Thus, despite all the outsourcers’ talk of booming markets in China and other low-income countries, Aeppel writes of a heater manufacturer returning production from China back to Kentucky to cut the cost of shipping to its American customers. And of electronics outsourcer par excellence Emerson bringing Asian production to Mexico and back to the United States to save on supplying their “North American” (read “overwhelmingly U.S.”) customers. And of a pump-maker transferring foundry work to Indiana from China “because the cost of transport overseas” – to U.S. customers – “was the straw that broke the camel’s back.” And so on.
It would have been nice had the piece also observed that the idea of moving factories thousands of miles from their customers didn’t come out of nowhere. Rather, U.S. trade policy made this strategy a no-brainer – at least until the oil price spike. Moreover, the need to junk today’s outsourcing-friendly trade arrangements remains as strong as ever. After all, China in particular has ruthlessly sought to monopolize ever more of the world’s manufacturing. Will Beijing really sit back and let a trifle like haywire global energy markets stand in its way?
Source: “Stung by Soaring Transport Costs, Factories Bring Jobs Home Again,” by Timothy J. Aeppel, The Wall Street Journal, June 13, 2008
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