Basic HTML Version
Invest in the U.S.
//
Manufacturing
S P E C I A L A D V E R T I S I N G F E A T U R E
15 and 20 percent a year, and that is a pre y good clip.”
At the same time, the productivity of the average U.S.
worker has increased to the point where it is basically
3.2 to 3.4 times higher than that of the average Chinese
worker, Sirkin adds. “So as we see wages in China grow
to the six-dollar-an-hour range, even if our workers
are only 2.5 times more productive, the wages in China
start to match the wages in the U.S.,” he says. At this
point, manufacturers start looking at other factors that
affect the cost of business including logistics, being far
away from customers, or the risk of a 7,000-mile supply
chain. “So when the difference betweenmanufacturing
in China and shipping a product to the U.S. – and
manufacturing in the U.S. to sell domestically – only
becomes about 10 percent, those additional cost issues
simply aren’t worth it,” says Sirkin. “That’s when you
begin to in-source rather than go offshore.”
SHORTENINGTHE SUPPLYCHAIN
One of the primary factors contributing to the
re-shoring or near-shoring trend is the cost of
transportation. “You might recall that in 1998, oil was
trading at $18 a barrel,” says Charlton Reynders III,
chairman and CEO of Reynders, McVeigh Capital
Management. “So back then the idea of shipping
something across the ocean and back wasn’t really a
cost issue.”
ABF Freight Systems, Inc., one of North America’s
largest motor carriers, is already starting to help its
clients realize the benefits of shortening and optimizing
supply chains. “Americanmanufacturing has a
bright future, particularly as the rising tide of Asian
manufacturing begins to give way to regionalization and
so-called near-shoring – placing manufacturing closer
to the end markets,” says JimKeenan, ABF’s senior vice
president of sales and marketing. “Small U.S.-based
manufacturers are finding that their supply chains are
more efficient when they forgo the lower labor costs
of Asia in favor of the higher cost but greater value
that domestic operations bring – greater predictability,
less inventory costs and more control,” Keenan adds.
“However, most large Americanmanufacturers have
Charlton Reynders III, chairman and CEO of
Reynders, McVeigh Capital Management.
Irvine values its businesses and
TECHNOLOGY
is
thriving
here.
.D$BCF 8BZ
4VJUF t
Irvine, CA 92614
XXX JSWJOFFDPOEFW DPN t
Allergan
Blizzard Entertainment
Broadcom
Edwards Lifesciences
Fisker Automotive
Foundation 9 Entertainment
Gateway
Kawasaki Motors, USA
Kia Motors America
Toshiba America Information Systems
University of California, Irvine
Vizio, Inc.