Companies Move Manufacturing Jobs Back to America

[phototec]

Yes, some Companies are Moveing Manufacturing Jobs Back to America!

A factory sits empty. It’s not in the Rust Belt, nor is it part of a manufacturing exodus that has cost the U.S. thousands of jobs. It is a factory in Shenzhen, China, and the American company that once employed Chinese workers is now packing up, coming home and bringing the jobs with them.

John Higgins, CEO of Neutex, an LED lighting company, said it will be cheaper to manufacture in Houston.

“I’ve gotten in fights, I’ve gotten in arguments with CEOs on planes telling me what an idiot I am for coming back,” Higgins told ABC News.

A decade ago, a factory worker in China made 58 cents an hour. Today, wages are more than $ 3.00 and there are predictions of $6.00 an hour by the year 2015. It may sound cheap, but some economists argue when you factor in productivity those wages add up. The Boston Consulting Group argues the American worker combined with technology in the U.S. makes the American worker more than three times as productive as the Chinese worker.

“When you factor in that the American worker is nearly four times as productive, that math quickly adds ups,” said Hal Sirkin, senior partner at the Boston Consulting Group.

http://abcnews.go.com/blogs/business/2012/02/companies-move-manufacturing-jobs-back-to-america/

 

[Pat Whatley]

Just curious how he's figuring four times more productive.

In China since there is such a large and cheap workforce an unbelievable amount of manufacturing is done by hand. In the United States more and more of our jobs are becoming automated.

Think about it, 1 American worker driving a combine can harvest more corn than 1000 migrant workers can pick by hand.

I don't know, and I've got nothing to base that on, it's just a thought.

 

[WildWestDesigns]

A decade ago, a factory worker in China made 58 cents an hour. Today, wages are more than $ 3.00 and there are predictions of $6.00 an hour by the year 2015. It may sound cheap, but some economists argue when you factor in productivity those wages add up. The Boston Consulting Group argues the American worker combined with technology in the U.S. makes the American worker more than three times as productive as the Chinese worker.

That's what I was talking about in the other thread. It cycles. It was dirt cheap for us to build things here. No child labor laws, no working condition laws, no environmental laws. All those came about because we could afford to be worried about those things. Eventually that will cycle to the emerging markets as well. They can artificially retard it for a little bit, but after awhile it will catch up. With more and more economies interlocked with each other, it's going to be harder and harder to hold the edge. China might still have the edge for awhile longer by having their currency connected to ours and not "floating", but I doubt even that will last all that much longer.

 

[SD&F]

I will need to see it to beleive it. That would be great.

 

[2NinerNiner2]

Yep, and not just China.

Caterpillar, via their Progress Rail Service Corp., moved 700+ jobs back to the USA, to Muncie, Indiana from London, Ontario. "Thanks!"

 

[signswi]

Just curious how he's figuring four times more productive.

http://en.wikipedia.org/wiki/Productivity#National_productivity

A hidden factor is work quality...many vendors I talk to that had outsourced have had to scale it back or stop all together because their loss rates were so high overseas. The quality just isn't there or there is too much time and money lost in miscommunication and training.

 

[WildWestDesigns]

http://en.wikipedia.org/wiki/Productivity#National_productivity

A hidden factor is work quality...many vendors I talk to that had outsourced have had to scale it back or stop all together because their loss rates were so high overseas. The quality just isn't there or there is too much time and money lost in miscommunication and training.

Another factor that I would consider is the re-investment into resources. Mainly the workforce.

One of the easiest forms to see is "continued education" of the workforce. That increases productivity as well and it doesn't cost as much as one would think despite the cost of the continued education part.

How many people do continued education on these boards when new technology comes out? If "you" didn't and "you" find yourself using that new technology, you won't be as efficient/productive as you could be, because more then likely "you" would still be using the same techniques that worked in the old tech, that might still work in the new tech, but isn't the efficient method anymore.

 

[AnotherSignManiac]

Glad to see more jobs are being brought back over here. I for one am happy to say in my area where I live there are 5 different call centers.

 

[CanuckSigns]

Yep, and not just China.

Caterpillar, via their Progress Rail Service Corp., moved 700+ jobs back to the USA, to Muncie, Indiana from London, Ontario. "Thanks!"

They are not alone, There are quite a few American companies that have plants up here, that are closing up their Canadian operations and moving back south, Aparently there are quite a few financial incentives the US government has introduced that is making this worthwhile.

It makes you wonder, once the government turns off the tap, are these companies still going to have warm and fuzzy feelings about moving back home?

 

[WildWestDesigns]

It makes you wonder, once the government turns off the tap, are these companies still going to have warm and fuzzy feelings about moving back home?

It just depends. If the only thing that changes is the incentives have dried up then I doubt they will.