‘Runaway’ Manufacturing Plants

A dispute continues about whether manufacturing plants will soon be nonexistent in the United States.  The topic of discussion is whether “reshoring” will be effective or if the hub of manufacturing will continue to move offshore.

Manufacturers Alliance for Productivity and Innovation (MAPI) defines these “Runaway Plants” as, “A plant that closes in the United States and reopens in a foreign country with lower operating costs and then has those products shipped back to the US.”

This has been a constant issue for the struggling economy as employers (particularly smaller organizations) cut corners in order to reduce costs.

According to MAPI, “The stock of U.S. manufacturing plants is the net result of a constant flow of closings and openings. What may be surprising to some observers is that the rate of plant closings has a declining trend over the last 13 years.  Unfortunately, the rate of plant open­ings has consistently fallen even more. On average over the last 13 years, 3.5 percent of all plants closed each quarter and 2.9 percent of all plants opened. The most recent data for the first quarter of 2012 show that approximately 10,000 plants closed (3.3 percent of plants) and 8,000 plants opened (2.6 percent of plants).”

The number of manufacturing jobs has also been damaged by the flow of factories opening and closing.

The Reshoring Initiative is an organization that was founded in order to: “bring good, well-paying manufacturing jobs back to the United States by assisting companies to more accurately assess their total cost of offshoring and shift collective thinking from ‘offshoring is cheaper’ to ‘local reduces the total cost of ownership’”

Total manufacturing jobs started growing again in the first quarter of 2010, primarily due to new initiatives by Ford Motor Company and General Electric to bring manufacturing back to the United States from Asia.

Social tagging: > > > >