New Age of Crap Cars

Automobiles these days are more expensive and unreliable. Who will go back to making a simple car?

Manufacturing in the US

Here's a counter argument to my claim that the US cannot bring its manufacturing back onshore. Guardian Bikes brought their bicycle manufacturing to the US from China, and they're moving to acquire all components domestically.

While Guardian are well organised, I still think that the availability of a skilled labour force will be the problem for the US as a whole.

Right To Repair

Watching the below documentary, I thought here's even more reason to stick with the old and trusted. My car is 20 years old, it goes just fine and can be repaired by anyone. Personally, I'm not interested in advanced diagnostics. My own experience in quarrying is that the more techie things get, the more shutdowns you have, with sensors throwing up errors and shutting things down when they needn't. All these shutdowns cost money in lost production, and prices have to be adjusted upward as a result.

New Zealand Environment and MMP

New Zealand has a major flaw with its economy and that is it has an anaemic secondary manufacturing sector. NZ does make some things, but not enough of its national income derives from secondary industry. This has a major impact on the environment. To maintain its position as a fully developed OECD economy NZ finds itself having to do two things in the absence of manufacturing; it must flog the land to exhaustion and pollute the rivers.

The intensification of agriculture has got to the breaking point. You will find commentators saying the answer is the service sector and Kiwis doing things smarter. Yes, fine, but NZ is small and isolated, it's hard to get noticed. Its all very well trying to be the next Microsoft or Google but how realistic is that? Not very realistic is my reply, and NZ does not have really big global scale service sectors and I'm thinking banking and insurance. NZ relies on overseas funds from banking and overseas owned insurance companies.

For little NZ, the answer is to extract mineral ores and transform them into metals. Then take those metals and make products from them. Then sell those products worldwide. And if feasible, make those same products in other countries with the design aspect handled in Kiwiland. You may think of Toyota when I say this but I'm thinking Scania. Scania are Swedish heavy trucks and made in factories around the world. But Sweden only has a population of 9 and a bit million. Less than twice the size of NZ. And they have Volvo construction equipment to boot, and on and on. NZ should try to emulate their example.

Will this happen with the current political set-up? Never. The German style of Mixed-member Proportional (MMP) voting introduced in the mid 1990's ensures NZ is stuck with the way it is. The country has professional naysayers in the Greens, refusing to lead or take any responsibility, hogging positions that could be occupied by more able parliamentarians. And contrary to what NZ was promised, the country has rarely had majority governments, instead being led by minority governments hanging on by pleasing the myopic middle ground in order to survive in office. NZ has ended up with the worst of all worlds.

And it will get worse. The day could come where MMP delivers tyranny. One example is where a party receives, say, 60% of the vote but all others fail to get to the 5% threshold. This means all Parliamentary seats would go to the one party making the threshold (in theory but with some seats being won without many party votes, there would be one hell of an overhang in that Parliament). Or how about the ultimate minority party, say one with 35% but the rest unable to garner much more than 10% each, with a large number of votes wasted on parties not making the 5% threshold; meaning the government would rule a country where the overwhelming majority had not voted for it. Incredible, it could actually happen. Who were the fools that foisted this system on the NZ people.

Made in New Zealand

How many global brands can you think of that are made in New Zealand? One that I didn't know about is Sistema Plastics. I saw that it has been sold to a US company for US$470 million. I have a daughter at school and she says that everyone she knows has a Sistema lunch box, while my wife informs me she buys Sistema because it is made in New Zealand. Well I never!

Read about the Sistema sale here; http://www.wsj.com/articles/newell-to-buy-sistema-woodwick-for-a-combined-570-million-1481547345

One brand made in New Zealand that I am fully aware of is the Barmac crusher. A Barmac vertical shaft impactor (VSI) can be found in 60% of the world's quarries. From Matamata to the world. The company is now owned by Metso, the Finnish giant.

How about Swazi wet weather and outdoor gear made in Levin: http://www.swazi.co.nz/about-swazi/

How about Tracgrip and Trackback, Kiwi engineering for getting your track-type tractor on the go up hills and for getting those tracks that skip off, put back on http://trackgrip.co.nz and trackback.co.nz/trackback/

How about Cavotec MoorMaster in Christchurch. They manufacture giant suction cups to hold ships in place alongside the dock, it really does work!! It's a surprise when you first see the suction cups lock on, it goes THUD: http://www.moormaster.com

Then Brightwater Engineering (yes, that's little Brightwater near Nelson in the South Island) manufacture Yarders, see their biggest machine: http://www.brightwater.co.nz/assets/Uploads/BE85-Yarder-Spec-Sheet-Web-Version3.pdf

You'd think with all this innovation and enterprise going on that the government would be a bit more supportive, eh. But NZ has a grandstanding attention seeking sound bite set of politicians who probably have never heard of any of the companies listed here, with the exception of Sistema (maybe not even then). New Zealand has to grow up and realise the rest of the world only pays lip service to free trade, they do not actually practise it and to compete NZ has to get real and tilt the playing field in its favour when it suits.

Bruce Greenwald: Death of Manufacturing

I found the following video from an embedded link on the Columbia University website. Bruce Greenwald describes the death of manufacturing and the global deflation:- 



He makes perfectly valid points. But it is interesting to hear that agriculture is finished. New Zealand is a country that relies on agricultural exports. Oh no, are we in trouble or what? Then we have manufacturing, New Zealand is a bit anaemic there, but that too is finished. Again, oh no.

But something he may have overlooked - productivity gains are still achievable in both agriculture and manufacturing. The answer I think lies in automation. Machines making other machines and machines doing the actual farming and manufacturing. Then the next development is machines deciding what to produce and when and in what quantities.

But where Greenwald nails it, is talking about the structure of an economy. Getting the structure right is key, and New Zealand needs to look at it as their structure is weak. NZ is vulnerable, it's just that it dodged the bullet back in 2008/09.

Manufacturing New Zealand

Good news this time, Skellerup are building a new factory making milking machine rubber parts, replacing the factory damaged in the earthquakes. Looks like this part of their business is too valuable and they know if they moved it to China, the IP would just get stolen ( the gumboots are made in China....jicydk)

http://www.stuff.co.nz/business/industries/10172109/New-Skellerup-plant-in-Wigram