Monday, October 24, 2011

Reshoring Example: Houston-Based Farouk Systems


"Farouk Shami, chairman and main owner of Houston-based Farouk Systems, made an unorthodox choice when he decided where to expand production of his professional hairdressing equipment. Rather than adding to his existing workforce in Asia, Mr. Shami expanded in Texas.

More of his products now carry the “made in America” label after the decision four years ago to cut back on the work he was giving to subcontractors, based mainly in China and South Korea, in favor of expanding local production.

As a result his company – which supplies professional hairdressers with high-tech dryers, hair curlers and other specialized equipment – has added 400 jobs to its Texas-based workforce, which now totals 2,000.

Production costs are only slightly higher in the U.S. than in China, he says, because the workers are more efficient. “I may need to employ only 15 people to do a job that would require 70 in a Chinese factory,” said Mr. Shami.

This year 80% of his company’s production is being done in the U.S., compared with 40 per cent in 2007. His sales have risen by about 20% since the decision to expand the domestic operation."

4 Comments:

At 10/24/2011 10:26 AM, Blogger Buddy R Pacifico said...

Farouk Systems on winning a recent lawsuit (10-13-2011) against Costco, for selling counterfiet branded Farouk merchandise:

"Not only do counterfeit and fake goods infringe on intellectual property rights of brand owners, but they also take much needed jobs away from the American economy”.

 
At 10/24/2011 11:39 AM, Blogger OBloodyHell said...

>>> “I may need to employ only 15 people to do a job that would require 70 in a Chinese factory,” said Mr. Shami.

Probably robotics, too. A fully modern factory that uses machines more than human power.

As it went with agriculture, machinery -- in the form of robotics -- will make the manufacturing workforce only 2-5% of the population.

We are in an IP & Services Economy. All substantial new wealth will be derived from IP & Services, not from manufacturing, any more than wealth comes from food any more.

 
At 10/24/2011 7:23 PM, Blogger Craig said...

We are in an IP & Services Economy. All substantial new wealth will be derived from IP & Services, not from manufacturing, any more than wealth comes from food any more.

We are no more an "IP & Services Economy" [sic] than we were a "new" economy in the nineties or a "green" economy, um, never. Trying to define the economy is a fool's errand.

And lots of wealth still comes from food.

 
At 10/26/2011 2:32 AM, Blogger James said...

Moving production to Texas may not involve many jobs for Americans. In addition to hiring foreign workers on H-1Bs Farouk Shami stated that he mostly hired blacks and Hispanics because he does not believe that "whites" wanted to work on factory floors. He stated that white people would want positions as supervisors or would want to be paid more than their counterparts. That sounds like a guy who is not going to pay wages that would support a middle class family and, if he were a Republican, he would be called a racist.

In a recent run for public office as a Democrat he stated that he was "not sure" if the U.S. government was behind the 911 bombing or not.

Reshoring has a common theme. Outsourced jobs that once supported an American lifestyle are borough back as MacJobs.

 

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