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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This will happen only if the Obamanation liberals will stop with their outlandish rules and regulation stopping the US from prospering. I look forward for this to happen. But it will not happen with this lam administration on hand.
Charles,,, Pay attention please
No government oversight & regulation of the financial system broke our economy & led directly to a global economic collapse ---- The Deepest Recession in history
You think conservatives hate Federal Bailouts?
Guess again sport ---- They just anointed Mitt Romney their Presidential Candidate,,,, His Bain Capital got a $44 Million dollar Bailout
They fight to remove regulations that prevent future federal bailouts
Charles,,, Look into these Private Equity firms of those like Ronmey's,, Are they "Free Market"? Yes... The part of the Free Market we need to bring under strict federal oversight to protect the tax payer & the economies of states
They run the public retirement insurance plans that are bankrupting every state --- That's the next Tax Payer Bailout
Private equity is routinely charged with all sorts of iniquity. It strips companies of assets and flips them for a fast buck. It loads them up with dangerous amounts of debt, to suck out capital for its investors. It pays scant attention to employees and suppliers. Its greedy partners avoid the tax that others have to pay. If the markets turn, the volume of condemnation will only increase. Imagine the derision when funds stop making money even as their partners take home large salaries on the basis of past achievements; when private-equity-owned companies default on debts, leaving insurers and pension funds saddled with the losses; when workers are put on to the street because of desperate cost-cutting or bankruptcies.
Jim, are you encouraging people here to vote for Romney? You can if you like, I am not voting for Romney. Colon Powell maybe, but Romney. No way.
jim ditch the bugs bunny and get a god like photo like me that drives all the lib women wild and people will take your posts more seriously
reality,,, If you think what I wrote is promoting Mitt Romney, you've got your Ron Paul or Gingrich Tin Hat on backwards
Jim,
Just messing with ya.
One cost factor that any executive, consultant, or advisor NEVER discusses when they recommend outsourcing is the cost to reestablish those same capacities back in the U.S. later. If they did, they very likely would not have left to begin with. I have tried to make this clear in the past but either most don't comprehend it or they have a much shorter time horizon (like retirement, bonus, etc). Most people don't want to think of PLAN B but it seems to be the plan everyone eventually goes with.
Ya know, you just can't make some people happy. If you publish an article about jobs going overseas and you get "Oh, boo hoo hoo! We're losing jobs to _____! (Enter any Asian country here)". And then if you publish an article about jobs coming back to the US, those same morons start in with "Now I'm going to have to pay higher prices because these manufacturers will have to have to pay higher wages, benefits, etc., and I don't want that!"
I have four words for you people: Shut The F**k Up.
Do you people know the Chinese are buying land to build communist cities in the USA?
That is where these jobs will be going.
WAKE UP AMERICA!!!
Hahahahaha,,,,,,Your almost as funny as Lim
You won't be laughing for long when you find out what I am telling you is true.
run your ass out and vote buddy,thats why i say put americans in wash.d.c. and start the investigations for TREASON
We the people will not be able to vote in 2012. We the people will lose all of our rights as citizens and become subjects (SLAVES) in the New World Order before than.
WAKE UP AMERICA.
Talk about nutty extremists... the above comment takes the cake
Siara,
Go read up on what could happen if our POTUS declared martial law. Elections could be suspended, possibly indefinitely. I'm not saying that is what will happen, just saying it's possible. It wouldn't take much for our Pres to become dictator. (and if the OWS movement turns violent, which it could, then Obama would have his reason for declaring martial law.) Seems like the timing of the OWS movement may have not been so random if you look at the whole picture
So maybe Jeffrey isn't all that nutty when you think about it.
Have you heard of the National Defense Authorizatin Act, FEMA concentration camps that are being manned now, I could go on and on and on .
WAKE UP AMERICA!!!
Jeffrey D Parks, I'm guessing the D in your name stands for delusional? Now go take your meds, put on your little tinfoil hat and get ready for bed. Things will be all better in the morning. There's a good little boy.
With the low cost of America's labor China is outsourcing jobs back to the US to avoid paying the higher labor cost of manufacturing in China. If the republican ran congress decreases the minimun wage further there will lots of the poor paying jobs in the US and the 1%ers will reap the benefits.
Our Union wages have not dropped a dime
not to imply compassion to republicans which i despise, but my union wage dropped 30% since the ression and has not went back up.
Since the what?
Bo
That is not true union wages did drop in the 90's and they have never recovered from it.
Not just wages and benefits, but work opportunities have diminished as well. I do recognize this is an issue for most, Union or Not.
Peace
Impeach the congress.
High treason for Alan and the USA financial crime syndicate of the USA. THe most powerful crime families.
Having lived through several recessions, and several booms, it never ceases to amaze me how diverse our feelings are, and how easy we place blame. The manufacturing jobs coming back here are the first signs of a change for the better. We innovate, we don't copy others. Innovation cycles take time, and aren't the result of political parties in power, but part of a free enterprise system. It's finally time for the cycle to change for the better, and free enterprise (without government programs costing big bucks), is our economic secret sauce.
Quit whining about abstract reasons and looking to place blame. Vote in the elections, educate your children, and get to work.
Why dont we bring back the jobs from India as well???????
i got a better idea,why not send the unaccountable anti americans in the two partys to china,runout and reelect the TRAITORS that are distoring american,then sit back and watch
Americans are like sheep. They have the wool pulled over their eyes and can't see what is going on in America because they don't pay attention or do any research. They just believe the BS on the NEWS.
Shame on these SUPER GREEDY corporations. Paying slave wages while living disgusting pig like opulent life styles. Open up your eyes fellow Americans to the fact that we are now controlled by a combination of a plutocracy and oligarchy that has, throught a coup like manner, taken over this country and the government. The problems lie on the polar ends of the spectrum, whereby the mega wealthy pukes, and the entitlement scammers that have used and abused the system for several generations now. It's the middle class that's getting raped by these thieves at each end of the polar spectrum. I'm an Independant, and have no clue who I'm going to vote for since they are all a bunch of corrupt crooks owned by the lobbyists and/or mega wealthy pigs. Demogracy NOW!! unbridled raw capitalism is evil and demonic at its very root.
We already have Demogracy -- we're being led by a demagogue!
We have cashocracy.
http://www.youtube.com/watch?v=a2yhcuQjUqc
This article doesn't seem to cover the fact that companies hire in Asia to avoid having to comply to our worker-protection laws. They can hire children, make people work 70 hours a week, pay 50 cents per hour, have miserable, unsanitary working conditions, no lunch breaks, etc.
My (possibly wrong) impression is that the top 1% do this to duck the laws that were instituted in America in the first part of the 20th century. They are returning to a Robber Baron atmosphere in which they can work people practically to death.
Why be so nice. The Rober baron is too nice, its blood sucking parasites. These guys celebrate the poverty in the USA. They love it and pee on the death and misery. The Cheer ( search GOP death cheer) when poor americans die from medically treateable conditions.
Now they hope they can sell american organs to the dumb rich chinese who think that americans organs are better then the chinese organs.
This may sound off the wall but it is looking as if it will come to pass. That is, some people will have to die since they are unable and or unwilling to share the fruits of a country we all defend and work our asses for.
Those that understand it is the enemy within that is the source of our problems know what I mean.
Lets bring the jobs back from India as well !!!!!!
The productivity of a factory worker is always measured in widgets produced per unit of time. You can pay an American $10 per hour to priduce 4 widgets per hour, or you can pay a chinese worker $2.50 per hour to produce 1 widget per hour. The labor cost of production is the same in both cases. We have already gone through this with Japan. The Japanese build car factories here now, and the Chinese soon will.
COMMUNIST factories in America? I think not!
That's correct, you think not. Just as we must obey their laws when building and operating factories in China, so to, they must obey our laws when operating here.
You want our money to stop flowing to China, but you don't want their money to start flowing to US?
Do you think the news or our government is going to tell you the truth? The Chinese are buying land here in America to build self contained communist cities in the USA.
WAKE UP AMERICA!!!
Our own young people (hippies mostly) used to do that a lot in the sixties. Such communities are called 'communes' and people who live in them are called 'commune-ists', which is pronounced 'communists'. We have, and have had since the 30's, a significant number of communists in this country. We know how to handle communists and communist infiltrators here.
If the Chinese bought the whole state of Arizona, they would still be required to run it in a fashion consistent with the AZ state constitution and the US constitution. The Japanese own a lot of property in the US, but have little or no political power.
If China owned a bunch of valuable poperty here, that should mean they wouldn't dare nationalize US property in China for fear of US nationalizing their property here. Worried about our debt to China? What about their much older debt to US.
When the Commies conquered China they nationalized all American companies and property. They also refused to pay back their WWII loans, or return the military equipment we loaned them. If you figured up the dollar value it would be quite large, and after charging interest from 1940 to present, it would no doubt cover any debt we owe China.
What the hell?
When the Commies conquered China they nationalized all American companies and property.
Thats just cr+p. THe american rich folk used companies to rip of peasants around the world. Why do you think everyone hates the USA, the 1% are not just the enemy of the USA, they are swindling everyone. They pay bribes and get coupes and anything goes.
These 1% are above the law. THey showed it when no one of the finanical crime sydnicate of the USA went to jail. They even got the courts to born them a child and call it a corporation.
Tell me thats not crazy?
Need Proof? Read " War is a Racket". You can see what Standard Oil did to china and then we had to break up the Bi+ch here. These Standard oil threatened the congress.
Now the congress is owned.
Where I live, there are a lot of openings for skilled manufacturing jobs. Engineers, drafters, machinists, welders, etc etc. These people who claim that manufacturing is 'dead' have obviously never worked in the manufacturing industry or bothered to look at a job board.
The key word is "skilled". The ones complaining want a job that pays $20/hour for putting labels on boxes. The truly skilled tradesman knows how to make his machines and tools create useful items. It is the same group that runs off to college and gets a degree that nobody cares about. If you can't get a degree in something like engineering that pays back the huge cost of school you might as well not have a degree. Spend the 4 years getting paid low wages..better than borrowing money.. to learn how to actually do things.
Unfortunately for manufacturing employers it is hard to find someone who is willing to spend time to learn the trades. Everyone wants instant everything without realizing that anything that is easy to learn can be done by someone who will do it for less money in another country.
That is a lie. The manufacturing the jobs that the Right wingers talks about is a lie. Everythings just phooey.
YEa all american are lazy and poor if they can't apply for a government 700 billion TARP bailout and then 27 trillion fed bailout.
The rich live in this dream world of entitlement and just take out the rich. Thats really rich. THey dont call the rich filthy rich for nothing.
From what I can gather from my relatives in the UK, they even have a longer waiting list for medical procedures than we have in Canada where they wait until you are close to death before they do anything for you. In Germany the rates for Health Care a straight percentage of your pay and it is expensive. But then again, everything from Aspirins to Spas are covered. The system is overburdened though since everybody is trying to get the money's worth out of it. They seem to have an abundance of physicians though and since their pay is not that great a number of them actually work in Britain part time.
What is happening is that the Chinese are building clone factories and cutting off the cheap labor to the foreign plants in China. Intel has suddenly come to that rude awakening and is trying to make deals to come back to the US. Toyota was the first to be cloned and driven out. Google (as their product was just software and clever ways of doing things) was quickly copied and kicked to the curb. What use does China have for foreign CEOs creaming millions off the backs of their workers?
Regards, The Old Prospector
You are ignorant if you believe that the reason jobs went to China was because of cheap labor.
Cheap labor was an added bonus to having access to the largest pool of consumers on the planet.
While jobs may return to the U.S., it is apparent that Education should be our focus.
25% as productive? all I see from China is poison dog food, children's toys with lead paint, "manufactured" goods that are so poorly constructed that you'll likely get less than six months out of them, a workforce that is about to have mass suicides because of working conditions and whatever the headline will be next week. Maybe all these "patriots" will bring jobs back to America when its "profitable", maybe they will pay a little taxes??
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.
Wow, who would have guessed that when Bush Sr. and Clinton came up with the "FREE TRADE" agreements of the 90's that jobs would go overseas (LOL). After all we were PROMISED that such agreements would create American jobs. Many of us saw the motive back then and guess what....politicians are still looking to screw us in order to pad their pockets!
But then you have to figure in that Toyota, Mitsubishi, Honda, Nissan, Hyundai, Isuzu, Kia, and Subaru have manufacturing plants here in the USA, and employ something like 95,000 citizens around the country.
Mercedes-Benz, and Nissan also have U.S. plants that employ American autoworkers, and Volkswagen will soon.
VW already does, in Chattanooga, Tenn., on the site of a former military Ordnance Works.
For this to be true, there would have to be a surge in "nationalism". That's not going to happen until we rid ourselves of our anti-business President. The uncertainty of our future, coupled with a "pro-organized labor" President, will make outsourcing continue for a long time. To make matters worse, the MSM keeps printing lies as fast as Obama prints and spends money. Well maybe not that fast, but we have little or no job growth and to believe otherwise is sheer fantasy and dishonesty at it's worst. The MSM continues to print untruths in an attempt to get Obama reelected. In reality, all the jobs are where labor is the cheapest as in China, Mexico and South America where the government controls business and everything else.
No. It is that top 1% of leeches draining our strength that we have to get rid of. Paper shufflers who earn 600 times what the actual workers earn.
If I recall, there was quite a bit of commotion in Congress over it... Conservatives & Blue Dog democrats supported it & the Bush tax incentives that went along with it encouraged the problem accelerating it
"Free Market" & "Federal Government Regulation & Interference" they kept screaming as they were taking our country away & giving it to the Corporation who is now "We The People"
We, the Corporations of the United States, in order to abolish those imperfect Unions, esablish our ideas as being Justice, provide for domestic tranquility, and claim that those who oppose Us are all on Welfare, do hereby Ordain and Establish our Ownership over the United States of America ...
Unfortunately we can't turn back the hands of time, the world wide economy has eaten our lunch. But, I can't help but think since so many countries are having the same problems and since policies have allowed the rich to become richer and the poor to become poorer this has helped the sale of cheaper (and often inferior goods) made in foriegn countries with cheap labor and lax safety standards. I do not know of one Mother or Father in this world who would not pay more for safer food for their children or safer,sturdier toys,cars,furniture,appliances etc. The problem is that most either have to buy cheap or do without and this has gone on so long that American manufacturer's cheapened their own products in attempts to compete, and eventually shuttered their plants. We still have a few branded items that are considered superior worldwide, if American industry wants to help bring manufacturing jobs back they should be working toward quality and reputation. Hollywood should use American product placement in their movies that foriegners love so much. Kim K should squeeze her big butt in a pair of American jeans when the pay her $50,000 to attend a party in Dubai ,people should advertise what is good about our products every chance they get. If we never get back the quality, we will never get back the jobs. I love the NC furniture manufacturer's story, as the standard of livig increases in other countries the "haves" will want status symbol products-percieved as the BEST, we should concentrate on that.
Not only has China's wages gone up, The US now has wages that are competitive with second tier countries.
reality-1087596
"The United States may be on the verge of bringing back manufacturing jobs from China."
Underline "may be" for 2015
Tee Chinese worker does not work as many hours, or days as americans is what they mean by under productive. They are not willing to work themselves into disability at an early age. We americans are happy to work 60 to 80 hours a week with repetitive work. If the companies can just figure away around those damn workman comp claims and get the wages lower they will definitely be back in 2015.
You are so very wrong! I am living in China. My wife is a school teacher and she works 10 to 12 hours a day, 7 days a week! Her brothers and sister work at varies jobs and they all work the same hours. The only people that have decent work schedules, I know you can guess are the CEO's and upper management and government workers. the rest work very long hours. But they are learning, they are striking, like a union.. ha, no unions here, asking more wages and benefits, much like we did in the roaring 20's and will be again if you let this right to work states get a hold and naturally the union busting GOP. They are not Communist..... they are Capitalism/Communism.... the worker sees no difference in either.... either a dictator or a CEO... both want money and power! Be careful America...for what you wish for....
The one thing they do have going for them is.... they can retire at 50!
tom are you a chinese citizen or an american?
Tom,
You are very correct. I do not live in a right to work state, don't like them. I had read that the chinese workers work less sometime back in early 2011. Newsweek I believe had the article of what the conditions were supposed to be like.
These manufacture companies do need to be union controled, otherwise the workers here will be screwed over, for the companies are looking at the cheaper wages now and hoping for more lax osha laws and less Federal and state tax's to come back.
I am an American citizen.
This nation of ours became great under the unions. I can remember hunting for a job and even if they were non-union they would say we pay union scale wages. Unions set a standard. The CEO's were rich then too. But they didn't make near the percentage they do now.
If they would except the unions and union wages even today, they would make plenty of money.... but they want it ALL... they want sweat shop conditions.
it is 4AM for me... I am beat... so I will say goodnight/good-day to all