Saturday, October 22, 2011

From "Made in China" to "Made in the USA"

THE TENNESSEEAN (AP)  -- "Four years ago, the Tennessee-based company Pro Charging Systems outsourced manufacturing of several key components of its new line of battery chargers to China. The idea was to take advantage of lower labor costs and other advantages the company was counting on as it made charger parts there that would end up in hunting vehicles and golf carts sold in the United States.

Over the past year, though, Pro Charging has shifted that work and some other assignments back to U.S.-based suppliers.  The Tennessee company illustrates a surprising trend — call it a trickle — in which some manufacturers are bringing jobs back to America from Asia. With U.S. jobless rates stubbornly high, it’s part of a welcome reversal fueled by the Chinese economy starting to lose its cost advantages for many products made abroad but bound for final assembly and sale here.

As labor costs rise in China — along with steep fuel and transportation costs to ship merchandise back home — the idea of making goods in the U.S.A. starts to look better to American companies, a recent study by The Boston Consulting Group found. U.S. suppliers also are closing the gap in relative costs by operating more efficiently here.

“We’re not saying that factories in China will close,” said Mike Zinser, a partner who leads Boston Consulting Group’s manufacturing work in the Americas. “There will still be huge demand for serving the Chinese market and the rest of Asia. But in terms of supplying North America, China will no longer be the default option.”

U.S. manufacturing advantages include a better-skilled workforce, ease of security and other logistical advantages “that will make the U.S. a better option for many companies,” wrote Justin Rose, co-author of the Boston Consulting study. It lists transportation goods, including vehicles and auto parts, household appliances, and furniture among seven sectors that could return up to 3 million manufacturing jobs to the U.S."

HT: Mike W.

21 Comments:

At 10/22/2011 1:24 PM, Blogger arbitrage789 said...

Maybe these guys ought to be setting up shop in Vietnam.

 
At 10/22/2011 2:43 PM, Blogger Larry Sheldon said...

Why does Tennessee come up in these discussions so often?

 
At 10/22/2011 2:54 PM, Blogger PeakTrader said...

"Return up to 3 million manufacturing jobs to the U.S."

If we can do that, we should be able to return up to 300,000 farming jobs to the U.S..

 
At 10/22/2011 3:17 PM, Blogger PeakTrader said...

And up to 30,000 hunting-gathering jobs.

 
At 10/22/2011 4:28 PM, Blogger sethstorm said...

Then lock these gains in the US with tariffs. Then get these factories up in the North.

arbitrage789:
From one Third World hellhole in need of a cleansing to another? It would just make for another reason to turn Vietnam into a glass parking lot.

Why is it that business wants to set up in counntries that allow for slavery? If workers have too much freedom to object, the business threatens to move somewhere that has slavery.

 
At 10/22/2011 7:28 PM, Blogger Rufus II said...

Tennessee is well situated geographically, for one.

Transportation-wise, for another.

Decent workforce. Fairly high unemployment. Right-to-Work, I believe.

Good Universities UT, Vanderbilt come to mind.

Good BarBQ in the Memphis area. :)

Pretty nice place to live, all in all.

 
At 10/23/2011 8:11 AM, Blogger juandos said...

"Why is it that business wants to set up in counntries that allow for slavery? If workers have too much freedom to object, the business threatens to move somewhere that has slavery"...

Gee sethstorm which countries have the slavery you're refering to?

Pro Charging Systems may want to reconsider a move to Tennessee until they can find out if the state isn't running rampant with theiving, parasitic fools like this Lynchburg loser...

 
At 10/23/2011 11:05 AM, Blogger Buddy R Pacifico said...

"If we can do that, we should be able to return up to 300,000 farming jobs to the U.S.." &

"And up to 30,000 hunting-gathering jobs. &

up to: 1000 economists; 25,000 forklift drivers; 75,000 truck drivers; 2500 engineers; 2500retirement planners; 1000 robotic technology sales people; 15,000 office administrators; 25,000 maintenance services personnel etc., etc.

 
At 10/23/2011 11:19 AM, Blogger PeakTrader said...

Buddy, perhaps, you can explain what happens after 3 million Information-Age and Biotech Revolution jobs are added instead? (while continuing to import goods at lower prices and higher profits).

 
At 10/23/2011 12:38 PM, Blogger Buddy R Pacifico said...

Perhaps Peak Trader can explain:

why three million high tech jobs won't be created in addition to three million manufacturing jobs;

and why he is objecting to manufactureres re-shoring jobs in an up-dated processes setting.

This is not a zero-sum circumstance where the U.S. will be an advanced on-shore manufacturer, or has bio-tech growth, or highly efficent farming.

 
At 10/23/2011 5:35 PM, Blogger PeakTrader said...

Buddy, resources, e.g. labor, capital, land, raw materials, energy, etc., are limited.

If we need more farmers to produce food, then we're going backwards.

We've had four major economic revolutions, i.e. Agricultural-Industrial-Information-Biotech.

The only way to move from one economic revolution into the next is by using fewer and fewer resources in prior revolutions.

There will be many more economic revolutions. Perhaps, Nanotech will be next.

Why did U.S. firms offshore initially, and why does the U.S. lead the world in all four economic revolutions?

To import goods at lower prices and higher profits, which freed-up limited resources for emerging industries.

 
At 10/23/2011 6:33 PM, Blogger PeakTrader said...

Also, there's another reason why U.S. firms offshored initially:

Steve Jobs warned Obama of 'one-term presidency' over business policies
23 Oct, 2011

"You're headed for a one-term presidency," Jobs told Obama when the two met in the fall of 2010.

He told Obama that he had to adopt more business-friendly policies, saying companies were more likely to build factories in China because of "regulations and unnecessary costs" in the United States.

 
At 10/23/2011 10:18 PM, Blogger sethstorm said...


Why did U.S. firms offshore initially

Wrong.

Offshoring is used as a means to counter market pressures from workers within a nation. If businesses feel that people that work for them have too much freedom, offshoring is used to gain concessions - using the world to destroy the gains of a US citizen.




Gee sethstorm which countries have the slavery you're referring to?

Would be easier to say China + the entirety of the NATO-defined Third World. If the government is willing to bend over backwards for a business yet not do the same for the people that work for these businesses, the Third World country has such slavery.




PeakTrader said...

He told Obama that he had to adopt more business-friendly policies, saying companies were more likely to build factories in China because of "regulations and unnecessary costs" in the United States.

Steve Jobs didnt want to say he wanted slavery, given his defense of Foxconn. Business friendliness is just another word for slavery - given the proof around the world.

If you make it too costly to develop in places like China, they'll have no other alternative except the US.

 
At 10/23/2011 10:29 PM, Blogger sethstorm said...


juandos said...
10/23/2011 8:11 AM


Now if they institute a departure or scuttling tax that far exceeds the ability to pay it, they can't leave.

I thought Tennessee had one for this specific situation.

 
At 10/24/2011 12:14 AM, Blogger Ron H. said...

"I thought Tennessee had one for this specific situation."

You mean no one can leave Kentucky without permission?

 
At 10/24/2011 4:11 AM, Blogger sethstorm said...


You mean no one can leave Tennessee without permission?


FTFY.

They cant declare bankruptcy without a substantial penalty.

 
At 10/24/2011 9:25 AM, Blogger Buddy R Pacifico said...

Peak Trader,

I don't disagree about the future of nono-tech and industrial/knowledge revolutions.

I do disagree that farming, manufacturing, information and bio-tech can't all thrive in one economy. Limited resources for farming was dealt with by potash, combines, silos and grain cars. Manufacturing is employing robotics and just-in-time practices. Information technology has Moore's law at work constantly. Bio-tech and nano-tech will figure things out when intellectual property is protected world-wide.

Farming never left the country did it? No, it has constantly improved for 150 years or more. It was not crowded out by manufacturing, but instead adapted manufacturing techniques and goods for huge productivity gains.

You seem to be snobbish about manufacturing, but it does provide the high-tech gadgets and gizmoos that conserve limited resources. manufacturing is greatly high-tech now (ex. hand painted embellishments). Current farming, manufacturing, information tech and bio/nano-tech are not hunter-gatherer camps.

 
At 10/24/2011 11:55 AM, Blogger Ron H. said...

"FTFY.

They cant declare bankruptcy without a substantial penalty.
"

Thanks.

Declaring bankruptcy means having a negative net worth. More liabilities than assets. What possible penalty can be imposed on someone who has nothing? Flogging perhaps?

 
At 10/24/2011 4:29 PM, Blogger sethstorm said...


Declaring bankruptcy means having a negative net worth. More liabilities than assets. What possible penalty can be imposed on someone who has nothing? Flogging perhaps?

No, more like they have to pay a fee that they cannot afford.

 
At 10/24/2011 6:05 PM, Blogger Ron H. said...

"No, more like they have to pay a fee that they cannot afford.

So, they end up in debtors prison?

You write some of the most bizarre stuff I have ever read.

 
At 10/25/2011 6:57 AM, Blogger sethstorm said...


Ron H. said...

You're the one making the bizarre interpretations.

 

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