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Dr. Ron in China

Folks,

One of the big holes in my resume is that I have never been to China. That shortcoming has just been resolved. On June 7 at 10:35PM local time I was scheduled to arrive in Guangzhou after 22.5 hours of traveling. Unfortunately I arrived in my hotel at 3AM June 8 due to local thunder storms. Because of the international date line and the late arrival, I lost Wednesday! (I left on Tues and arrived on Thurs.)

First impressions? Wow, no one every told me China (well at least the Guangzhou/ Shenzhen and Shanghai areas) was so modern! The infrastructure (highways, power gird, hotels, shopping malls, airports, telecommunications, etc.) is awesome. To my eye, the infrastructure was on the level of or in some cases better than the US. (Although, even my Chinese friends said a trip to some of the poor spots would be an "eye opener.")

I visited two factories owned by Galanz a large manufacturer of microwave ovens and air conditioners. Galanz has a 45% market share of microwaves world-wide and produces many units for retailers like Sears and Wal-Mart. Although only entering the air conditioner market in 2000, Galanz already produces 12 million units per year.

I found the tours extremely interesting. Galanz is nearly totally vertically integrated. Starting with raw material like copper, steel and plastic they manufacture the products "from scratch," even making the transformers used in their units. They believe strongly that they can have the greatest value add, by making all of the components and subassemblies. Their plastic injection molding facility was one of the largest I have ever seen, having upwards of 75, 15 meter (50 feet) long machines.

The were up to speed with WEEE and RoHS and were performing lead-free solder assembly. The facilities were clean and well organized, with rapid work flow. The company has 3 million square meters (30 million square feet) of floor space and 20,000 workers. The average assembly line worker makes $125US per month (up from $20 or so less than 10 years ago.)

I'm still an optimist. Companies like Galanz raise my standard of living. It's because of them I can purchase a microwave oven for a fraction of what it cost in 1980. It also can't be bad that 100s of millions of Chinese now have money to spend. This fact was so evident in the many stores I visited, that were crammed with goods and people.

An example of how all of this helps the US? Because of the growth of China, steel is in great demand and the price has risen. Many small US steel companies that were facing bankruptcy now find a strong price and demand for their products.

So we need to quit all of this "hand-wringing." If we all have our own CIP (continuous improvement plan) and look for the opportunities we will prosper. Last week (June 13) was my 59 th birthday and I have never felt there were more ways that I can contribute than today. And I expect tomorrow will only offer more opportunities.

Cheers,

Dr. Ron