Lenovo to start making some PCs in America

American companies outsourcing manufacturing to China is a fact of life these days. But Chinese companies outsourcing manufacturing to America? Now that’s worthy of a headline.

Yes, believe it or not, Lenovo announced earlier this week that it’s going to open a manufacturing line in Whitsett, North Carolina early next year. There, some 115 American workers will build "Think"-branded systems for sales in the United States. In other news, we’re getting unconfirmed reports that hell has just frozen over.

The U.S.-built systems will include "some of Lenovo’s newest and most innovative products, such as the recently announced ThinkCentre M92p Tiny desktop and ThinkPad Tablet 2," according to the company. Lenovo goes on to note that domestic manufacturing will allow it to "deliver products to customers even more quickly and reliably in many situations, while offering an even broader and more valuable set of PC-related services." I suppose that makes sense. Considering some of Lenovo’s competitors are perfectly happy to keep production outside the country, though, one has to wonder if this is more of a PR stunt than a business decision.

In any case, the new manufacturing line will be located right inside Lenovo’s existing distribution center, which is located here about a dozen miles east of Greensboro. Lenovo says the facility was "recently expanded" and has 240,000 square feet of total floor space. Hiring for the manufacturing line is scheduled to kick off "later this year."

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    • xii
    • 7 years ago

    I’ve been following the Lenovo X1 Carbon threads on some forums, and it seems Lenovo has some quality issues and trouble getting the things delivered on time — especially custom built orders (which are apparently sent directly from China). Batching up individual orders and sending them directly from China doesn’t seem like a very effective way to do business.

    I think the idea here would be to be able to deliver custom built configurations faster and handle warranty claims in a shorter time frame. I doubt there is any direct manufacturing of hardware involved, as opposed to assembling components and reacting faster to market demand.

    For now, the idea of Chinese companies opening manufacturing branches in America still has a sense of irony to it, though…

    • TheMonkeyKing
    • 7 years ago

    In NC, it will be the “Thunk it” pad.

      • TheBulletMagnet
      • 7 years ago

      Nah, you can’t pronounce the TH if you don’t have teeth.

    • Arclight
    • 7 years ago

    Sweat shops with American illegals working in China, soon.

      • ludi
      • 7 years ago

      Or, how about a Foxconn factory that builds iPads at slave-labor rates in rural Appalachia?

        • Arclight
        • 7 years ago

        Foxconn is still waiting for super materials to come down in price. It seems that they will need some extra strength wires for the anti-suicide nets for typical Americans with weight problems.

    • ludi
    • 7 years ago

    This could become more of an ongoing phenomenon as costs in China’s developed industrial zones continue to increase. Note that the date of the article below is May of this year:

    [url<]http://www.economist.com/node/21549956[/url<]

      • Sam125
      • 7 years ago

      Interesting article, although the author admits that manufacturing will likely stay put in China for at least the next 10 to 20 years. A weak dollar policy has attracted a few manufacturers back to the US and has made existing manufacturing more attractive, but once the dollar begins to add any kind of strength to its base, then expect those jobs to be shipped out of the country again. For better or worse, that’s the cost of globalization.

      Honestly, I blame the concept of a publicly held company. Shareholders don’t add any value to a company except to extract wealth from it.

        • ludi
        • 7 years ago

        [quote<]Honestly, I blame the concept of a publicly held company. Shareholders don't add any value to a company except to extract wealth from it.[/quote<] What can labor produce without capital? There is such a thing as an employee-owned company but that tends to limit the size of contracts a company can take as a function of its existing size. This reduces risk, but also the rewards.

          • Sam125
          • 7 years ago

          [quote<]What can labor produce without capital?[/quote<] Ha! Does it really matter whether that capital comes from a wealthy private investor or a government subsidy? It seems all the same to me, which is why capitalism is a huge farce. lol

            • trackerben
            • 7 years ago

            The proceeds of governments must still come from somewhere, do they not?

            Usually extracted under coercion by fiat of confiscatory laws enforced by the police power of the state, aka taxes. In modern times these can also be borrowings from foreign lenders who expect the borrowing nation to use those same taxing powers to confiscate enough wealth to pay them back.

            In a third scheme, authorities alarmed by their fiscal weakness use monetary schemes to print money to devalue the currency and thus liabilities, in the process <diminishing> the value of ordinary taxpayers’ assets and perhaps boosting export competitiveness. This is the real farce in the system, the inflexible responses of profligate governments who know better in answer to the inappropriate demands of the less-productive portion of the population.

            Given how stacked the odds are against defending a lifetime of accumulated wealth, it’s a wonder that people can still be found these days risking their capital in all sorts of iffy ventures and instruments.

            • Sam125
            • 7 years ago

            [quote<]The proceeds of governments must still come from somewhere, do they not?[/quote<] Sure, although it doesn't come from the Big Bad Government. It comes from the Central Bank which is really the Big Boss of the national banks and not really an arm of the US Government. Which means it doesn't really matter if the US can tax its citizens, the taxation is really only used to fund the US Treasury and other government programs. That would be true whether the US stayed with fiat money or reverted back to the gold standard. The President, Congress, the Supreme Court, etc have no influence over monetary policy. Which is probably for the best, as politics has no place in either the legal system or in the US financial and banking systems. Do you know why Bernanke has maintained a weak dollar policy? It's because he's stated that monetary policy will shift from controlling inflation (the primary motive of the Central Bank for much of the 20th century to the early 21st century) to creating jobs domestically. This could, of course all backfire if the US takes a credit rating hit and people begin to lose faith in the dollar. So yeah, taxes don't really mean anything to the CB and investors still invest because the 10% of the companies that succeed due to VC funding still more than makes up for the 90% that end up failing or going nowhere.

            • trackerben
            • 7 years ago

            In the first case mentioned, proceeds for government-directed “investment” come directly from taxpayers who are only found in the greater private economy. Why? Because the taxpayers either won’t or can’t contest it. In the second case of foreign borrowings, proceeds come from the savings of millions of foreigners which are managed by their sovereign or pension funds. Why? Because foreigners somehow figure their monies are safer/earn better in USA in the long run, and count on the US government to extract taxes from a compliant populace. “Render under Caesar…” works for foreign creditors as much as local ones.

            In the third inflationary case, proceeds are extracted from an unholy combination of domestic borrowings and “convergent” monetary policy. In effect borrowing from the future as usual, but nowadays also including the no-longer-extreme case of defaulting federal government debt, borrowing from future generations, from our children who would have to pay for this ratcheting debt load with a future currency of a lesser heft. Why? Because the banks have it easy lending securely to the US and State governments. The children aren’t around to protest, and their parents’ generation can’t be bothered today about where all that nice government pork influencing their votes is coming from. Even the unborn have to give. “Everybody has to Give” is the current mantra. “Everyone gets their Fair Share” is the byword for blessings, except for the unborn citizen, whose economic prospects are prevented or aborted by those in Congress who won’t mind much if they are physically so.

            In some advanced nations, taxes and redistributive programs confiscate up to half of all economic output, which may be as much as half of all taxable earnings capacity. This is currently the case in France, and USA is heading in their direction. Why? Because the Federal and State governments can, are allowed to, and make it so in the banks’ interest. Much of the electorate is obliviously feeding off the Federal and foreign-sponsored largesse, they want their government to guarantee their lifestyle, it’s the New Tribal American Way. May my Tribe prosper, and off with yours… This unjust system is incentivized by lenders who have no other system as “safe” to park excess investible funds into at the $Trillion scale these funds seek, what with the loud failure of socialized governances the world over.

            With combined ultra-inflationary and monetary strategy, the Fed is coordinating with the US Government wherever it can to solidify the currently evolving scheme, wherein the USG bails out/ guarantees those borrowings from foreigners on which it and so many tribal Americans are dependent on to keep things sweet. In effect the USG is financing its own borrowing needs, which of course makes less and less sense going forward to pure private-sector players, like those in the bond and commercial paper markets (Non-US sovereign paper is effectively a desert of crises these days).

            Thus Investors like Bill Gross and Soros who can read the writing on the wall are weighing heavily into near-cash and Treasuries, and producers like Apple and General electric keep tens of $Billion cash reserves on hand. And banks like BA and JPMorgan Chase and even bigger Chinese megabanks put what funds they don’t keep in cash or mandated reserve, towards lending to the “safe” USG and States instead of to SMEs. Yes, banks lend less these days to small and medium american businesses whose vast numbers and employment have always represented the true engine of US economic growth, and yet who are collectively the most oppressed and neglected business entities in the country.

            Agreed, it would be for the best if “politics has no place in either the legal system or in the US financial and banking systems”. But the opposite sadly obtains, and reality is amenable to wishes only in the dreams we can work out. But in a land where the heavy hand of hungry government is felt, people wake up, get wise, and tend to load up on flight-ready assets.

            • Sam125
            • 7 years ago

            Wow, where’d you learn to write like that? That’s so atrociously bad, it’s funny. Actually, it’s not funny it’s just horrible. lol

            First, off: Once you strip away all the extraneous verbiage, you’re simply reciting a tired old argument that really needs to be put to pasture. The US has been running a deficit budget since its inception, and as long as someone is willing to buy US debt, there’s no problem unless some fool, or group of fools try to make it a problem. Yes, appealing to people’s emotions by saying, “b-b-but you’re selling out our CHILDREN’S FUTURE!” kind of scares people into believing it’s true, it’s simply a ploy to manipulate people into believing in a fake problem to begin with. As I wrote earlier, as long as people don’t lose faith in the dollar then everything is fine, because Greenspan, Bernanke and every other chairmen of the Fed have the responsibility to ensure that doesn’t happen.

            Which again, has nothing to do with taxes so most of your writing is simply moot on the matter. Nations don’t tax each other and it’s nations not tax dollars that determine monetary policy, just because a Central Bank determines that jobs are more important than controlling inflation doesn’t mean or even imply that there will be hyper-inflation (which is a terrible assumption on your part) so…yeah. But thanks for the “illumination”. If I ever want to be lectured on, “unholy combination of” loans and monetary policy or how the government is “confiscating half of all economic output” I’ll be sure to query some other goons that endorse the rubbish that you wrote.

            Oh, as an aside, corporations horde cash for various reasons. None of which imply that the government or country are doomed. As with Apple, Steve Jobs was dying of cancer for most of Apple’s most successful years, do you really think he cared about what to do with the billions Apple was hording? Other corporations were hording cash due to economic uncertainty yes, but the fact that businesses are hiring again indicates that a business feels confident enough to take on more risk. Seriously, you should stop with the fear mongering.

            • ludi
            • 7 years ago

            A government or its central bank can issue paper all day long and it is good for nothing more than lighting your grill if there isn’t a strong economy to back the value of that paper. No government on earth creates value from thin air — they obtain it by taxing the economic contributions of their citizens.

            • trackerben
            • 7 years ago

            As Milton Friedman once said, “Only government can take perfectly good paper, cover it with perfectly good ink and make the combination worthless.”

            What Mr. Friedman did not foresee, was most of the developed nations eventually hashing their finances and currencies in concert and yet calling the whole mess a “World Order”.

          • BobbinThreadbare
          • 7 years ago

          There are many ways to get capital, and the current system seems broken.

    • Deanjo
    • 7 years ago

    Well there goes Lenovo’s quality…

    [url<]http://youtu.be/LgTLx93vyrU[/url<]

      • mcnasty72@gmail.com
      • 7 years ago

      Really, so items created in America no longer represent a quality product?

        • Deanjo
        • 7 years ago

        Has it ever since WWII?

          • TO11MTM
          • 7 years ago

          My old Airgun Designs AutoMag was made in the USA in the early 2000s and was one hell of a quality product. Same goes to my old Matress; it’s lasted me 10 years of extreme childhood abuse and then another 10 of adulthood abuse.

            • trackerben
            • 7 years ago

            Intel, IBM, HP, Micron, Boeing, Lockheed Martin, Raytheon, General Electric, United Technologies, Caterpillar, General Dynamics, L-3 Communications, OshKosh, RocketDyne, Belden.

          • A_Pickle
          • 7 years ago

          I’d disagree. Honestly, “Made in USA” versus “Made in China” are practically scientific metrics of whether or not a product will break within it’s first three uses or last you several years.

      • Sam125
      • 7 years ago

      That’s most likely a spoof meant to fire back at the Japanese (in a racist form) when Japan’s PM in the early ’90s said that US manufactured goods weren’t high quality and competitive anymore because Americans are too lazy.

      Insulting, but kind of funny at the same time because it’s sort of true.

    • tanker27
    • 7 years ago

    Umm wow! Funny.

    To answer tootercomputers question: No, too many lost days to winter weather effects.

      • trackerben
      • 7 years ago

      Or the floods, earthquakes, volcanic eruptions, and tsunamis which are routine occurences in the Pacific Ring of Fire, and civil unrest which is frequent in China’s interior.

    • tootercomputer
    • 7 years ago

    Amazing. Notable, too, that it is North Carolina. Gotta wonder if the northeast will ever get back manufacuring .

      • TheBulletMagnet
      • 7 years ago

      As long as companies can rely on the South’s lower wages and less union presence then companies will probably not go with the Northeast. For better or poorer…

        • TurtlePerson2
        • 7 years ago

        I think it’s really only the unions that hold back the Midwest. If you were an auto company building a plant, would you rather hire workers who you can pay $15/hour or workers who you can pay $30/hour? Also, the $30/hour workers have a 20% chance of not showing up to work for a week or so every time you renew their contracts.

          • MadManOriginal
          • 7 years ago

          Alternatively, would you rather hire workers who can purchase your product new or not?

            • ludi
            • 7 years ago

            That’s a lousy economic principle, and to try and carry it across an entire economy would destroy more jobs than it could ever create. Example: I work as a consulting engineer in the electrical power industry. I could not afford my own labor rates, let alone the total cost of any work product I have produced. Fortunately, I don’t need to. My work is purchased by other, larger entities; they, in turn, produce and/or sell power, of which I buy and use only a tiny fraction.

            • MadManOriginal
            • 7 years ago

            So clearly your work doesn’t apply in this example. You are not a purchaser of your goods. On the other hand, I’d guess that a decent number of auto workers buy cars.

            It’s not a perfect or universal principle, but it’s hard to not think of it when talking about automobiles given that Henry Ford had the basic idea. There is no longer a need to ‘create buyers’ but it sure helps if there are buyers to maintain the market.

            • ludi
            • 7 years ago

            There is no economic rule or principle that anybody has to be able to afford the exact product they make. I own two Toyotas that are respectively 10yo (Celica) and 14yo (Camry), both in relatively good condition, and paid less for both than the cost of one entry-level midsize car. Just because some American autoworker is assembling Dodge Vipers in Detroit or BMWs in Spartanburg does not mean they are entitled to a wage that enables them to buy those particular vehicles.

          • TheBulletMagnet
          • 7 years ago

          If I was a company than absolutely I would hire the cheapest labor I could to get the job done. But I believe that the fact that our wages have stagnated for so long is a direct result of less union participation by the US population. I think more evidence to this relationship is the fact that profits for many of these large companies have not stagnated, and neither has executive compensation.

          But you could be on to something with the fact that if the midwest has unions then companies may not want to come there. I think labor in the US right now is in a race to the bottom.

            • trackerben
            • 7 years ago

            The fact that skilled labor costs in China and the others BRICS are only a fraction of those in the US is a big factor but one of several. Regulatory hindrances and hidden costs of doing business can play a big part as well.

            There is a ground truth which was made plain to me when I was there on business. It is that the average price of a desired consumer item in the streets of Guangzhou today will one day be its average price in the global markets. If Americans cannot be found to reliably produce that good at a competitive price, all future upstream value-added gets ceded to other nationalities who can.

            • MadManOriginal
            • 7 years ago

            Trickle down economics. It works, except when it doesn’t!

            • trackerben
            • 7 years ago

            Inescapable logic, except where it isn’t!

    • willmore
    • 7 years ago

    Is the Chinese economy doing so well that they are starting to outsource? Interesting.

      • Arag0n
      • 7 years ago

      Well, chinese usually outsource to vietnam, thailand or west of china… the surprising thing is outsourcing to… USA…. but i read somewhere that Tianjing salaries were getting higher than USA salaries.

      • TO11MTM
      • 7 years ago

      It actually can make sense for certain products… Not sure how much it is on laptops but the costs to bring stuff over the ocean are ever-rising. There theoretically -should- eventually come a point where between Developing nations wages rising and the cost of fuel rising, where it just makes more sense to make it here again.

      Whether we make it to that point is anybody’s guess.

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