New Kubota Factory

[dstig1]

A big driver for localizing production is to reduce costs and expand your market share. You have no idea how much more expensive it is to import something than it is to make it locally. But until the volumes become large enough to make the investment worthwhile, a company will bite the bullet and import.

An effect that this has is that only more expensive stuff tends to be imported as the import costs are less of a bite in higher dollar items. A good example are the Euro luxury car makers. BMW/Mercedes sell a lot more models in Europe than they do here, and they are a lot cheaper there...because they make them there. They are also not considered as high end there as they are in the US for the same reason. We only see the expensive models. They do not bring over the low cost models as the import costs would make them too uncompetitive.

Now someone will rightfully say "What about all that cheap low-end Chinese junk that gets imported?" Absolutely a good point - it still costs a fortune to import it. Does that give you an idea just how cheap China is?

There are also a lot of currency risk issues that go away when you make something where you sell it. If the currency exchange rates change between the country you make something in and the country you sell it in, it can have huge effects on the bottom line (positive or negative). Building locally removes/reduces that a lot.

If you have a good solid market in another country, and especially if it is growing, then it is a very smart move to start making products there. But it is not easy to start that up - halfway around the world in a place with different language and culture and customs. Starting up operations in a new country is not for the timid.

 

[BethesdaEC]

Here's an example to stir the pot. A company has forecast that they will lose $50M next year. They hire a new CEO and he wants $5M base and a bonus of 25% of what he saves the company. He says he can't prevent it from losing money this first year. So he takes the job and the company loses only $10M. How much do you pay him? By contract, $5M + (he saved you $40M x 25%) = $15M. Did he earn it or not? They still lost money and one could argue that losing $10M sure isn't worth a bonus, but in light of losing $50M, it might be. And that is up to the Board of Directors to determine, not the average stock holder.

So what exactly was he getting the original $5M for? To lose the $50M they would lose w/o him? Again - how dumb are we? And, guess who gets "carry" that salary bonus on their backs - the consumer of said product or the workers who "have to" pay more for their retirement plans, health care ..... There's no free lunches and this is where the free market vomits on itself.:thumbsup:

The best example I can think of in recent times is Allen Mulally, CEO of Ford. Bill Ford realized that he was incapable of running Ford and was searching for a new CEO. BTW my hat is off to Bill on this one, it takes a smart man to realize your not smart enough. Anyways they brought Allen in for about $40M if I recall correctly with a lot of worthless options if he didn't do well. He has taken Ford from the brink of bankruptcy to company that has just announced the return of dividends and is making some of the best and most exciting cars on the road in all categories. All of this was done without any bailout money, and the most remarkable thing is he completely turned around the underlying culture of Ford. I would argue that it was the best money Ford ever spent.

 

[Verticaltrx]

soory to say but to the rest of the world "Made in Japan" gets a huge premium over "made in America"

Unfortunately I have to agree. I'm also fearful that the Kubotas made here won't be of the same quality as those that came directly from Japan.

 

[Turbys_1700]

Interesting reading to say the least...
Business is in business for one reason and one reason only...
To make a profit...
Lowering costs by lowering labor costs increases profit...
The Soviet Union tried socialism...
How well did that work out...
I just saw where China imposed tariffs on US autos entering China from the US in retaliation to Obama's tariff on Chinese imported tires earlier...
This ain't gonna end pretty...

 

[beppington]

Interesting reading to say the least...
Business is in business for one reason and one reason only...
To make a profit...
Lowering costs by lowering labor costs increases profit...
The Soviet Union tried socialism...
How well did that work out...
I just saw where China imposed tariffs on US autos entering China from the US in retaliation to Obama's tariff on Chinese imported tires earlier...
This ain't gonna end pretty...

Hopefully it simply ends with us ceasing trade with China. I don't think a free market (however not free ours really is) can we compete with a communist economy. Not for very long anyway.

 

[houstonscott]

If I buy a Kubota I would prefer it be imported from Japan. Assembled here from parts is next best thing, and what is happening now in GA. Most of the Kubota problems I read about on the forum can be attributed to miss assembly of the machine. Parts left out or installed backwards stuff like that, the quality of the assembly is gigantic to the quality of the machine, and I believe they do a better job over there. I am a big BMW fan and owner too, I would never buy a model made in USA, just not a German car if it's built in USA.

HS

 

[Volfandt]

If I buy a Kubota I would prefer it be imported from Japan. Assembled here from parts is next best thing, and what is happening now in GA. Most of the Kubota problems I read about on the forum can be attributed to miss assembly of the machine. Parts left out or installed backwards stuff like that, the quality of the assembly is gigantic to the quality of the machine, and I believe they do a better job over there. I am a big BMW fan and owner too, I would never buy a model made in USA, just not a German car if it's built in USA.

HS

I find this both interesting and troubleing, nothing personal and I don't mean to point you out. I actually know several people w/similar opinions. I just want to point out that we have very differing opinons

Kubota has been making BX's in GA since the 30 series (BX23's, BX2230's, 1500's & 1830's) and this series of BX's have an excellent track record. What wasn't sold in the N American market was exported and still is.
When I say manufactured, I want to point out that the engine and HST was/is manufactured in Japan but the rest of the tractor was/is manufactured in the GA plant(s) and the imported engine & HST are assembled into the tractor. All the OEM implements are manufactured in one of 2 plants in GA and assembled or shipped w/the BX's to their destination(s).

My 04 BX23 has not required any dealer/warranty work since I took delivery, has performed exactly as it's been designed to and I couldn't be happier w/it. The ID plate indicates that it is Made In America.
Now is it the exception or is it the rule? I'd like to think it's the rule.
To be truthful, I am proud that it is both made in America and it has been a very good buy.

I've worked/apprenticed in manufacturing and I'm presently in a service type industry (telecommunications install/repair) and in the vast majority of cases I've worked and work w/individuals & craftsmen that are very conscientious in their craft.
I would put them up against anyone in a competing industry. Fact is, if they weren't the business wouldn't and couldn't be competitive in todays world market.

In any case, I have no problem spending my hard earned $$$'s on big ticket products that are manufactured in N America by N American craftsmen.

Dave

 

[5030]

........In any case, I have no problem spending my hard earned $$$'s on big ticket products that are manufactured in N America by N American craftsmen......


Substandard wages don't attract craftsmen or retain them and pride in product is secondary to quality when the wage isn't comensurate with the position.

That's the whole crux of this thread.

I don't fault Kubota in trying the get the most for the least, that's good business ethic. My issue lies with the fact that when you do offer less (12 buck an hour welding jobs) you get what you pay for and no more.

Guess that's why the company I work for starts new hires in factory, non assembly positions ar $18.50 per hour and skilled trades at 22. You get way more flies with honey than vinegar and the company I work for is highly profitable and busy, even in these trying times and like I said previously, we sell material to Kubota, among others in the tractor business.

I'm also more likely to purchase a tractor made wholly in Japan versus a 2 country build simply because the Japanese still retain the 'craftsmen' attitude that WAS prevelant here, 30 years ago and isn't today. The Japanese pride themselves on quality while we pride ourselves on productivity at the expense of quality.....

That is a sad situation........

 

[houstonscott]

I have to be honest I still would not buy an American car. I own a truck but only because there are few choices, and the trucks I have owned have been disappointing mechanically. Engine failures at 120K, small parts breaking within days of ownership. Even my 2010 Suburban 4x4 has issues with interior quality, parts and bits break and are cheap. While the old MB in the drive way sits out, has 160K on it and goes to work everyday without failure. The interior is still perfect and everything is intact and works. I am on third BMW have never had a failure of anything above a battery or tail lights. Toyota, Honda, and others didn't get into the American market because of American craftsmanship and acumen.

HS

 

[300UGUY]

The best example I can think of in recent times is Allen Mulally, CEO of Ford. Bill Ford realized that he was incapable of running Ford and was searching for a new CEO. BTW my hat is off to Bill on this one, it takes a smart man to realize your not smart enough. Anyways they brought Allen in for about $40M if I recall correctly with a lot of worthless options if he didn't do well. He has taken Ford from the brink of bankruptcy to company that has just announced the return of dividends and is making some of the best and most exciting cars on the road in all categories. All of this was done without any bailout money, and the most remarkable thing is he completely turned around the underlying culture of Ford. I would argue that it was the best money Ford ever spent.

Although I worked for GM, I have several relatives that work for Ford. Bill Ford is plenty smart enough to run Ford. He really is, as he is chairman. The problem he faced was that Ford is a family company. A lot of folks are 3rd & 4th generation employees, not to mention a bunch of Fords that are not as well known as Bill. The company needed to change in ways that a lot of these folks would find uncomfortable, at least in the short term. Mulally was brought in as the outsider to force these changes. He had a track record of doing this at Boeing. He took strikes, and moved the company HQ to Chicago. Mulally got 2 things - a bunch of money, and he can pick his own retirement age. Really in some ways he is a "hitman".

 

[MessickFarmEqu]

Kubota has been making BX's in GA since the 30 series (BX23's, BX2230's, 1500's & 1830's) and this series of BX's have an excellent track record. What wasn't sold in the N American market was exported and still is.
When I say manufactured, I want to point out that the engine and HST was/is manufactured in Japan but the rest of the tractor was/is manufactured in the GA plant(s) and the imported engine & HST are assembled into the tractor. All the OEM implements are manufactured in one of 2 plants in GA and assembled or shipped w/the BX's to their destination(s).

I'd echo that. I don't see any difference in quality based on where they are making stuff. I think the Japaneese culture is what contributes to the quality of the products they produce. Its a very different enviroment.

 

[keyman1808]

I find this both interesting and troubleing, nothing personal and I don't mean to point you out. I actually know several people w/similar opinions. I just want to point out that we have very differing opinons

Kubota has been making BX's in GA since the 30 series (BX23's, BX2230's, 1500's & 1830's) and this series of BX's have an excellent track record. What wasn't sold in the N American market was exported and still is.
When I say manufactured, I want to point out that the engine and HST was/is manufactured in Japan but the rest of the tractor was/is manufactured in the GA plant(s) and the imported engine & HST are assembled into the tractor. All the OEM implements are manufactured in one of 2 plants in GA and assembled or shipped w/the BX's to their destination(s).

My 04 BX23 has not required any dealer/warranty work since I took delivery, has performed exactly as it's been designed to and I couldn't be happier w/it. The ID plate indicates that it is Made In America.
Now is it the exception or is it the rule? I'd like to think it's the rule.
To be truthful, I am proud that it is both made in America and it has been a very good buy.

I've worked/apprenticed in manufacturing and I'm presently in a service type industry (telecommunications install/repair) and in the vast majority of cases I've worked and work w/individuals & craftsmen that are very conscientious in their craft.
I would put them up against anyone in a competing industry. Fact is, if they weren't the business wouldn't and couldn't be competitive in todays world market.

In any case, I have no problem spending my hard earned $$$'s on big ticket products that are manufactured in N America by N American craftsmen.

Dave

I agree and let us not forget that many of the little problems like loose lines or loose nuts and bolts or not enough fluid is contributed alot to the dealers. These machines come crated and still need a good amount of assembly at the local level. So lets not lay everything at Kubota's feet

 

[bunchgrass]

Stopped watching professional sports 20 years ago!

College sports are there as well now. Big bucks. Example - our local university, Washington State, just hired Mike Leach as head coach for 2.25 M per year and approve a multimillion dollar upgrade to the stadium facilities (paint isn't even dry on the last upgrade). Meanwhile, the rest of the university is experiencing massive budget cut as part of the state's attempt to balance its billion dollar plus deficit.:confused2: Next step is get rid of my TV - ESPN/FOX/DirecTV Oh and the BCS. Puke.

 

[rkeith]

Unfortunately I have to agree. I'm also fearful that the Kubotas made here won't be of the same quality as those that came directly from Japan.

I have to agree as well.
Both Kubota and Massey Ferguson's are "Made in Japan"

 

[Grateful11]

It will be another "assembled in the us" just like Deere. I want "made in America"!!

If you're talking tractors or vehicles, good luck finding one that has everything
made here, I doubt you're going find it.

I find it odd that Asian companies come here to have their stuff "assembled" and
the American companies seem to be going outside the country, especially Mexico,
for their stuff to be assembled. Saw Chevy PU on a new car lot not long ago engine
made in Mexico, entire vehicle final assembly in Mexico. I'm not buying a vehicle
made in Mexico especially one that cost over $40K. Just more corporate greed.
They claim to do this to stay competitive but they never lower the price.

 

[TractorTidy]

Boy this thread is a waste of time. The only informative part was the first, the rest is nothing but complaining and politics.

 

[RDrancher]

Well it sounds like good news to me. Any job coming to the USA is a good thing for all of us, whether you like what they're paying or not.

Just out of curiosity, where are the L49's and M59's manufactured? It's down the road a bit, but a TLB will be my next major purchase.

 

[Martian]

If you're talking tractors or vehicles, good luck finding one that has everything
made here, I doubt you're going find it.

I find it odd that Asian companies come here to have their stuff "assembled" and
the American companies seem to be going outside the country, especially Mexico,
for their stuff to be assembled. Saw Chevy PU on a new car lot not long ago engine
made in Mexico, entire vehicle final assembly in Mexico. I'm not buying a vehicle
made in Mexico especially one that cost over $40K. Just more corporate greed.
They claim to do this to stay competitive but they never lower the price.

Totally true. Even if you make it yourself chances are your buying parts or tools from elsewhere or they are. Today we are really in a global economy. America can't succeed without china/Japan and the opposite but I like to see more jobs in here in my home country.

 

[Grateful11]

Boy this thread is a waste of time. The only informative part was the first, the rest is nothing but complaining and politics.

Like they say if don't like what you see pass it on by. Your own post was a complaint in itself.

 

[devildog1]

Highest-paid CEO collected $145.3 million in a year- MSN Money

After reading about this CEO making $145.3 Million Per year and some here are arguing about whether $12.00 per hour pay is to low or if $25.00 per hour is to high, this still makes me the sickest. Nobody and I mean nobody is worth that kind of money, It only means that we the people are letting this kind of outrageous abuse to continue, me included. Those welders in that new Kubota Plant should be making a competitive wage to keep and raise there family, that's not asking for to much is it?
DevilDog