U.S. manufacturing adapting to combat job outsourcing, starting to bring jobs back from overseas

Local manufacturer rebrands to fight job loss

KANSAS CITY, Kan. - The state of manufacturing in the US is improving. The rush to outsource to foreign countries has slowed and in some sectors, the tide is reversing. The reasons why manufacturing jobs are returning to the US are varied but almost everyone can point to the bottom line as a common thread. "Managers are learning now the cost of globalizing in a big way," said Rockhurst University professor of Economics Michael Tansey. "They are finding out, you know what, better to keep it at home."

That doesn't mean all the jobs are coming back. Tansey says the low-end jobs are gone. One local company knows that first-hand. A&E Custom Manufacturing in Kansas City, Kansas rebranded themselves from a stamping company to better fit the available market. They recently added robots to the work floor to increase production.

"We're trying to make our work process as efficient as possible so we can get as much work through the plant as we can," said Bill Goodman. The robots enable the company to give the customer exactly what they want at the same time cutting down the lead time from design to delivery, another leg up for local manufacturers. "Our world has changed. We're no longer competing with somebody down the street," said Goodman. "We're competing with similar companies across the world."

The current economic conditions around the world are also lending a hand in jobs returning to the US. Rising fuel prices increase shipping costs. Foreign wages are starting to climb. Supplier's inventory levels are low too. But communication is becoming a bigger factor. "American business has found it very costly when those communication gaps occur," said Tansey. "Particularly on a globalized level."

Goodman feels this rebound, while good, can fall short because manufacturers need more skilled workers. "We have to have skilled people to run this incredibly expensive and technical equipment," said Goodman. His company is hiring and will train new employees but they need to have some technical skills. Goodman adds that US manufacturing is facing a shortage of workers and that shortage could reach a critical level within the next ten years.

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