Foxconn, the Taiwanese company responsible for manufacturing Apple computers and phones, is making inroads in the US (though many Americans still think of it as a callous exploiter of cheap foreign labor). Foxconn recently announced plans to build a $30 million plant in Harrisburg, Pennsylvania that will create 500 new jobs, a massive expansion of its current small efforts in the region. The company has stated that it wants to capitalize on Americans’ preference for domestically produced goods, but its reasons for the move go beyond simple appeals to patriotism. And, as Bloomberg notes, the strategy isn’t unique to Foxconn:
An increasing number of technology companies are relocating manufacturing facilities to the U.S. because they want their product designers to be near the manufacturers for quality control, according to Scott Andes, a senior policy analyst at the Brookings Institution’s Metropolitan Policy Program in Washington.“We’ve seen a lot of new insourcing,” Andes said in an interview. “A lot of this is because companies are beginning to have a greater sense of the full cost of production.”Some companies found overseas manufacturing more costly than expected, he said. “I think a lot of companies jumped the gun on labor costs alone” and didn’t take into account energy and transportation costs, which are relatively high in China when compared to the U.S., he said.
Indeed, wages are rising in China and stagnating in the US, narrowing the discrepancy in labor costs. Meanwhile, America has retained its advantages of higher quality work and lower transportation costs. This story and others like it suggest that America still has an edge in attracting manufacturers. The large-scale manufacturing employment of the mid-20th century may be a thing of the past, but the industry as a whole finds the US to be as hospitable as ever.[Chinese factory image courtesy of Shutterstock]