Reduced to a Service Economy? America can do Better…

It is not the common perception, but there is a subculture within the RV industry composed of retirees who do not have the income to support the lifestyle of living on the road, especially with the price of gas approaching $4.00 a gallon when they are getting 4 miles per gallon, at best, with a tailwind.  To make ends meet, they take on temporary day jobs during the summer, working at theme parks such as Dollywood and Silver Dollar City.  When the tourist industry slows down they drive to one of Amazon’s distribution centers where, for the months of November and December, they become temps, filling fourth quarter orders.

Amazon and the theme parks recognize the advantages of this symbiotic relationship and comp the RVers with free RV parks, all hookups included, for those that chose this lifestyle.

Meanwhile, Amazon, within the last month or so, purchased a manufacturing company that makes robots.  They plunked down $750,000,000.  They didn’t buy the company as an investment.  They are looking to replace their employees that currently stock the shelves and pull product for order fulfillment, all with robots, with little regard for their current employees, and with no thought for the RV folks.

I then read that Google is actively working on replacing truck drivers with computers.  They are experimenting with innumerable cameras placed all around the truck, which relay vital information to a computer network within the truck.  It will then be remotely controlled through satellite systems.  The truck will start, backup to loading docks, and drive as long as their fuel tanks allow, as I understand they have yet to figure out how to pull into the fueling stations and remotely fuel up.

I’ve only addressed the jobs that are being replaced domestically by automation.  Can we talk about the number of manufacturing jobs that have been lost to third world countries, primarily China?  Foxconn, for example, employees upwards of 1,500,000 Chinese producing computers and computer components for worldwide consumption.

The company that could provide remarkable leadership in helping to restore the American economy is Apple Computer.  They have built their war chest of $500 billion in cash on the backs of inexpensive labor in China.  In so doing, they have additionally gutted America’s infrastructure needed for electronics, and developed that entire platform in China.

Lord knows, they have the margins.  An IPad retails for $500.  The hard costs for building one is $161.

Steve Jobs was a proponent of reality distortion.  He convinced himself, and all of the people surrounding him, that anything was possible, even if it required a little distortion of reality.

Reality distortion does have its downsides.  It was what lead to his untimely demise, as he felt  he could cure himself with his mind-bending tactics rather than follow the advice of the doctors.

It is time to bring jobs back to America, and Apple Computer, without Steve Jobs at the helm, would be a great place to start, applying the upside of reality distortion principles to resurrect electronic domestic manufacturing.  Their stock would take a hit initially, and part of their $500 billion would be plowed back into the American economy for start-up operations, but over time they would create a remarkable success story, even if their margins were not as obscene as they are now.

They like to think green at Apple.  Do the math on how many millions of gallons of jet fuel would be saved making computers in the US of A.  Apple transports most of their finished goods from China by air.

Their marketing department would have a heyday exploiting this.  The nightmares that they currently face over the abuse of labor in China would go away, and their percentage of the worldwide market share would increase from the goodwill generated.

America deserves better than being reduced to a service economy.  We do not need to live in a post-manufacturing world.  We have proven that we can compete in the automotive industry.  Think Ford. We can compete in the electronics industry as well if given the opportunity.

We simply need a heavily capitalized company such as Apple to lead the way, and leave the government out of it.

 

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8 Responses to Reduced to a Service Economy? America can do Better…

  1. Herman Myers says:

    Peter, I agree whole heartedly with your blog. Where do we go from here to see this
    happen? This hits home when I have a son who does not have a job. Keep writing.

  2. Lilly Shurance says:

    I hope you write to Apple and offer your suggestions. Hope they’ll listen too.

    • peter says:

      Great idea Lilly! But the chances of getting something as insignificant as my blog to a decision maker in Apple is like one in a million!

  3. Peter, a good blog. However this just scratches the surface of the jobs problem here in our great country of U.S.A. I could write pages about why we are in a service mode and why even service jobs are disappearing.
    Most of the problems we have are because of moral decline. Single parent homes, the drug culture, the work ethic, “dishonesty” which is considered the norm now in America. The top of the list is Greed, personal, business and government. Greed has very likely destroyed more jobs than anything else. Will it ever change?

    • peter says:

      You bring up many good points Wendell. Thanks for setting the example that you do for taking the moral high road. You are a man of integrity, and I respect you for that.

  4. Carol says:

    I think we must also look at why manufacturing companies left the USA. My understanding is that due to the numerous regulations the USA requires it often cost $1,000,000 more to build a manufacturing plant here. This does not include all the regulations required once it is up and running. I believe we could begin trying to change some of the current laws and decrease these regulations. This would entice companies to bring their manufacturing back to the USA. We could all get involved in educating ourselves on the laws and writing and electing people that have this mindset.

    • peter says:

      Carol, your comments remind me of a conversation I had with a business owner in China. When I told him we had just spent $5,000,000 building a manufacturing facility in the United States, he threw back his head and laughed. He said for a couple hundred thousand, we could have built the same facility in China.

      We domestic manufacturing companies are on a steep hill with the regulations we are subjected to. Changes are being made. Today’s news announced “crowd sourcing” for financing, meaning that small businesses can now raise up to $2,000,000 from private investors without SEC approval, an encouraging move.

      (http://www.cfoworld.com/strategic-finance/35887/obama-signs-bill-focused-crowdsourced-investments)

      You’re quite right. Small business can’t do this on it’s own. Apple could do it in a heart beat, if they would bite the bullet, and make the necessary investments, with their mountain of cash.

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