The export of bicycle manufacturing to Asia is the "canary in the
mineshaft" for what has been a general trend over the past generation.
Globalization is a fact of life for our country, but we are practically
the only country that treats it as a norm as well as a fact. Our Asian
competitors happily stack the deck in favor of local manufacturers,
because they recognize the importance of exports to their economies.
For example, the Chinese supply manufacturers supply
government-subsidized materials to domestic manufacturers to make it
easy for them to compete and build jobs. For example, subsidized
aluminum supplies for Chinese bike manufacturers in the late 1990's
crushed American manufacturers like Huffy and Roadmaster within an 18
month period - creating lots of Chinese jobs and increasing their
economies of scale in producing aluminum. The increased income tax
revenues more than paid for the cost of supplying their manufacturers
cheap aluminum.
They're doing the same thing today with carbon fiber. Outside of (and
because of) our war effort, carbon fiber is a pricey commodity in our
country. China, instead, uses bicycle production not only to build jobs
but to build their capacity in carbon fiber production that can
ultimately be used for their own military purposes when needed. Here's
the fun part, several fork manufacturers including Reynolds and True
Temper opened joint ventures in China, but were forced to use expensive
US-supplied carbon fiber benefiting only from cheap labor. As China has
ramped up their own subsidized carbon fiber-based products, these joint
ventures are seeing continued economic pressures. Reynolds already
eliminated forks from its product lines and True Temper just announced
plans to end the supply of composite forks. Now, only a few scattered
domestic manufacturers remain, while our expertise in this area has been
almost fully transferred overseas. What's more, China's economies of
scale also allow them relatively easy conversion to defense
applications, while our falling production means we lose our strategic
military capacity.
As long as we make the free market an object of worship instead of tool
for the public good, we are headed to world where we lose our real
freedoms because of our economic and military decline.
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