CICP News & Updates

A recent article in USA Today tracks an emerging trend among some U.S. companies – the “onshoring” of manufacturing operations from overseas back to the United States.  The piece (‘Some manufacturing heads back to USA’) reports on recent moves by companies like General Electric, Ford Motor Company, Caterpillar and NCR that are moving manufacturing work back from countries like China, India and Mexico.

The companies cite a number of reasons behind the nascent onshoring trend – rising wages in China (recently reported on this blog), poor quality from suppliers, the threat of intellectual property theft and the logistical complexities that come from a global supply chain (which can limit customer responsiveness).

This trend bears watching.  In June, Deloitte Consulting and the U.S. Council on Competitiveness released the annual Global Manufacturing Competitiveness Index for 2010.  The study (based on a survey of 400+ manufacturing CEOs worldwide) ranked access to educated workers capable of supporting innovation as by far the biggest determinant of success.  If the United States can successfully re-energize our technical education system and maintain a skilled workforce and innovation advantage, the onshoring movement should continue to gain momentum.

Indiana also stands to reap the benefits as well, with our inherent logistics advantages, strong manufacturing base, and leadership in exports and foreign direct investment.  Indiana has been a winner in globalization: If foreign manufacturers find the Hoosier State such a hospitable place to locate operations (and Indiana has led the nation in manufacturing jobs created by international companies two consecutive years), then we should be well-positioned to compete for U.S. corporate investment as companies look to relocate closer to home.