I came across an article from Bloomberg BusinessWeek from earlier in the year that was very satisfying to read. The basis of the article was that it is now just as economical to make goods in the United States as it is in China. Of course, this is of great interest to us, as it probably is for you.
There are a variety of reasons of why we are now competing against China. They include:
- Rising costs of labor in China
- Improvement in American productivity
- Reduced energy costs in the U.S.
According to the Bloomberg article, these and other factors have made $1.00 in US manufacturing costs compare favorably to the .96 in manufacturing costs it takes in China. When you consider transportation costs, quality, and patent rights, America looks very favorable again.
The problem, as the article points out, is that many manufacturers in the United States are using a playbook that is 10 years old or older. We still have this vision that seeking an overseas supplier or building plants overseas will save us money. We are forgetting the guiding principle that purchases are still emotional and selling value – “Made in the USA” – can help nourish that emotion. As it turns out, it is a very practical decision too.
Over the past ten years, both Mexico and the U.S. have made strides in competitive manufacturing costs while costs in places like China, Brazil, Poland, and Germany have risen significantly. This has changed the landscape across the globe. But far too many, even in our own country, haven’t realized it yet. Things change, and they have. Somehow, we accept that we can carry a computer in our pockets with apps that can do almost anything, but we can’t grasp that America is very competitive in manufacturing again.
We are doing our part to make “Made in America” carry a message of quality. It is a message we all need to help the brand. I hope you will spread the word and do what you can to bring manufacturing jobs back to the United States. It is an emotional message that your customers want to buy into.
It took time to lose many of these jobs, and it will take time getting them back. But the realization that it is smart business to manufacture in the U.S. is as good as a place to start as any. You can read the complete Bloomberg BusinessWeek article here. Read it, pass it along, and let’s keep things moving in a positive direction.
We are on the cusp of rebuilding our manufacturing base in this country, and 21 Handshake client Wiley Metal located in Indiana is proud to be a part of that. We appreciate all of our customers who are helping to make “Made in America” so meaningful again.