Sal,
Thanks for being willing to join the discussion.
Could you say more about this idea of "spiraling up" in terms of workers' wages? In particular, could you reflect on the differences between manufacturing in the US vs in Europe?
By Spiraling up, I mean that we must figure out ways to increase wages so we can afford to purchase without seeking the lowest price. We pay our staff as much as we can, rather than as little as we can. We provide good bennies and as much security as possible. I believe we need to do this as a nation. It does mean less profit, which we have to accept.
To compare apples to apples, let's focus on knives in the sub $50 range. These knives are mostly made with fine blankable steels of varying quality with 12C27, 420HC and Aus8 being near the top of that group.
Not sure of the question? I don't think you will find many knives produced with high cost steels selling for under $50. A lower cost steel will be much less expensive to purchase the raw materials. But the processing costs can be considerably more expensive. Stamping vs laser cutting for example. The stamping equipment is much less expensive and can punch 5 pcs per second. the laser is much more expensive and may take 10-20 seconds to cut out a blade. That's a 50 - 1 difference in processing time not counting the cost of the laser. The same ratios will be evident in heat treat, grinding, drilling, reaming, polishing, sharpening, etc.
As a consumer, it appears that European manufacturers are doing a better job of competing with US manufacturers but they're doing that under a fundamentally different social contract with their governments and societies in which the companies pay higher taxes but in return get:
+ Release from paying health care costs (provided by a variety of single payer systems)
+ Release from paying other worker benefits (provided by more robust social services of European governments).
+ Benefit of a healthier work force (the US trails many developed countries in most health metrics)
+ Benefit of better educated work force (US the US trails many developed countries in most education and worker training measures)
I can't speak too much of European manufacturing, as they don't have to show country of origin. When I did some investigating in some European countries, I found much less manufacturing that I would have guessed, and much more importing that I thought. Importation of both completed products and parts. Far more traders and services in Europe.
If you are going to compare knife manufacturers, especially with high cost steels, There are not many knife manufacturers in Europe making knives with high cost steels of which to compare. Of those that we do work with, I find their costs to be similar to US costs.
I personally question the quality of healthcare from single payer systems over what we provide for our staff. But that's just my opinion. I think that our education systems here could be improved quite a bit, but again, that is just my opinion. We have some great schools here, but not all get to experience them. In my opinion,, "whatever the problem, education is the solution".
There are confounding factors to be sure. Swings in currency exchange rates are obviously linked to the ebbs and flows of imported goods in the US.
Most currency swings are workable, It's the Chinese Dollar /Yuan difference that is too great of a variance to compete against.
And there are some basic trade-offs. My understanding is that it's easier to start companies in the US and European style social-democracies tend to produce more long term under-employment.
I would tend to agree, but I have few facts to be sure. Gail and I began Spyderco with $250 in 1976. We were living in and working out of a converted bread delivery truck. I think it would have been very difficult to do that the same way and be successful anywhere but in America.
But one can't go to a local retailer, buy a Victorinox SAK or one can't get an Opinel or Mora, all of which can be purchased for less than $30 and not wonder, how can these companies produce knives this good for so little while paying their employees so much and guaranteeing such good social benefits?
"Knives this Good" is a relative value. While I have much respect for Victorinox, Opinel and Mora, any of their knives produced in CPM-S90V would cost 10 times as much, assuming they had the equipment and knowledge to be able to process the steel. It's the cost of the exotic steels and processing same that carries the high mfg cost. Remember, these materials are very obstinate and resist change, so they are more difficult to convert from a raw blank to a finished blade. Also quality and close tolerance becomes more of a challenge. On our locks for the Native, we are holding .0005 requiring a wire EDM for production. I don't think that the above mentioned companies could match that.
Maybe the US has some lessons to learn?
I think all countries have lessons to learn. We've learned a great deal from the countries with which we do business. In the end, it all gets down to the end line goals.
sal
