
Originally Posted by
rickdugan
Jimbo and eagle are contending that there are factors besides labor costs that determine where a manufacturing operation is based and I am sure that there are for some ventures. Airplanes, tractors and heavy construction equipment are probably good examples of things that require a certain number of workers with very specific skills and training as well as finely tuned manufacturing processes, much of which would be hard to easily replicate elsewhere. With respect to automobiles sold in the U.S., even foreign manufacturers have found that it is easier and cheaper to assemble them here, due to the availability of component parts suppliers as well as the high cost of shipping cars overseas.
But, again, nobody is arguing against that...
What I did take issue with is the notion that wealthy investors are flocking here to the U.S. to open businesses and are throwing cost considerations to the wind. First, these so-called "wealthy" investors do not have to be very wealthy in order to qualify, nor do they need to create many jobs. Second, it is uncertain how many will even meet their visa requirements after two years anyway - the historical success rates are actually pretty low. Net-net, there is no evidence to suggest that the E5B visa program has, or will be, very additive to the overall employment picture.
With respect to the re-shoring initiatives, I guess we shall see. I have read one-off success stories where small numbers of jobs have been moved back, but I have not been able to find any evidence of large scale success. IMHO labor costs in China and the yuan's value relative to the dollar are both going to need to rise a great deal in order for most manufacturers, and especially those with labor intensive processes, to seriously consider moving operations back to the U.S. And this little discussion doesn't even address things like corporate taxes, regulatory compliance costs, future employee health care expenses, exposures to lawsuits and potentially other uncertainties and impediments involved in trying to run a large scale manufacturing operation in the U.S.
We shall see, but IMHO, without a lot of changes to the current cost structure and business climate here in the U.S., I don't see many large manufacturing operations being uprooted from China and moved back here anytime soon.
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