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(A few) Factories Bring Jobs Home Again
I found a Wall Street Journal hanging on my door again this morning. I've been wondering when this would happen:
Stung by Soaring Transport Costs, Factories Bring Jobs Home Again (pay)
The rising cost of shipping everything from industrial-pump parts to lawn-mower batteries to living-room sofas is forcing some manufacturers to bring production back to North America and freeze plans to send even more work overseas.
"My cost of getting a shipping container here from China just keeps going up -- and I don't see any end in sight," says Claude Hayes, president of the retail heating division at DESA LLC. He says that cost has jumped about 15%, to about $5,300, since January and is set to increase again next month to $5,600.
The article goes on to describe various small manufacturers that are finding that transportation costs have made production in China, and even Mexico, less competitive, or even non-competitive with local production. Due to the rise in oil prices and other energy costs we are witnessing either a hiccup or a reversal of a three-decade trend of out-sourcing manufacturing jobs. While this could be some relief for the US worker, the article does not speculate about how China may react if a larger percentage their firms start losing these opportunities. AIUI, China holds a lot of US paper.
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Comments (4)
Car Connection repeats rumors that China may eliminate or severely cut back fuel subsidies - after the Olympics, of course.
http://blogs.thecarconnection.com/blogs/paul_blog/uncategorized/cheap-chinese-gas/
June 13, 2008 8:02 AM | Reply | Permalink
Interesting! Hadn't given much thought to this. What happens to the global economy, when one can't afford to leave one's own backyard?
June 13, 2008 10:21 AM | Reply | Permalink
There is something very sweetly ironic in all of this. First, NAFTA turns around and bites us all in the ass. And then high gas prices force us to turn around and bite NAFTA in the ass.
June 13, 2008 12:34 PM | Reply | Permalink
I hope bush doesn't get credit for bringing them back.
June 13, 2008 3:46 PM | Reply | Permalink
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