I came across this article from the Kentucky Courier Journal.
Some US manufacturers, including General Electric are finding reasons to bring manufacturing back to the US.
There’s even some buzz words being created around it.
“On-shoring,” “back-shoring,” and “re-shoring” are all buzzwords for a U.S. manufacturing industry hopeful for change after decades of being weakened by cheaper labor overseas.
If this is a trend, I’m all for it.
Hat tip: Andrew Casey
Sounds great!
Definitely interesting.
We will want a strong specialised, advanced manufacturing base for this country. It is a huge generator of foreign income and also local jobs.
Also there’s nothing wrong with advanced NZ engineering and design talent creating and testing products here in NZ, creating innovative marketing around it, with some of the items built elsewhere – in China for example – and from there sold and shipped across the world. Exactly what Apple does with the iPhone. And all that money comes rolling on back to New Zealand.
That requires that NZ develop particular expertise in supply chain and supplier management.
I understand that in more than a few cases the Chinese are buying out/making life tough for their joint venture manufacturing operations and want to have 100% control, after all they have acquired the necessary technology and know how from their off shore partners, and now some USA co.s are having to re locate back to the USA and resart manufacturing..
“You think our government is a gorilla,” Bethune said. “Their government is 10 gorillas.” (on China)
It’s kind of always been a hard subject to broach.
It’d be very easy to try and disregard the facilities overseas but then who can compete with $0.50/hour pay rates? I wouldn’t want to see anyone here having to live on that (or anywhere else for that matter).
And then there’s the taking of NZ jobs. It’d be easy for us to look at the money coming back into NZ and say “well that’s okay” but then where does that money go? Those poor sods finding themselves unemployed have found themselves in dire straits and those who own the company find themselves better off. Is Fisher and Paykel even really owned by NZ’ers? Being a NZ company (and being publicly traded) is different from being a NZ owned company.
Look at India – certainly a fairly wealthy country BUT the distribution of that wealth is such that there are definite classes. See a few people living under nothing more than a mosquito net on top of what’s essentially a rubbish dump, and those people who have found themselves without a job starts to take on more gravity.
As transport costs increase over the next 20 years we can expect more industries we thought gone from NZ to return and an increase in the repair/maintanance industries… We can also expect goods to be a lot dearer…
@ Nevyyn: all great questions. Where does the money go? The Govt has to encourage movement of the new found foreign capital into productive enterprises e.g. basic sciences R&D, new product development, buying advanced plant, machinery and computing resources. NOT into the next housing bubble please.
Bear in mind that countries like Malaysia, Singapore, South Korea do have medium to high wages but all have advanced manufacturing onshore.
The core of AMD microprocessors are made in Germany and then shipped all the way to Malaysia for final fabrication, for instance.
An extra $3.00 of labour cost in a $1000 microchip is very easy to ignore, less so for a $6 kg of milk powder.
As for your India example: that is the trick – using the additional tax revenue gained to ensure that issues of equality are fully addressed e.g. access to education, healthcare, housing…that would be according to Labour principles of course. Under Nats or the Act, expect the few to benefit, not the many.
@ Jeremy M Harris: NZ is as close to the world as it is ever going to be. And today we don’t blink twice at shipping a kilo of lamb, a kilo of cheese or a bottle of wine across the world to successfully sell it, so I’m damn sure can do the same for lots of other things.
Transport costs and distances are real, but they are also not as big a factor as our mindset of being far away.
Like I said, AMD finds it perfectly economic to ship their high value microprocessors halfway across the world from where they are started in order to finish them.
Transport costs matter the most if you want to operate on the lower tiers of the industrial and service hierarchy, not the highest most advanced tiers.
“TelstraClear proposal edangers 120 jobs”
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10639678
Great, just great.