Special Report

Manufacturers Bringing The Most Jobs Back to America

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The loss of American manufacturing jobs to foreign labor has been a central theme of several presidential candidates’ campaigns. However, the trend of offshoring may be slowing, according to one organization.

According to non-profit advocacy group the Reshoring Initiative, offshoring resulted in a net loss of approximately 220,000 manufacturing jobs from 2000 to 2003. However, according to the group, the country added roughly as many jobs due to foreign investment and reshoring as it lost to offshoring last year. Some of the largest U.S.-based companies, likely for both public relations and practical reasons, have begun building factories domestically for operations that would likely have gone overseas a few years ago.

Offshoring, or shifting production from U.S. plants to foreign facilities, is a relatively recent phenomenon that has taken a considerable toll on the U.S. economy. In an interview with 24/7 Wall st., Harry Moser, founder and president of the Reshoring Initiative, explained that recent developments have made the prospect of manufacturing domestically much more feasible. Moser cited economic troubles and rising wages in China as one of the primary drivers of this recent trend.

Click here to see manufacturers bringing the most jobs back to America.

Indeed, lower labor costs and fewer regulations in countries such as China have created an incentive for U.S. companies to relocate production there. Consequently, U.S. manufacturing has taken a major hit. A study by the Economic Policy Institute found that the U.S. lost roughly 2.4 million manufacturing jobs to China alone from 2001 to 2013.

However, the same market forces that have pushed American jobs overseas are now bringing some of those jobs back. Recently, labor costs in places such as China have been rising, and when paired with high international shipping costs, offshore production presents less of a discount than it once did. Recently, General Electric shifted production of a water heater from China to a plant in Louisville, Kentucky. The move brought hundreds of manufacturing and engineering jobs back to the U.S.

While the reshoring phenomenon is primarily a byproduct of expensive labor abroad and high shipping costs, bringing manufacturing jobs back to the United States is often beneficial to a company’s image. For example, Walmart contracted General Electric to manufacture high efficiency light bulbs in its plants in Ohio and Illinois as a part of Walmart’s brand-boosting Made in USA initiative. Similarly, Farouk Systems, Inc. cites image as a primary reason for reshoring jobs. Along with Walmart and General Electric, Farouk Systems ranks among the companies bringing the most jobs back from overseas.

A variety of other logistical factors are also making reshoring more practical for businesses. In the era of Amazon, in which consumers expect quick turnaround on products, it can be more practical for companies to manufacture products in-country to have the product ready for customers faster and avoid shipping expenses.
Moser further explained that reshoring can often improve the quality of the manufacturing product. “Many have done it because of the consumer preference for made in America products.” Moser added.

The extent to which these factory openings are truly a sign of an American manufacturing renaissance or merely a pause from the ongoing departure of the industry from U.S. shores is still unclear. One certainty is that it will take more than a few thousand jobs to reverse the trend of decades of offshoring and heavy reliance on foreign imports.

The roughly 22,000 jobs these companies have brought back to the country over the last five years is not insignificant, but it is a drop in the bucket compared to those they have sent abroad. According to one EPI estimate, Walmart alone was directly responsible for the loss of 200,000 American manufacturing jobs due to it’s Chinese offshoring.

It is perhaps much easier to make the argument that the service sector is experiencing a true revival. While several years ago it was common practice for American companies to offshore customer support call center jobs, many American companies and customer service contractors are adding or plan to add jobs in the U.S. As of last year, there were roughly five million Americans employed in some 66,000 call centers across the country.

The Reshoring Initiative provided 24/7 Wall St. with estimates for the U.S. based companies that have reshored the most manufacturing jobs in the past five years. These reshoring estimates are based on company announcements to move international manufacturing operations to the U.S.

These are the manufacturers bringing the most jobs back to America.

9. Mars Inc.
> Total jobs reshored:
1,000
> Country reshored from: N/A
> State benefiting : Kansas
> Industry: Food

McLean, Virginia-based Mars Inc., one of the largest candy companies in the world, announced in 2011 it would build a brand new manufacturing facility in Topeka, Kansas. The $270 million plant opened in 2013, and it was estimated it could add 1,000 jobs to the area — jobs that had previously been overseas. As is the case with much of the recent reshoring, the company looked to reduce transportation costs. At the time of the announcement, Mars Vice President of Supply Mike Wittman said, “The site will be a reflection of our commitment to manufacture our products in the markets where we sell them.” A strengthening U.S. dollar was also a factor in the decision, according to the company. Last year, Mars announced a $100 million expansion of the plant. The company estimated the expansion would create another 70 jobs.

8. Farouk Systems
> Total jobs reshored:
1,200
> Country reshored from: China
> State benefiting : Texas
> Industry: Electronic appliances

Hair care product manufacturer Farouk Systems announced in 2009 it would move its entire production from a supplier in China to a brand new factory in Houston, Texas. Founder Farouk Shami explained that the company stands to gain from reshoring by improving its image and the quality of its final product. Farouk Systems, which is best known for its line of ceramic hair irons, sells its products all over the world. Roughly 60% of its sales at the time of the announcement, however, were in the United States. The manufacturer explained that it regularly struggles against counterfeiters, primarily from China, and relocating manufacturing to Houston will allow the company to more easily combat fakes.

7. Flextronics (Apple)
> Total jobs reshored:
1,700
> Country reshored from: N/A
> State benefiting : Texas
> Industry: Computers

Apple does not have the best reputation for its manufacturing facilities. In particular, the company faced significant outcry from consumers and human rights groups over its contractor Foxconn’s plants in China. There have been a number of worker suicides in recent years in these plants, which have been criticized for suspect working conditions. Through another of its contractors, Apple seen an estimated 1,700 jobs come to the United States from overseas. Singapore-based Flextronics, which builds Apple’s Mac Pro desktop computers, announced in 2013 it would be build the computers in a facility in Austin, Texas rather than overseas.

6. Caterpillar
> Total jobs reshored:
2,100
> Country reshored from: Japan, Mexico
> State benefiting : Georgia, Texas
> Industry: Machinery

Caterpillar announced last year plans to move its truck manufacturing operations from a facility in Mexico to Victoria, Texas in an effort that will support hundreds of American jobs. The heavy equipment manufacturer’s Victoria plant has been manufacturing hydraulic excavators since 2012 and will now be expanded to accommodate vocational truck manufacturing. In 2013, the company opened a brand new facility just outside of Athens, Georgia. The new facility will shift manufacturing jobs from Japan and employ roughly 1,400 Americans building tractors and excavators.

5. General Motors
> Total jobs reshored:
2,345
> Country reshored from: Mexico, Canada
> State benefiting : Tennessee, Michigan
> Industry: Transportation equipment

Though General Motors is one of the Big Three American automakers, much of the company’s manufacturing takes place in foreign countries. As is the case with several other large American companies, however, GM has started bringing some of its foreign manufacturing back to the United States. In the spring of last year, the company announced its intention to halt production of the Chevrolet Camaro at an assembly plant in Ontario, Canada and relocate production to a plant in Lansing, Michigan. The move shifted hundreds of jobs back to the U.S. GM has also been busy moving jobs out of Mexico. In 2014, the company announced it would move manufacturing of the Cadillac SRX to Spring Hill, Tennessee, from a factory in Mexico.

4. General Electric
> Total jobs reshored:
2,656
> Country reshored from: China, Mexico
> State benefiting : Kentucky, New York, Ohio
> Industry: Electrical equipment and appliances

Over the past several years, GE has moved thousands of jobs from China and Mexico back to the United States. In 2009, the company announced it would begin manufacturing its water heaters domestically. Because of the rising cost of labor in China, in addition to international shipping costs, GE now manufactures water heaters on an assembly line in Louisville, Kentucky. Additionally, in an effort to bring jobs back from overseas, GE is now manufacturing high efficiency light bulbs in Circleville, Ohio and developing and manufacturing high-energy density batteries in Schenectady, New York.

3. Boeing
> Total jobs reshored:
2,700
> Country reshored from: N/A
> State benefiting : Missouri
> Industry: Transportation equipment

Boeing announced in the fall of 2014 it would transition several hundred manufacturing jobs from overseas to its plant in St. Louis, Missouri. The reshored jobs will primarily be parts manufacturing for the company’s 777 series passenger jets. The restructuring will mean more jobs in the company’s St. Louis plant, which currently serves as the headquarters for Boeing’s Defense, Space and Security division. The division already employs some 14,500 local workers. The shift will also support new jobs at Boeing’s assembly plant in Puget Sound, Washington, where final assembly of the aircraft takes place. The change is scheduled to be implemented by 2017.

2. Ford
> Total jobs reshored:
3,200
> Country reshored from: Mexico, Spain
> State benefiting : Ohio
> Industry: Transportation equipment

According to the Reshoring Initiative, Ford is bringing more jobs back to America than any U.S. company other than Walmart. Last year, Ford moved manufacturing of its F-650 and F-750 trucks from Mexico to a production plant in Avon Lake, Ohio. Additionally, in the spring of last year, the company announced it would shift production of its 2.0 and 2.3 litre Ecoboost engine from Valencia, Spain to Cleveland, Ohio. Ford implemented the manufacturing moves to reduce shipping costs and improve manufacturing quality. The company will also receive millions of dollars in state tax breaks for bringing jobs to the Buckeye State.

1. Walmart
> Total jobs reshored:
4,838
> Country reshored from: China
> State benefiting : N/A
> Industry: N/A

Walmart, the world’s largest company, announced in early 2013 a “Made in USA” program in which it pledged to purchase $250 billion of American-made products for its stores by 2023. Reshoring Initiative estimates that the company’s investments will add several thousand jobs in the coming years, and that the investment could indirectly result in thousands more. Of course, the company is perhaps one of the biggest single importers of foreign goods into the United States. By one estimate, Walmart’s Chinese imports alone displaced close to 200,000 American jobs.

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