Wednesday, May 14, 2014

Reshoring Initiative From the NAHAD Stage

At the 2014 NAHAD Annual Convention, many important and interesting topics were presented front the stage provided by the excellent NAHAD management team.  One of the most interesting and encouraging presentations involved The Case for Reshoring - To Offshore or Reshore?  How to Objectively Decide, presented by Harry Moser, President of Reshoring Initiative.

Mr. Moser lead off his presentation with some definitions such as this one:

Reshoring/Backshoring/Onshoring/Insourcing - Bringing back manufacture of products that will be sold or assembled here.  That is fairly simple to understand, it means having things made here in the U.S. that were once made here but at some time, outsourced to other countries.

In his argument, Mr. Moser pointed out that some of the rationale for moving manufacturing away in the first place was for lower coast labor.  However, taking into account the cost of shipping products back to the U.S. that advantage is reduced.  The cost gap for labor is also closing.  One source that he quoted stated that we expect to see the net labor costs for manufacturing to be at about the same place by 2015, next year.

The speaker went on to give several examples of successful reshoring along with more reasons for doing so.  It makes sense to me.  Manufacturing jobs will help our economy because they help to create other jobs in the service industries.  Obviously some manufacturers feel the same way.  21% of large companies are actively engaged in reshoring now which is twice the rate of 2013.  Made in America is taking on greater meaning.