US firms bringing work home from overseas

Oct 01, 2012

(Phys.org)—Increasingly, U.S. firms are moving or considering moving their manufacturing operations back to domestic soil from overseas, finds a new study co-authored by a Michigan State University supply chain expert.

Fueling the trend are rising labor costs in emerging countries, high and increasing , global risks such as political instability and other factors, said Tobias Schoenherr.

"Going overseas is not the panacea that it was thought of just a decade or so ago," said Schoenherr, assistant professor in MSU's top-ranked Department of . "Companies have realized the challenges and thus are moving back to the United States."

The study found that 40 percent of manufacturing firms believe there is an increased movement of "reshoring" – or moving back to the United States from countries such as China and India. The results differed by industry, but were led by aerospace and defense; industrial parts and equipment; electronics; and medical and surgical supplies.

"We were surprised by the large percentage of firms indicating that they are considering reshoring," Schoenherr said.

In addition, nearly 38 percent of companies indicated that their direct competitors have reshored.

In addition to rising costs and global risks, Schoenherr said companies are concerned with the erosion of intellectual property overseas and problems, which can be difficult to fix when dealing with multiple and language and cultural barriers.

"From my communication with some firms, I also sense a genuine desire to help the U.S. economy and to bring back jobs," Schoenherr said.

The study, sponsored by the Council of Supply Chain Management Professionals, is based on a survey of 319 firms.

Schoenherr's co-authors were Wendy Tate and Kenneth Petersen of the University of Tennessee and Lisa Ellram of Miami University (Ohio).

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User comments : 5

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Caliban
1 / 5 (1) Oct 01, 2012
All very scientific, I'm sure.

Unfortunately, statements like:

"The study found that 40 percent of manufacturing firms believe there is an increased movement of "reshoring"


and

"We were surprised by the large percentage of firms indicating that they are considering reshoring," Schoenherr said.


and

In addition, nearly 38 percent of companies indicated that their direct competitors have reshored.


and lastly,

"From my communication with some firms, I also sense a genuine desire to help the U.S. economy and to bring back jobs," Schoenherr said.


Sound like, and appear to be, entirely anectdotal.

What's really being said is that --yes it is true that the offshoring of American jobs is a dicey proposition--but that it has served its purpose, and now that the American Working Class has been softened up, we want to bring those jobs back to America, where we can pay less and offer fewer hours and benefits(if any) than even five years ago.



rwinners
5 / 5 (3) Oct 01, 2012
The study found that 40 percent of manufacturing firms believe there is an increased movement of "reshoring" – or moving manufacturing plants back to the United States from countries such as China and India."

Sure. How about some statistics? Considering???? Sure, we will move all our equipment to new or re-newed plants in the US. How about some actually commitments? How about listing some actual moves?
Shakescene21
5 / 5 (3) Oct 01, 2012
"The study found that 40 percent of manufacturing firms believe there is an increased movement of "reshoring" – or moving manufacturing plants back to the United States from countries such as China and India."

This should have been stated as "The study found that 60 percent of manufacturing firms DON'T believe there is an increased movement of reshoring ...".

geokstr
1 / 5 (6) Oct 01, 2012
And it's all because of Obama's wonderful treatment of corporations, the lack of corporate bashing in his campaign, his oft-stated love of capitalism, and the restraint of his agencies like the EPA, the FTC, OSHA, et al, in passing new stringent regulations...

Oh, wait...

Maybe they're thinking of moving back in anticipation of having a new president with actual, like, you know, business experience in turnarounds, problem-solving and leadership skills, and a love of his country.
alfie_null
3.7 / 5 (3) Oct 02, 2012
If geokstr plans on becoming a pundit, my advice would be to not quit his day job.

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