Reversing A Herd Mentality- Reshoring

Discussion in 'Current Events' started by Margot, Mar 25, 2012.

  1. Margot

    Margot Account closed, not banned

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    There have been a number of reports like this since last winter.. In fact Gov Chris Christie did a whoe sement on on the the morning news shows.

    http://www.npr.org/2012/03/13/148470066/factories-reshore-some-work-from-overseas

    During the worst of the Great Recession, U.S. factory jobs were disappearing at a furious pace. As 2007 began, about 14 million Americans were working in manufacturing.

    Three years and one frightful recession later, only 11.5 million were.


    But since 2010, employment has been ticking back up, with companies adding about 400,000 jobs.

    One reason for at least a small portion of that growth: the return of factory work from overseas. Experts say it's difficult to accurately measure the number of jobs tied to work returning from other countries, but some employers say they know it is happening.

    Reversing A Herd Mentality

    Howard Hauser, a vice president with Hiawatha Rubber Co., says for a long time, manufacturers followed a herd mentality of sending work offshore. They all wanted components produced in low-wage, emerging markets like China.

    Shoe Company Practices Insourcing For The Sole

    Seeing rising costs in Asia, Keen brings jobs back to the U.S. by making work boots in Oregon.

    "They were looking at the piece price. And it looked like, 'We're going to save a lot of money,'" he said. "But the bottom line was they didn't save nearly as much as they thought. And with the quality issues, they're just not getting product that's acceptable for the customer."

    Now Hiawatha, based outside Minneapolis, is getting those contracts.

    And Hauser has himself decided to "reshore" production of a component that was being made in China. The move will result in three new hires at his plant.

    He says the part was not difficult to make, but the Chinese factory kept botching the job. He says Hiawatha, which makes rubber components for equipment such as printers and pumps, can do it better.


    Richard Beaulieu operates a molding machine that makes rubber parts for radiators at Hiawatha Rubber Co., just outside Minneapolis.

    From Soup To Overtime

    As business picks up and hiring resumes, the employees at Hiawatha are feeling more confident now. But it's still painful to recall the recent tough times when orders dropped off about 40 percent and production hours were slashed.

    One worker, Richard Beaulieu, says he had to make do while working just three or four days a week.

    That went on for nearly a year. His memory of that lean time: "Many, many months, and a lot of soup," he says. "But you just buck it up and get through it."

    Beaulieu and the other 65 full-timers are back to normal hours now — and can even count on some overtime.

    The U.S. Looks More Competitive


    American Manufacturing Jobs

    (In millions)

    Source: Bureau of Labor Statistics

    Dan Meckstroth, an economist with the Manufacturers Alliance for Productivity and Innovation, says labor in the United States is looking more competitive internationally for a number of reasons.

    For one, U.S. wages are still depressed because of the relatively slow overall recovery. At the same time, wages have been rising in emerging markets. In addition, the skill level of American workers is generally higher. And the supply chain disruptions after last year's Japanese disasters made some companies skittish about outsourcing to Asia, he said.

    But Meckstroth says it's hard to quantify any job gains from "reshoring." The number may not be great, but at least the trend line is good, he said.

    "I'm not saying there's a tsunami of production coming back to the United States. It's a trickle," Meckstroth said. "But a trickle back is better than the tidal wave out."

    But at Hiawatha Rubber, Hauser does not think the future of manufacturing lies in bringing work back, even if that's benefiting his company now. He believes greater productivity for the sector will come through increased automation. At his factory, more automation will eventually mean fewer workers. But the workers who do remain, he says, will be high-skilled and high-paid.
     
  2. Margot

    Margot Account closed, not banned

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    Fyi.................
     
  3. Margot

    Margot Account closed, not banned

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    Fyi.................
     
  4. Curmudgeon

    Curmudgeon New Member

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    We can hope that more manufacturers do the same. We are also seeing some companies bringing back call centers to the U.S.
     
  5. Margot

    Margot Account closed, not banned

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    I hope so.

    I think things will improve if we can avoid another war.
     
  6. Zosiasmom

    Zosiasmom New Member Past Donor

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    It would take people buying the bullet and avoid large chain stores and spend hours searching for Made in America products. They would have to buy produce from their neighbors, can it, freeze it, etc. I do this. It's not easy, but I'd rather spend more to support my neighbor and my tribe than pay Wal-Mart a frickin cent.
     
  7. Margot

    Margot Account closed, not banned

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    I think someone sent me an email about buying American.. and how many jobs that would create.
     
  8. Zosiasmom

    Zosiasmom New Member Past Donor

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    There would need to be a buying trend for American goods. The easiest way is just to place a heavy tax on goods coming in until the profit margin is decreased to the point where it makes no economic sense--after all, other countries do it to us.

    But they won't.

    So I just buy from my neighbors. I no longer believe politicians will ever act in our interest. The incentive is for them not to do so.
     
  9. Margot

    Margot Account closed, not banned

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    This was a grassroots thing.. not politicians.
     
  10. Zosiasmom

    Zosiasmom New Member Past Donor

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    And that is how it will have to be, unfortunately.
     
  11. BTeamBomber

    BTeamBomber New Member

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    The thing that can help the US get an equal footing with the rest of the world in manufacturing starts by practicing the same exact practice that has helped those companies overseas. Government subsidies for keeping jobs here. I know, I know, the tea party would never support the government opening their wallets to subsidize the cost to private industry. But that is the reality of the competition the US is facing. In China, the government will pay for half or all of the costs of building plants, thereby allowing newer manufacturers to start profiting immediately without having to pay the starting costs of a mortgage or other expenses. The US simply cannot compete with that type of environment.

    The one advantage that could save billions on this type of plan is that right now the US has gobs of buildings and plants sitting empty that could be reconfigures for pennies on the dollar versus building new. The government could make promises to manufacturers to cover the costs of those rebuilds and then simply hand over the buildings to any company willing to go into them and hire workers to create. The cost savings to those companies would be such that we wouldn't have to worry about lowering salaries or fighting off unions. Given the fact that most of the goods created get sold in the US, the advantage of shipping costs and import fees would disappear and the US would once again take over the world in manufacturing.

    It costs money to make money, and the revenues earned in income taxes by successful manufacturing companies coupled with the government savings on less welfare and medicaid expenses of newly employed people, would more than make up for the expense of these subsidies. It needs to have happened yesterday.
     
  12. septimine

    septimine New Member

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    Right, that will show the recession. I can't help but notice that even in the article, the grand total of jobs created by moving the factory back to the US was THREE. Maybe if 6 more move back, we can have 18 jobs. The recession is over people!
     

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