Zhu Zhu

I wonder if there was any consideration, any at all, for Russel Hornsby and his small company, Cepia LLC of St. Louis, to manufacture his Zhu Zhu Pets in the U.S.

I'd bet the decision to manufacture elsewheres took less than a picosecond.

For a host of strategic reasons, the manufacturing was offshored because of the financial realities of taxes, financial incentives, and cheap wage labor. But I'd bet also that today he would have an inability to borrow to expand production of these little robotic hamsters.

Imagine trying to go to a major bank to proposition them to finance a manufacturing facility in St. Louis. Horrors! Imagine trying to secure capital from private investors to fund the ramping up of domestic production. No way.

Even if Missouri provided some sort of tax break or other financial incentives, it would likely take eighteen months to obtain all the environmental, health, and safety permits to build the facility. By then the Zhu Zhu craze might have waned. Imagine the costs associated with employee health and vacation benefits, unemployment insurance, payroll taxes, and compare that with $2.00 an hour Han Chinese immigrants in Hangzhou. Imagine next Christmas, when employee health benefits will cost 7% more than today.

Imagine having to build a supplier network here in the U.S. from scratch, to get all the raw fuzzy material, stuffing, electronic and plastic components necessary to build the hamsters. If all these suppliers are only overseas to begin with, why do the end manufacturing here anyway?

Imagine the host of complaints and ensuing litigation that neighbors would raise if St. Louis adopted this new manufacturing facility anywhere near residential housal units. Imagine smokestacks near your housal unit! Nope, can't have that, so the residents will demand the location be put way out on the margin, with no hope of any sorts of alternative transportation to it other than solo occupant motoring, enslaving the workers to thirteen years of life working to buy and keep their cars.

Can you imagine any resurgence in American manufacturing? I didn't think so.