Although she wasn’t aware of it at the time, Rosemary Coates, who is currently Executive Director of the Reshoring Institute (Los Gatos, CA), was working for the dark side. Coates spent the 1980s and 1990s helping U.S. manufacturers offshore operations, first mostly to Singapore, Malaysia and Taiwan, and then increasingly to China after it joined the World Trade Organization in 2001. It seemed like the right thing to do from a business perspective. She began to have second thoughts, though, during the 2012 presidential campaign, when President Obama and Republican candidate Mitt Romney alike had harsh words to say about U.S. companies sending jobs to China. Her real epiphany came later, when she thought about the future her grandchildren might face if this trend were to continue unchecked. “All of these companies moved their operations to China, and I helped them do it, I thought to myself,” Coates told PLASTEC East/MD&M East attendees from Center Stage last week. So, in 2014, Coates founded the Reshoring Institute, dedicated to providing research and support for companies bringing manufacturing back to the United States.
Coates still consults with many clients that are manufacturing in China, but these tend to be companies producing goods that are sold in the domestic markets in which they are operating. “We call it local for local,” Coates told PlasticsToday. And that principle should apply to the North American market, as well.
“The United States lost about 2.7 million manufacturing jobs between 2001 and 2011, and that really got to me,” said Coates. Rising labor costs in China have chipped awat at that flow, but only up to a point. Yes, wages have been going up 14 to 18% per year, but, noted Coates, “for roughly the same job, a Chinese worker currently earns $4.63 per hour where a U.S. worker makes $26.10. It will be a long time before Chinese wages catch up.”
| Bringing back manufacturing jobs to the United States is all well and good, but they have to be the right jobs or we’re just spinning our wheels. Rosemary Coates spoke with PlasticsToday in April about the types of jobs we need to truly make America great again: ” Yes, manufacturing jobs are coming back, but they are fewer than advertised . . . and better .” |
More importantly, perhaps, for the reshoring movement, the mood in our country has changed, and the notion of corporate economic patriotism has lost its French inflection. (France more or less invented the concept several years ago, as a justification for dissuading businesses from moving manufacturing to other low-wage countries and attempting to obstruct some mergers with non-French companies.) The example of Walmart, which has pledged to spend more than $250 billion over 10 years to buy goods made in the United States, is a shining example. “Remember when Walmart moved procurement to Shenzhen, China, and factories were closing across the United States and people lost jobs? Those people were Walmart customers, and the corporation had its ‘a-ha’ moment and shifted its strategy. The result [of this and other initiatives] has been
