Halliburton Moves to Dubai

[the]

Originally posted by Superman
I know I'm not telling "the rest of the story." I leave that part for you guys.

Still, what I've said is true,

I don't think what you've said is true at all. Actually, I think you're just totally making it up.

[island_dude]

Read "the Corporation" It goes into depth on this issue. In the US, PUBLIC corporations are assigned virtual "personhood". They must follow the laws of the land or face sanctions just as people do. Other than to be subject to the law, they have only one requirement by law, and that is to generate profits for their shareholders, and properly manage their assets. I have ot do some research, but in the book, they did cite case law where shareholders did sue because a company did not fully exploit every opportunity to maximize profit.

If a company wishes to invest a certain amount of its profits in charitable giving, it must be able to show it shareholders that there is some benefit to this action. Generally, the reason is associating good will with the company's actions. There is nothing that requires them to be "ethical", simply lawful.

So I have to say Superman is absolutely correct.

[jyl]

Originally posted by lendaddy
The product being made in China now is only one of 20 or so, 18 of which are made in the USA yet. If he moves his entire company over there he will obviously have the other product made there as well. Plus he will not have the three week lapse in QC checks that can cost big bucks. Then you can factor in the lower costs of doing buiness over there in regards to insurance, regulations and taxes... not to mention a much decreased risk of litigation.

So what are we doing to make this company want to stay here? Or don't we care?

Hard to say without knowing what they make and how much cheaper operating in China will be for the company. And I understand if you can't go there on a public forum.

But, you're saying they were getting the components 20-30% cheaper through China sourcing, and if he moves the whole company there his costs will be MUCH lower still and he'll make a better product.

So sounds like by moving the whole company to China he can produce same/better quality at a 40-50% (?) lower cost than he was producing in the US with US sourcing. (I'm doing my best to guess at it from what you've posted.)

Then I'd think there is no way to keep this company here, through lower taxes, regulations, etc. The cost difference is too much.

[lendaddy]

Originally posted by jyl
Hard to say without knowing what they make and how much cheaper operating in China will be for the company. And I understand if you can't go there on a public forum.

But, you're saying they were getting the components 20-30% cheaper through China sourcing, and if he moves the whole company there his costs will be MUCH lower still and he'll make a better product.

So sounds like by moving the whole company to China he can produce same/better quality at a 40-50% (?) lower cost than he was producing in the US with US sourcing. (I'm doing my best to guess at it from what you've posted.)

Then I'd think there is no way to keep this company here, through lower taxes, regulations, etc. The cost difference is too much.

You are close. What I meant is the quality would be improved if produced wholly in one place rather than piece-mealed from two countries (this is an aesthetic part and getting the components to match has proven difficult). Obviously the formula for best quality was 100% US/local product, but 100% Chinese/local product is desirable over a mix.

After that, I imagine some of their items are more labor intensive and some less. Those with a high commodity content will not see as large a savings. So it would be more like 20% accross the product line for manufacturing costs. Manufacturing costs are of course only one part of expenses and I would certainly be shocked if they couldn't save another 20% on all other costs.

So, we're still looking at 20-30%. But the downside is that you're in China where the government could turn on you in an instant, nationalize your company, you must ship accross an ocean to reach your main customers, etc.. Not to mention you have to live there.

If we can keep the numbers anywhere near close, companies would much rather be here, with their end customers.

[the]

Originally posted by island_dude
There is nothing that requires them to be "ethical", simply lawful.

So I have to say Superman is absolutely correct.

You need to focus on the issue.

There is nothing requiring anybody (person or corporation) to be "ethical."

But there is nothing requiring a corporation to be UNethical. That's what Superman had said. That a CEO is REQUIRED to do something UNETHICAL if there is profit to be made, or the CEO can face action against him.

I have to say Superman is absolutely incorrect.

That's why neither he nor anyone else could ever find an example of that happening.

[jyl]

Originally posted by lendaddy
You are close. What I meant is the quality would be improved if produced wholly in one place rather than piece-mealed from two countries (this is an aesthetic part and getting the components to match has proven difficult). Obviously the formula for best quality was 100% US/local product, but 100% Chinese/local product is desirable over a mix.

After that, I imagine some of their items are more labor intensive and some less. Those with a high commodity content will not see as large a savings. So it would be more like 20% accross the product line for manufacturing costs. Manufacturing costs are of course only one part of expenses and I would certainly be shocked if they couldn't save another 20% on all other costs.

So, we're still looking at 20-30%. But the downside is that you're in China where the government could turn on you in an instant, nationalize your company, you must ship accross an ocean to reach your main customers, etc.. Not to mention you have to live there.

If we can keep the numbers anywhere near close, companies would much rather be here, with their end customers.

I see, it is much closer than I thought. So maybe if their costs in the US could be reduced by 10% they'd choose to stay here.

[lendaddy]

Originally posted by jyl
I see, it is much closer than I thought. So maybe if their costs in the US could be reduced by 10% they'd choose to stay here.

I wouldn't know, it could be much higher. I am taking a guess based one one anecdotal experience.

The bottom line is that we could be much more competitive.