Beyond reshoring: Why restarting plants and hiring workers are just as crucial

04/26/2013


PE: You've suggested that manufacturing had been neglected for a decade. It now seems to be making a comeback. What's driving this manufacturing renaissance, and what needs to happen to keep it growing? 

Van den Bossche: Back in 2001, when China joined the WTO, the cost proposition of that nation, with an abundance of workers, low-cost labor, attractive government incentives, and a huge potential domestic market, was a big driver for companies closing their U.S.-based operations and moving eastward. In the eight years following, exports from China to the U.S. virtually tripled. During that period, according to the Organization for Economic Co-operation and Development, while companies have been investing in efficient, state-of-the-art technology for their overseas manufacturing facilities, their existing U.S. plants have not benefited from similar capital flows into new or upgraded equipment and, as a result, the U.S. is sitting on a relatively old machine base.

Similarly, the domestic U.S. manufacturing workforce is also aging. According to the Economics and Statistics Administration, the average age of this workforce is close to 45 and it’s estimated that 10% of the current manufacturing workforce will retire in the next 3 to 5 years, leaving behind a serious skills gap.

Nonetheless, manufacturing in many ways has always remained the cornerstone of the U.S. economy and, globally, the U.S. is also still the largest manufacturing economy, producing more than 20% of all manufactured products across the globe. So when the trends listed in your earlier question started to emerge, companies figured that “coming back” would be relatively easy and several big-name manufacturers announced their intent to return.

But we’re not seeing the big return just yet. In 2012 industrial production and capacity utilization started off the year strong, fell over the summer, started to pick up in the fall, but then fell more recently, back to early 2012 levels and, overall, industrial production still remains well below its pre-recession levels. So, even though the intent is there, U.S. manufacturing companies will need to work hard to overcome the constraints they face due to the aging assets and workers.

Aging assets will require significant commitment of capital to build new plants or make targeted investments to extend the life, and increase the productivity, of existing assets. The aging workforce will force companies to think more strategically about recruiting, training, and retaining talent. Government may also need to play a part by initiating or maintaining programs that proactively drive the “Make it in America” agenda through the provision of investment incentives, appropriate education, and other measures.


<< First < Previous Page 1 Page 2 Next > Last >>

The Top Plant program honors outstanding manufacturing facilities in North America. View the 2015 Top Plant.
The Product of the Year program recognizes products newly released in the manufacturing industries.
Each year, a panel of Control Engineering and Plant Engineering editors and industry expert judges select the System Integrator of the Year Award winners in three categories.
A new approach to the Skills Gap; Community colleges may hold the key for manufacturing; 2017 Engineering Leaders Under 40
Doubling down on digital manufacturing; Data driving predictive maintenance; Electric motors and generators; Rewarding operational improvement
2017 Lubrication Guide; Software tools; Microgrids and energy strategies; Use robots effectively
The cloud, mobility, and remote operations; SCADA and contextual mobility; Custom UPS empowering a secure pipeline
Infrastructure for natural gas expansion; Artificial lift methods; Disruptive technology and fugitive gas emissions
Mobility as the means to offshore innovation; Preventing another Deepwater Horizon; ROVs as subsea robots; SCADA and the radio spectrum
Power system design for high-performance buildings; mitigating arc flash hazards
Research team developing Tesla coil designs; Implementing wireless process sensing
Commissioning electrical systems; Designing emergency and standby generator systems; Paralleling switchgear generator systems

Annual Salary Survey

Before the calendar turned, 2016 already had the makings of a pivotal year for manufacturing, and for the world.

There were the big events for the year, including the United States as Partner Country at Hannover Messe in April and the 2016 International Manufacturing Technology Show in Chicago in September. There's also the matter of the U.S. presidential elections in November, which promise to shape policy in manufacturing for years to come.

But the year started with global economic turmoil, as a slowdown in Chinese manufacturing triggered a worldwide stock hiccup that sent values plummeting. The continued plunge in world oil prices has resulted in a slowdown in exploration and, by extension, the manufacture of exploration equipment.

Read more: 2015 Salary Survey

Maintenance and reliability tips and best practices from the maintenance and reliability coaches at Allied Reliability Group.
The One Voice for Manufacturing blog reports on federal public policy issues impacting the manufacturing sector. One Voice is a joint effort by the National Tooling and Machining...
The Society for Maintenance and Reliability Professionals an organization devoted...
Join this ongoing discussion of machine guarding topics, including solutions assessments, regulatory compliance, gap analysis...
IMS Research, recently acquired by IHS Inc., is a leading independent supplier of market research and consultancy to the global electronics industry.
Maintenance is not optional in manufacturing. It’s a profit center, driving productivity and uptime while reducing overall repair costs.
The Lachance on CMMS blog is about current maintenance topics. Blogger Paul Lachance is president and chief technology officer for Smartware Group.
The maintenance journey has been a long, slow trek for most manufacturers and has gone from preventive maintenance to predictive maintenance.
Featured articles highlight technologies that enable the Industrial Internet of Things, IIoT-related products and strategies to get data more easily to the user.
This digital report will explore several aspects of how IIoT will transform manufacturing in the coming years.
Maintenance Manager; California Oils Corp.
Associate, Electrical Engineering; Wood Harbinger
Control Systems Engineer; Robert Bosch Corp.
This course focuses on climate analysis, appropriateness of cooling system selection, and combining cooling systems.
This course will help identify and reveal electrical hazards and identify the solutions to implementing and maintaining a safe work environment.
This course explains how maintaining power and communication systems through emergency power-generation systems is critical.
click me