Offshoring hits home

MUNCIE -- On the eve of the closing of City Machine Tool & Die -- the manufacturing firm their family ran for decades -- John and Jim Wagner, the majority shareholders in the company, talked about China.
Although thousands of miles separate Muncie and China, the Asian country's burgeoning manufacturing industry weighed heavily on the minds of the hometown businessmen.
The two traveled to Japan, Colombia, Brazil and elsewhere to build their business -- "Places I never thought I would see," Jim Wagner said -- but China remained fixed in their thoughts.
The two had gone to China in the early 1990s to set up fixtures for a manufacturing plant.
"We went to the house of a middle manager at the plant," John Wagner remembered. "It was small, with a closet that held his bike."
The Wagners -- whose company made died and work-holding machines over the decades -- learned that because of government subsidies, the Chinese company could afford to pay even its managers a pittance.
"His income was $370 a year," John Wagner said.
The low wages and low costs enjoyed by manufacturers in many parts of the globe have an impact on companies right here in Muncie, the Wagners noted.
"We've lost business to China," Jim Wagner said. "We lost a John Deere contract."
Although many factors led to City Machine's closing after 70 years of operations, the loss of that farm equipment contract to a Chinese manufacturer still weighs heavily on the Wagners.
Some businesses from this area have found a way to prosper in the increasingly global marketplace, where jobs can be lost -- or relocated -- to China or Mexico.