Why are only Foreign companies investing in America? - Page 3
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  1. #41
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    I don't know. Lots of US companies are investing in foreign markets as well. It probably has a lot to do with avoiding tariffs and gaming the tax system of each country.

    For example, Caterpillar owns a majority of English engine maker Perkins, who in turn is in bed with Japanese engine maker Shibura.


    Then you get into questions like what is an American company? For example, look at Case New Holland. I would consider them an American company, but are they really? They were rolled into Fiat Industrial along with Iveco and who knows what else. Then spun off along with part of Iveco back into "CNH Global" which is based in the Netherlands but still controlled by Fiat (maybe).


    I interviewed for a job at Manitowak Cranes back around 2007. At that time they told me that the majority of their sales were now outside the US and expected to trend more in that direction. So, they have to think globally just like companies investing here.

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    Quote Originally Posted by ewlsey View Post
    I don't know. Lots of US companies are investing in foreign markets as well. It probably has a lot to do with avoiding tariffs and gaming the tax system of each country.

    For example, Caterpillar owns a majority of English engine maker Perkins, who in turn is in bed with Japanese engine maker Shibura.


    Then you get into questions like what is an American company? For example, look at Case New Holland. I would consider them an American company, but are they really? They were rolled into Fiat Industrial along with Iveco and who knows what else. Then spun off along with part of Iveco back into "CNH Global" which is based in the Netherlands but still controlled by Fiat (maybe).


    I interviewed for a job at Manitowak Cranes back around 2007. At that time they told me that the majority of their sales were now outside the US and expected to trend more in that direction. So, they have to think globally just like companies investing here.
    A lot of US companies actually pay MORE taxes in China than they do in the USA. The new list of 60 companies that paid no US federal income tax includes a bunch with Chinese branches, and Chinese corporate tax is 25%. Of course, finding out what chinese tax they paid is very very difficult. And, also, these companies pay various other taxes here- employee taxes, property taxes, utility taxes, etc.

    But still- it seems like, in many cases, they do pay taxes overseas, but then figure out ways to avoid taxes here. If taxes, alone were the deciding factor, it would seem they would manufacture everything in the USA, because its so easy to not pay here.
    Cat, alone, has over 20 factories in China. I cant imagine the Chinese let them pay zero taxes.

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  5. #43
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    Where's the money and opportunity?

    YouTube

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  7. #44
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    *actionable* opportunity....

    Facebook has been banned from China, and I think they will be so long as the autocratic regime persists there.

    The video Gordon linked too supports three thoughts:

    a. The startling rise of the Chinese economy is surely, and by all accounting, one of the most dramatic stories in history. This is associated with a large scale conversion of a command-and-control economy to a capitalist one - though of course things like state owned enterprizes means they have, as always, large scale cronyism. (Centrally controlled economies seem to devolve into nothing but cronyism...)

    b. The Chinese numbers are suspect - and there are deep implications for this. I've not seen ANY credible observer claim that China hasn't achieved one of the most dramatic economic rises in history - on a par with something like the industrial revolution - BUT - I also don't recall any serious observer who claims that the Chinese numbers should be taken at face value.

    c. The GDP numbers for the US are literally off the top of the chart - but of course growing much more slowly. Which raises that the point that while the US is indeed very rich (as is most of western europe), the opportunity for upside here is more limited, because you are pushing off the top, instead of playing catchup. This will skew new investment numbers - if you already have enough steel capacity to make all the steel the US needs, then buliding new steel plants with similar efficiency is a pointless exercise.

    AND - in a well developed economy, there will surely be a trend towards refining existing investments rather than starting whole fresh ones. If you have already have large plants, more investment will go towards upgrades. Those upgrades will often not be as visible, nor make the news. (A lot them on this forum - new machine days where an older slower machine is replaced with a newer faster one. From the outside, not a new shop, doesn't even look like a huge reinvestment. And the paper won't report the shop got 5% or 15% or whatever more productive. But it's still real investment.)

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    Quote Originally Posted by bryan_machine View Post
    b. The Chinese numbers are suspect - and there are deep implications for this. I've not seen ANY credible observer claim that China hasn't achieved one of the most dramatic economic rises in history - on a par with something like the industrial revolution - BUT - I also don't recall any serious observer who claims that the Chinese numbers should be taken at face value.
    Very true. I don't think I'd trust numbers from any country at face value. It is true that what has happened and is happening in China is remarkable. I've been there several time on both business and vacation and what I've seen never fails to amaze me.

    Of course not everything is milk and honey but I've never been to a country where it was.

    As for the Chinese form of government how else can 1,400,000,000 people be kept more or less "in line"?

    I had no objection to Hussein (Iraq) of Gaddafi (Libya) being "removed" but more have died after they were removed and neither country can be described as peaceful.

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    Quote Originally Posted by Gordon B. Clarke View Post
    As for the Chinese form of government how else can 1,400,000,000 people be kept more or less "in line"?

    I had no objection to Hussein (Iraq) of Gaddafi (Libya) being "removed" but more have died after they were removed and neither country can be described as peaceful.
    That is a problem, keeping people "in-line". Seems like everyone wants others to live according to their ideology. Kind of like you wanting to push your agenda and call the US a bad actor.

    As for the deaths in Iraq, Hussien and son's are responsible for approximately 900,000 deaths during their rein. The Iran-Iraq war, Invasion of Kuwait, brutal killings and abuse (tying up a person, blind folding them and pushing them of a bridge, or throwing them in a pit so that dogs could tear them apart) and using gas on his own people are not in your playbook, but are relevant.

    As for Libya, well the people were tired of that tyrant.

    All in all I am not sure how your post relates to the title of the thread.

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    Quote Originally Posted by drom68 View Post
    All in all I am not sure how your post relates to the title of the thread.
    Following your logic neither does yours. Read posts #44 and #45 if my reply bamboozles you.

    I was in fact agreeing with bryan_machine. At least that was the intention.

    Why you even mention the USA in your post mystifies me.

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    Let's return to an adjusted version of the real topic of the thread:
    1. How much real opportunity for investment is there in the US today?
    2. How much of that opportunity is being effectively pursued?
    3. By whom?
    4. How visible is it?
    5. When all is said and done, does the US (or the world?) have a problem?

    I don't really know, and am not sure anybody else does either - but I do suggest that measuring success on this (very real topic) by the rate of annoucements of large plant openings by companies that happen to be US based is probably not the most effective way of thinking about the topic.

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    Quote Originally Posted by bryan_machine View Post
    Let's return to an adjusted version of the real topic of the thread:
    1. How much real opportunity for investment is there in the US today?
    2. How much of that opportunity is being effectively pursued?
    3. By whom?
    4. How visible is it?
    5. When all is said and done, does the US (or the world?) have a problem?

    I don't really know, and am not sure anybody else does either - but I do suggest that measuring success on this (very real topic) by the rate of annoucements of large plant openings by companies that happen to be US based is probably not the most effective way of thinking about the topic.
    Warren Buffet is sitting on $20B+ that they have yet to find a place to put... Berkshire is very conservative in their approach but when they find something worth buying in their eyes they do. I will be interested to see what the next few years look like as we likely head into a recession.

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  14. #50
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    Quote Originally Posted by bryan_machine View Post
    Let's return to an adjusted version of the real topic of the thread:
    1. How much real opportunity for investment is there in the US today?
    2. How much of that opportunity is being effectively pursued?
    3. By whom?
    4. How visible is it?
    5. When all is said and done, does the US (or the world?) have a problem?

    I don't really know, and am not sure anybody else does either - but I do suggest that measuring success on this (very real topic) by the rate of annoucements of large plant openings by companies that happen to be US based is probably not the most effective way of thinking about the topic.
    Those are pertinent things. New factories are more efficient yet they likely will make established things. It would be interesting if Carbon Fiber could be produced for much less money and bringing better quality overall. Things like 5G are supposed to bring a lot of wealth yet I understand we are not prepared technologically to lead in this area yet China is.

    Growth plods along with things which are made and sold and sometimes improved in design as time goes on. The tendency is to become more efficient or to find cheaper labor or sources for natural resources. This may be the reason Buffet has that money is that there is nothing new enough to him that would justify his investment and that he is better off waiting to see what comes up to invest in.

    It does not mean he only does short term and high return only because he has many investments in well known companies which have been around for some time and likely will continue to be.


    If there is enough manufacturing here in this country then there will be more investment in machine tools. There must be a fair nitch for this right now. The thing is how can you really know how manufacturing is going unless it is just plain obvious in that your shop is buried in work? Usually when a outfit is swamped it is then that they will get more help hired or more capacity.

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    Spinit - one problem is "unless it is just plain obvious in that your shop is buried in work" - that is at best a vague indicator of the state of manufacturing as a whole or the economy as a whole - at least for most job shops. You might be really slow, or overwhelmed, due to things quite counter-cyclical to whatever else is going on in the economy as a whole.

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    Quote Originally Posted by bryan_machine View Post
    Spinit - one problem is "unless it is just plain obvious in that your shop is buried in work" - that is at best a vague indicator of the state of manufacturing as a whole or the economy as a whole - at least for most job shops. You might be really slow, or overwhelmed, due to things quite counter-cyclical to whatever else is going on in the economy as a whole.
    Yes you are absolutely right and that is why there is the uncertainty of making the investment. What if you lose some big customers after committing to a new piece of equipment. We hear a lot about manufacturing growing and coming back in the US and the higher pay and so on. We only can judge by what we experience in reality and it may not be the whole picture because there are other countries who manufacture and work and investment has gone to them in the past. It is sort of like we do not know well what is going on until it is years down the road as it is not really seen.

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    Quote Originally Posted by Spinit View Post
    Yes you are absolutely right and that is why there is the uncertainty of making the investment. What if you lose some big customers after committing to a new piece of equipment. We hear a lot about manufacturing growing and coming back in the US and the higher pay and so on. We only can judge by what we experience in reality and it may not be the whole picture because there are other countries who manufacture and work and investment has gone to them in the past. It is sort of like we do not know well what is going on until it is years down the road as it is not really seen.

    Most results are way delayed from the cause. It's always the US president AFTER the one that made the problem who gets blamed, because the structural problems take longer than a presidential term to appear. Likewise, the president after the one who put in place the solution is the one who gets the praise. In neither case did they do anything to deserve it,

    All the indicators are delayed, so you need to look at "rates of change" (slope of the curve) and not just the absolute numbers. But, everyone seems to persist in looking at the absolute numbers instead. It's natural, because you do not care that all sorts of people are getting hired, or if more shops are busy, if YOU or YOUR shop are not getting the benefit yet.

    Same with planning, and new programs at a company.... nobody seems to care that things are getting better, you still get punished NOW for "missing the numbers" this quarter, even though you are on track to exceed them substantially in the future.

    I understand that back 120 years or so, GE lost money on making light bulbs for several years, but then made all that and more back in one year once the volume came up to where it was expected to get to. In these days, the product manager or CEO would have been fired, and the product line shut down by the short term thinkers... that would be a loss over 12 or 15 quarters.... nobody could stand that.

    The chinese and Japanese, as well as others have, and WILL CONTINUE TO beat our brains out, simply because virtually.no US company can effectively implement a long term plan when the "stock tail" is "wagging the company ". The exceptions are certain big companies like Apple, which "get a pass" from the market because everyone "believes in them". That belief can change.
    M


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