What price China?

It's time to order new circuit boards (pcbs) for the projects I do in my Computer Engineering Technology class. No big deal. I normally email my requirements to the sales or engineering department at my pcb facility of choice in Toronto, and they get back to me with a price.

This time, no response came. The website was still there, offering the latest and greatest in pcb technology, but email and the phone numbers were dead. Another victim of the recession, I guess.

Plan B. A local company that specializes in really complex circuit boards has occasionally done work for me (mostly out of charity for the school kids, I think). I drove by their plant after school earlier this week hoping to drop off my design and noticed their sign was gone, replaced by the hastily-hung vinyl sign of a different company. Another one gone.

Plan C. Get an online quote from another local company, as well as another company with an agent in the province who's actually just a front-end for the manufacturing plant over in China. Both quotes come back in hours. Local $640.00, China $430.00 (including shipping).

Seeing the relative prices, I know what happened to the companies I used to go to - they're victims of the Asian tiger.

I brought this up with my students and we discussed the options. The local company was closer, and might be a bit faster, but China is cheaper. The local company would have to conform to our labour and environmental laws. The Chinese company - who knows? And, it's cheaper. The environmental impact of having a parcel go UPS from China to here involves three airplane rides (Beijing to Alaska, Alaska to Kentucky, Kentucky to Hamilton), and two truck rides (one at that end, one at this end), but it's still cheaper. Besides, it's not like the airplane is only carrying my package - it was flying anyway. But the loss of local jobs, meaning fewer people here with the financial means to be able to buy the very things I'm teaching my Engineering Technology students how to make - that hurts.

My students and I decided we should buy local. Why? Although the price difference between the circuit boards is a significant, the circuit board is just one part of a larger product. The real cost of the difference between buying local and buying from China is about 3% of the final cost of the product. And that's just not enough of a savings for us to sacrifice local jobs and probably contribute to more than $200.00 worth of damage to the ozone layer or through greenhouse gas emissions.

I'm proud that my student were able to see that, and recognize that the cheapest price may not be the bargain that it seems to be. Let's hope that other companies also see the value maintaining local customer and supplier relationships, and not just in trimming their bottom line. Because, despite how far down can bring down your costs, your unemployed neighbours won't be able to afford your product, and that foretells a gloomy future for your business.