Question

Why do you think it is so hard for US manufacturers to be competitive? replay to this two people did you agree with them ?

1. Manufacturing Regulations

I believe that the greatest challenge that the United States faces in staying competitive on the world stage in terms of manufacturing is that of regulations. The United States has a very highly regulated manufacturing industry, some of these are necessary such as safety regulations and quality assurance ones. Others may not be as necessary and do more harm than good. This increases the cost of converting raw materials into finished goods and therefore, the final price of said product.

Compare this to a country like China which, due to their lack of regulations, can cut corners in manufacturing in order to make the final product cheaper and therefore easier to price competitors out of the market. This is especially true of steel, where China's process of creating, as well as the quality of steel, is consequently not as high quality as in the US, but as a result, it is far cheaper.

2. Fear of Changes Failing

I believe that one thing that makes US manufacturers unable to be competitive is the fear of failing. By this I mean that manufacturers are worried that if they change their production or processes there is a chance that they could mess up and hurt their business. To some people being steady and safe makes more sense then taking a risk, especially when the changes cost a large amount.

Answer 1

It becomes hard for the US manufacturers, due to the higher cost of production and operations in the USA that causes price level to be on a higher side. It creates price disadvantage in the international market and US manufacturers cannot remain competitive against other players from countries like China. It happens due to higher overhead costs being incurred due to employees' welfare and associated costs. Hence, a disadvantage is associated with the US manufacturers. It is also present in the domestic market of the USA also, when cheap imports come from the overseas and give stiff competition in terms of price and standard quality of the products.

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Reply 1:

It is true that regulations and quality norms are responsible to raising the cost of operations. But, safety regulations are must for a manufacturing setup on the basis of OSHA guidelines and it is more of the fixed cost nature. But, the majority of the rise in cost, comes from the cost incurred on employees. It makes them produce goods at a higher factor cost that leads to the higher price and a reason for becoming less competitive. It is the reason that US firms are going for the global sourcing from countries like China and India to reduce the cost and remain competitive.

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Reply 2:

USA is the place where majority of the innovation and patent taking place in the world. Hence, it should not be considered as a point that US firms fear from change and innovation. Rather, it is the source to make the firm more competitive. The lean sigma and Six Sigma programs along with the process re-engineering, encourage the firms to change and become lean. It helps reducing the cost and firms become more competitive in nature due to reduction in wastes.