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Study: Manufacturing returning to U.S.

Oct. 6, 2012 at 5:40 PM   |   Comments

EAST LANSING, Mich., Oct. 6 (UPI) -- Companies are returning, or considering returning, manufacturing operations to the United States from overseas, a Michigan State University expert says.

Tobias Schoenherr, an assistant professor of supply chain management, said a number of issues were luring manufacturing operations back to the U.S. mainland, including rising labor costs in emerging countries, high oil prices, increasing transportation costs and global risks such as political instability.

"Going overseas is not the panacea that it was thought of just a decade or so ago," Schoenherr said in a statement. "Companies have realized the challenges and thus are moving back to the United States."

Schoenherr's research found 40 percent of manufacturing firms believe there is an increased movement of "reshoring," or moving manufacturing plants back to the United States from countries such as China and India.

Schoenherr, Wendy Tate and Kenneth Petersen of the University of Tennessee and Lisa Ellram of Miami University in Ohio surveyed 319 firms and said the results differed by industry, but the trend was led by aerospace and defense; industrial parts and equipment; electronics; and medical and surgical supplies.

"We were surprised by the large percentage of firms indicating that they are considering reshoring," Schoenherr said.

Companies said they were concerned about the erosion of intellectual property overseas and product quality problems, and problems resulting from multiple time zones, and language and cultural barriers, could be difficult to address, Schoenherr found.

"From my communication with some firms, I also sense a genuine desire to help the U.S. economy and to bring back jobs," he said.

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