Ready for a big Cat fight? As in Caterpillar Inc., which is thinking seriously about bringing jobs back to the U.S. from overseas in an attempt to ... get this ... save money! The Wall Street Journal reported in a recent edition about a trend many in the manufacturing industries have been seeing for some time: reshoring, or bringing jobs back to the U.S., which could spark intense competition from states starving for new jobs and looking to replenish its manufacturing core.
The reasons for reshoring are many and obvious: Shipping from overseas is tough in a JIT environment that so many manufacturers need and demand; better communication with R&D departments and production lines; and a lack of quality and consistency from overseas operations. Says Cliff Waldman, an economist with the Manufacturers Alliance/MAPI, a public policy and economics research group in Arlington, Va.: "If you want to keep your supply chain tight, it's hard to do that with a 16-hour plane ride from Shanghai to Ohio."
The reshoring trend is picking up so much steam that the National Tooling and Machining Association (NTMA) and the Precision Metalforming Association (PMA) are joining with the Association For Manufacturing Technology (AMT) to host the first-ever "Re-Shoring Fair" May 12 in Irvine, CA. Called "Re-Shoring to Bring Manufacturing Jobs to the United States," the event will provide a one-stop shop for larger U.S. OEMs to find competitive job shops to manufacture parts and tooling.
"Reshoring means bringing lost manufacturing jobs back to the U.S. by uniting large manufacturers with competitive domestic suppliers," says Christie Carmigiano from PMA. "Going local can reduce a company's total costs and offer a host of other benefits, while bringing U.S. manufacturing jobs back home."
The cost savings are real. Caterpillar, for instance, tells the Wall Street Journal that it believes it can triple its production of excavators by closing its Japan plant and combining it with its Chicago location at a new yet-to-be decided location (can you hear the tax incentive machine whirring?). The Journal article says that last June GE Appliances brought jobs back from China to its Louisville plant thanks to a new union contract that reduced labor costs.
Carmigiano says that more than 50 representatives from large manufacturers are expected to attend the reshoring fair and learn about competitive domestic sourcing opportunities from 200 top custom U.S. manufacturers.
"The fair is intended to change the sourcing paradigm from 'Off-shored is Cheaper' to 'Local Reduces Total Cost of Ownership,'" Carmigiano says.