Yakima County Development Association - Reshoring: Manufacturers Coming Home to Roost

Jonathan Smith

The President’s Pen is a weekly blog written by Jonathan Smith, New Vision’s President and CEO about local economic development projects and initiatives. It also covers economic trends, workforce issues, business climate policies, and manufacturing news. 

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Reshoring:  Manufacturers Coming Home to Roost

Reshoring: Manufacturers Coming Home to Roost

April 23, 2013

Our Marketing Director Shannon Hitchcock recently returned from a conference with site selectors.  It gave us a good opportunity to market our region to professionals helping companies locate new factories.  The meetings also provided some excellent insights into broader economic trends shaping our community.  One of the bigger topics of discussion at the event concerned the future of manufacturing and Shannon learned that American manufacturers are coming home to roost.

A perfect storm of a weaker dollar, worker unrest in parts of the world, the cost of energy and a growing demand for US product from China's middle class has large manufacturers opening up new plants right here at home. Companies like Apple, Airbus, GE, Caterpillar and Toyota are just a few who have already made the shift.

"There are several factors working in our favor right now that have lead to the resurgence of manufacturing in United States," said Mike Heilala, a site selector with Accenture.  Fundamental issues are driving the reshoring trend such as cheaper, reliable energy sources, a strong labor force to draw from and more operational flexibility.   "Despite all the progress made over the last decades, manufacturers are finding that their ability to provide the new levhels of operational flexibility needed are not easily obtained by being off-shore," Heilala goes on to say.

The decision to move off-shore used to be as simple as chasing cheap labor (i.e. China and Mexico).  In a recent survey conducted by Accenture and the National Association of Manufacturing finds that 61% of executives' surveyed reported that they will need to undertake some shifts in their plant operation and their supply network. And while the cost of labor still plays a significant factor in determining where a company locates, the proximity to the customer base and the cost of transportation are now taken into consideration as well.

imagesCAOMDDRVShould we call it a comeback yet? Heilala is cautiously optimistic. "The global landscape has become increasingly complex. Companies should take a step back and reevaluate true "total landed costs' and the linkage to serving customers. Watch for emerging trends that will impact US manufacturing and supply networks in a positive way."

The path forward does look bright for "Made in America." and we are working to make sure manufacturing companies can grow and stay competitive in the Yakima Valley.  We are also positioning the region for new business development.  Companies are not just talking about reshoring, they are doing it and we need to be ready for new opportunities.

 


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"New Vision has been a great partner for our business as we continue to grow in Yakima County. They helped us finish another expan-sion project recently and have instrumentally helped us grow from 20 to 200 employees in Yakima County." - Doug Christie, Amtech Corporation