#199. Yes, It Can Happen!

Posted on | The Agurban

Yes, It Can Happen!

Back in August 2008, we wrote about “Bringing Jobs Back from China: Can It Happen?” We are happy to report that it has happened!Ā 

Thomasville Furniture announced in late summer that it was bringing back some of the work that it had farmed out to China due to lower labor costs. Ed Teplitz, president of Thomasville, cited the rising costs of doing business in China and the opportunity to increase production at its underutilized factory in Lenoir, NC, as a key factor. In addition he said that “the benefits and economics of manufacturing in China now are not as positive as in the past,” citing rising transportation costs. Another benefit of the move is that the company will be able to ship products to its customers more quickly. One hundred jobs have been reinstated at the Lenoir plant.

Another manufacturer adding jobs is Haleyville, AL’s Exxel Outdoors Inc., a maker of sleeping bags. With costs in Alabama running 3 percent below those in China, Exxel is cutting production at a joint venture in Shanghai while hiring workers, adding machines and increasing output at the 250,000 square-foot plant in Haleyville.

The need to cut costs means manufacturers large and small are revisiting their outsourcing policy. Ikea, the world’s largest home-furnishings company, opened its first U.S. factory in May. Caterpillar Inc., the world’s largest make of earth-moving equipment, and Home Depot, the biggest home-improvement retailer, plan to produce or buy more goods in the U.S.

“China’s outsized competitive advantage was bound to normalize,” said Cliff Waldman, economist at the Manufacturers Alliance/MAOI, an industry trade group. “The gold rush of China is slowing down a bit.”

Sources: shippingdigest.com, Bloomberg.net, and washingtonpost.com.