Tuesday, November 27, 2012

Should We Stay or Should We Go Now?

Here are two recent conflicting reports about manufacturing in the US. First, a "Good News" article about reshoring - the moving of manufacturing plants back to the US.
“It’s against the paradigm that people have accepted [about what is made in China]. But people are usually about a decade behind in their perceptions. Anything that’s got a significant amount of money on the bill for shipping to the US, you’ve got to consider making it in the US. The shipping that we’re saving, and the fact that we don’t have to carry so much inventory, frees up cash.”
My experience here at Aspen Research in helping companies reshore has been more from a concern about quality, but the point about carrying inventory on "floating warehouses" is also a real concern. Regardless, I always found it rewarding to know that I directly helped some Americans have jobs and that cheap labor is not the solution to a companies financial problems.

But then on the other hand is news that an American company is encouraging its suppliers to move their facilities out of the US in order to take advantage of cheap labor. That company: Boeing. Granted, they are suggesting Mexico rather than China as a travel destination, and while I realize that a company can do business wherever it wants, Boeing is more than a little indebted to US taxpayers. The company receives a good number of military and other government contracts to the tune of tens of billions of dollars. As expected, this news is not playing too well for many people with "...mostly negative responses to Boeing inviting suppliers to an event that will teach them how to outsource work to Mexico."

Such is the world we now live in.

P.S. I apologize to The Clash for blatantly ripping off the title of one of their songs. I hope their lawyers aren't too bothered. I certainly don't want London calling! (But you should if you don't already.)

1 comment:

CoulombicExplosion said...

Kinda odd that Boeing would be suggesting this to their suppliers when they themselves seem to have had outsourcing backfire on them with the 787 project!