Trump has Manufacturing all Wrong

Trump ManufacturingReshoring is of great interest to us at Proficient Sourcing because of our desire—and ability to provide good manufacturing candidates for the outsourcing needs of most OEM’s.  We have a very wide and diverse collection of shops to do just that.  If reshoring is on your agenda, we hope you will keep us in mind.  Here’s a listing of most of the capabilities we can offer.  In fact, we are available and ready to assist you with any manufacturing supplier situation.

As a consequence, we often check in with the Reshoring Institute, where juicy tidbits often lurk.  And so recently we found a fascinating article from Forbes listed there, entitled “Trump Has Manufacturing All Wrong..And So Do The Rest Of Us”.  This article has numerous excellent points, so we will quote generously from it and the link to access the whole article is at the end of our article.

Trump’s State of the Union address promoted an Ohio manufacturer along with the number of new jobs.  According to a Gallup poll from the summer of 2017, the most popular solution for job creation is keeping manufacturing from going overseas.  That answer was given even more than reduced regulations or lower taxes.  So where is Trump wrong, along with the rest of us?

Essentially manufacturing in the US is quite healthy and an excellent career choice, both of which seem to contrast with popular opinion.  But manufacturing in 2018 is far different than that of the sweat shop of the 1950’s, and requires different skills.  This article points out a number of excellent points:

First, the article notes that succession planning presents a serious obstacle to manufacturing.  Nearly half of all privately held companies are baby boomers, and “as these CEO’s retire, less than 15% pass on to the next generation.  …  Many of these companies will be liquidating their assets to overseas buyers, selling the land and shutting their doors”.  While there are organizations working to stem this tide, their efforts “aren’t nearly keeping up with the problem”.  This could be a very big problem moving forward.

Manufacturing work today has a number of positives, yet many people seem to fear it’s a dead-end industry. “Yet, US exports of manufactured goods have quadrupled over the past 25 years, mostly due to productivity and advanced technology.”  Further, manufacturing of today is not the sweat shop of 50-60 years ago.  Most factories are very clean and the work is more knowledge than brute force.  Also, the average factory worker in the US “earned $77,060 annually…which is 28% higher than the average US employee”.  Finally, “81% of manufacturing jobs require no work experience for an entry-level position”.  Sounds like a good place for jobs to us!  And there are many openings.  This means “there’s not a job shortage; there is a skilled workforce shortage”.

The US has a big advantage in innovation and entrepreneurialism.  We are a country full of small and very nimble manufacturers (we have a number of such suppliers ready to help you).  It is also helpful if the shop floor is nearby for engineering and product development to visit for adjustments.

While it’s true US labor costs are high relative to many countries, the total cost of ownership is often much closer.  The Reshoring Institute has a comprehensive worksheet you can access on their website to evaluate relative costs, and often the US comes out favorably.

This article points out a number of other factors associated with US manufacturing going forward.  It’s a worthwhile read and here’s the link.


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