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Speaker: Reshoring is happening, and it will accelerate

By: Bill Bregar

March 13, 2014

WESLEY CHAPEL, FLA. — Mike Zacharias is a U.S. manufacturing supporter, a journeyman toolmaker. But he ran into a dilemma when his company, Extreme Tooling & Engineering Inc., exhibited at the MD&M trade show in 2007.

Half the people who stopped by Extreme Tooling’s booth asked if Extreme could source molds made in China.

“They assumed the USA was too expensive,” he said.

And when Zacharias said he did not, they walked away.

So Zacharias began researching China, looking for a partner that could make high-quality molds. In 2008, he helped start an American-Chinese joint venture in China, Cosmos Tooling Solution Ltd., where he is president.

“We felt we needed to have identical manufacturing systems,” he said. The idea was to create a “one-stop shop” for customers.

Zacharias gave his blue-collar, yet internationalist, outlook in a presentation at the Plastics News Executive Forum in Wesley Chapel.

A big topic at the forum was reshoring — companies moving production from China back to the United States. Zacharias said it is really happening, and will accelerate.

“A lot more clients are looking at the total landed cost. They’re much more educated,” he said. “The cost of quality has become a much bigger component of the decision process as it has historically.”

But Zacharias said his experience in both countries goes against the common belief that manufacturing in China could hurt U.S. factories. He said business has grown 42 percent since 2008 at Extreme Tooling, based in Wakefield, Mich., in the state’s Upper Peninsula.

At the same time, reshoring will not hurt China, as domestic consumption grows there, he said.

“Who is reshoring bad for? My opinion is nobody. It’s not bad for anybody,” he said. And it’s good for America. “As a third-generation toolmaker/machinist, I’m damn proud of that.”

In China, Cosmos moved last year from the coastal manufacturing city of Dongguan, 120 miles north to the smaller city of Shaoguan, an area with a more-stable workforce.

“Our plan is to grow our domestic client base and build more in China for China,” Zacharias said.

And Zacharias said U.S. toolmakers that survived the onslaught of molds from China — which he described as a level of threat the industry will never face again — are stronger that before. They should be proud.

It’s a big turnaround, Zacharias said.

“If someone would have asked us five years ago that things would be better today than in days past, I would’ve said no freakin’ way,” he said.