Manufacturing & Technology News continues to be invaluable for anyone who really cares about the state of America’s industry and the rest of its productive economy. Here’s just the latest example.
President Obama, the Boston Consulting Group, and numerous other cheerleaders keep blathering on about a surging wave of manufacturing reshoring keying an historic renaissance in the sector. Reliable supporting data is nowhere to be found (quite the contrary), but this doesn’t faze many of the cheerleaders. They’re often happy to base their claims largely on surveys of what executives profess to be thinking seriously about (whatever that means) or on any other straw they can grasp. And gullible reporters are just as happy to parrot the results.
Manufacturing & Technology News just took the obvious next step and actually tried to find out what these executives actually do. And at least for (what’s left of) the American electronics industry, it turns out that although many of its leaders have said they’ve been “interested” in bringing some of their overseas production back stateside, “few companies to date have taken action,” according a follow up study conducted by an electronics industry association. The bottom line: “On-shoring is still a relatively rare phenomenon.”
Also fascinating: Of the (10!) companies that were actually found to have returned factories and jobs to the United States, half saw their production costs rise, but half saw no change, as the benefits of being closer to their customers geographically offset the generally higher level of other U.S. domestic manufacturing costs. At the same time, only two of the companies saw their sales rise.
Nor does the electronics industry association expect meaningful reshoring to take off for the foreseeable future – mainly because of those higher U.S. production costs (like wages), and because (surprise!) taxes and regulations in first world America are a heavier burden on businesses than they are in third world China or Mexico. Moreover, decades of mass electronics offshoring has left the United States with a thoroughly supply chain in the sector.
Critics often complain that President Obama too often confuses talking about a problem with solving a problem. The persistence of reshoring hype shows that, when it comes to strengthening domestic manufacturing, he’s anything but alone.