I was fascinated by an article in the Wall Street Journal this week about a baby seat manufacturer who was exploring bringing manufacturing of one model back to the US from China.
In the end, spoiler alert, they decided to keep it in China.The decision was not based on price, which they determined, would be the same or slightly cheaper here. In China, they have a network of suppliers and vendors that can step in if there is a problem. That network no longer exists in the US. Fear of the downside risk drove the decision.
In 1999, when i left manufacturing, we had networks of suppliers we could count on. It was price that drove manufacturing off shore. As consumers, we were benefiting from large corporations like Home Depot and Wal Mart which drove prices down and sold a much larger variety of products in one place. The small store could not compete with them and went out of business. That was the lumber yard my family business sold to. Many manufacturers closed in the US or sent production overseas. Lots of good manufacturing jobs went with them.
It is the American consumer who is buying all those products made offshore.We consumers have benefited from the cheap prices that this offshore manufacturing brought. But we find that our children can only get minimum wage retail jobs. If we want to have more jobs here, are we wiliing to pay for it?
Sadly, instead of trying to get jobs back from China, states are stealing jobs from each other.We sit here in California watching Texas, New Mexico, most of the South and Nevada actually recruiting manufacturing companies from California. Those states get more jobs, the company makes more money and California loses.
Just this month (indeed for years now), we have heard from both political parties about who is to blame for the lack of job growth. I say we are all in this together. It will take a serious national conversation about job training, government encouragement of manufacturing, improving infrastructure, and education aimed at the jobs of today.
And, with our national advantages like cheaper energy, honest governance and financial strength, we are in a wonderful position to do something about bringing and keeping better jobs in the US. The US is doing so much better than Europe or Asia right now. Let’s seize the opportunity to bring jobs home.