I read this article today on Institutional Investor – it tackles the ubiquitous idea that the manufacturing industry in the US is dead, a victim of outsourcing to countries with cheaper labour costs. The writer believes that the idea of the “death of manufacturing” doesn’t reflect reality at all – in fact, there’s a lot of good news about the state of the industry in the US. Here’s an excerpt:
Today the U.S. specializes in making products that require a high degree of innovation and technological content. Savvy U.S. manufacturers that are widely regarded as possessing the right stuff include A123 Systems in lithium-ion batteries; First Solar in thin-film solar modules; Johnson Controls in office-climate and automotive-electronic systems; Plexus Corp. in outsourced manufacturing of proprietary products in the defense and wireless communications industries; Stryker Corp. in orthopedic products, such as artificial hips and knees; and Varian Semiconductor Equipment Associates in ion implanters used to fabricate semiconductors.
In a novel counter-trend, foreign manufacturers are increasingly making things in the U.S, which accounts for 40 percent of global demand. Foreign manufacturers find it advantageous to establish plants in the U.S. for various reasons, such as gaining marketing opportunities, earning tax credits and — brace yourself — exploiting cost advantages. For instance, a Chinese company in Spartanburg, South Carolina, pays just 4 cents per kilowatt-hour for electricity to power its plants, compared with up to 14 cents in China.
Click here for the full article.