- Jul 10, 2006
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I meant to post this months earlier, but here it is.
http://www.appliancemagazine.com/editorial.php?article=2429&zone=114&first=1
This article says that a study done by the Boston Consulting Group has identified seven manufacturing sectors which they predict will in the next five years begin resourcing jobs from China due to increasing costs.
On a related issue: http://www.appliancemagazine.com/news.php?article=1575014&zone=0&first=1
We just bought a Whirlpool refrigerator this past weekend. It took a bit to talk my wife out of the Mexican-manufactured LG she so liked, but in the end we found an American-manufactured Whirlpool she loves. It's worth the extra time and trouble, and a little extra cash.
http://www.appliancemagazine.com/editorial.php?article=2429&zone=114&first=1
This article says that a study done by the Boston Consulting Group has identified seven manufacturing sectors which they predict will in the next five years begin resourcing jobs from China due to increasing costs.
It's not a long editorial and it's well worth reading. If it holds true - and it just might, since while there are many other poor nations there are none with China's size, aggressively low wages, and top-down manufacturing-friendly business environment - then it will be good news indeed. We might even be able to trade with China on somewhat of an even footing, in a best case scenario. And while I'm more of a protectionist, this is one area where I'd be happy to be proved wrong.ith U.S. competitiveness continuing to improve and costs in China rising, the United States will be in a strong position by 2015 to eventually add 2 million to 3 million jobs and an estimated $100 billion in annual output in a range of industries, according to a new report by The Boston Consulting Group (BCG).
The report - U.S. Manufacturing Nears the Tipping Point: Which Industries, Why, and How Much? - is the latest study by the group of the emerging reshoring or "insourcing" trend. The report expands upon earlier BCG research released last year on the changing economics that are starting to favor manufacturing in the U.S.
The first report, published in August, explained how 15-20% annual increases in Chinese wages and other factors were rapidly eroding China's manufacturing cost advantage over the U.S.
In October 2011, BCG's second set of findings identified seven broad industry sectors most likely to reach a "tipping point" in the next five years - the point where China's shrinking cost advantage should prompt companies to rethink where they produce goods meant for sale in North America.
The second formal report - authored by Harold L. Sirkin, Michael Zinser, Douglas Hohner, and Justin Rose - elaborates on those findings and projects how much production work is likely to shift from China to the U.S. in each of the seven tipping-point sectors - including appliances.
The combination of manufacturing work returning from China in these sectors and increased U.S. exports due to improved global competitiveness is expected to create 2 million to 3 million U.S. jobs by the end of the decade. The job gains will come directly through added factory work (600,000 to 1 million jobs) and indirectly through supporting services, such as construction, transportation, and retail.
Harold L. Sirkin, a BCG senior partner and coauthor of the report, said higher wages in China is only part of the reason that America may see a manufacturing renaissance. "The U.S. manufacturing sector has gotten a lot more competitive over the past decade. And in recent years, companies have been paying much closer attention to the total costs of delivering a product made in China compared with making it closer to the end customer."
BCG identified several large and small companies that have added or plan to add U.S. production after assessing the costs and risks. Among them: Farouk Systems Group, a Houston-based producer of professional hair care appliances and spa products. The report noted that Farouk Systems plans to move final assembly of some appliances from China and South Korea to a 1000-worker factory in Houston as a way of cutting inventory costs.
On a related issue: http://www.appliancemagazine.com/news.php?article=1575014&zone=0&first=1
We just bought a Whirlpool refrigerator this past weekend. It took a bit to talk my wife out of the Mexican-manufactured LG she so liked, but in the end we found an American-manufactured Whirlpool she loves. It's worth the extra time and trouble, and a little extra cash.