China has been referred to as the world’s factory. Many of the products we buy come with a small label that says “made in China.” It is no surprise then, that China produces more in manufacturing than any other country in the world.
Despite China being a powerhouse of production, more and more U.S manufacturers are bringing production back to U.S shores. Reshoring has started a shift in manufacturing trends.
The big question is WHY?
Manufacturers are building new factories on U.S soil and creating 1000’s of jobs. Yet, we are constantly hearing about the economic storm clouds hanging over the U.S. Is it true? Does it mean manufacturing is also set for a storm?
Read on to learn which manufacturers are taking the lead, why, and 5 key drivers that will affect your industry too. You will also learn why NOW is the best time to build new factories.
It is true that top companies like Apple are using China for mass production. China has been developing its manufacturing capacity for years. In fact, between 2008 and 2016, Chinese manufacturing grew 94%. That is a remarkable achievement when considering the economic backdrop of a worldwide recession.
Apple now wants to invest more into their own operations in the U.S. but they also want to support the manufacturing industry more widely. Their Advanced Manufacturing Fund is used to invest in U.S companies provide a stimulus to the domestic manufacturing.
Apple will have a long list of reasons but one basic reason is the American people. It is known that Apple uses China for a major part of their supply chain. Americans want to see manufacturing come home and Apple is responding.
Boeing landed a major deal selling Singapore Airlines 39 planes. It seems Boeing has been bringing jobs back to U.S soil since 2010. This will be a real boost to the motor industry. As many as 8000 jobs could be brought back to the U.S.
This deal with Singapore Airlines will be a factor but a major driver is U.S economics and the desire of the Trump administration to see U.S. manufacturing where it belongs in the U.S. Can the Trump administration really impact the national economy this much? Here is an interesting report on the economic impact of Trump’s recent visit to Montana.
Ford will bring back over 4,000 jobs to U.S soil benefiting the motor industry. Their Michigan facility will benefit from an investment of $700 million and help create some 700 jobs in this project alone.
Even though labor is considered to be cheaper in China, Ford has forged a close working partnership with the United Auto Workers Union. This has many benefits including a deal for safer working conditions that even involves the federal government. This kind of partnership will have wide-reaching benefits for all involved. Smart move.
In the past few years, some 2,500 GE jobs have been or are being reshored. Their refrigerators and washing machines have been manufactured in China and Mexico. Now GE is shifting production to Kentucky.
There are multiple reasons such as lower transportation requirements as well as the use of a more qualified workforce, and incentives from the government.
Intel plans to reshore some 4,000 jobs for a $5 billion microprocessor plant on U.S. soil. This may even lead to the creation of as many as 10,000 jobs. This facility is about being world class and a world leader.
They are high-tech and expect to pay top dollar for the expertise they need. When you are recruiting from a highly competitive employment pool, you need to be prepared to pay the ‘going rate.’ No need for China.
There are many other major players in the industry that are bringing their manufacturing back to U.S. shores. For example, Polaris report some 2000 jobs; SolarCity a similar number; Merck & Co over 1500 jobs; Element electronics similar with 1500 jobs; as well as Insulet with 1500 jobs.
Here are 5 key drivers that will likely affect your industry too:
Alexander Pope once said, “don’t be the first into something new but also don’t be the last to make the change.” How true! The trend has already been set by some of the major manufacturers.
It is very telling to see that vacancy rates for U.S. manufacturing has fallen to just under 4%, down from 7% over the last 10 years. The average of new manufacturing space is 100,000 square feet off the pre-recession average. Now that is real progress.
Of course, to build a new factory takes resources and there are many ways you can do this. Make sure you get more information and explore your options.
The manufacturing trend for bringing production home is set. It is a complex economic decision but others have already made their minds up and are building new factories on U.S soil. Giants like Apple are creating 1000’s of jobs in America.
Yes, China has been the factory of the world but this latest shift in production power is putting the industry back into America. The Trump administration wants it. The American people want it. The economics can support it. What will you do?
Stayed informed. That is a priority. Keep in touch with what is affecting the American people here.
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