Mazda Moves Away From China Parts Suppliers

[CarpeDiem]

After being hit hard by the scarcity of parts coming out of China - particularly chips - Mazda executive admits that the era of globalization is ending, plans to establish manufacturing/assembly plants in-country.

Mazda moves away from Chinese suppliers, attempts to bolster domestic production

Japanese car manufacturer Mazda is attempting to build supply line infrastructure outside of China after COVID-19 lockdowns deeply disrupted their manufacturing process.

www.foxbusiness.com

 

[theblooms]

Good. About time people stop giving the Chinese communists money.

Yes people, Red China is a totalitarian communist dictatorship with child and slave labor camps. I'll never understand how or why people don't automatically recoil at the mere thought wanting to to business there.

 

[7eregrine]

Good. About time people stop giving the Chinese communists money.

Yes people, Red China is a totalitarian communist dictatorship with child and slave labor camps. I'll never understand how or why people don't automatically recoil at the mere thought wanting to to business there.

And people who don't ever consider looking at where things are made... and unwilling to pay just a bit more for Made in the USA products drive me nuts.
My Father In Law, Vietnam veteran, asked him "You'd pay a couple more dollars for something made here instead of China, right?"
Nope... I'm too cheap.
I mean I know just about everything is made there, but when I have a choice, I make the right choice. Not this guy.... he's too cheap. UGH...

 

[wlong01]

There are certain things that should (must) be manufactured here. Chips (not potato),
especially the ones that go into military hardware, pharmaceuticals, essential infrastructure like electrical transformers, etc. There's more but you get the gist.

The rest of the crap can be made elsewhere.

 

[GFrosty]

Good. About time people stop giving the Chinese communists money.

Yes people, Red China is a totalitarian communist dictatorship with child and slave labor camps. I'll never understand how or why people don't automatically recoil at the mere thought wanting to to business there.

In the early- to mid-1990s, it wasn't too clear. But, these days there is no reason for anybody to believe they operate in an upstanding fashion. Never was a place for "tight" accounting; always was a place for "greased palms" easing things in the short term; has since become a place of enslaved labor, forced dictates upon the companies, corporate/industrial espionage, etc.

If only for the shipping problem of crossing half the globe and the insecurity that, alone, creates, as costs re-balance it's getting tougher to justify going after cheapie labor as the driver for reducing the cost structure of a range of products. With China getting frisky with their influence-peddling (-forcing) with other nations' companies, it's becoming a clear and present danger to companies to continue to do business with them.

I shudder to think what the global impact would be if the chip/fab companies in Taiwan become subjected to a Chinese take-over. The little bumps in the road we've seen, economically, this past couple of years will seem like a Sunday picnic.

Kudos to Mazda to re-think things, at least a little bit. Getting in bed with the devil only comes out one way, in the end. Hopefully, the company will swear-off use of all things Chinese, even if it takes a few years to accomplish.

 

[181962]

Moves such as this do not end globalization. "We are no longer in the era of globalization as we were in the past." Right, it's a different era of globalization than in the past.

In fact, if there is to be less reliance on China that means more globalization with redundant sourcing. If anybody thinks Mazda or anybody else is going to stop buying from China altogether they're fooling themselves. It's about having multiple sources for parts when possible, which is not always the case, so if one can't deliver then another option is available.

As for China being a commie totalitarian regime, the trend toward liberalization and openness which was to be encouraged came to a screeching halt with Chairman Xi assuming power in 2013. By then the cat was out of the bag. You can't reverse trillions of dollars in Chinese industrial investment overnight and probably never.

 

[181962]

There are certain things that should (must) be manufactured here. Chips (not potato),
especially the ones that go into military hardware, pharmaceuticals, essential infrastructure like electrical transformers, etc. There's more but you get the gist.

The rest of the crap can be made elsewhere.

That's about as far as it goes.

 

[Jack Rabbit]

up

Moves such as this do not end globalization. In fact, if the object is to decrease reliance on China that means more globalization with redundant sourcing. If anybody thinks Mazda or anybody else is going to stop buying from China altogether they're fooling themselves. It's about having multiple sources for parts when possible, which is not always the case, so if one can't deliver then another option is available.

As for China being a commie totalitarian regime, the trend toward liberalization and openness which was to be encouraged came to a screeching halt with Chairman Xi assuming power in 2013. By then the cat was out of the bag. You can't reverse trillions of dollars in Chinese industrial investment overnight and probably never.

It could be done. Painful for all countries involved. Well, painful for the general populace of both or all( if more than two countries are involved in isolationism. Most of the aristocracy will still be ok. However after a time, things would tend to balanced.

 

[GFrosty]

If anybody thinks Mazda or anybody else is going to stop buying from China altogether they're fooling themselves.

Certainly not so long as there aren't (for a given company) a couple of alternate suppliers or source-manufacturers that'll do. Certainly not so long as for most sub-parts and many sub-assemblies the car brand manufacturers don't make such items themselves.

The head-long 1990s rush to "improve" supply chains has itself come at a gross cost, one that matters much to some and little to others. Companies will decide for themselves whether they imagine such issues are cost-free. Customers will decide for themselves as well. No way to know how it'll play out, for certain.

 

[mrplt]

In fact, if there is to be less reliance on China that means more globalization with redundant sourcing.

I fully agree. I think this is the move. Even without the chip shortage/latest shenanigans, China reached its peak efficiency -- so economies of scale do not really apply anymore.
That's why IMO companies are investing in India/Vietnam/Bangladesh etc. (also thanks to the global dislike of China) Not necessarily because of the working conditions. Unfortunately, they don't really care unless it becomes a hot topic on Twitter.

 

[yrwei52]

And people who don't ever consider looking at where things are made... and unwilling to pay just a bit more for Made in the USA products drive me nuts.
My Father In Law, Vietnam veteran, asked him "You'd pay a couple more dollars for something made here instead of China, right?"
Nope... I'm too cheap.
I mean I know just about everything is made there, but when I have a choice, I make the right choice. Not this guy.... he's too cheap. UGH...

And you yourself bought a CX-5 which is NOT made in the USA?

 

[Jack Rabbit]

And you yourself bought a CX-5 which is NOT made in the USA?

Countries like Japan, Germany, Italy and even Mexico are just a drop in bucket and barely account for the huge trade imbalance. The mass outflow of wealth and money in America has been to OPEC for oil which is only eclipsed by China for everything else under the sun (to include precious metals, raw materials, automotive and electronic parts, clothing and all the other little items in dollar stores, walmart, etc. It would be interesting to see but I surmise a pie chart may show China with 70%, followed by OPEC with 20% and the remaining 10% other countries.
Let that sink in for a minute.

 

[theblooms]

Up until 2021, America was making so much domestic oil, we were actually exporting it. Which was a major reason it was $1.59/gal at the time. And even when we did import oil, it mainly came from Mexico and Canada.

But then in 2021, some big changes happened, and now we're in the jackpot on the oil front.

 

[181962]

It would be interesting to see but I surmise a pie chart may show China with 70%, followed by OPEC with 20% and the remaining 10% other countries. Let that sink in for a minute.

You can look this stuff up. In 2021 China represented 19% of US imports in 2021. Canada and Mexico combined totaled 27%. The US trade deficit in 2021 was $859 billion. The deficit with China was $355 billion or 41% of the deficit.

 

[181962]

Up until 2021, America was making so much domestic oil, we were actually exporting it. Which was a major reason it was $1.59/gal at the time. And even when we did import oil, it mainly came from Mexico and Canada.

But then in 2021, some big changes happened, and now we're in the jackpot on the oil front.

The US was net exporter of crude oil In both 2020 and 2021, the first time that happened in consecutive years since 1949. The EIA projects net imports for 2022, not too surprising as exports to Europe have increased in response to Russian aggression and sanctions.

 

[ColoradoDriver]

And you yourself bought a CX-5 which is NOT made in the USA?

I think the comment was more about something not being made in China vs strictly being made in the USA.

As for chips (semiconductor, not potato or tortilla), if China ever does try to take over Taiwan, I suspect TSMC facilities will be either damaged in the fighting because of where they are located, or purposefully sabotaged. Either way, world will be in for a lot of hurt. TSMC is the market leader for the most advanced semiconductors.

 

[Natey]

And people who don't ever consider looking at where things are made... and unwilling to pay just a bit more for Made in the USA products drive me nuts.
My Father In Law, Vietnam veteran, asked him "You'd pay a couple more dollars for something made here instead of China, right?"
Nope... I'm too cheap.
I mean I know just about everything is made there, but when I have a choice, I make the right choice. Not this guy.... he's too cheap. UGH...

The sad part is Bill Gates, Bezos, etc all agree with him. It's not worth opening up a warehouse or factory here when you can save a few bucks with slave labor.

 

[mrplt]

The sad part is Bill Gates, Bezos, etc all agree with him. It's not worth opening up a warehouse or factory here when you can save a few bucks with slave labor.

Not to defend anyone (Bill Gates, Bezos, China etc.) but it's more than saving a few bucks with slave labour.

Due to economies of scale, it makes much more sense for a Chinese company to manufacture one billion screws a year for 100 different companies as opposed to 100 companies manufacturing them separately. Shipping etc. also becomes cheaper and more effective as there is more demand.
Wages aren't as bad as they used to be in China, apparently the average factory worker makes around $300. (I know it's still bad, but not as bad as it used to be) That's why companies like Apple can afford to switch to Vietnam etc.
China has the infrastructure and the know-how now. Alongside lax environmental and safety laws. We recycle plastics in Canada and the US -- which then get exported to third countries. Yeah, some of it get recycled. The rest? Garbage. We just like outsourcing our problems.

 

[ceric]

I prefer buying stuffs made in
1. US of A
2. Freedom loving countries
3. Else if no other choices
Sure, prepare to pay a bit more.

For foods and safety related issues (e.g. tyres), no #3.
I don't trust them.

 

[GFrosty]

As for chips (semiconductor, not potato or tortilla), if China ever does try to take over Taiwan, I suspect TSMC facilities will be either damaged in the fighting because of where they are located, or purposefully sabotaged. Either way, world will be in for a lot of hurt. TSMC is the market leader for the most advanced semiconductors.

It'd also be one of the prime "prizes" of any war upon Taiwan. I imagine they would want to capture it intact, if at all possible. Imagine being able to hold that company's output over nations' heads, via dictating terms of its ongoing operations. It'd be a very "big stick" in their hands.