700 a year at full-rate production.
Based on unit sales, Cessna Aircraft Company is the world's largest manufacturer of general aviation airplanes. In 2006, Cessna delivered 1,239 aircraft, including 307 Citation business jets, and reported revenues of about $4.2 billion. Cessna has a current backlog of $11.9 billion. Since the company was originally established in 1927, some 190,000 Cessna airplanes have been delivered to nearly every country in the world. The global fleet of more than 5,000 Citations is the largest fleet of business jets in the world. More information about Cessna Aircraft Company is available at http://www.cessna.com.



Most people don't realize that the new category of Light Sport Aircraft are not FAA certified. The Cessna Skycatcher is not designed and certified to FAA regulations or standards. It is designed to ASTM standards. This is not unique to Cessna's Skycatcher, but all LSA aircraft. Therefore it does not require the rigorous testing or high skill level for manufacturing and assembly. I don't think it could be built in the US for the $109,000 price point.

Cessna has maxed out its production facilities in Wichita and Independence. Cessna currently has a US$12 Billion backlog for aircraft. For that reason the LSA and even the yet to be launched Large Cabin Concept (LCC) jet will not be manufactured at Cessna.



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Boeing Flown: 701,702,703;717;720;721,722;731,732,733,734,735,737,738,739;741,742,743,744,747SP;752,753;762,763;772,773.
User currently offlineJetJeanes From United States of America, joined Oct 2004, 1434 posts, RR: 1
Reply 2, posted (7 years 2 weeks 4 days 14 hours ago) and read 3240 times:

There is very little manufactured here in the states anymore. Sorry to see cessna fall to the overseas market as well


i can see for 80 miles
User currently offlineCitationJet From United States of America, joined Mar 2003, 2469 posts, RR: 3
Reply 3, posted (7 years 2 weeks 4 days 13 hours ago) and read 3210 times:

Quoting JetJeanes (Reply 2):
There is very little manufactured here in the states anymore. Sorry to see cessna fall to the overseas market as well

Cessna builds all of the Citations, Caravans, piston singles in the US. The foreign sales market is very important to Cessna. Foreign customers and foreign markets are currently purchasing 50 to 60% of the aircraft that Cessna builds. With currently a US$12,000,000,000 backlog in orders at Cessna, foreign markets have ordered over US$7B in Cessna aircraft.
The Skycatcher being built in China will represent about 1.2% of Cessna's annual sales. The reason for introducing the Skycatcher is to stimulate pilot training starts, which will help sale of other Cessna models as the pilots move to larger models.
Exporting US$7 billion in aircraft (60%) to foreign customers while manufacturing 1.2% of your product overseas seems like a fair trade balance.
Also the LSA is not an FAA certified aircraft, it will be certified to ASTM standards. To build the LSA with the existing personnel and quality and manufacturing systems would be cost prohibitive.
The LSA's Teledyne Continental O-200D engine will be built in the US, and the Garmin glass cockpit will be built in the US. The aircraft will be manufactured and put into a crate in China, shipped to the US and assembled in the US.

[Edited 2007-12-09 16:21:03]


Boeing Flown: 701,702,703;717;720;721,722;731,732,733,734,735,737,738,739;741,742,743,744,747SP;752,753;762,763;772,773.
User currently offlineWarRI1 From United States of America, joined Sep 2007, 9292 posts, RR: 12
Reply 4, posted (7 years 2 weeks 4 days 10 hours ago) and read 3104 times:



Quoting CitationJet (Reply 3):

I thank you for the information about the new aircraft, When I read the story in the local and our largest newspaper about the statement from the CEO of Cessna about the ability of the Chinese Corporation( Chinese Government any way you look at it) to build it for 40% less than the US workers, it got my attention, either he was misquoted or he insulted the abilities of the US aircraft workers as far as quality goes. I have been around a long time and I have watched the little bites such as this little insignificent plane takes out of US jobs become devastating later on as the mind set of mangement becomes fixated with cheaper labor and more profit and more bonuses for themselves. I can look back to when there were so many jobs out there, you could pick and choose and never have to worry, the cycles were there of good times and bad and we always knew it would come back, not anymore and to see the aircraft industry start the little steps down the road of our other battered and sometime almost non-existant industries is a wake up call. I had family who worked in the aircraft manufacturing industry all their lives and made a darn good living doing it. Once again I will say it outsourcing and the tranfer of technology to communist nations is stupidity, plain and simple. Manufacturing technology in the aircraft industry is going over there, bit by bit, too many bites of the apple and all you have is the core. I hope I clear the standards for the civil aviation forum.



It is better to die on your feet, than live on your knees.
User currently offlinePC12Fan From United States of America, joined Jan 2007, 2469 posts, RR: 5
Reply 5, posted (7 years 2 weeks 3 days 22 hours ago) and read 3006 times:

Well at least they will keep production of the "new" C350 and C400 over here.


Just when I think you've said the stupidest thing ever, you keep talkin'!
User currently offlineBond007 From United States of America, joined Mar 2005, 5455 posts, RR: 8
Reply 6, posted (7 years 2 weeks 3 days 22 hours ago) and read 3006 times:

They'll never get off the ground with all that lead paint !!

Jimbo



I'd rather be on the ground wishing I was in the air, than in the air wishing I was on the ground!
User currently offlineWarRI1 From United States of America, joined Sep 2007, 9292 posts, RR: 12
Reply 7, posted (7 years 2 weeks 3 days 20 hours ago) and read 2954 times:



Quoting Bond007 (Reply 6):



Quoting Bond007 (Reply 6):
They'll never get off the ground with all that lead paint !!

I like that one, and all too true as we all know, maybe they will use a lighter lead paint on the new aircraft.



It is better to die on your feet, than live on your knees.
User currently offlineGeekydude From China, joined Apr 2004, 401 posts, RR: 2
Reply 8, posted (7 years 2 weeks 3 days 10 hours ago) and read 2874 times:

I may be wrong, but the Shenyang Aircraft Company has been a pretty reputable company. After all if they can put a Su-27 together with no problem, the quality of the C-162 can be easily ensured.


FLIB 152 'heavy' low approach...Caution wake turbulance!
User currently offlineWarRI1 From United States of America, joined Sep 2007, 9292 posts, RR: 12
Reply 9, posted (7 years 2 weeks 2 days 17 hours ago) and read 2751 times:



Quoting Geekydude (Reply 8):
may be wrong, but the Shenyang Aircraft Company has been a pretty reputable company. After all if they can put a Su-27 together with no problem, the quality of the C-162 can be easily ensured.

You see that is the point, when Communist China wants to produce a quality product, they seem to do so, it is the sporadic quality that concerns me and as I have said before, food and lead poisoning is a moral and health issue. I do not think it is too far of a stretch to link the two. If they are so good at producing aircraft with such quality that they can compete with other countries aircraft workers, how come they cannot produce food and toys with the same attention to detail as their aircraft industry does?



It is better to die on your feet, than live on your knees.
User currently offlineSkyexRamper From , joined Dec 1969, posts, RR:
Reply 10, posted (7 years 2 weeks 2 days 8 hours ago) and read 2670 times:

Warning!! Wash hands after touching anything painted! Could contain lead paint.  banghead  It is sad to see Cessna of all companies to look to China for help in keeping costs down.

User currently offlineLuv2cattlecall From United States of America, joined Sep 2007, 1650 posts, RR: 2
Reply 11, posted (7 years 2 weeks 2 days 7 hours ago) and read 2660 times:
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So now 100 Low-lead isn't just a fuel type but a paint hue?

[Edited 2007-12-11 22:12:02]


When you have to breaststroke to your connecting flight...it's a crash!
User currently offlineGeekydude From China, joined Apr 2004, 401 posts, RR: 2
Reply 12, posted (7 years 2 weeks 2 days 7 hours ago) and read 2642 times:

I am not defending the companies turning out inferior quality products. They are to blame, and there's no excuse for that whatsoever. But it's a bit stretching the line if we reach the conclusion that all the companies in China are in a grand conspiracy sending contaminated food and toys to the US in an attempt to slowly poison the US population.

The truth is not only do US consumers get hurt by those dishonest companies, the ones that are hurt the most are Chinese consumers who get to consume more of these contaminated products on a day to day basis, and those honest companies who have painstakingly established a market share in the West through honest hard work. On this front against inferior products, the Chinese consumers and the vast majority of Chinese companies are indeed fighting the same enemy.

On the other hand, however, we should also think about the roles the US companies played in this whole mess who imported poisoned products and sold them under their brand names. Capitalism seeks the lowest cost which creates efficiency, but certain cost on quality inspection should not be spared under any circumstances. Here I do not think Mattel and others have done even remotely enough. They should have been more cautious and paid closer attention when importing from a dubious source. If we absolve Mattel from such obligations and put the blame entirely on the Chinese, which is obviously the most convenient thing to do, next time sooner or later we'll see the same problem happening again, maybe not from China, but from other developing countries .

Lastly I think it's unfair to label everything associated with China as "communist". Again I am not defending the government's less than stellar record on human rights issues and democracy, I think vast improvement needs to be done in that area. But just focus our attention economically, if you ever go there you will realize that in many respects China is even more free market oriented than many countries in Europe. The ratio of government owned companies is surprising low. Most people and companies are just working hard competing honestly to make a living. The populist politicians and some tv anchors would seize every opportunity to blow things out of proportion and make the American public believe that the "Communist" Chinese are up to something ulterior. What they often refrain from telling however, is that by restricting trade, most US consumers will be worse off and many many more poor people in China will be deprived off a chance to get out of poverty.

It is Economics 101 that tells us global trade is win win for all trading partners. We should not be sad just because companies find a lower cost supply source from abroad. Rather, as a nation whose success has been largely built upon free market capitalism and free trade, America should do something concrete and fruitful about those workers who are displaced by global trade, instead of finding a scape goat and blaming the world's poorest people for "stealing" jobs.

Every major technical innovation displaces workers and causes society to shift production patterns. The US throughout history has transformed itself from an agrarian to manufacturing and now to a service intensive economy. With each and every major transformation, lots of worker were displaced, people got disgruntled. Remember reading about those days when labor unions blame machines for stealing jobs? But over the long run, an average American is now able to enjoy a standard of living much much higher than his/her grandparents. Why? Increases in productivity make everyone better off in the long run.

Trade does almost the same thing as technical innovation. In both cases, suppliers are able to supply to the market a higher quantity of their products at a lower cost. So trade is to be celebrated instead of being shunned.

I understand it's human nature that craves for job security. But to stop trade is like curbing the advance of human society just as curbing tech innovation would do. America is probably in a better position than any country in the world to face the challenge of global trade given its superb higher education system and its free market spirit that fosters entrepreneurship and innovation. So a better attitude would be to embrace the trend and reap the benefit. Retaining and re-educating the work force would help as more and more new jobs are created that require new sets of skills. Americans should be confident that they are up to the challenge. Being complacent and refusing to adapt is not going to lead everyone very far.

Coming back to aviation. I think it's a good thing Cessna can use the global manufacturing and supply chain to cut cost and produce a less expensive product for its customers. Eventually, its the customers that benefit. This is the essence of free market capitalism. I'd be happy to fly a C-162 no matter where it's assembled, be it in Kansas, Europe, Japan, or China.



FLIB 152 'heavy' low approach...Caution wake turbulance!
User currently offlineWarRI1 From United States of America, joined Sep 2007, 9292 posts, RR: 12
Reply 13, posted (7 years 2 weeks 1 day 19 hours ago) and read 2559 times:



Quoting Geekydude (Reply 12):
Lastly I think it's unfair to label everything associated with China as "communist". Again I am not defending the government's less than stellar record on human rights issues and democracy, I think vast improvement needs to be done in that area

Well, I have been around alot longer than most on this forum and when I label something communist in a communist nation, and that something is made under the communist system and therefore that something is under the control of the communist government and therefore when it is inferior, it is a failing of that system and the system in China is communist. The aircraft mentioned in the thred is going to be manufactured under both systems, communist and Capitalist and we know that the communist party controls the aircraft industry in China and so we know this, that the government of China is not made up of fools and they will push the aircraft workers to turn out a good product for future income and for competition against the Capitalist System. We all know there is such a competition, don't we? and whether aircraft or toys or food are the product the system that makes that product is to blame. Now lets touch on the jobs and the loss of income when you lose that job, I do not think anyone in the unemployment line gives a hoot about the guy in China or anywhere else who took his job, all he knows is that someone shifted his livelyhood out of the country to enrich himself, or the corporation for which he works. Cessna Aircraft can use any rational it wants to, the bot tom line is going to be a loss of work and income for someone in the chain of manufacturing for those aircraft., the same goes for any company who does this, this is not a noble cause to improve the lives of Chinese workers, this is business plain and simple, go where the cheap labor is and enrich ourselves while we are doing it. I said before and I will say it again, it is now becoming the aircraft workers time in the barrel and we all know what that means.



It is better to die on your feet, than live on your knees.
User currently offlineGeekydude From China, joined Apr 2004, 401 posts, RR: 2
Reply 14, posted (7 years 2 weeks 1 day 11 hours ago) and read 2490 times:

As a matter of fact, what you described as "aircraft workers' time in the barrel" has started long before the Cessna case. Big manufacturers like Boeing and Airbus have been relying on overseas suppliers of parts from time immemorial. The difference now is that the scale of international labor division has greatly increased thanks to increased level of international cooperation and competition. Boeing's 787 project even has a big chunk of the design work done by foreign companies, let alone the manufacturing of key parts. Airbus is adopting more or less the same route. I do not agree that offshoring production is simply management's dirty means to enrich themselves.It's not just a matter lowering cost and increasing profit anymore, rather, this is about survival and the long term growth or existence of the company in a new fiercely competitive global environment. If your company does not do that, someone else will; and in time they will push you out of the market place altogether, plain and simple. A smart company needs to get a head start in the new game. But in the end, it's the customers that are rewarded the most by being able to fly in better cheaper airplanes. There is a short term trade off in this game in that some workers' livelihood will be negatively affected. But there would be no jobs to speak of in the long run if the company was forced to closed down due to lack of competitiveness since it refused to change its business model.


Quote WarRI1: "when I label something communist in a communist nation, and that something is made under the communist system and therefore that something is under the control of the communist government and therefore when it is inferior, it is a failing of that system and the system in China is communist."

Applying your logic above, each time some quality control issues come up in the US, do you categorically make the generalization that it's the failing of the capitalist system? Think about all the aviation related accidents that could be attributed to manufacturing error or design faults. Do you reject the capitalist system because it's responsible for causing tragic accidents? We all know sporadic instances do not represent the "true population" very well if you would forgive me for using some statistical parlance. In fact, we should not even talk about "isms" at all, because the failure of some products meeting quality standards is not caused by the "system" in which they are produced, but they are isolated incidences that need to be coped with on an individual bases no matter where they are produced.

It might surprise you that the vast majority of the Chinese made products meet safety standards and they are made by privately owned enterprises that have nothing to do with the "communist" government. So basically US consumers are dealing with the free market capitalism component in China. It will do those entrepreneurs, the vast majority of which are hard working and honest, save some bad eggs, great injustice if we label them simply as "communist". They are anything but!

Even if the Shenyang Aircraft Company is owned by the Chinese government, I do not think there's anything to be concerned about when it comes to assemble such a light aircraft. Airbus is heavily owned and regulated by some European governments, does it bother us the slightest bit when we board an Airbus? It's the quality of the product that matters, everything else takes the back seat.

Today's world is changing so fast that most of us do not even comprehend the impact of the changes. Many things that could not be done before across national borders are now doable by talents from different countries. This can bring enormous benefits as well as challenges. Everyone living in advanced countries should have a new mindset, be it aircraft manufacturing workers or people flipping burgers. The key is be humble and be willing to change, improve, and cooperate. If you are always thinking about the good ol' days, then you will be left behind. Complaining does not help; put your feet on the ground, adapt and do something beat all else.



FLIB 152 'heavy' low approach...Caution wake turbulance!
User currently offlineWarRI1 From United States of America, joined Sep 2007, 9292 posts, RR: 12
Reply 15, posted (7 years 2 weeks 1 day 10 hours ago) and read 2452 times:



Quoting Geekydude (Reply 14):
The key is be humble and be willing to change, improve, and cooperate. If you are always thinking about the good ol' days, then you will be left behind. Complaining does not help; put your feet on the ground, adapt and do something beat all else.

Well, I am glad that we have established that Cessna, an American and a Capitalist Company has taken work away from American Capitalist workers and given it to a communist corporation wholly owned by a communist government. this must be the dawning of a new age in the name of trade,I guess trade will cure all the ills of the Capitalist world and the communist one, we will have an era of enlightnenment and prosperity and the displaced workers are to earn a living how? and fly on these lowcost aircraft how?, it seems that in the Capitalist world one must have money to do those things, and I suspect also in the communist one, now let us think about how the Capitalist workers will feed and cloth their families after we have changed, improved and co-operated ourselves into financial ruin. We can then watch the developing countries and I do include China own the same corporations who changed, improved and co-operated themselves into not owning the companies any longer. China will own the companies and they will fly around the world in these, correct me if I am wrong here, probably expensive aircraft now that the profit goes into different pockets. Now let us get to the word (humble) I do not like that word, never having been humble before, I am sure not going to start being humble anytime soon. I do know as soon as the aircraft and the corporations which make them are either broke or foreign owned(along with a great portion of othe non- aviation companies) we will then discover the true meaning of the word (Humble) The past history of the world does not show a trend by Victorious Countries to treat beaten countries humbly, it is the opposite, I am afraid. There is one country that has done so in my lifetime and I am proud to say that I live in it. I say again that Cessna should be ashamed for this contract for (lowcost aircraft) and I wonder how many of the displaced and humbled Capitalist workers will be able to afford one.



It is better to die on your feet, than live on your knees.
User currently offlineGeekydude From China, joined Apr 2004, 401 posts, RR: 2
Reply 16, posted (7 years 2 weeks 1 day 9 hours ago) and read 2438 times:

WarRI1, it's been nice having this discussion with you. I do not mean to disrespect. By "humble" I really mean people everywhere should reevaluate their surroundings, and be prepared to change; assuming the "we're #1 and will always be" sort of thinking is incorrect. Being able to maintain the #1 status requires a lot of hard work; such status does not come about if one' just complaining. This is especially pertinent for Americans if they want to keep the competitive edge.

It seems to me that you're against trade, offshoring or outsourcing in general, regardless of whether the issue is related to the pure private sector or the government sector. Allow me to ask you this, had Cessna decided to move the production to England, would you feel any better? What about Alaska? What about India? Just places in general you can't put a qualifier "communist" on, Would you feel any better?



FLIB 152 'heavy' low approach...Caution wake turbulance!
User currently offlineWarRI1 From United States of America, joined Sep 2007, 9292 posts, RR: 12
Reply 17, posted (7 years 2 weeks 19 hours ago) and read 2381 times:



Quoting Geekydude (Reply 16):
WarRI1, it's been nice having this discussion with you. I do not mean to disrespect

I did not take it as a lack of respect, so no offense taken, I am a person of the so called (old school), I have seen alot of history, some good and most not so good. I quote (author unknown to me at this time) " Those who do not know history are doomed to repeat it), I have always tried to stay in tune with history and its lessons and I believe that more than ever that the younger generation should take heed and study it more. I quote once again( It may have been Lenin) we will let the Capitalists sell us the rope that we will hang them with" In todays world that applies to many enemies and many possible enemies of Democracy. Now if I was a dreamer and I thought that Cessna by outsourcing the work of American workers to China would help the cause of world peace and harmony, I would not object as much, maybe. I am not a dreamer and therefore, I do not think that giving work and technology to a country (we know that communism is not the only threat out there) that maybe a danger to us in the future, I think is folly. I find fault with Capitalism all the time, maybe more than you, so when I find the aircraft industry outsourcing possibly strategic( we all know that aircraft technology is applied to rocket technology) and in this day and age rockets are the great danger to us all.(all as in the world) we maybe selling the (so called rope) for profit that will hang us all. I also believe in equality and when I see Cessna and other corporations giving away billions of dollars in lost wages to foreign workers and the trade surplus is so lopsided as to be pathetic than I have a problem with trade and the Capitalist system. The wealth is flowing one way, up! whether it be in the US, or China or anywhere else in this world. In the US it goes to the Billionaires and trickles down, In your country, it goes to the government, then the new wealthy and then trickles down. I do not believe that we have survived so long here because we gave away our industrial base or our ability to feed and cloth ourselves. That is what we seem to be doing now and whether it is airliners, or parts of airliners, or babies toothbrushs, we are weakening ourselves economically in this insane world. Once again I will say this and no offense, as we are small cogs in this world and because I am from a country where freedom is taken for granted and I can rant and rave and Cessna and Boeing, and possibly Airbus will not pay attention anyway, until the lessons of past history come back and kick us all in the teeth once again. In this world only the strong survive, the weak survive because the strong let them.



It is better to die on your feet, than live on your knees.
User currently offlineKELPkid From United States of America, joined Nov 2005, 6428 posts, RR: 3
Reply 18, posted (7 years 2 weeks 18 hours ago) and read 2372 times:

Note to China: let your currency freely float.

Then we'll see if that 40% labor savings "really" exists...I have a feeling Chinese labor would still be somewhat cheaper, but the cost of shipping parts and goods globally might actually rise to where it actually belongs.

IMHO, one of the worst wrongs that China has committed against the US is not allowing it's currency to freely float on the world market. If Chinese shippers, in addition to Chinese laborers, were able to charge what their products are truly worth on the world market, we wouldn't see this apparent cost advantage.

I will truly never understand why a nation that directly manipulates its currency on the world market was given a "Most Favored Nation" trading status by my country. I guess the Arkansas ties between Wal*Mart ant El Presidente were rather strong in those "heady" days of the late 1990's...

I suppose I should tie this back to airplanes. As we know (from examples from just about any other industry), this is just a start. Do you think Cessna will look at Independence, Kansas, as a bonus to the organization after comparing labor costs with the factory "over there?" Do you not think the Chinese will send consultants to Wichita to try and help Cessna cut its labor costs?

I have a feeling that in a few years, there will be nothing but a huge, empty warehouse at Independence, Kanssas and that all of the factory tooling will have departed via container to some place in China...

Thanks, Mr. Clinton  Sad



Celebrating the birth of KELPkidJR on August 5, 2009 :-)
User currently offlineGeekydude From China, joined Apr 2004, 401 posts, RR: 2
Reply 19, posted (7 years 2 weeks 17 hours ago) and read 2345 times:



Quoting WarRI1 (Reply 17):
I find fault with Capitalism all the time, maybe more than you,

That statement may be correct. Our discussion shows I am clearly much more pro free market and pro capitalism than you are. Your statements suggest that you're veering toward Karl Marx's point of view on capitalism and labor relations instead of me. In fact, I am totally against central planning. Don't let the little red flag fool you; it does not mean I am pro "communism" in any way.

Quoting WarRI1 (Reply 17):
we all know that aircraft technology is applied to rocket technology) and in this day and age rockets are the great danger to us all

This alarming call is completely warranted; but it reflects perfectly well the sentiment stirred up by some populist politicians in attempt to create groundless fear. Basic aircraft design is not super high tech. Assembling aircraft is even lower down the tier in terms value added, and sooner or later can be done robots. Do you know many countries in world including China have already possessed rather sophisticated rocket technologies? If they are already able to send a man into space and a probe to the moon, you think they will get a wealth of inspiration to improve their rockets by learning from assembling a Cessna LSA? For me, this is just too far stretched to be credible.

Quoting WarRI1 (Reply 17):
I also believe in equality and when I see Cessna and other corporations giving away billions of dollars in lost wages to foreign workers and the trade surplus is so lopsided as to be pathetic than I have a problem with trade and the Capitalist system

We need to consider the whole picture here, gentlemen. First of all, bilateral trade does not matter! Any International Economics text book will attest that a country should focus on the overall trade picture instead of myopically clinging to the trade balance with one country. True, China does run a trade surplus with the US, but overall with the entire world China is just barely running a balanced trade. Where have all the surplus US dollars gone? The truth is China has been using the surplus US dollars to purchase goods and services from the rest of world. And in turn those countries who received US dollars from China will spend money to purchase American goods and services. And this in turn spurs export and creates jobs in the US.



The reason why the US is have a trade deficit with the rest of the world, China included, is the gap between savings and investment. In other words, the savings rate in the US is too low, both in terms of private savings and public savings. This leads to a shortfall of investment funds which by accounting identity must be financed by borrowing from abroad. And how do nations borrow funds usually? Yes, by incurring a trade deficit!! And how to reduce a nation's trade deficit? Save more! And how to save more? Both individuals and the government have to save more! So at the very bottom, in order to address the trade deficit, the US government MUST cut his BUDGET DEFICIT by either reducing spending or increasing taxes! So now I hope you have realized that it's the US government's uncontrolled spending that's indirectly causing the deficit to a large extent. If you do not fundamentally address the savings problem, even if we totally eliminated trade between China and the US, the US would still run just as big a trade deficit by purchasing/borrowing from other countries. Only this time, prices would be dearer at the expense of all the consumers.



FLIB 152 'heavy' low approach...Caution wake turbulance!
User currently offlineGeekydude From China, joined Apr 2004, 401 posts, RR: 2
Reply 20, posted (7 years 2 weeks 15 hours ago) and read 2321 times:



Quoting KELPkid (Reply 18):
IMHO, one of the worst wrongs that China has committed against the US is not allowing it's currency to freely float on the world market. If Chinese shippers, in addition to Chinese laborers, were able to charge what their products are truly worth on the world market, we wouldn't see this apparent cost advantage.

I am sorry but I have to beg to differ. Again your thought reflects the populist view without really thinking over the stakes at play thoroughly. Let's just say China completely floated its currency today with one shot, do you know what would happen tomorrow? Simply put, global financial disaster! Here is why. Asian central banks (like the Federal Reserve in the US) have been traditionally holding large amounts of US dollars as reserves. Of all the central banks, the People's Bank of China is among the biggest holders. I've heard numbers as a high as one trillion dollars. Can you imagine releasing 1 trillion dollars to financial and currency markets all at once? The value of the dollar would totally ruined to say the least! Worldwide inflation would become uncontrollable, with the US suffering the most. In the past two decades, people in the West have lost memory of the high rate of inflation prevailed in the 70's. But with the Federal Reserve cranking out green backs like crazy, there should have been inflation rates as high as 6 to 7 percent per year for the past 20 years. In reality, the US inflation rate has been kept at 2-3 percent per year. Have you ever wondered what has kept the inflation at bay? The answer is global trade and international flow of capital. By pegging its currency with the US dollars, central banks in Asia must purchase and sell dollars in the currency market to uphold the relative value. And by purchasing dollars in large sums, the Asian central banks have alleviated a good deal of inflationary pressure in the US.
In addition, some of the dollars are used to purchase US treasury bonds which has helped to keep long term US interest rate low. In this sense, it's those Asian central banks that are helping you getting the zero percent APR rate when you purchase a F150 or a flat screen TV or a house for that matter. But nobody is grateful then, I guess. Also I guess nobody is complaining during the holiday season when they can buy 5 pairs of Chinese made shoes at the same price of 1 American made pair.

If you allow me to keep going, the borrowed funds from abroad (Japan, China, etc) are also used to purchase assets other than US government bonds. Money is channeled through the financial market to start up companies as well as well-established companies so that their production can expand and more and better jobs can be created.

It is beneficial to the US to keep a strong currency. But with the current rate of increase in money supply by the Fed, it would be a no-brainer that the dollar would drop like a rock if the Asian central banks suddenly refused to buy US dollars. And you think oil price is high now, wait till China completely floats its currency.

In reality, China has been reevaluating its currency position with the US dollar. The US dollar has depreciated against the Chinese RMB for over 10 percent during the past year. Once this process start, it might be self-fulfilling in that people everywhere will sell their US dollars because the green back is less valuable, This will make the Fed nervous for now it can only print money without having to worry about inflation.

If you just simplistically want the Chinese currency to float without factoring in all the consequences, are you willing to let all that I mentioned above just go away? Are you willing to incur all those massive costs such as the ruining of the dollar, global financial turmoil, pricier goods everywhere, no funds for investment which will ruin the stock market...just to name a few.

Rest assured the Chinese will re-evaluate its currency further, and it has been doing just that. They are not dumb because they have realized the US dollar is no longer the best storage of value and they are not content with subsidizing the US consumption and borrowing binge anymore. I just hope this process is slowly conducted so that a "soft landing" can be achieved without harming the two nations and the rest of world for that matter too much. But if you just push and push without understanding the full impact, and when that re-evaluation comes all of a sudden forcefully, be braced for what you ask for. It ain't gonna be pretty.



FLIB 152 'heavy' low approach...Caution wake turbulance!
User currently offlineGeekydude From China, joined Apr 2004, 401 posts, RR: 2
Reply 21, posted (7 years 2 weeks 15 hours ago) and read 2313 times:



Quoting KELPkid (Reply 18):
I suppose I should tie this back to airplanes. As we know (from examples from just about any other industry), this is just a start. Do you think Cessna will look at Independence, Kansas, as a bonus to the organization after comparing labor costs with the factory "over there?" Do you not think the Chinese will send consultants to Wichita to try and help Cessna cut its labor costs?

I have a feeling that in a few years, there will be nothing but a huge, empty warehouse at Independence, Kanssas and that all of the factory tooling will have departed via container to some place in China...

Wages are low in developing countries not because they are more efficient. Just the opposite, it's because their overall productivity is low which results in the economy not being able to afford to pay high wages. So I do not think the Chinese can offer any great advise other than to continue to improve productivity so that you can afford to pay Cessna assembly line workers the wage rate that is matched by their productivity. This is the way to avoid outsourcing.



FLIB 152 'heavy' low approach...Caution wake turbulance!
User currently offlineWarRI1 From United States of America, joined Sep 2007, 9292 posts, RR: 12
Reply 22, posted (7 years 2 weeks 9 hours ago) and read 2249 times:



Quoting Geekydude (Reply 21):
Wages are low in developing countries not because they are more efficient. Just the opposite, it's because their overall productivity is low which results in the economy not being able to afford to pay high wages. So I do not think the Chinese can offer any great advise other than to continue to improve productivity so that you can afford to pay Cessna assembly line workers the wage rate that is matched by their productivity. This is the way to avoid outsourcin

I am amazed that the US and other manufacturing nations have survived without the Chinese. I never knew that they were so good to us all before. I think that you will agree that before President Nixon's visit and the Cessna aircraft deal and goodness knows how many others deals things were not so cordial between our governments, and then the Capitalist weakness showed up, (greed) ( I am afraid the communists seem to suffer from the same ailment)( it is a human trait) so the ordinary people, Chinese, American and so many others again become the pawns in the game of power.




I see that you mention the price of sneakers made in China and how affordable they are, well you are talking to a fellow who would pay any price for a US made shoe and still try to buy US whenever possible, (darn near impossible now, I am almost barefoot in my old age.) I will now get back to cheap sneakers and cheaply made airplanes, not the quality,no,no, if the Chinese aircraft factory can turn out first line military aircraft, who am I to impune the quality. I must say your statement about the sneakers almost made me think that you have studied the ways of the Capitalists, that is what they try to make us think, that we should be grateful to the big business interests for the cheaply priced goods pouring out of China and meanwhile the wages drop because the highly skilled jobs are now over in China and other countries. I do not think that you will find too many fans by sluffing off the skill level needed for the making of components for aircraft and assembling them into a finished product. I have never been an aircraft worker and never will be, and if things keep going on their present course, not too many in the formerly competent Western Countries will have to worry about being one either. In this country things have progressed to a point where a large percentage of the population have trouble even affording the formerly cheap sneakers. Let me give you a simplistic example of economics, one that even I can understand. When you have a product that costs X amount of dollars and you were making X amount of dollars, and now someone say like a business person who you work for wants a five million dollar airplane instead of the two million dollar airplane that he had. That person sits down with his accountants and says the only way I can afford a five million dollar airplane is to outsource my companies work and I will lay off the workers and then by gollie I can afford that five million dollar plane and a new yacht. Well, the law of economics comes into play and the person who was making X amount of dollars is now making nothing and those Chinese made sneakers become very expensive, very fast, now that is the economics that I care about. I also agree with reply 18, let your currency float and let the chips fall where they may, it is about time for a dose of reality for everyone concerned in this global economy. Remember those that know not history are bound to repeat it.



It is better to die on your feet, than live on your knees.
User currently offlineGeekydude From China, joined Apr 2004, 401 posts, RR: 2
Reply 23, posted (7 years 2 weeks 7 hours ago) and read 2219 times:

WarRI1, I'd like to continue this discussion with you. But it seems like we have hijacked this thread into a debate no quite related to aviation. So if you will, we can move to the non-aviation forum. I am not sure I can make you change your mind on trade and outsourcing, but I still like to point out the fallacies in your argument.


FLIB 152 'heavy' low approach...Caution wake turbulance!
User currently offlineWarRI1 From United States of America, joined Sep 2007, 9292 posts, RR: 12
Reply 24, posted (7 years 1 week 6 days 8 hours ago) and read 2164 times:



Quoting Geekydude (Reply 23):

I agree, it was an interesting topic and I am afraid we could go on and on and never agree on these subjects, I am a cold war veteran and I am molded by that, I am sure we will cross paths again on this site on subjects of aviation and hopefully you and I will both learn something.



It is better to die on your feet, than live on your knees.
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