• “Reshoring” succeeds in bringing more than 600,000 jobs back to United States; helping reverse decades of “offshoring.”
By Keith Johnson —
The tide may be turning for those Americans who have lost their livelihoods to overseas workforces during the past few decades. Since 2010, manufacturing employment has increased by 600,000 jobs as more American companies rethink their decisions to outsource work and embrace the benefits of bringing their production operations back home, a trend now commonly referred to as “reshoring.”
Leading the way to this new era is Harry Moser, founder and president of the Reshoring Initiative, an industry-led effort that helps United States manufacturers realize the advantages of making their products on American soil and the critical role they play in strengthening the economy.
“Reshoring is happening and it’s significant,” Moser told this AMERICAN FREE PRESS reporter during a recent interview. “If you go back to 2003, we were offshoring manufacturing jobs at a rate of 150,000 per year. Reshoring was virtually zero. Nobody was doing it, and it wasn’t even discussed. As of 2013, however, reshoring and offshoring trends were neck and neck at about 40,000 jobs each. That’s not as good as gaining 150,000 jobs per year, but at least we’ve stopped the bleeding.”
For Moser, the mass exodus of U.S. jobs issomething that hits close to home. As a teen, heworked summers at the once sprawling SingerSewing Company in Elizabeth, New Jersey, where his fatherwas also employed as a foreman and manager.After watching that factory and its workersjoin the list of offshoring casualties, Moser dedicatedhimself to preventing other companiesfrom meeting the same fate.
“We don’t just wave the flag and ask these companies to take one for the home team,” Moser said. “We tell them that it’s in their best self interests. We show them that when they decided to send jobs offshore, they really didn’t do the math. They only factored in rudimentary costs rather than what we refer to as the ‘total cost of ownership,’ which includes duty, freight, packaging, carrying costs of inventory, travel expenses to check on suppliers, intellectual property risk and the impact on innovation when you separate engineering from manufacturing. There are 29 factors we use to help companies calculate their actual offshoring costs in hopes they’ll be more objective in their decision making.”
Moser told AFP that the ever changingwork environment at foreign factories isslowly reversing the trend of exporting U.S. jobs.
“When you do the math you’ll find maybe 25%of the cases where the work should be broughtback right now,” said Moser. “But as Chinese wages continue to go up at a rate of about 15%-18% per year, it will start making sense for a lotmore companies to bring those jobs home.”
Quality of workmanship is also a factor compellingsome U.S. compares to reshore.
“I was at a [June 17] reshoring conference at the Congressional Visitors Center, where one ofthe speakers reported that the rate of recalls onChinese products is six times as high as onAmerican products,” Moser said. “The generalbelief, in many industries, is that [foreign factories]
tend to do a good job cranking out highvolume products, such as electronics, whilethe quality of their tooling and mold work isnot nearly as good as it is in the States.”
When asked if there really is high demand forU.S. products, Moser replied: “We have 12 independentsurveys about consumer preference andthe conclusion is that Midwesterners, older peopleand the affluent prefer to buy American andwill pay somewhat more for it. People also saythey will pay more for U.S.-made safety relatedproducts, such as the buckle for your parachuteor the material used to make your child’s crib. Ibelieve that if a ‘made in America’ product is easyto find, most consumers will buy it, and I’ve beenworking with retailers to help make that happen.”
Moser went on to say that his biggest challengein meeting this emerging demand is thelack of a skilled workforce.
“Our basic education system isn’t goodenough, and it’s not providing the right incentives,”he said. “Too many [here] want to be infront of a camera or behind a microphone, andtoo few want to be a toolmaker or welder. TheGermans and Swiss place a higher value on theseprofessions. That’s why their people are makinga third more than ours and have a trade surplusinstead of a trade deficit.”
Motorola, Whirlpool and Caterpillarare just a few of the big name corporationsthat have decided to bring atleast part of their production operationsback to the U.S.
“The reshoring trends are [strongest]in electronics, computersand, surprisingly, apparel,” Mosersaid. “Apparel is fourth onthe list and the last thing youthink would come back becauseit’s so labor intensive.That’s if you look at thenumber of companies. Ifyou look at the number ofjobs, which I think is a lotmore important, it’s appliancesand machinery, becauseif Caterpillar puts in afactory that equates to acouple thousand jobs wherethe apparel cases are threehere or four there. It’s goodthese companies are comingback but it’s the jobs they bringwith them that really count.”
Keith Johnson is a writer based in Tennessee. He can be contacted at keithj.americanfreepress@yahoo.com.
