Re: [Leica] The Chinese Leitz lens factory

["Anthony Atkielski" <anthony@atkielski.com>]

From: Marc James Small <msmall@roanoke.infi.net>
Sent: Saturday, October 09, 1999 21:52
Subject: Re: [Leica] The Chinese Leitz lens factory


> I presume you have something other than a gelatinous hatred
> of capitalism to justify this position, Anthony?

Correct.  It is based on observation alone.

> Could I have some industry-wide totals?

As far as I know, greed is not tabulated officially.

> In the camera industry, the transfer of production
> overseas by German companies, especially Leica and Zeiss,
> has kept them in the camera business.  "Greed"?  No.
> Survival? Yes.

Why can't they produce domestically?

Is someone transferring something to the domestic labor market in order to
offset the trade deficit created by overseas production facilities?

> Show me a European camera company which is making HUGE
> profits.

Many European companies are too poorly managed to make money.  Additionally,
heavy socialist taxes cripple the creation and maintenance of profitability in
most European states.

> Leitz stayed in business because the Leitz family bankrolled
> the business.  Zeiss Ikon stayed in business because the Zeiss
> Foundation bankrolled the company.  Franke & Heidecke stayed
> in business because the Franke, Heidecke, and Voigtlander
> families bank-rolled them.  When these folks quit paying the
> bills -- it damn near bankrupted the Leitz family, incidentally
> -- the companies had to either go out of business or restructure.

See my comment about about European management techniques.

> Anthony, the choice is between no camera production, and
> that of a domestic company designing and marketing product
> made overseas.

There are other choices, as well.  You can produce the cameras domestically and
price them to cover the cost of production, plus a small profit.

> There is just no third choice in a free market.

Sure there is.  If price alone were the problem, Leica would have gone out of
business long ago, since nobody would have bought the cameras at all.  Clearly,
some people want to buy the cameras, even at current prices.  One strategy,
then, is to expand the market of people willing to buy them, rather than move
production elsewhere in an attempt to lower costs.

Cost-cutting measures are the hallmark of incompetent management, since
incompetent managers typically cannot think of any other way to improve the
financial health of a company.  The problem is that cost-cutting always shrinks
a company, and the shrinkage can only go so far before the company evaporates.

> Precision, hand-assembled mechanical components can no longer
> be profitably manufactured or, in the case of the Compur shutter,
> manufactured at all, even overseas.

Then either a new shutter design must be found, or a profitable way to make this
shutter must be found.  These are not insurmountable obstacles.

> Absolutely not.  To stay in the market, a chunk, if not all, production,
> must move overseas.

If this is true, why is anything produced at all domestically?  And if nothing
is produced domestically, where does the domestic wealth come from to keep the
economy running?

  -- Anthony