8 Employers Buck Outsourcing Trend, Bring Jobs Back To America
For decades, Americans watched helplessly as U.S. businesses outsourced, shipping good-paying jobs overseas. But now, the trend seems to be at least slowing a bit, as some employers are heeding President Obama's call for "insourcing."
Starbucks Coffee Co. is perhaps the latest example of a company bringing jobs back to America, a trend that some are calling "reshoring." The Seattle-based company recently turned to a struggling East Liverpool, Ohio, pottery maker -- not a Chinese one -- to manufacture 20,000 beige coffee mugs emblazoned with the chain's iconic logo, which Starbucks sells for $10 each.
"[E]ven though it's more expensive to manufacture this mug in the U.S. than it would be in China or Korea or Mexico, this is what we need to do," Starbucks CEO Howard Schultz told NPR.
In doing so, Starbucks joins a growing list of companies that are forsaking manufacturing in China, India and elsewhere. Though the coffee chain's effort in part appears to be altruistic, others are basing the move back to America on the bottom line, as they realize the costs associated with overseas production no longer make economic sense.
President Obama (pictured above) praised the shift earlier this year during a visit to a Master Lock Co. factory in Milwaukee. The venerable lock manufacturer recently brought back 100 jobs to its unionized factory in Wisconsin from China, citing rising production costs there.
Last year, a report from the Boston Consulting Group (via MSNBC) said U.S. employers' decisions to bring jobs back to the U.S. "is still in its early stages, but we believe it will accelerate in the years ahead." The report highlighted six employers that have chosen to shift operations back to the U.S. from China and elsewhere:
- NCR Corp. The company once famous for making cash registers recently moved its production of ATMs to a plant in Columbus, Ga., which is forecast to employ nearly 900 workers by 2014. About 500 of those jobs had already been added by April.
- The Coleman Co. The maker of camping supplies is ubiquitous among American outdoor enthusiasts. It announced plans to move production of its 16-quart, wheeled plastic coolers back to its Wichita, Kan., headquarters, where it already makes some coolers. Rising manufacturing and shipping costs tipped the scales toward bringing more manufacturing back to the U.S.
- Ford Motor Co. The iconic Detroit automaker has been steadily adding back jobs that were lost during the Great Recession. They include nearly 2,000 jobs that have been returned to Ford's factories in the U.S. from outside suppliers -- including those in other countries -- thanks to an agreement with the United Auto Workers that allows the company to bring in new workers at lower wages.
- Peerless Industries Inc. A maker of mounting systems for flat-panel TVs, Peerless recently shifted all its manufacturing from China to a new facility in suburban Chicago, creating 85 U.S. jobs. The move was done in part to reduce operating expenses and regain "complete control" of production.
- Sleek Audio Inc. The manufacturer of in-ear headphones for iPods and other devices moved its manufacturing to Florida from China two years ago, after company officials learned that the hidden costs of overseas production, including delays and shipping, eroded much of the expected savings.
- Outdoor GreatRoom Co. Long lead times, which required Outdoor GreatRoom to book orders from its Chinese suppliers nine months in advance, prompted the Eagan, Minn.-based company to shift production of its fire pits and some outdoor shelters back to the U.S. The move created 50 jobs at the company and 100 jobs total, including positions added at suppliers and related companies, spokesman Ross Johnson told MSN Money.
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David Schepp has spent more than a dozen years covering business news for the electronic and print media, including Dow Jones Newswires, BBC News, Gannett Co., and most recently at AOL's DailyFinance. Nearly 10 years ago, he started writing a weekly People@Work column, looking in depth at issues facing workers in today's workplace. Follow David on Twitter. Email David at firstname.lastname@example.org. Add David to your Google+ circles.more...