Manufacturing has been slowly trickling back to the U.S., a development that has been increasing over the past two years, reveals the Wall Street Journal. It is views as the "reshoring" of manufacturing work, which had been "offshored" to low-cost producers like China for the last few decades. Shipping production to Asia is not as popular as it was 10 years ago, according to Bill Good, a plant manager for Whirlpool. His company is considering bringing back production of small appliances to the U.S.
However, although some production is returning to the U.S. because of Whirlpool and other companies is not generating high job numbers. China still makes the majority of the parts for the mixers, especially the motors, because Whirlpool was unable to find any U.S. suppliers that could make them at a low cost. Any plastic parts for the mixers are being made in the U.S., but they are using equipment purchased from China.
In February, President Barack Obama visited a Master Lock factory in Milwaukee applauding it for bringing back work from Asia to the U.S. However, the company only created about 100 jobs. Otis Elevator Co.'s shift of some production to South Carolina from Mexico is expected to create about 360 jobs. Fortunately, Caterpillar Inc., General Electric Co. and Ford Motor have succeeded in creating about thousand positions that were brought back to the U.S. from Asia.
This does signal a promising return of manufacturing employment to the U.S. The total number of manufacturing jobs created has increased by 489,000 to 11.9 million. However, the majority of that surge is due to the economic recovery instead of reshoring. According to the economic research firm IHS Global Insight, the number of manufacturing jobs will go up 3.2% this year compared to a 1.6% increase of jobs in all industries. Daniel Meckstroth, chief economist at the Manufacturers Alliance for Productivity and Innovation, added that the return of manufacturing is because the U.S. is "becoming more competitive."
U.S. manufacturing has also become more attractive for some companies as a result of the rise in Asian salaries. Over the years the gap in salary between the U.S. and China has decreased. In addition, the fall of the dollar in the past ten years has also caused U.S.-produced goods to be more competitive. Furthermore, increased oil prices have made the cost of shipping goods across oceans more expensive making domestic manufacturing a less costly move.
China and other Asian nations continue to be very competitive on many products. One of the main reasons for this is that the U.S. is dealing with a lack of trained workers in some areas necessary for manufacturing, such as engineering and operating computerized machinery. U.S. corporate taxes are also higher than the majority of other industrial nations.
According to Dr. Simchi-Levi, global companies continue to expand production facilities in Asia to supply fast-growing markets. However, there are questions lingering over whether there is a point to trying to meet North American demand from Asian factories. He added that companies are looking to regional-manufacturing models where Asian plants supply Asian customers and North American plants supply Americans.
© 2017 Jobs & Hire All rights reserved. Do not reproduce without permission.
