A conversation with Harry Moser

Harry Moser, founder of the Reshoring Initiative, knows first-hand about companies moving manufacturing work outside the country.

Moser’s dad was a manager and foreman for Singer Sewing Machine Co.’s sprawling factory in Elizabeth, N.J. He spent summers during high school and college working there.

Today, the plant and jobs are gone and the work is being done offshore.

“That was a driving factor to do something about it,” Moser said.

Moser, 70, founded the Reshoring Initiative in 2010 to help companies bring manufacturing jobs back to the U.S.

That’s its mission. It helps companies assess their total costs of offshoring and how reshoring can reduce the costs of parts and tooling.

Moser, whose organization is based in a Chicago suburb, will be in Wichita on Thursday to host a Kansas Edge Reshoring Conference, sponsored by the Kansas Department of Commerce. It will highlight how Kansas is positioned to capture reshoring opportunities.

Gov. Sam Brownback will introduce new state resources available to help Kansas businesses. The conference also will feature a roundtable discussion by local businesses, including J.R. Custom Metal Products, Lee Aerospace and GTM Sportswear.

The free conference will be held from 8:30 a.m. to 11:45 a.m. at Wichita State University’s Hughes Metropolitan Complex, Room 180, 5015 E. 29th St. North. Registration begins at 8 .a.m.

In large part because of the Reshoring Initiative, Moser was inducted into the 2010 IndustryWeek Manufacturing Hall of Fame. He also took part in President Barack Obama’s 2012 Insourcing Forum and testified during a Congressional hearing on reshoring and manufacturing.

Moser has spent 45 years in the manufacturing industry, including serving as president and chairman of Charmilles Technologies Corp., now GF Machining Solutions. He retired as chairman emeritus in 2010.

He holds a bachelor’s degree in manufacturing engineering and a master’s degree in engineering from the Massachusetts Institute of Technology and a master’s of business administration from the University of Chicago.

In his role, Moser gives 100 presentations a year around the country about the reshoring efforts.

Offshoring has slowed dramatically in the past few years.

From 2000 to 2008 or 2009, companies aggressively put work offshore.

In 2003, the U.S. lost about 150,000 jobs to offshoring.

That’s now dropped to 30,000 to 40,000 jobs a year. On the flip side, they’re bringing back about the same number of jobs each year.

“We say we’ve stopped the bleeding,” Moser said.

Still, there are about 3 million to 4 million manufacturing jobs offshore today.

“The challenge is to bring those jobs back,” he said.

Before beginning the Reshoring Initiative, you worked with young people to promote jobs in manufacturing. How did that enter into your decision to help bring jobs back?

“I had been actively encouraging America’s youth to go into … manufacturing positions. I’d tell them they’d have good jobs if they did that. With all the jobs going offshore, I had to bring the jobs back – it makes me a hypocrite or a liar or something – so they could have the jobs I told them they’d have.”

Your phone is ringing more now. What’s happening?

“We’ve got real action happening. In the last week, I’ve had three large companies saying they’re trying to decide whether to bring manufacturing back and asking for our help. In comparison to three years ago, I might get one a year. Now, am I going to get three in a week all the time? I don’t know. But three in a week feels pretty good.”

For the companies bringing work back to the states, the highest percentage of it came back from China. What’s going on?

“Their wages (in China) have been going up 15 to 18 percent per year for the last 10 to 15 years and their workforce has fallen. It’s dropping by 3.5 million people per year (because of the) one-child policy that went into effect 35 years ago. … The supply of labor is going down and demand for labor is rising. … You have to treat them better. You have to make them safe. You can’t pollute the factory. The cost of producing things is going up in China much faster than probably anywhere else in the world. Therefore, that makes us relatively more competitive. China has gone from being invulnerable to being significantly vulnerable. … (In addition, there’s) intellectual property issues, corruption, a lot of things.”

You mentioned that often companies don’t look at all the costs involved when they decide to offshore. What do they do?

“They always think about the price or the wage rate because those are obvious. Some just do price. Some get a little more sophisticated and look at duty freight and packaging – the cost of getting it here. They should also look at the carrying cost of inventory. When you get in big containers maybe once a month, opposed to your local guy shipping it once a week or once a day, you have to have more on the shelf. …That costs money. Then there’s travel costs to go check on the supplier. It’s a lot easier to go to Kansas City than it is to Beijing.”

What else should they consider?

The intellectual property risk in some cases is horrible. Companies have been almost destroyed by people ripping off their design. If people do that here they go to jail. Over there, nothing much happens. And there’s an impact on innovation when you separate engineering from manufacturing. When the design engineers and the factory engineers and the workers can get together, they can improve the process. When they’re halfway across the world, it’s hard to do. Subtle things. ”

Why don’t they think about all the costs then?

“A purchasing department is rewarded for buying at a low price. But if that causes quality issues, delivery issues, travel, that’s not their problem. That’s not in their budget. They’ve gotten good bonuses for buying stuff at the lowest price. … You get bonuses for change and the head guy, whomever, the vice president, he puts in the program that we’re going to offshore 20 percent or 30 percent to China. It makes him or her look really good. It’s relatively easy to do rather than let’s train the workers and motivate them to work harder.”

What’s a company’s biggest challenge in bringing back work?

“I think skilled labor is the single biggest problem. … If Kansas had the best supply of skilled professions, the manufacturing jobs would come to Kansas.”

Who should attend the Reshoring Conference on Thursday?

“Big companies that have to make a decision where to source. Smaller companies, the suppliers to the big companies, (who can) use our methods as a sales tool to source in Kansas instead of in China or wherever. The people in the community that want that to happen, the economic developers, the chambers of commerce. … The tools we provide are free to use online. The data is free. We encourage people to take advantage of it.”