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Revisiting Reshoring - Accelerating, But Gradually

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For your viewing pleasure, here are a few observations, articles and examples regarding the emerging "trend" of reshoring (or backshoring, or in shoring) production back to the U.S.

Strong, comprehensive policies & action are required to accelerate & sustain the reshoring of production to the U.S.

Strong, comprehensive policies & action are required to accelerate & sustain the reshoring of production to the U.S.

There's a LOT of discussion around repatriating work back to the U.S. lately - in the press, the blogosphere, the gubmint, business and broadcast media. That's all good, no matter what your take is on the topic. But talk is cheap ... for this "trend" to become a movement will require action to improve the climate for doing business here. But the current economic landscape doesn't bode well for that happening at meaningful levels.

The deficit, states and municipalities nearing bankruptcy and the employment malaise in the U.S. make it so. We have to pay down the debt and recover - and that leaves us bringing a knife to a gun fight. Forget the argument that "if you want more of something, tax less of it." It's unlikely that with financial reform and health care already in the can that this government has the will to take what it sees as a gamble to cut taxes or ease regulation.

Sure, the bill to suspend tariffs for hundreds of materials is a great move in the right direction. Let's hope it's signed into law soon. But it's like using a squirt gun on a forest fire. Employment is a RESULT or byproduct of a strong economy - it's not exclusive. Until substantive change takes place, employment - real, long-term, good-paying jobs - will lag.

And that's why reshoring offers a foot in the door to meaningful recovery. Enabling manufacturers to bring production into or back to the U.S. could begin to increase revenue and employment organically and at more significant rates than we're likely to see through disjointed efforts intended to prop up policies for political reasons.

Hey, I can dream, can't I?

To date, many of the companies cited for repatriating production still have large quite a lot of work remaining in low-cost countries. And that's OK. Look, we have to be realistic and not paint all production as eligible for reshoring. The reality is that there will be a spread of work throughout the global value chains. It's always been so.

But determining what to offshore and what to keep domestically is key. All countries do this through their industrial policies. Materials and whole industries are subsidized or controlled via these policies, and a firm commitment to one that assesses and supports the resurgence of our manufacturing base is the only way to see meaningful growth in our industrial space.

To get a sense of how the reshoring topic is heating up, have a look at a few of these recently published pieces. While the cadence of these stories is increasing, we will all need to be active & attentive to maintain it beyond our limited attention span.

Supply Chain Woes Threaten Global Recovery (Financial Times; registration required) - The costs of segregating production far from a sophisticated R&D entity. (MFG.com's most recent MFGWatch survey is cited here)

Some Manufacturing Heads Back To USA (USA Today) - The fact that this topic has been covered in USA Today shows that reshoring has hit the mainstream - nothing but good, this.

Some Businesses Learning Value Of Bringing Factories Back To The US (www.knoxnews.com) - This piece with a local TN focus is extraordinarily well-written and thorough in its description of reshoring and its causes. (Kudos to author Ed Marcum)

Returning Jobs (Watertown [NY] Daily Times) - Another regional perspective, this time an editorial from upstate New York.

Reshoring Goes Mainstream (EvolvingExcellence.com) - Recognition of the importance of the USA Today article to the reshoring "trend." If these guys are on it, you know it's relevant.

Can you make this part?

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