Reshoring gives a boost to US manufacturers

By Frank Esposito
Senior Staff Reporter

Published: February 25, 2014 7:35 am ET
Updated: February 25, 2014 2:44 pm ET

Image By: The Gallery Studios Harry Moser

Related to this story

Topics Reshoring, Plastics News Executive Forum

WESLEY CHAPEL, FLA. — Reshoring has added more than 100,000 jobs in the U.S. in the last three years — and the trend shows no signs of slowing down.

That's the word from Harry Moser, founder of the Kildeer, Ill.-based Reshoring Initiative. Moser spoke Feb. 24 at the Plastics News Executive Forum in Wesley Chapel.

Since 2000, unit labor costs in the U.S. have roughly been flat, while those costs have increased rapidly in China. China's costs have increased at a compounded annual rate of 18 percent vs. an increase of 2 percent in the U.S. The U.S. increase also was matched by a similar increase in productivity.

Even though China's labor costs remain lower than the U.S., the gap isn't as great anymore, Moser said. China's labor supply also is tightening as a result of 35 years of that country's one-child policy, added Moser, who has more than 40 years of manufacturing experience.

"A lot of good work went offshore, and [U.S.] companies followed each other like lemmings — it was herd behavior," he said. "They improved their margins, but their overhead and shipping got worse."

"The strategy of getting so much work done offshore no longer makes sense."

The number of U.S. jobs being added from reshoring each year now stands at 30-40,000 — roughly equal to the 30 [thousand] -50,000 jobs that are offshored each year. "We've stopped the bleeding," Moser said.

In fact, Moser added, plastics and rubber is one of several "tipping point" industries, in which by 2015 it will make more economic sense to have products made in the U.S. than in China.

In 2013, 21 percent of large U.S. companies invested in reshoring — double the rate of 2012. According to a 2012 survey, 40 percent of contract manufacturers in the U.S. were doing reshoring work.

Although some arguments against reshoring continue — such as a shortage of skilled labor and experienced management in the U.S. and the cost of making the transition — Moser explained that many U.S. companies now can justify domestic investment in training and automation without sacrificing quality, delivery and time-to-market.

U.S. plastics firms that have resourced in recent years include Wright Engineering Plastics — an injection molder of medical products in Santa Rosa, Calif., and medical tubing extruder Precision Extrusion Inc. of Glens Falls, N.Y.

Moser's firm helps companies with reshoring by offering to supply chain problems, providing free software for companies and suppliers and by reviewing freight and duty rates.


Comments

Reshoring gives a boost to US manufacturers

By Frank Esposito
Senior Staff Reporter

Published: February 25, 2014 7:35 am ET
Updated: February 25, 2014 2:44 pm ET

Post Your Comments


Back to story


More stories

Image

DuPont resins help take Nike golf balls 'Fore!'ward

July 25, 2014 1:07 pm ET

It may be difficult to imagine just how much science, not to mention rubber and plastic components, go into a golf ball. But global giant DuPont Co....    More

Image

Plastics News Now: Lego pieces wash ashore 17 years after accident

July 24, 2014 9:16 am ET

Michigan replacing steel with carbon fiber to reinforce concrete on a bridge and we talk economics with Bill Wood.    More

Image

Molder provides quality parts and quality work for disabled adults

July 23, 2014 2:40 pm ET

Coarc Manufacturing Inc. does injection molding, assembly and all of the work of traditional manufacturer, but it also serves as part of Coarc Inc. a ...    More

Image

Plastics help designers bring home the gold

July 22, 2014 2:15 pm ET

Products with polymer content received multiple gold recognitions in the 2014 International Design Excellence Awards.    More

Image

Material Insights: PE makers declare force majeure

July 21, 2014 1:53 pm ET

Plus, changes in PET bottle resin price, PolyOne closing facilities and CCP Composites gets bought.    More

Market Reports

Plastics Recyclers Data Report & Directory

This exclusive MS Excel database contains all the companies from Plastics News' ranking of top North American Recyclers and Brokers by reprocessed volume and also includes a directory with materials processes, services offered and company contact information. Data is based on primary research by PN editorial staff.

Learn more

2014 Injection Molding Industry Report

GROWTH, OPPORTUNITY IN SIGHT FOR INJECTION MOLDERS IN 2014

In the wake of the economic turbulence earlier in this decade, molders today find themselves in much better shape. Molders are gaining a competitive advantage by investing in people, equipment and seeking inroads into new markets on a global scale.

Growth in the injection molding industry is going to be driven by low financing costs and a continued move to reshore some business.

Learn more

Shale Gas Market - Analysis of North American Region

This report highlights the impact of shale-based natural gas on the North American plastics market and features an in-depth analysis of production trends in the United States during 2013 and a forecast for 2014 and beyond.

Learn more

Upcoming Plastics News Events

September 10, 2014 - September 12, 2014Plastics Caps & Closures 2014

January 14, 2015 - January 14, 2015Plastics in Automotive

February 4, 2015 - February 6, 2015Plastics News Executive Forum 2015

More Events