Reposted form Motion Control Tip
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Reshoring Picks Up Steam
Miles Budimir | March 18, 2013 | Motion Control Tips
The reshoring trend got a boost last week at the Reshoring Summit: Bringing Manufacturing Back to the U.S., held right here in Cleveland. The summit’s focus was on educating manufacturer’s on the benefits of bringing manufacturing work back to the U.S., which included making the business case for such a move, as well as hearing successful reshoring case studies and learning the practical steps involved in bringing work back to the U.S.
While the reshoring movement is no doubt a positive development for manufacturing, the numbers tell a story of far more manufacturing jobs in China, let’s say, than in the U.S. So that blip on the radar screen is the trickle of jobs that may either be headed back to the U.S. or are remaining or being created here instead of in other countries.
Still, Harry Moser, founder of the Reshoring Initiative and a presenter at the Reshoring Summit, argues that only when not considering total cost of ownership (TCO) does it make sense to manufacture in foreign countries, like China. It’s only when TCO is considered that the costs to manufacture in the U.S. are actually lower than in China.
But even if that is true, the reality is that companies are choosing to manufacture in China not only to export back to the U.S. but in order to have a presence in the Chinese market with its burgeoning middle class and soaring demand for manufactured goods. If nothing else, this may prove that the simple black-or-white picture that’s often used in describing what is happening in the manufacturing world is inaccurate, and is probably more grayer than we’d like to admit.
One thing is certain, however. We’ll continue to cover the developments in this area. In the meantime, you can read more about reshoring here in an analysis by Design World editor Paul Heney.
An interesting related article.
“Historically speaking, manufacturing jobs have, on average, paid better wages than service jobs (with the former usually providing better benefits as well). But manufacturing, as a percent of the economy, has been on the decline for decades now. Over 5 million manufacturing jobs have been lost since 2000 alone.”
http://www.manufacturing.net/blogs/2013/03/is-re-industrialization-the-key?et_cid=3163320&et_rid=54693504&linkid=http%3A%2F%2Fwww.manufacturing.net%2Fblogs%2F2013%2F03%2Fis-re-industrialization-the-key
Thanks for mentioning the Reshoring Initiative!
Reshoring is definitely more than a trickle. About 10% of the approx. 500,000 manufacturing job growth since the low in January 2010 is due to reshoring. Based on the 400+ published reshoring articles in our Reshoring Library, we calculate that at least 50,000 manufacturing jobs have been reshored.
If companies consistently evaluate all of the costs and risks, about 500,000 more manufacturing jobs would come back today, consistent with the BCG estimate. The non-profit Reshoring Initiative’s free Total Cost of Ownership software helps companies calculate the real P&L impact of reshoring or offshoring. Current research shows many companies can reshore about 25% of what they have offshored and improve their profitability.
Companies, including contract manufacturers, can post their reshoring successes on our website at http://reshorenow.org/resources/cases/
You can reach me at [email protected] for help using our free tools for sourcing decisions and when selling.
More related:
Washington: Claiming that H-1B visas lead to outsourcing of US jobs, an American professional body of engineers has opposed the move of expanding the most popular working visa among IT professionals. “The H-1B programme shouldn’t be used to facilitate the transfer of high-paying jobs to other countries. If Congress wants a full US economic recovery, it shouldn’t even think about expanding it,” IEEE-USA President Marc Apter said.
Beginning Monday, the US Citizenship and Immigration Services will start accepting applications for the H-1B visas for the fiscal year 2014 starting October. Institute of Electrical and Electronics Engineers (IEEE)-USA is the largest body of electrical and electronics engineers in the US.
In a statement, the body alleged that most of these visas are being grabbed by those companies which outsource American jobs overseas. “Starting next week, proponents of an H-1B visa increase will bemoan the fact that the H-1B cap is already used up. But it was outsourcing companies — businesses who use the visas to take American jobs — who used nearly two-thirds of them” Apter said.
Referring to data compiled by the US Department of Labour Office of Foreign Labor Certification, the body said the top 10 companies applying for H-1B visas in the first three months of fiscal 2013 are all offshore outsourcing companies. These 10 organisations collectively had 1,12,739 positions — representing 73.4 per cent more than the base annual H-1B cap of 65,000 — certified to be filled by an H-1B worker.
Many of these work visas are issued to scientists and engineers, it said. Moreover, 64.1 per cent of the 1,75,806 certified H-1B applications from just 1 October to 31 December 2012 went to these 10 companies, and there are many more than 10 outsourcers, IEEE-USA said.
http://ibnlive.in.com/news/us-engineers-body-seeks-curb-on-h1b-visas/381988-2.html
Joe Brooks and the IEEA-USA are correct that the H-1B visa program is an adjunct to the offshoring of American jobs that has brought on the disintegration of the American economy and spreads unemployment and poverty throughout cour country.
In his book “The Failure of Laissez-Faire Capitalism and the Economic Dissolution of the West,” Paul Craig Roberts has this to say about the H-1B visas:
EXCERPT:
Engineering jobs in general are in decline, because the manufacturing sectors that employ engineers are in decline. During the five year period that we are examining, 2001-2006, the U.S. work force lost 1.2 million jobs in the manufacture of machinery, computers, electronics, semiconductors, communication equipment, electrical equipment, motor vehicles and transportation equipment. The BLS payroll job numbers show a total of 75,900 jobs created in all fields of architecture and engineering, including clerical personnel, over the January 2001-January 2006 period. That comes to a mere 15,180 jobs per year (including clerical workers). The fate of new university graduates cannot be very pleasant, with declining employment in the manufacturing sectors that employ engineers and a minimum of 65,000 H-1B work visas annually for foreigners plus an indeterminate number of L-1 work visas.
Not only the Bush and Obama regimes, with their claims of Iraqi “weapons of mass destruction” and “Iranian nukes,” base their policies on lies, but also corporations lie about “skill shortages.” Not content with moving Americans’ jobs abroad, corporations want to fill the jobs remaining in America with foreigners on work visas. Business organizations allege shortages of engineers, scientists and even nurses. Business organizations have successfully used pubic relations firms and bought-and-paid-for “economic studies” to convince policymakers that American business cannot function without the subsidy provided by H-1B visas. The evidence is conclusive that the visas do not fill a “skills gap.” The visas allow corporations to replace higher paid Americans with lower paid foreigners. Prior to being discharged, the American employees are first required to train their replacements. If the skills were in short supply, Americans would not be discharged when the H-1B visa holders are hired.
END EXCERPT
Citation: Roberts, Paul Craig (2013-02-02). The Failure of Laissez Faire Capitalism and Economic Dissolution of the West (Kindle Locations 1761-1775). Atwell Publishing. Kindle Edition.
Companies that have had recent mass layoffs (like Microsoft) still cannot get enough of global labor arbitrage, whether offshore or through the back door. Bean counter types believe that you can simply off shore manufacturing without the associated engineering, technology, intellectual property, and hands-on experience going along with the physical center of gravity - the making stuff operation. Politicians not only are bought off by big bucks, but actually see the world in highly abstract financial and economic theory terms, and disassociate from how things work on the ground.