We know that a few decades back China came after us with a vengeance; that they targeted American manufacturing and started luring many industries overseas.
We know they fixed on price as our area of vulnerability, and came after us using rock bottom pricing as their weapon of choice. And that was hardly a stretch, given China’s government subsidies and their millions of laborers willing to work in sweatshop conditions for sweatshop wages.
And we know too that Chinese companies kept their prices artificially low by often slashing quality to the bare minimum; high enough to pass muster but low enough to keep costs well below the going global rate.
So what did we do? Well, once again, as is now common knowledge, we punted on the whole price thing. We knew we wanted no part of a price war, just as we knew actually winning a price war is often the worst possible outcome for a combatant.
So, even as China’s government continued to subsidize its own companies, such as those in the solar power industry, most U.S. manufacturers decided to regroup, retool and go to war using what turned out to be a far more powerful weapon.
We rededicated ourselves to quality. And in the process U.S. manufacturers began using the vastly superior quality of American made goods to start kicking China’s low-cost butt in the global market all the way to Katmandu.
And in the course of doing that, and as a result of our country’s vastly superior reputation for quality, a funny thing happened in China.
As the size of the country’s middle class continued to explode as the seeds of capitalism continued to take root and flower, those hundreds of millions of suddenly middle class Chinese let it be known in no uncertain terms they wanted no part of Chinese goods. Now that they could afford it, they wanted only best. They wanted, in other words, things made in America.
As a result, of all the designer labels in China today, do you know which one continues to resonate most with middle class consumers and which one continues to suck up hundreds of millions if not billions of the country’s discretionary dollars?
“Made in U.S.A.”
Ironic, isn’t it? That after so many years of fearing Chinese manufacturers, it is China that now represents American manufacturing’s biggest and most fertile market.
That’s why China today is investing in America as never before. It’s why some Chinese private equity firms are building new manufacturing plants here, and creating hundreds, if not thousands of U.S. jobs. And it’s why others are buying established U.S. companies and leaving their brands and processes intact.
Now, I won’t kid you. It’s not all roses, and some of my peers continue to see China’s escalating investment and the country’s increased presence on these shores (and in our classrooms, board rooms and shop floors) in far more sinister terms, and I will get into some of that next week.
But in the meantime, know this: as a manufacturer committed to making the finest specialty couplings in the world, I’m relieved and delighted to say it’s apparently true what people have long been saying.
Quality does, indeed, never out of style.