bayerische wrote:

There's definitely the danger in the western world that we are given away our industrial economy "for free" to the Chinese, Brazilians etc. Time will tell. 

Completely correct. I'd like everything to be made in Denmark, England and so on. It wasn't that many years ago when pretty much the majority of Marks & Spencer's clothes were produced in the UK. Same with TM Lewin producing shirts in Southend. I remember calling the Southend factory and speaking about their shirts in the 90s. Not now. They are all made abroad. Why? As they want to drive down costs. Why? As consumers want cheaper products.

This is the fundamental problem. Not whether China is poor at manufacturing. That's almost a moot issue. The problem is now that brands want to keep the same products but reduce their costs. It means customers buy more product, which keeps them in business. Retail is all about the numbers game - quantity rather than quality.

Here in Bath - where there's more money than most UK towns - this theory still applies to retail. A friend of mine opened a superb store a couple of years ago stocking high value products, specialist candles and so on. Footfall is high, as you would expect in a town such as Bath. Problem is, people want everything to be £25 or less. They want to come in each week and buy a product or two, then return the following week - they don't want to buy an expensive product, clear their bank balance and not be able to shop the following week.

It's rampant consumerism. Shopping is the new religion. People want brands at bargain prices. This is why people have turned to cheaper manufacturing - when Chinese manufacturing becomes more expensive, brands will move to Vietnam and other locations.

What I find ironic about the arguments on this board is that people just do not seem to get the wider picture. Although we'd all love B&O to keep their heritage and probably half of the board are prepared to pay premium prices for this, the number of new consumers coming in below is dropping off, which is why B&O have been struggling for the last 2-3 years.

People <35 simply cannot afford to buy Danish, don't want to pay £1500 for a Danish-produced BS8, aren't fussed about products that last and so on. We've had many arguments about this on this very board.

B&O have recognised this and have shifted manufacturing to China so they can appeal to this forthcoming market. Their existing userbase of 45+, financially savvy customer base is (frankly) getting old, dropping off and being replaced by the most cash-strapped <35 year olds who are much more flippant with their demand. They are quite happy to spend £700 on a TV and swap it out every couple of years.

On a local football forum today, I saw a person asking what was the best 50" plasma he could buy for....£500! He couldn't even buy a Chinese-manufactured Beolit 12 for that price!

It's this consumerism that's driving supply. Brands are driving down their prices to meet the demand. This is also the reason why products manufactured in China appear sub-standard. It's not the manufacturing process, it's the quality of the materials that have been specified to meet a certain price point.

Don't blame B&O. They might lose some of their ageing customer base as a result of moving manufacturing to China (see above about their heritage), but they know they need to do something about the very price-savvy consumers out there and they only way they can keep reasonable build quality, plus decent audio, is to shift manufacturing.

If you want B&O to make a profit, have a future and meet a wider customer base, you may need to bite the bullet and realise that this rampant consumerism doesn't allow them to a) make a BS8 in Denmark, b) charge a premium price and c) compete in the current and forthcoming climate.

TerryM wrote:

Nothing wrong with the style,or quality,of my B & W Zeppelin.

Nor the BS8!

As I've said before though, it's not the manufacturing to blame, it's brands choosing poorer quality plastics and other components (for their TVs etc) to drive down their costs and, as a result, their retail price. The problem is only a small number of people have the income to pay for Danish-produced premium products and it's a diminishing consumer base. One minute we're arguing about the cost of B&O products - multi-page discussions on the subject - but on the other hand we're saying we want Danish-produced premium products *plus* cheaper prices? And we wonder why B&O have struggled to make a profit recently?

The argument doesn't stack up.

Tod Daniel wrote:

For me, quality is the key in my book and anything Made in China is poor, lacks style

Since when are the Chinese designing Apple, B&W and B&O products? You're saying the manufacturing process now dictates the design? I knew that's where Apple were going wrong. Poor Jonny Ive v Communist (as you call them) manufacturers. He really has his work cut out :)

Dkatz wrote:

The working conditions are completely different. If you want to know why you SHOULD care where it is made

 

I didn't say I don't care.... I said I don't mind...which is not quite the same.  The reality is that the retail prices the market will stand are beyond the supply chain logistics for many E.U manufacturing companies to compete - for a multitude of reasons.

It is a far wider debate than that of B&O outsourcing few "entry level" items - but the West cannot simply take the moral high gound having benefitted from around 300 years of industrial dominance, and expect emerging markets to pay £55 per hour to its shop floor staff or suddenly adopt the "best practise" it took us many decades to even try and implement - that is just so out of the question as to be almost funny. 

This short video sums up what the root causes of all this are - albeit answers as to how we resolve the current woprldwide problem are harder to come by.

http://www.youtube.com/watch?v=qOP2V_np2c0

 

 

 

((((ps - for the record, I would not use anything Bose make unless I need a new "generic" doorstop at some point - but thanks for the suggestion 😕))) LOVE THAT COMMENT FOLKDEEJAY

on a more seroius note, the reason I dont like B&O outsourcing to China is that the reason companies can produce and sell prodects cheaply when produced there is due to the appalling working conditions of their factories. Look at recent days reports on the factory making the iphone and ipad in China....The workers took to the roof and 300 threathen to commit suicide.....this same factory had a spate of suicides last year and 2009 and apple promised to address the workers concerns. Clearly insufficiently!!!

Also, China uses its almost 5 million prisioners in the unpaid production of toys and other products - there was a recent excellent report on CNN under their Modern Slavery series of reports.

So if this is a route that B&O choose to take, and I hope it isn't, then ill be looking online for vintage Danish products and foregoing their new ones.

Having ranted, I realise I am typing this on a notebook make in China...now there is irony. Probably my sofa too and the cup im drinking from......

but its just another angle to consider...the moral dimension of modern globalization.

 

PS FOLKDEEJAY....i have a Bose Ipod thingy in my small summerhouse (Shed) so at least i have banished it as far from my actual home as i can :):):)

 

Paul

Bayerische – You have to remember that Norway is perhaps the most expensive country in the world and because the living costs are so high, so is the minimum wage. I have a friend who just works at a bar and he gets something like 20 euros an hour... It's not just manufacturing wage, but wages in general that are higher there exactly because cost of living is higher. Although you do get more social benefits such as free medical, paid university, etc... The same goes for Denmark, things you don't get in America and other countries.

 

Perhaps this is another reasons that some B&O products in the past such as the Form 2, Beosystem 10, etc... have been made in Japan. The labour rate there is $27.80 compared to $1.68 average in places like China and Philippines (this is the latest data from the US Bureau of Labour Statistics). This is another reason why so many things are made in China now versus even Taiwan where the labour rates are $8.68 and hour. However, many in Europe a way around this, even B&O by opening factories in the Czech republic. Louis Vuitton opened one in Spain and some fashion brands have outsourced to Portugal. Interesting to note that US Labour rates are nearly half those of Norway and Japan is half that of Denmark... The so called growth rate of Chinese hourly rates is very miniscule, calculated in pennies per year compared to the many dollars a year in developed countries. The US and Japan actually had a decrease in Labour unit costs. Look at the statistics here:

moxxey wrote:

bayerische wrote:

There's definitely the danger in the western world that we are given away our industrial economy "for free" to the Chinese, Brazilians etc. Time will tell. 

Completely correct. I'd like everything to be made in Denmark, England and so on. It wasn't that many years ago when pretty much the majority of Marks & Spencer's clothes were produced in the UK. Same with TM Lewin producing shirts in Southend. I remember calling the Southend factory and speaking about their shirts in the 90s. Not now. They are all made abroad. Why? As they want to drive down costs. Why? As consumers want cheaper products.

This is the fundamental problem. Not whether China is poor at manufacturing. That's almost a moot issue. The problem is now that brands want to keep the same products but reduce their costs. It means customers buy more product, which keeps them in business. Retail is all about the numbers game - quantity rather than quality.

Here in Bath - where there's more money than most UK towns - this theory still applies to retail. A friend of mine opened a superb store a couple of years ago stocking high value products, specialist candles and so on. Footfall is high, as you would expect in a town such as Bath. Problem is, people want everything to be £25 or less. They want to come in each week and buy a product or two, then return the following week - they don't want to buy an expensive product, clear their bank balance and not be able to shop the following week.

It's rampant consumerism. Shopping is the new religion. People want brands at bargain prices. This is why people have turned to cheaper manufacturing - when Chinese manufacturing becomes more expensive, brands will move to Vietnam and other locations.

What I find ironic about the arguments on this board is that people just do not seem to get the wider picture. Although we'd all love B&O to keep their heritage and probably half of the board are prepared to pay premium prices for this, the number of new consumers coming in below is dropping off, which is why B&O have been struggling for the last 2-3 years.

People <35 simply cannot afford to buy Danish, don't want to pay £1500 for a Danish-produced BS8, aren't fussed about products that last and so on. We've had many arguments about this on this very board.

B&O have recognised this and have shifted manufacturing to China so they can appeal to this forthcoming market. Their existing userbase of 45+, financially savvy customer base is (frankly) getting old, dropping off and being replaced by the most cash-strapped <35 year olds who are much more flippant with their demand. They are quite happy to spend £700 on a TV and swap it out every couple of years.

On a local football forum today, I saw a person asking what was the best 50" plasma he could buy for....£500! He couldn't even buy a Chinese-manufactured Beolit 12 for that price!

It's this consumerism that's driving supply. Brands are driving down their prices to meet the demand. This is also the reason why products manufactured in China appear sub-standard. It's not the manufacturing process, it's the quality of the materials that have been specified to meet a certain price point.

Don't blame B&O. They might lose some of their ageing customer base as a result of moving manufacturing to China (see above about their heritage), but they know they need to do something about the very price-savvy consumers out there and they only way they can keep reasonable build quality, plus decent audio, is to shift manufacturing.

If you want B&O to make a profit, have a future and meet a wider customer base, you may need to bite the bullet and realise that this rampant consumerism doesn't allow them to a) make a BS8 in Denmark, b) charge a premium price and c) compete in the current and forthcoming climate.

Partly agree with you on this but remember that there are a lot of rich young people today. More than there ever were. It used to be people worked up in companies and became rich in their 50s but now with so many stars, young execs, startups, bankers, etc... in their 20s and 30s they can easily afford to buy B&O.

Maybe if companies didn't pay their execs so much and have millions funneled out: 

This is pure racism. Not every Chinese person works in a sweat shop! I find this post highly offensive. I doesn't matter what race you are or where you come from, you can still be intelligent, hard working with an eye for detail and a total commitment to quality.

B&O is a global company and like many global companies it wants to have infrastructure spread across the globe and around different economies. Key products are still made in Denmark but smaller products that demand higher volume manufacturing need to be made in high volume quality controlled assemblies - I don't think you would find any economist recommending anyone sets up a high volume factory in Denmark.

What's the problem anyway? Has anyone received a product that fell to bits when it arrived? I haven't seen any drop in quality at all.

I certainly would not call this racism! This is a debate about manufacturing and quality control. And yes, my MacBook is falling to pieces after 18 months even though it is the most well looked after machine around so yeah, control control on these mass produced expensive items is an issue here!!!

I have friends from prctically every single country in the world, however, after studying Law and Human Rights along with the Human Rights Act for 3 years at the University of Manchester, i'd definately say that China has one heck of a long way to go!

Anyway if you are happy to buy an inferior product that is made for £60 and being sold for £700, then go ahead, more the fool you! I on the other hand will be buying quality that lasts in the future!

Tod Daniel wrote:

I certainly would not call this racism! This is a debate about manufacturing and quality control. And yes, my MacBook is falling to pieces after 18 months even though it is the most well looked after machine around so yeah, control control on these mass produced expensive items is an issue here!!!

 

I don't suppose you have considered that actually might be a Californian design problem?