Opinion: How the U.S. could bring back up to half the manufacturing jobs that moved overseas

Market Watch ^ | March 10, 2017 | Harry Moser and Sandy Montalbano

[2ndDivisionVet]

For decades, U.S. companies have been chasing cheap labor offshore and then importing products to sell in the U.S. market.

Now, Trumponomics, a broader focus on Total Cost of Ownership (TCO quantifies all relevant costs, risks and strategic factors) and advanced manufacturing together have the potential to end the manufacturing stagnation of the past 30 years and create millions of manufacturing jobs in the U.S.

Over the past 20 years, the boom in offshoring drove our goods trade deficit up by about $640 billion a year, costing us three to four million manufacturing jobs....

[GodAndCountryFirst]

Ban unions and end the minimum wage nationwide. Then watch the jobs come streaming back.

[NobleFree]

“Many companies that offshored manufacturing didn’t really do the math. An Archstone study revealed that 60% of offshoring decisions used only rudimentary cost calculations, typically just price or labor costs and ignored other costs such as freight, duty, carrying cost of inventory, delivery and impact on innovation. Most of the true risks and cost of offshoring were being ignored.”

Of course - that bad accounting meant big bonuses for the “cost cutters.”

[RoosterRedux]

A big issue for spurring the economy to life is the fact that Obamacare still kills jobs at small companies.

Thx Freedom Caucus.

I haven't studied the HHS rules enough, but I am hoping that Tom Price has the power to eliminate the rules that require insurance at small businesses for 50+ employees.

Small business is the backbone of our economy. Obamacare is killing them.

[T-Bird45]

Thanks for posting this. I met Harry Moser at a manufacturing conference 5 or 6 years ago and use his formulas with clients to figure TCO. He makes a great point here about opportunity still being out there to bring home the work. Companies need to realize placing work overseas can’t be a one-time decision.

[ConservativeMind]

I know a firm in Illinois that moved manufacturing to China. They had performed a study about two years earlier that showed they would save over half the total cost of manufacturing, net.

They did the work to move all the jobs and found that, with the local Chinese inflation for salaries and all the continued churn of employees, their net costs after one complete year in China was almost the same as if they'd kept the production here.

They haven't made the move back, yet, last I heard.

[bigbob]

Its hard to quantify, but there is a cost associated with having your supply chain stretched halfway around the globe. Especially in industries where agility is important.