A "trickle" of manufacturing jobs comes back to U.S.
On MSNBC's Dylan Ratigan show last week, Alliance for American Manufacturing (AAM) Executive Director Scott Paul was asked if manufacturing jobs were indeed coming back to the U.S. His response was that, yes, some jobs are coming back. But the bigger question is how to turn this "trickle" into a trend.
The Wall Street Journal's James Hagerty has followed that up with an article entitled "Once Made in China: Jobs Trickle Back to U.S. Plants." Seems like everyone's thinking that, while "reshoring" sounds like a great idea, it's actually rather slow in happening.
Hagerty cites a Whirlpool Corp. plant in Greenville, Ohio that will begin producing KitchenAid hand mixers. For the previous six years, the hand mixers had been made by a contractor in Huizhou, China. The new operations at the Greenville plant will mean the addition of 25 manufacturing jobs.
Why was Whirlpool able to bring back production? Even though labor costs are still lower in China, U.S. manufacturing workers "on average produce about three times as much per hour as their Chinese counterparts because of greater use of automation and more efficient manufacturing processes."
By paring down production costs and streamliing the assembly process, Whirlpool found a way to make American manufacturing competitive.
Hagerty says this illustrates both the promise and limitations—of a reshoring trend "that has been growing over the past two years":
the "reshoring" of some manufacturing work that was "offshored" to low-cost producers like China in the past few decades. Producing in Asia "is not as big of a no-brainer as it was 10 years ago," says Mr. Good. Whirlpool is considering bringing back production of other small appliances.
Yet the return of some production to the U.S. by Whirlpool and scores of other companies isn't creating a huge number of jobs. Most of the parts for the mixers—including the motors—are still made in China because Whirlpool couldn't find U.S. suppliers that would make them cheaply enough. Plastic parts for the mixers are being made in the U.S.—but partly on equipment newly purchased from China.
It's a start, though, and one that the U.S. needs to pursue in order to boost a potential comeback for the manufacturing sector:
After a 35% decline in the number of manufacturing jobs between 1998 and 2010, the tally has since risen by 489,000, or 4.3%, to 11.9 million. Most of that increase is due to the economic recovery rather than reshoring. But IHS Global Insight, an economic research firm, forecasts that the number of manufacturing jobs will climb 3.2% this year compared with a 1.6% increase in all jobs.
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