Is there rapid RE-SHORING coming to the US?

Is there a rapid RE-SHORING happening in the US.. Jobs returning because of a 30% increase in shipping costs?

Wages in China have been increasing rapidly over the past five years.

Has the Anti-dumping trade law had an impact?

http://www.marketwatch.com/story/su...-see-manufacturing-returning-to-us-2011-12-15

Dec. 15, 2011, 10:16 a.m. EST

Survey: 85% of Manufacturing Executives See Manufacturing Returning to U.S.
Rising Labor Costs and Quality Concerns Have Companies Reevaluating Overseas Strategies

CHICAGO, Dec 15, 2011 (BUSINESS WIRE) -- According to a survey conducted by Cook Associates Executive Search ( www.cookassociates.com/executive-search ), a leader in retained executive search, 85 percent of manufacturing executives see the possibility of certain manufacturing operations returning to the U.S., with 37 percent citing overseas costs as the major factor.

Nineteen percent cited logistics and 36 percent stipulated other reasons, including economic/political issues, quality and safety concerns, patriotism and overseas skills shortages for highly technical manufacturing processes.

Cook Associates Executive Search polled nearly 3,000 manufacturing executives primarily in small- to mid-sized U.S. companies from October 13 through November 18, 2011.

Participants consisted of C-level executives (CEO, CFO, COO) and key functional Vice Presidents (Operations, Manufacturing, Supply Chain). The survey data was supplemented by written comments submitted by individual executives.

The survey identified low-volume, high-precision, high-mix operations, automated manufacturing and engineered products requiring technology improvements or innovation as the primary forms of manufacturing returning to the States.

"With increased manufacturing here in the U.S., we would expect increasing demand for engineering, product development, operations and finance positions," says Kevin Logterman, Managing Director, Industrial and Family Business for Cook. "We'll also see demand increase for finance/accounting specialists (CFOs, Controllers) who understand overseas operations and are able to calculate the true costs for exporting since they are difficult to quantify."

Logterman commented, "The executives we polled told us that wage inflation in traditional overseas venues, especially China, is changing the value proposition for American manufacturers.

Once, costs were the primary driver for moving manufacturing offshore, but now companies are doing the math and thinking more about staying at home. Also, executives told us that because logistics are complex to begin with, the financial argument has to be compelling and the dynamics are changing.

continued.

 

What exactly is returning and what type of manufacturing?

I can't imagine electronics which gets the components from overseas

I can't imagine the low cost clothing or even high cost for a label clothes returning

the cost for transporting a container from the Pearl River Delta to the USA has not risen so-to-speak within the past year so I'm not sure about this "report"

 

Hmm...and they blamed the global recession on the U.S. economy. I wonder if this was all just one big American government and economic conspiracy to end the outsourcing surge and to get jobs to come back to the U.S.?

I doubt it, but hey, if the U.S. government can send the CIA to overthrow foreign governments, I wouldn't put it past them!

 

Small companies.. less than 20 - 30 million have looked at the 30% increase in transportation costs and gone shopping in places like China and Guatemala for manufacturing.. and Chinese waged are going up.

I am kind of looking to see it's a trend.

 

Well, apparently it is happening, though they're not being too specific on what manufacturing outlets are improving. I'd imagine that the construction industry is making the most progress.

 

I have read that some companies are moving back. So far, it's only a small amount of companies doing it. But we can help speed it up if we show companies we prefer to buy American products. I have tried to do that when I switch from one product to another made in the US, by either writing the company I switched from, or E-mailing them and telling them why I switched. I did that with the companies I was buying my tooth paste, automatic dish washing detergent and tropical fish food from. I made my feeling plain to Sears when I went to replace all my appliances and only saw a few Whirlpool and GE appliance on the floor. As it turned out, I got my Maytag washer and dryer from Sears, but paid an extra $80.00 a piece for them. It was worth it to me.

 

Didn't you write a thread on that Marine? Oddly enough, my brother sent me the same ideas in an email... how many jobs it would create .. the point being just to be CONSCIOUS about buying American.

 

I try to tell people, don't believe the hype whenever I can, and that the U.S. still has a HUGE manufacturing industry. I've been active in promoting American-made sales with my business, too. Every sidearm and rifle on my wall and in my display cases are made in the U.S.A., along with all of my ammunition. I even turned down an offer from Remington a while back because they wanted me to distribute their Spartan shotguns which are made in Russia.

 

Yes I did. I look at the label of everything I buy. I have E-mailed 6 companies so far and told them why I won't buy their product. Hersey was another. It's pretty bad when Hersey closes a plant in Pennsylvanian and Mars opens a plant just 25 miles away from the closed Hersey plant.

I think if enough people complain and stop buying these company's products, we can change some minds. Most have an E-mail address on the label of their product. It only takes a few minutes of your time and caring about your country enough to do something worth while.

 

That's great. A few weeks ago, I bought my third Henry 22 lever action rifle. Gave one to my son and another to my Grandson. Every part in the Henry is made in the USA and the kids love that rifle. It's really affordable to buy.

 

I feel the same way - I'm more than willing to pay extra for American-made goods considering the quality is usually superior to the cheaper crap on the market.

What I don't get is why the president and the political leaders on the other end of Pennsylvania Avenue aren't constantly beating the "Buy American" drum (?). The silence is deafening...

 

Because the best interests of the career politicians in Washington is not the same as the best interests for the American people.

 

Especially the ones who declared that they should never let a serious crisis go to waste. While American people's priority was job growth, those politicians' priority was getting ObamaCare, Cap & Trade, Card Check, political patronage packages ("Stimulus") etc., passed. Now that their own jobs are in jeopardy, they finally found religion about priorities...

 

Why would anyone? I mean let a crisis go to waste.. If you want to turn lemons into lemonade, you ALWAYS make the best of things and try to find some creative way to turn it to your advantage.

WHO the devil would do otherwise?

 

All labor costs being equal, it would always be cheaper to manufacture something in your own country for purchase in that country. Of course, labor costs in China have always been significantly cheaper. It is inevitable that eventually those costs would as least balance both sides (their difference in labor+shipping = to our manufacturing costs due to higher labor costs) and create healthy competition. Eventually China and India's labor costs would allow the US to gain equal standing and eventually an advantage in manufacturing once their costs right even more. Its a good reason to vote for liberalism and unionization in both of those countries over the next few decades.

The one downside that the US is clearly not accounting for that will slow a resurgence in manufacturing success is access to new resources. China has been buying contracts and land drilling rights all over the world (Africa especially) in order to gain access to critical manufacturing components. The US simply could not compete at a global level with resources available only stateside. Without the foresight to get access for us to those resources, then China will simply change the game when they lose their labor advantage and instead, take advantage by controlling distribution of natural resources FOR manufacturing. The US can't take the lead economically if they have to pay massive surcharges and tariffs just to get the goods needed to create. Something to think about investing in now if US companies have the foresight to do so.

 

Not a chance. Between Vietnam, the Philippines, and so forth and the hundreds of millions of rural Chinese who are waiting for their chance at a factory job— American jobs are gone and they're never coming back. Innovation can create new ones. Good riddance.

 

...funny thing, the company I work for went back to doing things in house for this same reason a few years ago...shipping costs made it more profitable to go back to doing things in house...but regardless, someone misses out and that's the shipping companies and the company ramped up to do sub contracting...


Kabuki Joe

 

Hahahahaha.. Bravo... There is no easy way towards the future, but I am really very confident that we will move forward to being better than we have ever been.

I think we will have clean air, innovation in industry and a strong middle class. We just have to make some fundamental changes.. and not be tempted to go backwards out of fear.

 

...I know the company I work for is better for it...


Kabuki Joe

 

So your bosses didn't cave to pump and dump..

 

Here's a thought. As we withdraw from the rest of the world militarily, the investors are afraid of having their investments confiscated by newly emboldened nations, who no longer fear retaliation for such practices.
I wouldn't want to invest outside the sphere of US influence either. Not these days.

 

...at first it did but when they saw the HUGE EXPENCE of shipping added to the cost of sub contracting coupled with loosing the hands on control of the whole mfg process, they had an easy choice...


Kabuki Joe

 

Why would the Democrats miss an opportunity to pass ObamaCare, Cap & Trade, political patronage packages while the American people are focused on job creation?

Gee, I can't imagine why the priorities of the American people should supersede the priorities of self-serving politicians, Margot. We should totally abdicate our will and existences to the whims of our overlords in Washington and the sheeple who support them...

 

I disagree Doctor. Granted many won't come back, but I think many others can. I sure wouldn't count on innovation to create new jobs. Didn't we count on wind turbines and solar as new innovations that couldn't be taken away just a few years ago? China can make about anything we can. They are even a year or two away from launching their own space station, satellite to the moon and their own commercial airplane.

 

They can make most things indeed. But can they make it cheaper? More efficient? Doubt it, not if America tried. Reduce capital costs, decrease barriers to entry and technological acquisition. Considering the transport across the ocean, tariffs and taxes, and so forth— it's hard to imagine American machinery being beaten.

That said, American workers are unnecessary in much of that process. Unskilled workers should just move to China and ply their 'trade' in a factory there if they want a factory job.