#3 Quality control decline and actual failure escalated by orders of magnitude during the COVID Debacle. You can see it in a wide array of consumer goods, from appliances from Name Brands to food packaging, to service sector. This falls directly on the manufacturer, but Honeywell gets a bite of that apple too.
During my time in the State Homeland Security Office, we visited the nuclear plants at Diablo Canyon and San Onofre to talk about threats and vulnerabilities. Behind one of the sites was a huge transformer farm where the initial output from the reactor was stepped down for the transmission towers that moved to into the grid. Behind the 30-40 huge transformers for that process there was a block of spares, perhaps 1/2 the number of those in operation. In talking to the onsite engineer, I noted that they were all of friendly foreign manufacture (not Chinese by the way). In discussion about it I learned that the spares we in large number because it was a product that had very limited on hand availability at the point of manufacture overseas. So they were built on order, and took several months to manufacture and ship, hence the large spare inventory at the power plant. I was curious about the lifespan of the transformers and learned it was now 3-5 years, unlike the older US made GE models which had far longer lifespans, as much as 3 times as long, for roughly the same current purchase price. As an aside about limited US policy wisdom, he explained that the foreign manufacturer moved into this small but very lucrative product niche, and sold their units at a much, much lower initial price than GE, convinced the US Energy Dept to allow foreign sales in lieu of US only manufacture, and continued the lower pricing until GE closed down the facility that made these parts after a number of years of failed competition. Then the prices began to rise until the time of the conversation when he admitted that the net unit cost/lifespan numbers made it MORE expensive than the old GE product line by orders of magnitude. The foreign supplier had taken a loss in product pricing on the front end to freeze out the US manufacturer, used political influence to negate the sole sourcing rules for US only manufacture, and now netted a profit to cover the upfront costing by being now the only manufacturer for this high end, limited use product, a plan that had the vision to think in terms of years, not ROI for the next quarter. American market share defeated by short term thinking, which is how we have become a virtually non-industrial manufacturing nation dependent on our primary world rival for much of our consumer economy. |