Is It A General Trend Or A Temporary Phenomenon To Shift Chinese Manufacturing Back To The US Mainland?

In 80s of last century, when Bill Bill (Good) was studying in Auburn University, Alabama, he worked part-time at a local fitness equipment factory in.

Later, with the increasing pressure from low cost competition from Asia, such enterprises in the United States eventually disappeared.

Gould later worked for a Char-Broil barbecue maker in Columbus, Columbo, Georgia, during which he joined the decision in 2004 to shift the company's production business from the United States to China.

Recalling the process, his description is "extremely painful".

Such decisions became a trend at that time, resulting in a 6 million decrease in employment in the US manufacturing sector from 1997 to 2010, equivalent to all.

1/3 of the total number of employed persons.

In September last year, Goodall finally took a small step toward reversing the trend.

As manager of Whirlpool Corp. WHR -6.58% in Greenwell (Greenville) factory, he pferred the production of the KitchenAid brand handheld blender of the company to the United States of America (Corp.).

Over the past six years, the production of the product has been outsourced to a Chinese factory.

This factory is located in Huizhou, not far from Guangzhou.

Gould said that after Whirlpool made a decision to resume the production of this product in Green weir factory, "we all applauded and congratulated it."

How much employment has Whirlpool helped to help the United States? About 25 people.

The return of the agitator production business represents a trend that has been quietly taking place in the past two years: some manufacturing industries rooted in low-cost countries and regions that have left the US and China in the past few decades are now beginning to return to the US.

However, the impact of this trend is limited.

Gould said, unlike ten years ago, it is no longer a natural choice to plant factories in Asia now.

Whirlpool is also considering the return of more small household appliances to the US.

However, Whirlpool and many other companies have turned some of their production back to the US, which has not brought a lot of new job opportunities.

Most of the components of Whirlpool's agitator, including its electrical machinery, are still made in China.

Because Whirlpool can't find suppliers in the us to provide them with cheap raw materials.

The plastic parts of agitators will be produced in the United States, but part of the production equipment used to produce these accessories is newly purchased from China.

Barack Obama visited a factory in Milwaukee (Milwaukee) in February this year, and the United States President Obama paid tribute to the company to pfer some of its business from Asia to the United States of America (Barack) in February.

But in fact, Master Lock only brought about 100 jobs.

Otis Elevator Co (Otis Elevator Co.) plans to move some production businesses from Mexico to southern California, which is expected to generate about 360 new jobs.

Caterpillar Inc (Caterpillar Inc. CAT), Ge Corp (General Electric Co. GE) and Ford motor (Ford Motor Co. F) all have similar moves and created thousands of new job opportunities.

As manufacturers in the US adjust their production strategies, the employment situation in the US is improving, though the pace of recovery is rather slow.

Between 1998 and 2010, manufacturing employment in the United States decreased by 35%, and in the past few years it has increased by 4.3%, and manufacturing employment has increased by 489 thousand to 11 million 900 thousand now.

Much of the increase in employment is attributable to economic recovery rather than the return of manufacturing.

However, according to IHS Global Insight, an economic research firm, the number of manufacturing jobs will also grow by 3.2% this year, while the overall employment growth is expected to be only 1.6%.

Daniel Meckstrotk, chief economist of Manufacturers Alliance for Productivity and Innovation (Daniel Meckstroth), said: "we are becoming more competitive."

The manufacturing productivity and innovation alliance is a research institution based in Arlington, Virginia, USA. ()

Harry Moser Harry Moser, President of Reshoring Initiative, estimates that at least 25 thousand manufacturing and supporting jobs have been brought back to the United States in the past few years.

This is just a drop in the ocean relative to the vast unemployment army.

However, mozai believes that the potential of the manufacturing industry to return to the trend is great as enterprises begin to reconsider the cost of overseas production.

The regressive initiative agreement is a non-profit organization committed to promoting the return of manufacturing to the United States.

Manufacturing experts say the decision to make a return depends on a large number of changing factors, including taxes, regulatory regulations, exchange rate factors and government incentives.

And they think that for some commodities including shoes and clothing, American manufacturing will never be a viable option.

Massachusetts Institute of Technology, a professor of engineering systems and supply chain management expert Levi David Simchi-Levi, conducted a survey of 105 companies between January and February this year. The results showed that 39% of the enterprises were considering pferring some of their production business back to the United States.

In recent years, wage levels in Asia have risen sharply, and the wage gap between China and the United States has shrunk, which makes some companies feel that the attractiveness of American manufacturing has increased.

The continued depreciation of the US dollar over the past ten years has also increased the competitiveness of manufactured goods in the United States.

In addition, the rise in oil prices has increased the cost of p oceanic pportation, thus making local manufacturing more advantageous.

But in any case, the competitive advantage of China and other Asian countries on many commodities is still very obvious.

Once the professional technology and supply network mature, it is very difficult to move the location again.

For example, the status quo of smart phones in China is such.

And in areas such as engineering systems and automated mechanical operations, which are crucial to the production process, there is no skilled worker in the United States.

The corporate tax in the United States is also higher than most other industrial powers.

Meckstrotk, a manufacturing productivity and innovation alliance, said, "it does not mean that manufacturing will pour into the United States in large numbers."

The reality is that the situation in the United States will become more balanced, and enterprises will weigh the advantages and disadvantages more cautiously when considering whether to put the production line on the mainland or abroad.

Asia is no longer an inevitable choice.

Global companies are still expanding their capacity in Asia to meet the demand for fast growing markets there.

However, Singh Levi said that more and more people began to question whether it was reasonable to produce products in North American markets in Asian factories.

He said that enterprises are moving towards the local production mode, that is, the supply of goods to the Asian market in Asia, and goods for US consumer consumption to be produced in North America.

Cort Jacoby, a supply chain management expert at Hackett Group, a consultancy, said that for heavy or heavy goods such as heavy machinery, the possibility of returning to local production is relatively high, because the pportation costs of such products are very high because of relative prices.

Jacoby said that other products that may return to local production include frequently changing expensive colors or styles according to consumer requirements, such as advanced garments, furniture or household appliances such as Whirlpool agitators.

He also said that if manufacturers produce products that are highly demanding for safety, such as food or baby products, they may also choose to place their production lines in the United States because they can closely monitor all suppliers of raw materials.

For Whirlpool, the pfer of handheld mixer production line to the United States is a decision made after complicated calculations: for example, the cost of pportation and inventory is enough to compensate for the increased cost of paying higher wages to American workers.

Whirlpool can also make use of a ready American factory to improve its production process and make it more automated.

These costs are different for each manufacturer considering a return.

Not every company can come to the same conclusion.

One of Whirlpool's competitors, Nacco Industries Inc, based in Cleveland, has outsourced all of its Hamilton Beach brand household appliances to Chinese manufacturers, and the company has not pferred part of its production line to domestic plans.

Alfred M. Rankin Jr., chief executive of the company, said that in terms of economic efficiency, it is not cost-effective to build new factories in the United States specifically for such products in.M Alfred.

Unlike the company, Whirlpool has retained a factory in the us to produce agitators.

The factory in Green will manufacture KitchenAid vertical agitators.

Such a larger blender has never been outsourced to overseas production. One of the reasons is that the product belongs to high-end products, and the retail price is at least around $230, which is less competitive than other household appliances.

To produce a handheld mixer with a retail price of only $39, Whirlpool does not need to specialize in building a new factory. Instead, it can make use of existing factories, and even suppliers can basically use the same batch.

Goodall took charge of the factory in Green Weill in 2010.

One of his first tasks at the beginning of his term was to study whether he could pfer some of his products abroad to the US, and he hoped to expand the product line.

He and his employees began to calculate the cost of handheld agitator production.

As far as labor costs are concerned, despite the rapid growth in wages of Chinese workers, China's strength is still obvious.

The workers who work in Whirlpool Green's mill usually earn around $12.40 to $16.50 an hour, plus benefits.

According to data provided by Justin Ross Group (Boston Consulting Group) (Justin Rose), in the eastern manufacturing center of China, the hourly wage level of workers is no more than $3.40 to $3.50 per hour.

Ross has recently prepared a research report on the return of manufacturing to Boston consulting firm.

Although China's wage level is only about 1/4 of the Green wale area, the gap actually caused by manufacturers is not so large.

Ross expects us manufacturing workers to produce an average of three times the hourly output of Chinese workers, because in the United States, automation is more efficient and production processes are more efficient.

At the end of 2010, Gould went to Whirlpool at the headquarters of Benton Harbor, Michigan, and made a slide show for the David Elliott, which is responsible for small household appliances business in Elliot.

Elliot recalled that he was skeptical about the production of handheld mixers in the US. "I doubt this decision will ever be convincing."

After listening to Goodall's demo, Elliot asked him to go back and wonder if there were any more ways to cut costs.

Gould and his team in Greenwell decided to reduce the number of workers on each production line from eight to six.

To achieve this goal, they need to automate part of the product testing and simplify the wiring system.

Goodall's team also held more consultations with their plastic material supplier, Core Systems LLC.

The supplier, based in Paines Weil, Ohio, USA, agreed to let its workers bear the work of labeling trademarks on the plastic housing of the blender, thus reducing the workload of Whirlpool workers. Painesville

In early 2011, Elliot approved the revised plan to pave the way for the return of handheld agitator production in September of that year to Green.

On the new product line, six workers stand side by side.

As the product moves on a green conveyor belt, everyone has to complete a series of tasks in the same order every time.

The six person team completed a handheld mixer assembly and test every 30 seconds.

Whirlpool said that the production of this product was outsourced to China in 2005, compared with the output of the mixer originally produced in the United States before 2005. Today, the output of a worker in the US factory has increased by 24% per hour.

Todd Magee, the Whirlpool Corp responsible for the design of the production line, said, "all workers must work at the same speed. They must not lose a bit, or you will be left behind." Todd Maggie.

Convenient arrangements can help: the production line has a tray for putting cups, and some workers put mineral water bottles on them.

There are also women in the workers, and Brenda Walls is one of them. Brenda

Walls is a senior employee who has worked in Whirlpool factory for 15 years.

Wearing jeans and green T-shirts, she recalled the situation when handheld mixers were outsourced to China's production: "I thought they would never come back."

One reason why the production line is now more efficient than in the past is that all the parts and tools needed by workers are in the range of not more than one to two feet - another innovation since 2005.

Maggie said, "every item has its own location, and it is always fixed in the same place."

Labelling on the factory floor tells people exactly where the trash can should be placed.

Jeff Fettig, Whirlpool chief executive, said that since the production of handheld blender has returned to the US, the company can be more flexible and flexible. Jeff Fettig,

If retailers suddenly want different colors or different designs, Whirlpool can deliver within one or two weeks, and it will take at least one month to produce and deliver adjusted products from factories in China.

"No matter what changes the market may bring, we can follow suit," said Mr tiger, with a snap.

Handheld agitators return to U.S. production is good news for suppliers like Core Systems.

Bill Leo Baca, President of the plastic mold manufacturer, said that the new orders for Whirlpool's handheld blender parts would enable him to recruit about 10 full-time workers, bringing the total number of workers to around 300 Bill.

In addition, Core Systems has also won new orders from manufacturers returning to the US.

Core Systems also reduces costs, which is achieved by training workers to operate several machines at the same time and re organize the production of plants.

After the factory is adjusted, the finished products can be put together, and parts are no longer needed to be pferred everywhere.

And part of the work that was originally done manually was handed over to the robot.

Leo Barker said that for most products, the cost of raw materials is mainly the cost of plastics, which accounts for 62% to 78% of the total cost, while labor cost accounts for only 8% to 12%.

He said an efficient American manufacturer could make use of a very small number of artificial products, so that enterprises could find ways to hit the Chinese enterprises head-on.

Despite this, Leo Barca still had to deal with Chinese enterprises.

Recently, due to the increase in orders, Core Systems needs to buy some new plastic molding machines, and he finds that only the Chinese manufacturer of Haitian International can offer him the cheapest price and the fastest delivery speed.