Wednesday, May 18, 2011

Made in America

Come June, the [former Hoover] plant will be churning out EdenPure space heaters, vacuums, air purifiers and other small appliances once made in China.
You read that correctly: a manufacturer is moving production from China to America. The hopeful Washington Post story discusses the recent growth in manufacturing: 250,000 net new jobs in the last 16 months. A lot of that is probably just bounce-back from the abysmal lows in the Great Recession, but in the case of the EdenPure plant, it's a legitimate turnaround from the long-term trend of off-shoring.

Of course, the new jobs have lower wages than the old ones, and probably far fewer are unionized. As the EdenPure CEO says, “everybody wants to manufacture in the United States. It is just the cost of doing it” that prompts companies to move factories offshore.
He decided to move manufacturing back from China because it takes two months to get products to market from his factories there. That lag led to supply and inventory headaches for his weather-sensitive products, particularly his signature space heaters. Those problems became less tolerable as his costs for making products in China and shipping them home began to soar. The clincher was when his company was able to re-engineer the space heater so it required fewer man-hours to build. Even with all of that, Suarez said, his production costs are higher here than they would be in China. Nonetheless, he said he is happy to be bringing jobs back to his home town, adding that he will probably hire as many as 2,500 workers over the next 18 months.
American manufacturing was once written off as a lost cause, with the endless cities of Chinese workers always willing to work for less. But maybe, having shaken off the union shackles, Midwestern markets will once again find a place for the semi-skilled factory worker.

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