Typical decent Al Bicycle diamond frame costs $8 to make in Taiwan



L

Luke

Guest
This from Sheldon Brown's Bentride Podcast (@ 8:50). No wonder
manufacturing is a declining sector in North America! This can't be the
total cost of production (stock and labor); does the figure apply to
labor cost only?

The mp3 file is available for d/l at Sheldon's website
(http://sheldonbrown.com/podcasts/).

Luke
 
M

Marty

Guest
Luke wrote:
> This from Sheldon Brown's Bentride Podcast (@ 8:50). No wonder
> manufacturing is a declining sector in North America! This can't be the
> total cost of production (stock and labor); does the figure apply to
> labor cost only?
>
> The mp3 file is available for d/l at Sheldon's website
> (http://sheldonbrown.com/podcasts/).
>
> Luke



I heard that the Chinese were annoyed because India is underpricing them.

Marty
 
S

SMS

Guest
Luke wrote:
> This from Sheldon Brown's Bentride Podcast (@ 8:50). No wonder
> manufacturing is a declining sector in North America! This can't be the
> total cost of production (stock and labor); does the figure apply to
> labor cost only?


It's quite possible that $8 is the cost of an aluminum frame. Aluminum
is extremely inexpensive (why do you think the bicycle manufacturers are
using it?!). Look how cosmetically poor the welds are--no effort is put
into filing them. Welding seven or eight pieces of aluminum tubing
together is not a long or expensive process.

I think the real question is what is the ROI, including the cost of the
equipment and factory.
 
R

Ryan Cousineau

Guest
In article <051220051933154076%[email protected]>,
Luke <[email protected]> wrote:

> This from Sheldon Brown's Bentride Podcast (@ 8:50). No wonder
> manufacturing is a declining sector in North America! This can't be the
> total cost of production (stock and labor); does the figure apply to
> labor cost only?
>
> The mp3 file is available for d/l at Sheldon's website
> (http://sheldonbrown.com/podcasts/).
>
> Luke


Could be. The anecdote I heard from a maker of electronic I/O devices
was that when they closed their domestic manufacturing facility, the
economics were such that they could air-ship completed products to North
America from China for the same total mfg cost as making the connector
cords here.

It's Japan all over again,

--
Ryan Cousineau [email protected] http://www.wiredcola.com/
"I don't want kids who are thinking about going into mathematics
to think that they have to take drugs to succeed." -Paul Erdos
 
L

Luke

Guest
In article <[email protected]>, SMS
<[email protected]> wrote:

> Luke wrote:
> > This from Sheldon Brown's Bentride Podcast (@ 8:50). No wonder
> > manufacturing is a declining sector in North America! This can't be the
> > total cost of production (stock and labor); does the figure apply to
> > labor cost only?

>
> It's quite possible that $8 is the cost of an aluminum frame. Aluminum
> is extremely inexpensive (why do you think the bicycle manufacturers are
> using it?!). Look how cosmetically poor the welds are--no effort is put
> into filing them. Welding seven or eight pieces of aluminum tubing
> together is not a long or expensive process.


Still, to put it in perspective, the cost is only a couple of dollars
more than the price of a typical fast food meal. Unfinished welds
aside, that's an incredible achievement - if achievement is the right
word. It's an astounding fact. I wonder what the cost of production
would be on this side of the Pacific for a frame of comparable quality.

With domestic industry under siege by the Asian manufacturing
juggernaut on so many fronts, it's obvious the scope and degree of
economic advantage is pervasive.

>
> I think the real question is what is the ROI, including the cost of the
> equipment and factory.


Well, generally speaking, it's enough to flood the region (mainland
China, specifically) with a torrent of FDI; and capital, supposedly,
always seeks the highest rate of return. How long can it continue?

Luke
 
R

Ryan Cousineau

Guest
In article <061220050103469593%[email protected]>,
Luke <[email protected]> wrote:

> In article <[email protected]>, SMS
> <[email protected]> wrote:
>
> > Luke wrote:
> > > This from Sheldon Brown's Bentride Podcast (@ 8:50). No wonder
> > > manufacturing is a declining sector in North America! This can't be the
> > > total cost of production (stock and labor); does the figure apply to
> > > labor cost only?

> >
> > It's quite possible that $8 is the cost of an aluminum frame. Aluminum
> > is extremely inexpensive (why do you think the bicycle manufacturers are
> > using it?!). Look how cosmetically poor the welds are--no effort is put
> > into filing them. Welding seven or eight pieces of aluminum tubing
> > together is not a long or expensive process.

>
> Still, to put it in perspective, the cost is only a couple of dollars
> more than the price of a typical fast food meal. Unfinished welds
> aside, that's an incredible achievement - if achievement is the right
> word. It's an astounding fact. I wonder what the cost of production
> would be on this side of the Pacific for a frame of comparable quality.
>
> With domestic industry under siege by the Asian manufacturing
> juggernaut on so many fronts, it's obvious the scope and degree of
> economic advantage is pervasive.
>
> >
> > I think the real question is what is the ROI, including the cost of the
> > equipment and factory.

>
> Well, generally speaking, it's enough to flood the region (mainland
> China, specifically) with a torrent of FDI; and capital, supposedly,
> always seeks the highest rate of return. How long can it continue?
>
> Luke


See Japan, postwar rise of. Or Taiwan, or Korea. Basically, it continues
until a combination of rising wages and skills in the country
effectively puts them out of the global low-end manufacturing business,
but into more skilled, more valuable specialties. With Japan, it meant
they stopped manufacturing cheap electronics and stamped-tin trash and
became suppliers of good electronics, cameras, automobiles, bicycles,
and so forth. Taiwan similarly faced that pattern, to the point that
while they produce many good, high-end bikes (Giants, most notably, but
a great many other non-crappy bicycles are built there, regardless of
the nationality of the company that designs the bikes and puts their
name on them), they are now facing serious competition from China for
the Wal-Mart end of the market. Korea is similarly making the transition
from making terrible cars and commodity electronics to better cars,
desireable mobile phones, and HDTVs.

The interesting thing about China and India is that both have much
larger populations to draw on, many of whom are not off the proverbial
(and often literal) farms yet. That means they have a potentially longer
cycle of drawing workers into good jobs than my other three examples.

After China? Well, it will be a while, but Africa is waiting for its
turn. Most African countries suffer from devastating AIDS rates,
anarchy, horrendously bad political leadership, or all three, so it's a
bit like Maoist China. Until there is some stability in Africa,
industrialization can't happen.

--
Ryan Cousineau [email protected] http://www.wiredcola.com/
"I don't want kids who are thinking about going into mathematics
to think that they have to take drugs to succeed." -Paul Erdos
 
Q

Qui si parla Campagnolo

Guest
Luke wrote:
> This from Sheldon Brown's Bentride Podcast (@ 8:50). No wonder
> manufacturing is a declining sector in North America! This can't be the
> total cost of production (stock and labor); does the figure apply to
> labor cost only?
>
> The mp3 file is available for d/l at Sheldon's website
> (http://sheldonbrown.com/podcasts/).
>
> Luke


I saw an asian gent at interbike with an aluminum MTB frame, complete
and unpainted and he was selling these for $15...
 
D

Dan

Guest
"Luke" <[email protected]> wrote in message
news:051220051933154076%[email protected]
>
> This from Sheldon Brown's Bentride Podcast (@ 8:50). No wonder
> manufacturing is a declining sector in North America! This can't be the
> total cost of production (stock and labor); does the figure apply to
> labor cost only?
>
> The mp3 file is available for d/l at Sheldon's website
> (http://sheldonbrown.com/podcasts/).
>
> Luke


Keep in mind that the exchange rate for the Yuan is artificially low.
 
P

Phil, Squid-in-Training

Guest
Dan wrote:
> "Luke" <[email protected]> wrote in message
> news:051220051933154076%[email protected]
>>
>> This from Sheldon Brown's Bentride Podcast (@ 8:50). No wonder
>> manufacturing is a declining sector in North America! This can't be
>> the total cost of production (stock and labor); does the figure
>> apply to labor cost only?
>>
>> The mp3 file is available for d/l at Sheldon's website
>> (http://sheldonbrown.com/podcasts/).
>>
>> Luke

>
> Keep in mind that the exchange rate for the Yuan is artificially low.


You do know that we're talking about Taiwan, right?
--
Phil, Squid-in-Training
 
D

Dan

Guest
"Phil, Squid-in-Training" <[email protected]> wrote in
message news:[email protected]
> Dan wrote:
>> "Luke" <[email protected]> wrote in message
>> news:051220051933154076%[email protected]
>>>
>>> This from Sheldon Brown's Bentride Podcast (@ 8:50). No wonder
>>> manufacturing is a declining sector in North America! This can't be
>>> the total cost of production (stock and labor); does the figure
>>> apply to labor cost only?
>>>
>>> The mp3 file is available for d/l at Sheldon's website
>>> (http://sheldonbrown.com/podcasts/).
>>>
>>> Luke

>>
>> Keep in mind that the exchange rate for the Yuan is artificially low.

>
> You do know that we're talking about Taiwan, right?
> --
> Phil, Squid-in-Training



Once again I verify that I am an idiot.
 
S

Scott Gordo

Guest
Luke wrote:
> This from Sheldon Brown's Bentride Podcast (@ 8:50). No wonder
> manufacturing is a declining sector in North America! This can't be the
> total cost of production (stock and labor); does the figure apply to
> labor cost only?
>
> The mp3 file is available for d/l at Sheldon's website
> (http://sheldonbrown.com/podcasts/).
>
> Luke


I'm hijacking this thread over to alt.am-b.
It's not exactly shocking considering what you can purchase a Walmart
bike for, but still....

/s
 
S

SMS

Guest
Luke wrote:
> In article <[email protected]>, SMS
> <[email protected]> wrote:
>
>> Luke wrote:
>>> This from Sheldon Brown's Bentride Podcast (@ 8:50). No wonder
>>> manufacturing is a declining sector in North America! This can't be the
>>> total cost of production (stock and labor); does the figure apply to
>>> labor cost only?

>> It's quite possible that $8 is the cost of an aluminum frame. Aluminum
>> is extremely inexpensive (why do you think the bicycle manufacturers are
>> using it?!). Look how cosmetically poor the welds are--no effort is put
>> into filing them. Welding seven or eight pieces of aluminum tubing
>> together is not a long or expensive process.

>
> Still, to put it in perspective, the cost is only a couple of dollars
> more than the price of a typical fast food meal.


Yes, but the margin on a fast food meal is very high, the margin on a
bicycle frame is very low.

>> I think the real question is what is the ROI, including the cost of the
>> equipment and factory.

>
> Well, generally speaking, it's enough to flood the region (mainland
> China, specifically) with a torrent of FDI; and capital, supposedly,
> always seeks the highest rate of return. How long can it continue?


In some cases this is true, but in many cases companies are going to
China because they have dreams of selling to the Chinese population and
don't want to be shut out. Most of the automobile companies that built
in China are not profitable.
 
S

Sheldon Brown

Guest
Luke wrote:

> This from Sheldon Brown's Bentride Podcast (@ 8:50). No wonder
> manufacturing is a declining sector in North America! This can't be the
> total cost of production (stock and labor); does the figure apply to
> labor cost only?
>
> The mp3 file is available for d/l at Sheldon's website
> (http://sheldonbrown.com/podcasts/).
>

Actually I think the labor cost is insignificant...I'm pretty sure these
frames are built by robots...

Sheldon "Open The Pod Bay Door, HAL..." Brown
+------------------------------------------------+
| Love at its best means marriage, and it is |
| altogether the most beautiful thing in life |
| -- William Dean Howells |
+------------------------------------------------+
Harris Cyclery, West Newton, Massachusetts
Phone 617-244-9772 FAX 617-244-1041
http://harriscyclery.com
Hard-to-find parts shipped Worldwide
http://captainbike.com http://sheldonbrown.com
 
R

Ron Ruff

Guest
Sheldon Brown wrote:
> Actually I think the labor cost is insignificant...I'm pretty sure these
> frames are built by robots...
>

Ah!... I was wondering about this. But still someone has to build,
tend, and repair the robots, perform other prep work and cleaning up
around the place, produce and transport the materials, produce the
energy, etc. Mechanized production is often very efficient, but $/hr x
hours worked is still embedded in every aspect of it.

Who makes the robots, I wonder?

4lbs of Al tubing alone would cost more the $8 in the US...
 
L

Luke

Guest
In article <[email protected]>, Ryan
Cousineau <[email protected]> wrote:

> > Well, generally speaking, it's enough to flood the region (mainland
> > China, specifically) with a torrent of FDI; and capital, supposedly,
> > always seeks the highest rate of return. How long can it continue?
> >
> > Luke

>
> See Japan, postwar rise of. Or Taiwan, or Korea. Basically, it continues
> until a combination of rising wages and skills in the country
> effectively puts them out of the global low-end manufacturing business,
> but into more skilled, more valuable specialties. With Japan, it meant
> they stopped manufacturing cheap electronics and stamped-tin trash and
> became suppliers of good electronics, cameras, automobiles, bicycles,
> and so forth. Taiwan similarly faced that pattern, to the point that
> while they produce many good, high-end bikes (Giants, most notably, but
> a great many other non-crappy bicycles are built there, regardless of
> the nationality of the company that designs the bikes and puts their
> name on them), they are now facing serious competition from China for
> the Wal-Mart end of the market. Korea is similarly making the transition
> from making terrible cars and commodity electronics to better cars,
> desireable mobile phones, and HDTVs.


<snip>

More in my mind when I posed the question was the nature of North
America's commercial relationship with the Asian tigers - (with China's
emergence onto the global economic stage, a more accurate term would be
elephant!) For Japan, Korea, Taiwan - the post WWII success stories you
allude to - the existence of, and easy access to the greatest consumer
market in the world, the USA, was crucial to building their industrial,
export driven economies and laying the foundation for affluence. That
it was an explicit aim of American foreign policy to encourage these
economic ties with the intent of fortifying strategic alliances also
fueled their rise as economic powers.

The reality now is that the USA, in terms of relative wealth and
economic clout, is not what it was a half century ago. How long can it
continue to reprise its roll as the globe's most insatiable shopper? At
some point the bill has to come due.

Luke
 
S

SMS

Guest
Sheldon Brown wrote:
> Luke wrote:
>
>> This from Sheldon Brown's Bentride Podcast (@ 8:50). No wonder
>> manufacturing is a declining sector in North America! This can't be the
>> total cost of production (stock and labor); does the figure apply to
>> labor cost only?
>>
>> The mp3 file is available for d/l at Sheldon's website
>> (http://sheldonbrown.com/podcasts/).
>>

> Actually I think the labor cost is insignificant...I'm pretty sure these
> frames are built by robots...


I recall one bicycle shop owner claiming that AL frames were actually
welded by hand, while steel frames were welded robotically. I don't
believe that this is the case though.
 
R

Ryan Cousineau

Guest
In article <[email protected]>,
SMS <[email protected]> wrote:

> Sheldon Brown wrote:
> > Luke wrote:
> >
> >> This from Sheldon Brown's Bentride Podcast (@ 8:50). No wonder
> >> manufacturing is a declining sector in North America! This can't be the
> >> total cost of production (stock and labor); does the figure apply to
> >> labor cost only?
> >>
> >> The mp3 file is available for d/l at Sheldon's website
> >> (http://sheldonbrown.com/podcasts/).
> >>

> > Actually I think the labor cost is insignificant...I'm pretty sure these
> > frames are built by robots...

>
> I recall one bicycle shop owner claiming that AL frames were actually
> welded by hand, while steel frames were welded robotically. I don't
> believe that this is the case though.


I venture to guess that both types of frames are made both ways.

Both materials exist at virtually all points in the market, from the
cheapest department-store junk to signed-by-the-welder bespoke jobs. I'm
pretty sure the technology to robo-weld either material is available,
too. Aluminum is supposed to be a bit trickier to weld from what I hear,
but both materials require expertise when they are as thin as high-end
bicycle tubing.

--
Ryan Cousineau [email protected] http://www.wiredcola.com/
"I don't want kids who are thinking about going into mathematics
to think that they have to take drugs to succeed." -Paul Erdos