By Sopan Deb
Rock Center
The United States may be on the verge of bringing back manufacturing jobs from China.
Harold Sirkin, along with Michael Zinser and Douglas Hohner (all experts from the Boston Consulting Group – a leading management consulting firm), says that outsourcing manufacturing to China is not as cheap as it used to be and that the United States is poised to bring back jobs from China. The three consultants first reached this conclusion in a recently published study titled “Made in America, Again: Why Manufacturing Will Return to the U.S.”
Many companies, especially in the auto and furniture industries, moved plants overseas once China opened its doors to free trade and foreign investment in the last few decades. Labor was cheaper for American companies – less than $1 per hour according to the BCG report. Today, labor costs in China have risen dramatically, and shipping and fuel costs have skyrocketed. As China’s economy has expanded, and China has built new factories all across the country, the demand for workers has risen. As a result, wages are up as new companies compete to hire the best workers.
“The tilt is now getting lower,” Sirkin says. “We think somewhere around 2015 it’ll look flat and may start to tilt in the U.S. favor at that point in time.”
By 2015, it will only be about 10 percent cheaper to manufacture in China.
“We have to recognize one thing,” Sirkin told NBC’s Harry Smith in an interview to air on Rock Center with Brian Williams. “The average Chinese worker is about a quarter as productive as the average U.S. worker.”
“It’ll be a major impact. Our projections are, when you take the manufacturing jobs and then the service jobs that get created alongside those, that we will add two to three million jobs to the U.S. workforce.”
The U.S. is already seeing examples of this – starting in Lincolnton, North Carolina.
Rock Center has been following Bruce Cochrane of Lincolnton Furniture as he brings his family business back to the U.S. and re-opens the family furniture plant. Cochrane was invited to the White House last week for a forum on job creation with President Barack Obama and Vice President Joe Biden.
“Now, you don't have be a big manufacturer to insource jobs,” Obama said. “Bruce Cochrane's family had manufactured furniture in North Carolina for five generations. But in 1996, as jobs began shifting to Asia, the family sold their business, and Bruce spent time in China and Vietnam as a consultant for American furniture makers. But while he was there, he noticed something he didn't expect: their consumers actually wanted to buy things made in America. So he came home and started a new company, Lincolnton Furniture, which operates out of the old family factories. He's even re-hired many of the former workers from his family business. “
According to BCG, another manufacturer, Sleek Audio, moved production of its headphones from Chinese suppliers to a plant in Florida. Ford Motor Company is bringing back 2,000 jobs from China after striking an agreement with the United Auto Workers. Sirkin says it’s good news for the economy even though wages will be lower in those jobs than they were previously.
Sirkin believes fears that United States manufacturing is in decline are overstated and notes that the U.S. is still a manufacturing giant. In 2010, China provided 19.8 percent of global manufacturing value added. The U.S. accounted for a marginally less 19.4 percent, which, according to Boston Consulting, was “a share that has declined only slightly over the past three decades.”
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sounds like a bull media ploy to give obama a good image.this year i bet somehow unemployment will go down,some miracle will happen or a major disaster to make obooboo look good.this is all bull.we will bring jobs back and let the ilelgals do them.its all smoke and mirrors
Mike you are correct. Look what happened when 1 person comes back. Straight to the White House with obama taking credit. You know that person was told what to say. It is all to make onama look good, as you say, and from now until election this kind of stuff will keep going on.
I didn't catch it in time: onama should be obama Sorry
Why worry about that typo, goingmad...
It's obvious that you don't have any respect for Obama, and wouldn't give him credit for anything, except of course, what the current right-wing talking points prompt you to spew.
Regardless of how small a difference in wages and benefits the Chinese or other foreign workers will accept,corporate greed has become so pervasive in this country(USA)that even one tenth of one percent will not bring jobs back to America if it at all affects the bottom line of the corporation.
There's no reason any longer to outsource jobs or manufacture in China because we have millions of illegal immigrants that will work for practically nothing right here in the United States.
They have ruined the construction industry for many occupations already, and will do the same in many other occupations until we get more serious about control. Companies hire them with their fake ID's and Social Security cards and if it is discovered they are illegal, they are fired and they go right down the street and find another job. Nobody ever does anything about the fact they are here illegally.
I'm glad to see a shift in job creation here in the United States. Now, lets shrink the cheap labor pool so the people that are here legally can find a job and get payed a decent wage for their services.
Ever bought a hot-dog in a National Park? It cost much more than in town.
The hot-dog salesman must pay 20% tax to the federal government, (it may be higher now). He adds that 20% to your cost. YOU pay that extra tax.
The same is true for corporations. Raise their taxes and YOU pay it.
So if the article is true, 2015 is the year of the start to turn around for the U.S.. They must be taking into account that Odumbo and company are gone in 2012 and this is highly probable. If by some slim miracle Odumbo wins then all bets are off and jobs won't come back because that 10% difference will grow into a 25% difference thru his raising of taxes and enviromental regulations.
It may turn around sooner with the republicans as they may repeal a lot of the damage done by Obama and company.
Best case is republicans win, repeal of the damage created, and the passing of the FairTax ( HR25 ), this creates the atmosphere needed to start the jobs back here sooner.
If you really think that the current set of GOP'ers will enact the Fair Tax, I have some choice Fla. real estate for you as well (can't use the term "swamp" anymore to describe it, but it might be "wetlands").
wow. I have been saying for the last 30 years that since the manufacturing idustry out sourced it jobs to foreingers that our pepole will suffer and low n behold the government has finally seen what it has done to its own people. and the peole of the united states of america also did it to itself. this Christmas season how much did u spend,,,,$500.00 each..and out of the $500.00 how many products were actully made in the USA? maybe 1% so dont complain that ur husband got laid off when u yourself wont even buy MADE IN THE USA. i say stop supporting foreign business! my slogan is "BUY MADE IN THE US OR SAY GOOD BYE US" stop buying dunkin donuts no americans work or own them,,,gas stations,,liquior stores,,,support american owned business and within 6 month u will see our economy imporve. next time to spend money only buy MADE IN THE USA ITEMS
Since the outsourcing has been going on for fifty years you were a little late catching on Teresa. Of course since the outsourcing hit me personally in 1964 I caught on earlier. And there are many products tagged made in America that are actually assembled in other countries. The parts are made in America then sent to someplace like a Mexican border town to be assembled shipped back to their warehouse in Texas where the made in america label is put on. Get real that tag means nothing to the people who lost those assembly jobs.
In Nashville DD revoked the franchise of the South Asian guy who had it and now I do see Americans working there; don't know who has the franchise now but it's not quite the way that you are representing it, at least not here.
So, now they want to come back to America?
This was part of the plan all along,(coupled with unchecked illegal immigration) to get American workers so desperate for jobs that they will work for less.
Frankly, I'm surprised that they didn't consider moving operations to Africa, where they could pay workers the scraps that fall from their tables.
Welcome home, corporate a$$wipes!
blacks have low iq . lazy
Guess there's no moderation any more.
big biz psychopaths, no honor , no spine , no loyality, terroist.
Made in America is easier said than done.You have the auto companies touting American knowhow and American pride,but that car has just enough US made parts in it to ba called American.Every nut, bolt and screw price has been price analyzed to death.Cross docking,a favorite in auto companies,whereas parts are manufactured overseas,brought to the US,then relabled as US made,is prevalent.
Most Chryslers have 85% US made parts and are assembled in the US and Canada. Ford and GM, not so much.
Yep, & they're owned by the Feds and those great Americans at FIAT!
why would people go to work for 8 dollars an hour when the government are sheltering them and giving out food stamps like no other. Obama loves giving, instead of making work, the pipeline, more drilling, means more restuarants, more strip joints, more hotels, more building where the pipeline will go through, come on obama is a loser,
There is no difference between the Republicans and Democrats. Both are financed by the same global banks and different corporations. Result.. misprepresentation of the American citizen.
The common goal to steal taxpayer money and cheat the American worker using money to fund elections.
How more straight forward is that.
you're half right,why would people work for 8 dollars an hour?do you?
Some are too good to work for $8.00, but not too good to beg.
Ever hear of the working poor?? Many, many US citizens work for eight dollars an hour (and less) and survive by living in government subsidized housing. They qualify for "food stamps" and depend on medicaid.
THAT is the new job market.
Reading the blogs, it's very obvious that many bloggers are more knowledgeable and intelligent than this brainless writer.You may reject my blog but, hey,you read it just pass it on to this writer.
One of the problems with returning jobs to the USA or any other western country is that when companies moved production to China in many cases they also moved the equipment used. I cannot see that the Chinese government will allow this equipment to be removed from their country and so those companies who are in this situation and wish to move back to the west will have to re-capitalise their operations. Certaintly not a cheap way to go. It was only a matter of time before China would nationalise and sieze those assets anyway.
Since China manufactures more products for sale in countries other than for the U.S. market, there is no reason to bring any equipment back to this country. You are correct, however, in that companies wishing to establish operations here will need to provide sufficient capital to buy the equipment necessary to bring them on line.
remember its all about the investers who make deals with the chinese and get products for cents on the dollar are the ones who controll that decision not the president or anyone who thinks they can bring the jobs back are crazy!if a man wants to be rich he would have things made in china if he wants to go broke he would make things in the united states because of insurance for the workers and now the hire minimum wage fee's it would never work.
If you want cheaper healthcare in the USA then takes the lawyers and litigation out of the picture. Doctors are human, they make mistakes like anyone else does but then get penalised to hell. OK if negligence is involved then they should be penalised but not for genuine mistakes or unforeseen circumstances.
As an RN of better than a quarter century I'll add this about health care--You want the truth/You can't handle the truth!
Take the corporate profits out of it too!
AMEN, most people couldnt handle the truth about alot thing that happen in this world. and if they did know do u think that they would do anything about it?
I fully support bringing jobs back home, U.S.A., where they belong. My company has just brought back an appliance that was outsourced to China. We need to get this kind of "mindset" to the forefront of America. We cannot support the "American economy" by sending jobs across the pond. I try to "buy American" when I can, but if you don't research your purchases, it is very hard to do. Why support a communist country? We need to fix the problems on the home front before we worry about others.
It wasn't greed that damn near killed our economy.It was "EXTREME" greed dude!Why are americans fat and lazy?because the jobs went away.Everyone [almost] has an innate desire to be productive.If you're poor like a lot of americans now,there aren't any" priceless" moments like in the commercials.But you can do the attainable.Eat,drink,smoke,and screw.You bring back jobs,all the social ills wane.Better health less violence.Our fathers were too tired to get into trouble,they were too busy getting all the OT they could.Could see a future w a mortgage.They saved and looked after their reasonably sized family.Rich bastards got richer.Better bring back jobs.They're the friggin' "nobility",and if things continue we're gonna have an american bastille day/revolution
Actually, there's far less violence than there was 30-40 years ago for the most part. The bulk of violence is drug- and gang-related, and of course we know that the gangs exist in part for the drug business, since they are doing something with the profit margin only illegal activities have. But we have to have better jobs here, I agree, and add to you "nobility" all of those "public service" workers who think that they are entitled by right to much better pay and benefits than most of those they presumably serve.
I LOVE "MADE IN USA" !!!
wow. I have been saying for the last 30 years that since the manufacturing idustry out sourced it jobs to foreingers that our pepole will suffer and low n behold the government has finally seen what it has done to its own people. and the peole of the united states of america also did it to itself. this Christmas season how much did u spend,,,,$500.00 each..and out of the $500.00 how many products were actully made in the USA? maybe 1% so dont complain that ur husband got laid off when u yourself wont even buy MADE IN THE USA. i say stop supporting foreign business! my slogan is "BUY MADE IN THE US OR SAY GOOD BYE US" stop buying dunkin donuts no americans work or own them,,,gas stations,,liquior stores,,,support american owned business and within 6 month u will see our economy imporve. next time to spend money only buy MADE IN THE USA ITEMS.
put americans back to work, BUY MADE IN THE USA OR SAY GOOD BYE TO THE USA
"Bring back jobs" might be a little presumptuous. The manufacturers in China are much more likely to have their Chinese-sourced components and sub-assemblies shipped to final assembly plants in Mexico. As a result of NAFTA, that is what makes sense to these corporations. They don't have any allegiance so they are just looking at cost and ease of management and shipping, both of which can be readily had in Mexico. Shipping tariff-free into Mexico is easy if you improve your product's value at least 15%. Basically unloading and repackaging meets that value increase requirement. Having the 'assembled in Mexico' label will add market acceptance over the old 'Made in China' label.
The Chinese might have shot themselves in the foot with their tricky business practices, poor product quality, and artificially high fixed exchange rates, but that doesn't mean every manufacturer automatically runs back to the U.S.
are there any mexicans left there?
Big multinational corporations are presently setting up there. They spend money to know for sure if the labor pool is adequate and priced right.
Auto manufacturers go there. Electronic and mechanical assemblers go there.
Now Bombardier regional and Global Jet aircraft will be manufactured in Leon (Central highlands of Mexico). They all know the Mexican business environment is right for their businesses. It's also a good deal closer to their larger markets, and a lot less tricky to operate in compared to China.
And that, while not exactly domestic, is far more in the U.S. interest than the same thing being done in China.
Why should American employers be responsible for health care it should be a personal thing right now an employed person has less insurance than a welfare recipient,less access to prescription drugs. We reward sloth instead of helping the productive
. “The average Chinese worker is about a quarter as productive as the average U.S. worker.”
Sirkin sir, you are a tard.
well, we discussed this some time ago, and it is going just the way we predicted,..Americans as whole are astonishingly productive, they have excellent work ethics, and they most often like their employers,the "go for the bottom line" type of business is on its way out as it is always a short term solution that,when it crashes[and it always does!!] tends to take down a larger portion of the market than they are involved in.manufactoring at the resource base! will be the new future,cut shipping/handling/insuring costs by a large factor? and you become very competitive,..it wont and cant happen overnight,but it will happen,,I see health care costs are a hot topic?? and rightly so,,here in Canada our costs have been skyrocketing for decades and the system is on the verge of failing big time,, and some of us have been acting to get at the problems and what we found is that the main problems are;Profit taking in excess, and staggering corruption,...the corruption is the main problem and in the main it is corperate driven and most often corperate crime[white collar],The abusers have set up deals where they police their own activities with predictible results,,there is also a serious problem with secondary "insurers" that are nothing more than cash grabs for orginised crime[wcb,s etc]..these "insurers" use the deny deny and offload onto the public system tactic and keep all the money from payins by working people,FOR THEMSELVES!,..In BC alone this has led to a staggering 11.3 BILLION$ cash in in what the "insurers" are calling "excess funds",..If we really want social care etc, then it has to be no! secondary insurers, and no! excess profit taking from the system,,It is very easy to steal benifits from those who are weak and or vulnerable due to injuries,,so,, do bring back manufacturing etc, and try and keep it small, local and productive,,, but we all need to rethink how we look after our people,police the abuse, shut off the criminals, and keep them out of real health care and business in general,,We said before" The US is not! crashing, all that production capabilities is not going anywhere, rather, they are resting, taking stock, and they will pick it up and be productive and!! effective, when they do".. and hey,,, thats whats happening,..very!! nice to see,,, sometimes,, good things happen,slowly but surely,,some good comments here,, smart, to the point and food for thought,, also! nice to see,..gudonya!..
As a result of a hurry-up Supreme Court decision, we are now fully into the big money corruption at the national level too.
Not, that we haven't always had it to a lesser degree. But that was small time 'wink-and-a-nod' kind of corruption. Now we have the specter of huge corporate cash being shoveled into politicians' regimes who are going to kiss their corporate asses after the election. Remember, corporations do what behooves them financially. If gigantic cash support for their politicians didn't pay them back handsomely, they wouldn't do it.
As you might note, they are not only doing that kind of huge investment, but it is more widespread, under-the-table, and sneakier than ever.
Meanwhile, the average guy can't compete with that kind of influence peddling just with his vote.
Will take a constitutional amendment to fix it -- not that one isn't needed!
THats the problem . We don't have accountability. When its so blatant that they cant not but prosecute the crimes. They will settle out of court.
The Dodd-Frank does not go far enough in area of responsibility in area of the regulatory agencies involved. When these people fail to do there duty. The need jail time. We need them the regulator to be up for clear cut charges that involve jail time. So they have to put it on the line and have ethics. Need an example?
Mary Jo white is a former AG that helped the American Finanical Crime sydnicate get away with the trillions .
Well this is what you get when the national motto is. Horray for me and screw you!!
Just hope I live to see our country return to. United We Stand!!
i always believed the chinese would tire of working for peanuts I was right
As a British citizen, I have nothing but gratitude for what the NHS has done for me. I recently had a full hip replacement, which was done by the surgeon of my choice and in the hospital of my choice and at no cost to myself. The cover provided for dentistry is the only area needing improvement.God forbid that the NHS is privatised by this government as I fear that will mean the end of decent cover for us. Well done, NHS !
You pay for that health care system in Britain with a VAT. There is no free lunch, somebody pays. Your hip replacement was possible because companies in the U.S. had the profit motive necessary to fund the research and development of that surgical technique. There is a reason the vast majority of medical breakthroughs occur in this country.
You mean there's no free dentitistry in Britain? My, whoud've ever thought that!