‘On-shoring’ trend brings new focus
Northern Nevada Business Weekly
Rob Hooper is absolutely convinced that some of the manufacturing jobs that left the United States in the past decade are headed back home.
And Hooper, the executive director of Northern Nevada Development Authority, is working closely with local and federal officials to make sure the region is well-positioned to catch some of those jobs as they land.
He’s not alone. The U.S. Department of Commerce this month launched SelectUSA, a program that’s designed to bring overseas investment and jobs to American shores.
Bill Cline, director of the Reno office of the U.S. Commercial Service, says the initiative includes efforts to make sure that U.S. companies take a close look at returning jobs to America from China and other low-cost countries.
In Nevada, Cline said the Commerce Department will look to align itself with local and statewide efforts to bring manufacturing jobs back. There’s nothing flashy about the work that NNDA is doing to position the region to capture some of those manufacturing jobs.
Instead, Hooper says, the nonprofit headquartered at Carson City is putting together the basic building blocks that manufacturers need.
It expects to complete a manufacturing database in the region by this autumn. Manufacturers will use the database to find vendors and customers throughout the region – and may help entrepreneurs see opportunities to work as suppliers to manufacturing companies.
That directory is especially important in attracting on-shoring businesses, because few of them actually moved their factories overseas. Instead, they signed contracts with foreign manufacturers, and on-shoring means they’ll be looking for American contractors.
“It’s easier to move a contract than it is to move a company,” says Hooper.
Working with Ascent Douglas, a campaign to strengthen the Douglas County economy, NNDA has targeted the outdoor recreation industry as a likely source of jobs as manufacturers look to bring some of their operations back to America.
Douglas County combines a network of outdoors’ manufacturers with a lifestyle that’s attractive to people in the industry, county officials have noted.
They’ll be telling that story again this summer at Outdoor Retailer, a big gathering of manufacturers, distributors and retailers of outdoor gear, and Ascent Douglas will be fine-tuning its message to target on-shoring manufacturing jobs.
After a decade in which manufacturing was dominated by off-shoring, Hooper says the trend appears to be reversing course quickly.
“The scenario is just not good any more,” he says of the drive by manufacturers to chase low-cost foreign locations for their manufacturing.
A key element, Hooper says, is rising costs. Wages for many Chinese workers are pushing the equivalent of $8.50 an hour – rates are at $6.50 in Bangladesh – and increased transportation costs between the Far East and U.S. ports further erodes the cost advantage of off-shored manufacturing.
Quality problems with foreign manufacturing continues as a major headache for some companies, Hooper says, and the slow turnaround between the conception and the delivery of products is a problem in fashion-related industries such as outdoor apparel.
And then, some executives who have contracted their manufacturing offshore complain that they’re tired of the demands of travel. “It’s executive-burn time,” Hooper says.