Bringing Manufacturing back to the UK

[joe cassidy]

Following on from discussions in other topics about whether Farish should bring back production to the UK I would like to report on my shoe-buying experience today.

The last time I bought a pair of Dr. Marten's was about 10 years ago. They were made in China and were very uncomfortable so I have been buying other brands since then.

However I decided to give DM's another chance today.

I am pleased to inform you that they are once again made in England (and comfortable) but they cost Euro 230, about 3 times what I paid last time.

Best regards,


Joe

[Paddy]

Hi Joe,

This topic comes up numerous times on different forums and the concensus seems to be that it would not make commercial sense for model railways.  Despite recent labour cost rises in China and the devaluing of the Pound they are still a low cost manufacturing location.  Modern models have lots of fitted detail and this requires skilled labour - imagine how much it would cost to do this sort of thing in the UK.  Also, China has economies of scale in this area that I fear the UK could not get near.

I would love to see model railways made in the UK again but sadly I struggle to see how this can happen.  It might be possible if all the manufacturers got together but that is not going to happen - cartel, lack of competition etc.

In terms of UK railway models I just don't think there is the volume anymore - everything is a limited edition. 

Paddy

[red_death]

It isn't just the cost of manufacturing in the UK, but also availability of skills.

Cheers, Mike

[Thorpe Parva]

Farish (i.e. Bachmann) are a Chinese owned company so UK manufacturing will never happen.

Dapol & Hornby are UK Companies so theoretically possible. I could be wrong but I believe that Dapol produce some of their plastic kits in the UK and that Humbrol Paints are now locally produced.

[Snowwolflair]

Hi Joe,

This topic comes up numerous times on different forums and the concensus seems to be that it would not make commercial sense for model railways.  Despite recent labour cost rises in China and the devaluing of the Pound they are still a low cost manufacturing location.  Modern models have lots of fitted detail and this requires skilled labour - imagine how much it would cost to do this sort of thing in the UK.  Also, China has economies of scale in this area that I fear the UK could not get near.

I would love to see model railways made in the UK again but sadly I struggle to see how this can happen.  It might be possible if all the manufacturers got together but that is not going to happen - cartel, lack of competition etc.

In terms of UK railway models I just don't think there is the volume anymore - everything is a limited edition. 

Paddy

I used to run factories in the Far East and I can confirm they have no skills we do not have.  What they do have is cheap money to build factories and cheap labor to build the product.  We could make all the products being produced in China here but we would have to pay the extra.    The last quote I saw was an iPhone would cost $5 more to make in the US rather than China.

However as the pound has slipped by 20% the advantage of "cheap" China is currently being lost and I know companies in many industries here who make in China are going to be moving their production back here.   Having said this they wont do it until they know it will stay this way permanently (the end game of Brexit whatever it is is still open).  Regardless we are going to pay more, just that in future we will employ more people here than paying to employ them in China.

I'm trying to keep this a economic input however, watch the world of protectionism, trade barriers US vs Mexico, US vs China and you will see there is political will to bring manufacturing home everywhere, as it has finally dawned on politicians that the cost of unemployment, social care and lost taxes is greater than the cost of cheap manufacturing.

[Paddy]

One thing to remember is volume though.  In the case of the iPhone you are talking about 10s of millions of units which means any increase in costs can be spread out.  Given the margin Apple enjoys on a iPhone they could be probably be made almost anywhere and still be profitable. 

Sadly, Hornby can only dream of selling that many A4s. 

Paddy

[Snowwolflair]

One thing to remember is volume though.  In the case of the iPhone you are talking about 10s of millions of units which means any increase in costs can be spread out.  Given the margin Apple enjoys on a iPhone they could be probably be made almost anywhere and still be profitable. 

Sadly, Hornby can only dream of selling that many A4s. 

Paddy

No, everything is relative and volume might affect the amount of difference but not the fact there is a difference.  We are already paying the baseline price penalty for a low volume product, so its only differentials that matter.  The $5 is a differential not a change in base cost.



Mike
They are using schoolgirls no brighter than ours and training them.  I literally have been there and done that.   "No skills" are a capitalist propaganda weapon and complete rubbish. 

In China this week they will train +500,000 new workers who have joined the workforce for the first time after the Chinese New Year, and next week they will be 100% trained and productive (or they will be sent back to their villages).

[joe cassidy]

In fact I just read the booklet that came with my shoes. In 2003 Dr. Marten's closed all their UK factories except one and outsourced 98% of their production to Asia.

Shoes from the remaining UK factory sell at a premium of around Euro 100 compared with the asian products.

Best regards,


Joe

[Newportnobby]

I think I'll put on my Chinese Doc Martens and kick this thread into touch.
Sorry, Joe, but as far as manufacturing model railway stuff such as Farish, Dapol and DJM, it's just not going to happen in the UK

[Snowwolflair]

newportnobby, I think you are correct on this, however if the pound stays at 1.24 to the dollar indefinitely it would certainly be cheaper to make in the UK for all scales not just N.

What you have to remember is that most components in a model are low tech in their nature (molded plastics, etc) and require automated high tech to manufacture (so we can buy the same machines as they do).  The few high tech parts like motors can be multi country sourced although may still be cheaper from the far east for a while.  It's a question of critical mass of production but if Hornby, Dapol Farish and the rest all committed to UK manufacture it would easily sustain two or three independent manufacturers.

[Newportnobby]

Sorry, but I don't think you are taking the labour situation seriously enough in your calculations. I know I'm tip-toeing on the edge of getting into politics here but I don't know how much a Chinese worker gets paid but I'd bet on the fact it's less than the UK minimum wage
As others have said, training and payment of a wage a UK person would consider acceptable would still price things out of the market.

[keithfre]

There was a telly programme a couple of years ago about a cushion manufacturer in the UK who was repatriating some of his production from China. It clearly showed that the Chinese workers were less productive and had less of a work ethic than his British ones. Perhaps this is why there are so many complaints about quality control with Chinese-produced models.

[Yet_Another]

The thing that keeps on coming up, and being ignored, is that Bachmann/Graham Farish is owned by Kader, which is a Chinese company, which does its manufacturing in China. I'm sure there would have to be a very strong economic argument for them to offshore part of their manufacturing to the UK.

[geoffc]

There are other factors to consider as well if you product is being made in a factory that you do not own on the other side of the globe.

Lack of quality control unless you have one of your employees on the factory floor and maybe not even then.
Products coming out of the back door and being sold at half your price, look on eBay, Atlas Dinkys sale for £10 or less including postage, subscribe to Atlas Editions and they cost £18!
Being gazumpped when a larger order from another customer arrives, creating delays for your product.
The cost of shipping, I know you can get a lot in a 40ft container but it all adds to the cost.
As for skills that is debateable. I received an Atlas Dinky with only one wheel on the front axle as the axle was not long enough to fit the other one. Where was the quality control or the workers interest in doing the job properly.
A lack of esprit de corps for your company, they are not part of it.
We are only part way through the 5 year plan to increase wages by 100% in China, when that ends will there be another plan to increase wages?
I am old enough to remember when cheap far eastern goods came from Japan, Taiwan and S Korea, they are not cheap now.
I can see a time when China prices its self out of the market.

Geoff

[keithfre]

The thing that keeps on coming up, and being ignored, is that Bachmann/Graham Farish is owned by Kader, which is a Chinese company, which does its manufacturing in China.

That was mentioned by Thorpe Parva.