Companies returning to the US must seek out quality suppliers
In recent years, companies that have moved offshore have begun to reevaluate their decision to relocate to foreign countries.
In recent years, companies that have moved offshore have begun to reevaluate their decisions to relocate to foreign countries.
Harry Moser, founder of the advocacy group Reshoring Initiative, told Material Handling & Logistics that many companies offshored in hopes of cost savings, but between the price to export and import products and supplies, as well as other expenses, organizations are finding that their best move might be to come back to the states. In 2016, more jobs were reshored than offshored, according to information collected by Reshoring Initiative.
Transportation equipment manufacturing jobs come home
By far, the industry driving this trend the most is transportation manufacturers. Between 2010 and 2016, 444 transportation equipment companies reshored 133,963 jobs. Companies that have brought numerous jobs back in this sector include:
Ford – 3,200 jobs
As of 2016, Ford has brought back the second-highest number of jobs to the U.S., following only Walmart, whose "Made in USA" initiative has encouraged many returning jobs. Ford's reshoring efforts began in 2014 when the company announced it would be relocating production of its F-650 and F-750 trucks from Mexico to Lake Avon, Ohio, according to Manufacturing.net.
"Building these trucks in-house will utilize our expertise from our other tough truck and commercial vehicle lines to give our customers a better product at a competitive price," explained Joe Hinrichs, Ford president of The Americas.
The company also reshored production of its 2.0- and 2.3-litre Ecoboost engine to Cleveland from Valencia, Spain, according to information provided to 24/7 Wall Street from Reshoring Initiative. All said, Ford has brought 3,200 jobs from overseas to the states between 2011 and 2016.
Boeing – 2,700 jobs
Following Ford, Boeing has brought the third-highest number of jobs to the U.S. from overseas. In 2014, the company announced it would move production of 777 series passenger jet parts to its St. Louis facility. The expansion would not only create jobs in St. Louis, but also support Boeing's operations in Washington state, where final assembly of the planes is carried out.
The change is planned to be completed this year. Between 2011 and 2016, the company has reshored 2,700 jobs, and this is expected to grow over time.
General Motors – 2,345 jobs
General Motors is widely known as one of the "Big Three" American automakers, alongside Ford and Fiat Chrysler. Despite this distinction, the bulk of GM's manufacturing jobs are nowhere near American soil. However, seeing the benefit of bringing jobs back to its home turf, the company announced in 2015 a $5.4 billion plan to invest in American plants.
GM elaborated that the investment would retain 1,900 jobs in Lansing, Michigan. Additionally, GM explained that it had created 3,650 new jobs since 2009 by investing close to $16.8 billion in the U.S.
According to 24/7 Wall Street, a total of 2,345 GM jobs were moved from Canada and Mexico to Michigan and Tennessee between 2011 and 2016.
Caterpillar – 2,100 jobs
Caterpillar, maker of heavy duty trucks and other large equipment, is a global company, and as such, it makes sense for the company to have a global presence. However, the company announced in 2015 that producing hydraulic evaporators, which weigh between 12 and 49 tons, is more cost-efficient and less energy intensive if done domestically, reported Great Manufacturing Stories. As such, the company opened a plant in 2012 in Victoria, Texas, to manufacture these products.
"For some products, it's more cost-efficient and less energy intensive when manufacturered domestically."
In 2015, Caterpillar announced it would expand the Texas plant to accommodate 200 jobs coming in from Escobedo, Nuevo Leon, Mexico, according to San Antonio Business Journal.
"The impact goes beyond the initial 200 jobs or so Caterpillar is adding to the state's economy, and speaks to the economic opportunity HOLT and Caterpillar jointly see in our region for expanded sales, parts support and services," explained HOLT Caterpillar President and CEO Dave Harris.
Caterpillar also brought around 1,400 jobs to Georgia from Japan, according to 24/7 Wall Street. Between 2011 and 2016, Caterpillar reshored 2,100 jobs.
Reshoring companies must seek out quality suppliers
When manufacturing work is moved offshore, quality often diminishes. Forbes contributor Steve Denning outlined the numerous problems Boeing encountered following its offshoring initiatives. Stories of cracked windshields, failing brake components and electrical fires threatened Boeing's credibility.
As these companies continue to move production of automotive parts and other components to transportation equipment back to the U.S., it's critical that they make sure they cover all their bases. One important aspect of ensuring high-quality production of parts is to ensure they can be transported safely.
Companies relocating their operations to the U.S. must seek out quality suppliers to ensure all parts have the right protective packaging to keep them secure and intact during transit. Manufacturers seeking protective packaging can find extensive helpful offerings from Pregis.
To learn how the right protective packaging can help keep your companies' manufactured components secure, reach out to Pregis's packaging experts.