manufacturing overseas to save costs. Conference Board of Canada. Oil costs
In an
MFG.com buyer survey this alone have doubled the price of shipping
year, 47 percent of companies said they goods between China and the U.S. over
will bring more work back to the U.S. in the past two years.
the coming year, while 41 percent said “If a company can save 15 percent by
they will source made-to-order parts to locating to China, it makes sense. But if
the U.S., where quality control is higher. those savings go down to 7 or 8 percent,
Requests for quotes to U.S. suppliers and you factor in the length of time it
from international buyers have doubled takes to ship goods from China to the
in the past year,
MFG.com found. U.S., it becomes less viable,” Beckman
Wisconsin-based Regal Ware gave up tells Newsmax. “Companies are starting
a 10-year Chinese experiment and moved to shift production back,” he says. “And
production home this year after repeated the trend will continue, especially if oil
problems, including signifi cant cultural prices stay high.”
differences. For example, when it came Scott Wilson and Doug Brown pro-
to working around the Lunar New Year duce an annual book, The Black Book of
in China, production ground to a halt Outsourcing: How to Manage the Changes,
when many employees left their posts Challenges and Opportunities, which
and didn’t return. confi rms the job-return phenomenon.
“It was always a bit of a nightmare try- And it’s not just manufacturing jobs,
ing to juggle around the holiday,” Regal they note. Out of $750 billion worth
Ware CEO Jeffrey Reigle told CNN. of outsourced labor, including jobs in
Moving work back to the Badger State telephone customer service, information
held other benefi ts for Regal Ware, espe- technology, and computer support, about
cially being able to reduce delivery time $200 billion in work is moving back
to its distributors from 60 days to just to the U.S., according to Wilson and
48 hours. Brown’s report. Concerns about security
Regal Ware’s overseas manufacturing of fi nancial and medical records also are
experience isn’t unusual. In fact, only having an effect, with 4,500 back-offi ce
33 percent of companies say they are jobs returning home, Brown says.
satisfi ed with the results of outsourcing, “It could ultimately make a very seri-
according to the NAM. ous impact on the U.S. economy,” Brown
While quality of work is certainly an tells Newsmax. “Clients want someone in
issue, the controlling factor in the glob- front of them who is an American and
al work force remains profi t, according speaks their language, and can respond
to Kip Beckman, economist with The quickly in the same time zone.”
COMPANIES COME HOME
REGAL WARE, WHICH MOVED PRODUCTION TO CHINA 10 YEARS
ago after 50 years of U.S. manufacturing, is just one of the businesses
bringing production back to American shores. Other examples:
Thomasville Furniture left China, reopened her Chinese-crafted
its North Carolina plant, and hired 50 workers. chests assembled in
Exxel Outdoors moved its sleeping bag and North Carolina to save
TING tent manufacturing to a new plant in on shipping costs. BELLA CHAIR
Haleyville, Ala. Crown Battery
Not necessarily
Emerson Electronics relocated some work picked up a fi ve-year
made in China.
from China to the U.S. to curb rising tax credit from Ohio for
transportation costs. expanding a factory
Desa, a heater manufacturer, went back to and moving manufacturing there from Mexico.
Bowling Green, Ky., after the cost of fuel, raw Farouk Systems will add 1,000 U.S. jobs
Y OF AMERICAN CHAIR & SEA
materials, and Chinese taxes jumped in 2007. when it moves its manufacturing of beauty
TES
Carol Gregg, a furniture designer, now has devices to Houston.
C
OUR
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