NAPLES, Fla.—Reshoring has brought some manufacturing jobs back to the U.S., thanks to changes in the global business world and in part to the efforts of industry veterans like Rosemary Coates.
Coates is executive director of the Reshoring Institute, a nonprofit consulting group based in California's Silicon Valley region. But earlier in her career, she worked to help manufacturers move their work elsewhere.
In the 1990s and 2000s, offshoring manufacturing from the U.S. to China was a strategy aimed at cost savings. The U.S., as a result, lost almost 3 million jobs between 2001-2011.
"It started to get to me a little bit. It began to eat away at me that I wasn't doing the right thing," Coates said March 5 at the Plastics News Executive Forum in Naples. "I realized my grandkids won't have a future if there's a big hole in the middle class of America."
The 2012 presidential election—in which candidates Barack Obama and Mitt Romney both criticized China for taking U.S. jobs—was "a catalyst for reshoring," she added.
Reshoring has continued to grow in importance because "the mood has changed," according to Coates. Quality issues with Chinese manufacturing also have played a role, she said, even though revenue from recent U.S. tax changes and repatriation of profits haven't been reinvested in manufacturing.
Talk of work coming back to the U.S. because of wages going up in China is "just buzz," Coates said. She pointed out that the average machine tool operator still makes less than $4 per hour in China while making just over $26 per hour in the U.S.
Megaretailer Walmart is investing $250 billion in U.S.-made goods after previously sending all of its sourcing to China, resulting in lost jobs for many Walmart shoppers.
"They had gutted their own consumer base," Coates said.
She cited General Electric moving production of its Geospring water heaters back to Kentucky as an example of successful reshoring. Otis Elevator, however, lost $60 million when it was not able to find workers for a plant it had moved back to the U.S.
In general, however, the U.S. reshoring trend remains positive for several reasons, Coates said, including advanced technology and reduced environmental regulations.
"U.S. manufacturing is hot," she added. "If you're importing parts, you should be thinking about a reshoring strategy."