Disappointed

[UTRacerX9]

Well, without going into really specific detail like company names and what not, I'll just say what the situation is.

The last three material fabrication jobs that I have wanted to award to an American company, I've been forced to turn over to China. Their pricing for fabrication these days is just so much lower than what we do in the states. The sad part is, their quality is rapidly improving so that (in this example anyway) we can't even fall back on the old "Made in China = Crap" argument, because there is a negligible difference between what they are turning out vs what we do in the states.

This last time happened today. A fabrication company in TX gave us a bid of $84,000. China? $50,000. I really wanted to keep that money in the states (especially my state) but there's no way I can convince my boss to go with that.

I guess with all the recent talks about hitting the debt ceiling and what not is weighing on me, and I wanted to do my part to lower our trade deficit if possible. I went back to them to see if that was truly their best bid they could do, (I even gave them the price of the competing bid!) and they said they couldn't come close and to give it to China.

I don't think I'm going to bother hunting around for US companies anymore after this last episode.

[AdamVR4]

Can you share any details about what was being fabricated?

Did you get any other US quotes? Was the company that bid $84k hungry for work?

[EZnTn]

I ran into the same thing a few years back.
I ran a fab shop, we manufactured 316L SS structures that fit on paper machines.
My shop was closed by corporate, division was eventually sold to a Canadian firm.
They contracted to China for 50% of what it would cost for fabrication in the States or Canada.
I spent 5 weeks in China insuring they did it right.
As much as I enjoyed my time in China, putting the work over there put a sour taste in my mouth.
When clients here realize how important it is to keep the work at home, they'll be willing to pay the additional amount.
If they don't, it will be their shop closing out to a cheaper off shore competitor next.

[DocWalt]

We've been using a fabshop in the US... If they don't up the quality of their work we're going to have to find someone else. I doubt it'd be cheaper for us to buy overseas, but geez.

[Alex3000gt]

Do not be fooled, China is serious about growth. They do not care who or what they crush along the way.

You want to stay on top? Get on your game and take pride in your work.

[UTRacerX9]

Adam,

When I first joined the company last year, a situation like this happened almost immediately, and I was given the name of the chinese company we'd worked with in the past, as well as a few names of companies here in the states that weren't able to price match in the past. After sending an email or two, I decided to go with the chinese company we'd already done business with before, as I really didn't have a ton of time to make a decision.

The products in this case are specialized metal racks/shelves/end caps designed to hold a variety of things. Technically, it really isn't my area at all to have to deal with fabrication costs, I'm in sales. But since the fabrication costs are part of our overall bid, it falls to the sales guys to get it done for the cheapest possible. If you don't have the cheapest total price, well, we don't get the business.

I had done some internet research trying to find an American company to compete this time around, and got in touch with a company here in TX. After giving them the specs, they came back with the cheapest bid among the American companies that I sent emails to. I don't think they are hurting for business, because they didn't even try to come back and counter with another price. The guy I spoke with also was pretty blunt when he told me to give the business to China, as if he'd had that conversation many, many times.

I dunno, if this happens again I will look into more companies, but I have a feeling no American company is going to be able to give me a bid that will be competitive. At this point, I think my next best option is to find another country, any country, besides China for this stuff.

[AgentOblivious]

Printing off Yuan to make your currency seem cheaper doesn't hurt either...

[DuTTch]

yeah no unions in China.

[j2k4]

I literally live in a community made basically of fab shops - two villages, probably 3K population...there were probably 25 shops locally doing welding/bending/machine/hydraulics/powder-paint for outside manufacturers and a couple of locals - Pettibone and Terex.

Terex pulled out, Pettibone is hanging on by it's fingernails.

There are less than ten shops left, and they're scratching for just about anything they can get.

I oughta see if they can make some shelving/end-caps for Todd.

[HilbillyHomeboy]

Do not be fooled, China is serious about growth. They do not care who or what they crush along the way.

You want to stay on top? Get on your game and take pride in your work.

Absolutely agreed on the first part, it won't be long (at this pace) and they will eclipse the US.

Pride isn't closing any gaps in wages paid, nor does it change the rate of electricity paid. Neither of which is remotely comparable between the US and China. Steel trades on the UK stock market cheaper than we can manufacture.

Adam,

When I first joined the company last year, a situation like this happened almost immediately, and I was given the name of the chinese company we'd worked with in the past, as well as a few names of companies here in the states that weren't able to price match in the past. After sending an email or two, I decided to go with the chinese company we'd already done business with before, as I really didn't have a ton of time to make a decision.

The products in this case are specialized metal racks/shelves/end caps designed to hold a variety of things. Technically, it really isn't my area at all to have to deal with fabrication costs, I'm in sales. But since the fabrication costs are part of our overall bid, it falls to the sales guys to get it done for the cheapest possible. If you don't have the cheapest total price, well, we don't get the business.

I had done some internet research trying to find an American company to compete this time around, and got in touch with a company here in TX. After giving them the specs, they came back with the cheapest bid among the American companies that I sent emails to. I don't think they are hurting for business, because they didn't even try to come back and counter with another price. The guy I spoke with also was pretty blunt when he told me to give the business to China, as if he'd had that conversation many, many times.

I dunno, if this happens again I will look into more companies, but I have a feeling no American company is going to be able to give me a bid that will be competitive. At this point, I think my next best option is to find another country, any country, besides China for this stuff.

That's not surprising to me. I deal with similar conversations every single day. Will you do this complex report for chicken scratch? No, I will not. Well we have a guy who will. That's great, call him? The difference is in my field, you do get what you pay for most of the time and there's no outsourcing possible other than some unreliable automated models.

It was cool of you to call them back and give them notice of how much under bid they were. Always good info to have, whether you can do anything about getting closer to the number or not.

Jeremy