Reshoring

I am often asked by those in the printed circuit and electronic packaging industries about reshoring. My response generally is that reshoring is a myth. It seems that whenever I try to contact someone by email I get an automated response stating, “I am currently in China and will return to my office on ….” Many of the facilities and much of the equipment that would be needed to reshore have been auctioned off or sent to the scrap heap. Those that operated them have moved on to other jobs. Some have gone to work for Chinese companies.  Further, reshoring intimates bringing back something. However, technology does not stand still. Advances in fabrication processes and equipment require major expenditures to produce today’s, and tomorrow’s products.

Major firms such as Apple have announced intentions to establish independent research facilities in China. Production often follows within the region of successful R&D.

What seems to be occurring is not reshoring but new activity to establish new companies, manufacturing operations and produce product — albeit on a very modest level. However, with a sluggish economy, high corporate taxes, and overly burdensome government regulations there are few venture capital sources available for such efforts – especially in the uncertainty promulgated by the current election year. In fact, affordable financing to modernize and upgrade America’s smaller PCB enterprises is largely unavailable.

We must also consider the question posed by Andrew Strong an associate director of Cambridge Consultants when we think about reconstituting older manufacturing plants for potential re-shoring: “Repair, Replace Or Re-Invent?” I would suggest, assuming that the products to be made have sufficient competitive market longevity, replace with improvements based on recent developments, automation, design changes, new materials, and lean manufacturing principles — assuming sufficient financing is available.

Reshoring continues to be a very “hot topic.” A member of our 2,500+ Linked-In network members wrote the following thought-provoking and incendiary comment: “Reshoring for electronics manufacturing doesn’t make sense due to high levels of process automation, extensive and effective supply chain already established, end product unit value to weight ratio enabling low unit shipping cost and relatively smooth global logistics.

The issues with establishing new manufacturing for other products in the USA are highest corporate tax rates, increasingly difficult regulatory positions discouraging small businesses and startups, government interference in attempting to “pick winners,” and uncertainty about the sustainability and competitiveness of our free market capitalism as we continue to follow the European socialists countries into oblivion.”

Another colleague of the past half-century sent an interesting response to the “silent  complaint” story linking it to reshoring. We posted it on our “Comments & Discussion” page.

What do YOU think? Do you wish to engage in this vital conversation? Should we redefine the challenge? Do you have a workable solution? Let us know!

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About Gene

Gene Weiner has spent his entire career -- spanning more than 50 years -- in the printed circuit and semiconductor industries. He spent the early part of his career in R&D as a student technician at MIT Lincoln Laboratories, then became employee no. 4 at Shipley, and later vice president of sales and marketing at Dynachem and president of New England Laminates. He has been a consultant to leading materials, circuit board and semiconductor companies for several years, and sits on the board of Wong’s Kong King International and the MBA advisory board of the Malcolm Baldridge School of Business at Post University. He was inducted to the IPC Hall of Fame in 2006.

1 thought on “Reshoring

  1. My observation is that instead of bringing assembly jobs back to the US, companies are ‘doubling down’ and sending technical jobs offshore. The company “Tech Center” located in the US is becoming a thing of the past. A pity since so much experience and knowledge is being abandoned for cheaper (less experienced) engineering labor off-shore. Hopefully others can give me examples of why I am wrong.

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