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Is it Possible to Pay US Wages and Compete with Low Wage Countries?

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  • Indium Corporation
  • Folks,

    The adventures of Patty and Rob continue........

     “No way Rob. I can’t buy this one,” shouted Phil.

    “I’m telling you I did all of the calculations. I know it can work,” Rob shot back.

    “No way! You’ve been hanging around The Professor too long,” Phil continued.

    “Guys, you’re not arguing again are you?” Patty said as she approached the lunch table.

    “Your hubby’s gone crazy Patty, why don’t you trade him in for me?” Phil teased.

    Why? Is he crazy? asked Patty.

    “He thinks that, if we can get uptime high enough here in the USA, we can compete with assemblers in low wage countries. He’s gone too far this time,” answered Phil.

    “Hear me out,” responded Rob. “Our uptime is about 30% on our lines. Patty and I made some measurements in China and uptime there is about the same. I did some calculations with ProfitPro and I’m convince that if we can get our uptime to greater than 60% we can compete, even if they pay only $0.75/hr vs our $12.50,” Rob finished.

    Rob showed the ProfitPro output and sure enough the numbers didn’t lie.

    Jan Curtis chimed in, “But Rob, that is theoretical. Realities might set in that will cause unforeseen problems.”

    Phil agreed, “The only way to prove it is to do it.”

    “You’re right,” said Patty, “Let’s do it!”

    “Whoa girl! How can we do it?" asked Rob.

    “Let’s develop a plan and go to Sam the GM and ask if we can do it,” was Patty’s answer.

    All agreed it was a gutsy move, but worthy, and the only way to prove the point one way or the other.

    So, Patty and Rob made an appointment with Sam Watkins, the site GM. They were admittedly a little nervous about the meeting. They both agreed that Rob should speak since it was his idea.

    “To what do I owe the honor of a meeting with our recently married superstars?” Sam cheerfully greeted them at their meeting.

    Rob explained their idea and showed Sam the ProfitPro output. He then requested that they be allowed to manage two assembly lines at ACME to show if increasing uptime to 60% was possible.

    “So basically you are asking me for permission to improve our uptime on two lines to help us make a lot more money?” Sam asked. “Do you have a plan?” he continued.

    Rob and Patty proceeded to show Sam their plan, and the two assembly lines on which they hoped to implement it.

    Is it possible to pay US-type wages and compete with low wage countries? Will Patty and Rob be successful? Stay tuned for the results.

    Cheers,

    Dr. Ron