Month: August 2010

This special August 2010 report in USA Today states that General Electric is moving significant production from China to a newly renovated factory in the USA, resulting in 400 jobs. The story highlights a growing band of U.S. manufacturers—including giants such as G.E., NCR, and Caterpillar—reversing the inexorable offshoring movement, bringing some new production back to the U.S. from far-flung locations like China.

Other OEMs that were buying components overseas are switching to U.S. suppliers. Ford Motor Company said on August 4 that it had brought nearly 2,000 jobs to its U.S. plants by 2012 from suppliers, including those in Japan, Mexico, and India.

Many reasons for the shifts were reported, often called “onshoring” or “reshoring.” Chinese wages and shipping costs have risen sharply in the past few years while U.S. salaries have stayed flat or, in some cases, fallen in the recession. Meanwhile, U.S. manufacturers have been frustrated by the sometimes poor quality of goods made by foreign contractors, theft of their intellectual property, and long product-delivery cycles that make them less responsive to customer demand. Several cite the drawbacks of tying up valuable capital in huge overseas shipments and want to bring assembly closer to engineers, suppliers, and customers. These concerns mounted as makers slashed costs in the downturn. Others are weary of midnight phone calls—and multiple annual trips—to Asia.

Check out OEM Tech Brief #39 for more information. You can also see a book review of “Poorly Made in China” here.