Friday, December 24, 2010

Re: Light-Sport Aircraft Yahoo group Cessna LSA, made in China.



bd, if I can be frank, I'd rather not add any fuel to your fire at this time.
 
But... at the risk of being seen as the "13th clown"* , I can tell you the definition of a "fair price".
From economics and business 101. : "The amount a willing buyer pays a willing seller."
 
All that other stuff you're typing... you loose me. 
Too many twists, turns, conditions, conspiracies,and contradictions.
 
with all due respect,
Frank
                            * Adam Walinsky, Cica 1964-ish
 
 
----- Original Message -----
From: b d
Sent: Thursday, December 23, 2010 9:01 AM
Subject: Re: Light-Sport Aircraft Yahoo group Cessna LSA, made in China.

Rick,
 
In regards to what you said:
A LOT more goes into the production cost than just the $25 an hour
the assemblers make. When I was building airplanes as a member of the
same union (IAMAW) the company paid me ~$30/hr and charged the customer
~$150/hr for my services.
Rick
What you seem to be describing is normal business is it not? The "Cessna China" will do it slightely different. The same Americans now doing business in China will pay their workers $1.84 and hour and charge the customer $150/hr. Yes?  
 
Out of curiosity,during the time you were getting the $30 per hour, did you feel you were getting overpaid as some people have indicated? Do you feel if you had accepted $1.84/hr, that Cessna would still be here in the US? Is that what American workers should do to keep their companies here?  
 
Did you feel the markup on your services was excessive?
 
I once worked for a firm in LA CA several years ago (1990's) who was subcontracted several times to the client who was Saudi Aramco. I negotiated for $100/hr and there were at least 4 parties between me and the client. I always wondered how much the client was being billed and how much I was leaving on the table that I could have gotten. over and above what I negotiated for.  I could have just as easily negotiated for $1.84/hr and they still would have billed the client the same rate. The difference between the $1.84/hr (Chinese wage)  and what I negotiated for would have been left on the table had I negotiated "Chinese style" rather than American style. Was I wrong? Am I thinking wrong? Am I one of theose terrible American workers that ran these poor businesses over seas?  I would hate to hear that if I did. LOL

On Wed, Dec 22, 2010 at 11:44 PM, Michael Huckle <m230683@hotmail.com> wrote:
 


> > A LOT more goes into the production cost than just the $25 an hour
> > the assemblers make. When I was building airplanes as a member of the
> > same union (IAMAW) the company paid me ~$30/hr and charged the customer
> > ~$150/hr for my services.
> > > Rick
> >
> >
> > Thanks for setting me straight.
> > I imagined it would be possible to make LSAs in USA,
> > selling them at 120k, and making 10k to 20k profit.
> > If we can't do that, we'll need to be grateful
> > to the Chinese Folk for helping us out.
> > Mike
>
>
> You're welcome Mike.
> But I don't know if it's "setting you straight". More like pointing out
> some realities gleaned through experience instead of speculatin'.
>
> In your earlier post you had said:
> "If there's 400 man-hours in each airplane, at $15/hr that's $6000.
> (5% of the cost of the plane)
> ? Cessna couldn't afford $6000 labor for each airplane?"
>
> And you would be right IF there were only 400 hours of assembly @ only
> $15 an hour.
> Unfortunately (or maybe FORTUNATELY if you work for an aircraft
> manufacturer here in the USA) there is a LOT more invlved.
>
> BUT.... If YOU would like to teach me how to fly Trikes for $15 and NOT
> charge me for the cost of YOUR trike, I might be willing to accept!!!
> ;)
> Cheers,
> Rick

It's okay Rick, I got your message before.
You estimated the Cessna LSA needs 1000 man-hours, and these men (or women)
would need to earn 25/hour, and allowing for overheads that would be 100/hr,
therefore,
total cost of labor for building each Cessna LSA in America would be $100k,
hence the need for them to build it in China, saving themselves $71k per plane.

Mike

.




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