You're right, a lot of low-priced consumer goods went offshore first in this huge manufacturing shift. It wasn't just assembly anymore, but the full bore. But what was changing in the late 80s was the fact that the entire assembly and manufacturing of all kinds of higher-ticket goods were going offshore, like electronics, as well as their entire support systems, including technical documentation and, eventually, much of engineering. I can remember attending several seminars in the early 2000s put on by professional organizations that were supposed to help tech writers and engineers somehow morph themselves into....accountants and real estate agents. I'm not kidding.
Yes, I, too, remember this happening in the 1980s. Much of it then was toys. Electronics followed as the factories become more sophisticated and EMS companies grew substantial enough to win trust. The real rush that came in the late 1990s and early 2000s when it took on a new life. I remember vendors and distributors noting that companies were not even thinking it through.
You know, Rob, what the tech writers union found out at the time was that major Silicon Valley employers had been gradually offshoring jobs for about 10 years and keeping it a huge secret. This was not rumors, but facts. They already had in the works the same plans for engineering jobs. By the time we found out what was happening, critical mass was being reached, so that's why such a huge dropoff happened so fast. It took a lot less than 10 years for the shift in engineering jobs, mostly because the infrastructure was now in place that could support offshoring of both job types. Apparently they started with tech writing because we had less of a clue what was going on than engineers and weren't thought likely to scream as loud (nor would anyone care as much if we did). Essentially the same thing had been going on with manufacturing, in parallel. I wrote a story about offshoring manufacturing as long ago as 1989 for Computer Design News.
Yes, I know what you mean. I was on the staff of Electric News during that crash. Companies were reporting 40% drops in business, almost overnight. Everyone was running to China without even thinking it through.
Some products won't come back (cellphones, laptops). But the rush is over according to outsourcing analyst firms. Some companies are coming back, some are deciding not to go to Asia.
With all the commody manufacturing in China, they will probably remain number one. But there is still tons of manufacturing here in the number two country.
Rob, thanks for this info. That's heartening and inspiring. I didn't know the offshoring wave had turned. I remember seeing hints of that a few years back and being cynical about those hints continuing and growing. I was at offshoring ground zero in tech writing in 2000-2001 when the news about it broke. We had 70% unemployment rates in that industry in that year. This was a huge industry crash, just before offshoring hit engineers. More recently, when wages started to increase in the Asian and other outsourced-to countries I hoped the wave would turn back, although it's unfortunate that it's at least partly because our own workers are getting lower pay.
Yes, one of the secrets of U.S. manufacturing is that it's robust. We were the largest manufacturing country until just two years ago when China passed us. Our labor costs are coming down lately. This is partly because there is less union, so some of the cost is coming from lower worker wages. Plus, our plants processes are driving down the cost of manufacturing through automation.
Companies such as Texas Instruments are choosing the U.S. for new plants. The outsourcing wave is over, and now brand owners are thinking more in terms of locating plants near the markets. That means Eastern Europe for Europe and the southern U.S. for North America. So a good chunk of manufacturing is coming back to the U.S. recently.
Thanks, that makes sense. This is clearly a multi-variable equation! It's also good to know that there are any products being manufactured over here, and even better to know that they're complex and high-ticket items.
There is probably a factor of how complex the products getting manufacturied are. The low-cost geographies tend to produce products that are commoditized. Complex medical products and military products are staying in North America.
At this year's MD&M West show, lots of material suppliers are talking about new formulations for wearables and things that stick to the skin, whether it's adhesives, wound dressings, skin patches and other drug delivery devices, or medical electronics.
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