波士顿关于制造业回流美国的问题英文.docx

波士顿关于制造业回流美国的问题英文.docx

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波士顿关于制造业回流美国的问题英文

MadeinAmerica,Again

WhyManufacturingWillReturntotheU.S.

AUGUST25,2011by HaroldL.Sirkin, MichaelZinser,and DouglasHohner

Formorethanadecade,decidingwheretobuildamanufacturingplanttosupplytheworldwassimpleformanycompanies.Withitsseeminglylimitlesssupplyoflow-costlaborandanenormous,rapidlydevelopingdomesticmarket,anartificiallylowcurrency,andsignificantgovernmentincentivestoattractforeigninvestment,Chinawastheclearchoice.

Now,however,acombinationofeconomicforcesisfasterodingChina’scostadvantageasanexportplatformfortheNorthAmericanmarket.Meanwhile,theU.S.,withanincreasinglyflexibleworkforceandaresilientcorporatesector,isbecomingmoreattractiveasaplacetomanufacturemanygoodsconsumedonthiscontinent.AnanalysisbyTheBostonConsultingGroupconcludesthat,bysometimearound2015—formanygoodsdestinedforNorthAmericanconsumers—manufacturinginsomepartsoftheU.S.willbejustaseconomicalasmanufacturinginChina.Thekeyreasonsforthisshiftincludethefollowing:

∙Wageandbenefitincreasesof15to20percentperyearattheaverageChinesefactorywillslashChina’slabor-costadvantageoverlow-coststatesintheU.S.,from55percenttodayto39percentin2015,whenadjustedforthehigherproductivityofU.S.workers.Becauselaboraccountsforasmallportionofaproduct’smanufacturingcosts,thesavingsgainedfromoutsourcingtoChinawilldroptosingledigitsformanyproducts. 

∙Formanygoods,whentransportation,duties,supplychainrisks,industrialrealestate,andothercostsarefullyaccountedfor,thecostsavingsofmanufacturinginChinaratherthaninsomeU.S.stateswillbecomeminimalwithinthenextfiveyears. 

∙AutomationandothermeasurestoimproveproductivityinChinawon’tbeenoughtopreservethecountry’scostadvantage.Indeed,theywillundercuttheprimaryattractionofoutsourcingtoChina—accesstolow-costlabor. 

∙GivenrisingincomelevelsinChinaandtherestofdevelopingAsia,demandforgoodsintheregionwillincreaserapidly.MultinationalcompaniesarelikelytodevotemoreoftheircapacityinChinatoservingthedomesticChineseaswellasthelargerAsianmarket,andtobringsomeproductionworkfortheNorthAmericanmarketbacktotheU.S. 

∙ManufacturingofsomegoodswillshiftfromChinatonationswithlowerlaborcosts,suchasVietnam,Indonesia,andMexico.Butthesenations’abilitytoabsorbthehigher-endmanufacturingthatwouldotherwisegotoChinawillbelimitedbyinadequateinfrastructure,skilledworkers,scale,anddomesticsupplynetworks,aswellasbypoliticalandintellectual-propertyrisks.Lowworkerproductivity,corruption,andtherisktopersonalsafetyareaddedconcernsinsomecountries. 

Thisreallocationofglobalmanufacturingisinitsveryearlyphases.Itwillvarydramaticallyfromindustrytoindustry,dependingonlaborcontent,transportationcosts,China’scompetitivestrengths,andthestrategicneedsofindividualcompanies.Butwebelievethatitwillbecomemorepronouncedoverthenextfiveyears,especiallyascompaniesfacedecisionsaboutwheretoaddfuturecapacity.WhileChinawillremainanimportantmanufacturingplatformforAsiaandEurope,theU.S.willbecomeincreasinglyattractivefortheproductionofmanygoodssoldtoconsumersinNorthAmerica.

Thisreport,thefirstinaseries,examinestheeconomictrendsthatpointtoaU.S.manufacturingrenaissance.Italsoexploresthestrategicimplicationsoftheshiftingcostequationforcompaniesengagedinglobalsourcing.

∙TheU.S.“Decline”andRenaissanceinPerspective

∙ThedeathofAmericanmanufacturinghasbeenforetoldmanytimesinthepastfourdecades.AstheonlymajorindustrializednationnotleveledbyWorldWarII,theU.S.accountedforaround40percentoftheworld’smanufacturedgoodsintheearly1950s.Butthen,fueledbyarelentlesswaveofimportsfromareconstructedEuropeandeventuallyfromJapan,theU.S.experiencedadramaticlossofmarketshareinindustriessuchascolorTVs,steel,cars,andcomputerchips.Inthe1970sand1980s,fearsofthelossofU.S.industrialcompetitivenesswereparticularlyacute,promptingawidespreaddebateoverwhetherthenationshouldadopta“JapanInc.”-styleindustrialpolicyandteachitsschoolchildrentospeakJapanese.ThencametheriseofsuchEastAsianTigersasSouthKoreaandTaiwan,whichledtoamassivetransferofproductionoflabor-intensivegoods,includingapparel,shoes,andtoys,andthenofmuchoftheU.S.computerandconsumer-electronicsmanufacturingindustry.

∙TheU.S.sufferedthroughmanypainfuladjustmentstothesechallenges.Unlikemostnations,however,itquicklyrippedofftheBand-Aidandallowedindustrytoadapt.Factoriesclosed,companiesfailed,bankswroteofflosses,andworkershadtolearnnewskills.ButU.S.industryandtheeconomyrespondedwithsurprisingflexibilityandspeedtoreemergemorecompetitiveandproductivethanever.Bythelate1990s,Americancompaniesdominatedtheworldinhigh-valueindustriessuchasmicroprocessors,aerospace,networkingequipment,software,andpharmaceuticals.Manufacturinginvestment,output,andemploymentsurged.

∙Itmaynotbeobviousyet,buttheU.S.manufacturingsectoristodayinthemidstofasimilarprocessofreadjustmentinresponsetoperhapsitsgreatestcompetitivethreatever—theriseofChina.Sinceopeningitsdoorstoforeigninvestmentandtrade,Chinahasofferedavirtuallyunbeatablecombinationofseeminglylimitlesscheaplabor（lessthan$1perhour）,agrowingpoolofengineers,afixedcurrency,andlocalgovernmentswillingtoofferinexpensiveland,freeinfrastructure,andgenerousfinancialincentives.

∙InthedecadesinceitenteredtheWorldTradeOrganization（WTO）in2001,Chinahasessentiallybecomethedefaultoptionforcompanieswishingtooutsourceproductioninordertolowercosts.From2000to2009,China’sexportsleaptnearlyfivefold,to$1.2trillion,anditsshareofglobalexportsrosefrom3.9percentto9.7percent,accordingtoUnitedNationsConferenceonTradeandDevelopmentdata.Thesedevelopmentsoccurredinaremarkablebreadthofindustries,fromlabor-intensiveassemblyworktoheavyindustryandhigh-tech.China’sportionofglobalapparelexportsincreasedfrom17.4percentto32.1percent,forexample.Itsshareoftheworldexportmarketforfurnituresoaredfrom7.5percentto25.9percent,forshipsfrom4.1percentto19.6percent,fortelecomequipmentfrom6.5percentto27.8percent,andforofficemachinesandcomputerequipmentfrom4.9percentto32.6percent.IntheU.S.,meanwhile,thelossofsome6millionmanufacturingjobsandtheclosureoftensofthousandsoffactoriesoverthepastdecadehasfannedfrequentwarningsofamanufacturingcrisis.

TheTideIsTurning

Onceagain,however,predictionsofthedemiseofAmericanmanufacturingarelikelytoprovewrong.TheU.S.manufacturingsectorremainsrobust.Outputisalmosttwoandahalftimesits1972levelinconstantdollars,eventhoughemploymenthasdroppedby33percent.DespitetherecentwaveofoutsourcingtoChina,thevalueofU.S.manufacturingoutput increased byone-third,to$1.65trillion,from1997to2008—beforetheonsetoftherecession—thankstothestrongestproductivitygrowthintheindustrialworld.AlthoughChinaaccountedfor19.8percentofglobalmanufacturingvalueaddedin2010,theU.S.stillaccountedfor19.4percent—asharethathasdeclinedonlyslightlyoverthepastthreedecades.

TheconditionsarecoalescingforanotherU.S.resurgence.Risingwages,shippingcosts,andlandprices—combinedwithastrengtheningrenminbi—arerapidlyerodingChina’scostadvantages.TheU.S.,meanwhile,isbecomingalower-costcountry.Wageshavedeclinedorarerisingonlymoderately.Thedollarisweakening.Theworkforceisbecomingincreasinglyflexible.Productivitygrowthcontinues.

Ouranalysisconcludesthat,withinfiveyears,thetotalcostofproductionformanyproductswillbeonlyabout10to15percentlessinChinesecoastalcitiesthaninsomepartsoftheU.S.wherefactoriesarelikelytobebuilt.Factorinshipping,inventorycosts,andotherconsiderations,and—formanygoodsdestinedfortheNorthAmericanmarket—thecostgapbetweensourcinginChinaandmanufacturingintheU.S.willbeminimal.Insomecases,companieswillmoveworktoinlandChinatofindlowerwages.Butthiswillnotbeanattractiveoptioninmanyindustries.Chinesecitiesintheinteriorprovinceslacktheabundanceofskilledworkers,supplynetworks,andefficienttransportationinfrastructureofthosealongthecoast,offsettingmuchofthesavingsaffordedbyslightlylowerlaborcosts.

Whenallcostsaretakenintoaccount,certainU.S.states,suchasSouthCarolina,Alabama,andTennessee,willturnouttobeamongtheleastexpensiveproductionsitesintheindustrializedworld.Asaresult,weexpectcompaniestobeginbuildingmorecapacityintheU.S.tosupplyNorthAmerica.Theearlyevidenceofsuchashiftismounting.

∙NCRmovedproductionofitsATMstoaplantinColumbus,Georgia,thatwillemploy870peopleby2014. 

∙TheColemanCompanyismovingproductionofits16-quartwheeledplasticcoolerfromChinatoWichita,Kansas,owingtorisingChinesemanufacturingandshippingcosts. 

∙FordMotorCompanyisbringingupto2,000jobsbacktotheU.S.inthewakeofafavorableagreementwiththeUnitedAutoWorkersthatallowsthecompanytohirenewworkersat$14perhour. 

∙SleekAudiohasmovedproductionofitshigh-endheadphonesfromChinesesupplierstoitsplantinManateeCounty,Florida. 

∙PeerlessIndustr