Reshoring Fail?


Some new reports are questioning whether the reshoring trend has stalled, or perhaps was never a trend at all.

Some of the controversy is a matter of definition. Reports of the reshoring trend have in some cases been based on what companies say they plan to do. It makes sense to look at corporate plans, because the process of reshoring is a lengthy one, but plans don’t always translate into action.

What’s more, some reports focus on metrics like imports from other countries, which do not necessarily tell much about reshoring efforts.

There’s also the fact that new factories built in the U.S. tend to be modern, with fewer workers on the floor. So a count of jobs created by reshoring gives unimpressive numbers compared with the numbers of jobs lost or even the number of jobs still held overseas.

However, the move away from manufacturing in China is not only bringing manufacturing back to the U.S. There’s also a race to the bottom, with companies moving factories from China to Vietnam and other countries that can still provide low-cost labor. It may now be cheaper and more efficient to serve the U.S. market from U.S. factories, but global corporations may still want Asian and Latin American factories to serve other parts of the global market.

To muddy the waters further, Asian companies are also finding that it’s more cost-effective to serve the U.S. market from U.S. facilities, and some are beginning to build factories in America.

Where will this all end up? Only time will tell. U.S. factories are still having trouble finding qualified workers and sourcing raw materials in America. The consequences of the decades spent manufacturing offshore won’t end in a short time. The big question in the end may be whether manufacturing companies are willing to be persistent.

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