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Is US manufacturing reflowable?

Apple's return to US production has a new step forward. Apple's largest foundry partner, Foxconn, has confirmed that they are currently evaluating the possibility of building in the United States and have already started preliminary negotiations on expanding operations in the United States. Foxconn said the potential range of investment has not yet been determined, Foxconn executives are currently with the relevant US officials for direct negotiations. Once the negotiations are completed, the details of the plan will be announced on the basis of a win-win situation.


Analysts believe that this is only the promise of the new US President Trump in the campaign, in order to absorb the support of more voters promise. Although, in the United States, "Made in America" is being seen by more and more American people. More and more people in the United States sent to the revival of manufacturing to stimulate employment rates, but in the cost, tax, logistics, labor costs and so constrained the US manufacturing industry did not achieve the revival. As early as the former president of the United States President Obama on the second term: the US manufacturing industry relocation. But in the past few years you can see: US manufacturing reflow is still a case, does not mean that China as the world's most important manufacturing base of the end of the status. Under the guidance of the global market rules, where there is a market, where there is a supply chain and a good economic ecology, where the manufacturing industry will be gathered.

Is US manufacturing reflowable?


"Let the United States become a new field of employment and manufacturing." A month ago, US President Barack Obama in the second term of his first national policy address shouted to revive the slogan of American manufacturing. Can the United States, which has not yet emerged from the financial crisis, set off a manufacturing revolution? What is the foundation of the United States to attract manufacturing "backflow"? Does the US manufacturing industry have a big impact on China's manufacturing industry? "Global Times" in the United States this reporter on a number of US companies to conduct research and interviews with industry experts. The conclusion is that the US manufacturing reflow is still a case, does not mean that China as the world's most important manufacturing base of the end of the status. Under the guidance of the global market rules, where there is a market, where there is a supply chain and a good economic ecology, where the manufacturing industry will be gathered.

The "reflow" of the manufacturing industry means a phenomenon in which the transnational corporations transfer the investment and production capacity of the manufacturing industry from overseas to overseas. It includes the relocation of overseas factories to the country, as well as the construction of factories in the country, Procurement plan. Some experts believe that, for decades, the US manufacturing industry in the outsourcing to go too far, the US manufacturing industry's return is over-outsourcing of the past, a "correction."

However, US multinationals, including Ford, are very cautious in using the term "reflow". In fact, the term "reflow" is not accurate in Ford because Ford's manufacturing in the United States does not mean closing a factory in Spain or Mexico. Ford's public relations manager Christina Adamsky told the "Global Times" reporter, Ford's behavior should be defined as the US manufacturing industry, "reinvestment." "We are arranging production layouts based on growth in customer needs and are committed to global capacity optimization," he said, adding that the Chinese market is a key engine for Ford's growth over the next 10 years. DuPont news executives also told reporters: "For China, DuPont has always been the input and commitment is the same." DuPont currently in mainland China a total of nearly 50 wholly-owned and joint ventures, with nearly 7,500 employees.

Jamie Mauter, chief economist of the National Association of Manufacturers, told reporters that some manufacturers have shifted their production lines from abroad, which is a decision made by the manufacturer on a case-by-case basis. He said that the US manufacturing industry return trend will certainly continue, but not all of the overseas production lines or have been transferred out of the manufacturing industry will return. The manufacturer will conduct a reassessment of the supply chain and production, such as labor costs, transportation costs and control of product quality. From the absolute number of unit labor costs, the cost of labor in the United States is still several times that of China. In some of the traditional manufacturing base in the United States, workers have been unionized, wage high asking price. In the automotive industry, for example, the data show that Ford and other US automakers pay hourly wages and benefits to auto workers' unions for up to $ 60-70. Maurelli told reporters that the average wage of US manufacturing workers is $ 77,000 / year. US manufacturing industry is relatively high, high productivity, high productivity, high wages of the industry.

A large number of workers with low labor costs and higher transportation costs will be a critical point around 2015, according to Harold Sierkin, a senior partner at Boston Consulting Group (BCG). In other words, by 2015, these products if it is to supply to the US market, then the United States is manufacturing "economic" approach. He believes that the United States in the early stages of the revitalization of the manufacturing sector. Sierkin said that for those who consider the company in the United States to build factories, it takes at least 3 years to complete the plant and make it full load operation. He said that the reason why Obama talked about the revitalization of the manufacturing industry and the return, is to let the US business owners "do math problems", calculate the construction of the United States in the United States is good for them.

At present, the US manufacturing industry revival, there are still many policy obstacles. Jay Timmons, chairman of the National Association of Manufacturers, recently criticized the US federal government for "doing much and much less" in revitalizing the manufacturing industry. In the case of a serious political stalemate in the United States, it is not easy for Washington to make policy adjustments. For example, a frequently mentioned program is that the United States to amend the tax law, the transnational corporations from overseas remittance profits in the domestic investment tax relief. But even this initiative, which is widely regarded as viable, has not become law after discussion for a long time. Mauro said that the political impasse has hurt American business confidence, but he said that now the Democratic and Republican parties pay attention to manufacturing, so the two sides will strive to find some common interests.

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