Sunday, March 05, 2006

Outsourcing

The jewelry industry has dealt with outsourcing for the past 35 plus years.Many American jewelry manufacturers started by using factories in India. These factories were able to produce finished jewelry at costs far below what these same items would cost in America. American jewelry manufacturers selling to retail stores kept the practice a secret.Although the cost of production was so little that the cost of labor often was not considered. When the wholesale price was offered to retailers, the cost to those retailers were not reduced.The American jewelry manufacturers profits soared. Many American jewelry manufacturers found the problem of competeing almost impossible by using American workers.In the meantime American consumers continued to buy jewelry but not recognizing lessor quality of workmanship. Price was king not quality of workmanship. As more American jewelry manufacturers understood, if they intended to stay in business they must close their American factories, dismiss their help and outsource their designs.India was first but not last. Some work went to Thailand.After Pres. Nixon went to China in 1972, the Chinese doors started to open. In the 1980's Chinese annual jewelry sales was $25 million which has increased to $12 billion,most of which is sold in the United States.Those of us who were employed in the jewelry business tried to cry out to our fellow Americans.No one was listening. Quality of workmanship was reduced as well as prices.Our industry in America was being destroyed but our American department store buyers were only interested in price. TV selling was starting and the jewelry sales increased over the TV and later on the Internet. Now years later many other industries are affected by outsourcing. The factories from Ohio to Georgia and other states have closed. Refrigerators are made in Mexico and now I understand that our military vehicles are being outsourced. Will it ever end ? Is price still king ? What happened to quality of workmanship and pride in what we made ?Your thoughts...Uncle Marty