Reshoring, with a Catch

A trio of recent posts on manufacturing reshoring — or not — caught my eye.

It’s not happening. Writing in Forbes, Workbench chief executive Prince Ghosh points out that the US lacks the human capacity to fully actionize a return of mass production: “US manufacturing still suffers from problems of labor skills and wage costs. Tariffs have succeeded in lowering global dependency on Chinese manufacturing, but they have failed in driving manufacturing back to the US.” He has a point: It took China 20 years to build up the workforce needed to become the World’s Factory, and that’s even with a roughly 800 million or more citizen advantage over every nation but India.

And there’s no assumption investment in the US will go toward the truly leading edge technologies. To wit: If TMSC builds a 5nm semiconductor wafer fab plant in Arizona, as promised, it will still be behind the state-of-the-art 3nm node process expected to be available in 2022.

It’s happening. A more optimistic view comes from Nick Stonnington, a Forbes Councils Member,* says the US “has the potential to be one of the few countries in the world that is essentially self-contained from a manufacturing standpoint.” 

“Reshoring US manufacturing,” he adds, “would not only save enormous transportation costs; it would tie up less capital for less time. When you manufacture your product 5,000 miles away, you must spend extra time specializing your process to each market. In contrast, localized production facilitates just-in-time manufacturing, which optimizes workflow to more quickly produce a more specialized product for less capital investment. 

It’s happening, but not how you think. In Footprint 2020: Expansion and Optimization Approaches for US Manufacturers, consulting giant Deloitte says “the next shift in manufacturing locations is imminent,” but adds “some 98% of companies surveyed plan to either expand existing sites, or open new facilities, in countries with existing operations. This trend is true for virtually all types of facilities, from production to assembly to R&D. China and the US are anticipated to receive the highest number of existing country expansions.”

One topic, three views. Which do you agree with? And why?

*For the uninitiated, the Forbes Council is basically a network of bloggers who pay Forbes to publish their work. So take that for what it’s worth.

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About Mike

Mike Buetow is editor-in-chief of Circuits Assembly magazine, the leading publication for electronics manufacturing, and PCD&F, the leading publication for printed circuit design and fabrication. He is also vice president and editorial director of UP Media Group, for which he oversees all editorial and production aspects. He has more than 20 years' experience in the electronics industry, including six years at IPC, an electronics trade association, at which he was a technical projects manager and communications director. He has also held editorial positions at SMT Magazine, community newspapers and in book publishing. He is a graduate of the University of Illinois. Follow Mike on Twitter: @mikebuetow