There’s something that has caught my attention with regards to the global economy — China and Mexico are losing jobs that had been shipped to those countries by companies currently headquartered in America.
It’s called ‘reshoring’ and it’s becoming something more and more common with each economic development announcement that has been made in recent weeks.
The economic environment has been changing, especially with regards to China, a country that is currently undergoing a financial challenge.
This caught my eye when it was announced at Monday’s press conference that TTI Floor Care (Oreck) is bringing back production lines that were shipped to Mexico and China a few years back. This will bring jobs back to the Upper Cumberland to a company whose existence was questioned as it entered bankruptcy court earlier last year.
As I write this, there’s another interesting development coming across: General Motors announced that they are moving production of the next-generation Cadillac SRX crossover SUV from Mexico to a factory in Spring Hill.
Considering this is a company that was in deep financial trouble a few years ago (not to mention it was bailed out by our tax dollars), this is encouraging news that perhaps the auto industry — manufacturing as a whole — is starting to make a comeback in the states.
Why were jobs shipped overseas to begin with?
According to the Reshoring Initiative, founded in 2010, is an industry-led effort to bring manufacturing jobs back to the United States, companies outsourced jobs overseas due to the massive U.S. trade deficit, the high unemployment rate and the debilitating budget deficit.
The initiative works with U.S. manufacturers to help them recognize their profit potential as well as the critical role they play in strengthening the economy by utilizing local sourcing and production.
Among the top reasons for reshoring, according to the initiative, are lower total cost of ownership, improvement in the quality and consistency of inputs, reducing pipeline and surge inventory impact on just-in-time operations, enhancing innovation, eliminating waste and instability and strengthening companies’ ability to respond quickly to customers’ demands.
The quality of the workforce and the product that is manufactured is the biggest reason I have heard behind the reshoring of these jobs.
With the General Motors announcement, it is said that the Spring Hill plant is among six manufacturing locations around the globe that will produce the new engine, and an additional $48.4 million investment is planned for the Bedford, Ind., powertrain castings plant.
“It was a good business decision to produce this powertrain in Spring Hill and Bedford. Both teams have strong performance records, especially in quality,” Arvin Jones, GM North America manufacturing manager, said.
When Academy Sports announced the investment here in Cookeville, along with the TTI Floor Care expansion announced just last week, the phrase that kept coming up was “quality of the workforce.”
There’s momentum in this region — and the state — with regards to economic development, numerous officials been saying over the past few weeks. It’s due to a number of reasons — geographic location, infrastructure, etc. — but it’s the employees behind the finished product or those who take the customer calls who deserve the credit.
And with a university that has a new office of research and economic development in full swing, along with other things, innovation in this region is brewing and things are happening.
@Column Tag:Laura Militana is the
business editor for the
Herald-Citizen.
Source Article from http://www.herald-citizen.com/business-alt/item/2564-the-reshoring-initiative
