Foxconn, Makers, and the Future of U.S. Manufacturing

By: Stett Holbrock, Make

Last week’s news that Foxconn will be moving some of its production to the US renewed discussion of the so-called “reshoring” of manufacturing back to the states. America’s manufacturing sector has been growing for years. According to new research from the Boston Consulting Group:

“Manufactured exports—a bright spot of the US economy in recent years—are set to surge. Combined with jobs created as a result of reshoring, higher US exports could add 2.5 million to 5 million jobs by the end of the decade, as manufacturers shift production from leading European countries and Japan to take advantage of substantially lower costs in the U.S.”

What reshoring means for makers entering the marketplace remains to be seen. Foxconn, manufacturer of the iPhone and other Apple products, is for big players, not small volume makers graduating from the garage. The conventional route for makers looking to scale up is to head to China where they can find an appropriately sized manufacturer that will make their products cheaper than they could in the US.

But shouldn’t declining US production costs benefit makers and as well as the manufacturing heavies? Industry watcher and MAKE contributor Travis Good is skeptical. But, he says: “The true opportunity comes when pro makers can tap into the idle cycles of the US’s automated manufacturing capacity. As a small example, Ted Hall (ShopBot) is trying to make it possible for pro makers to slip their production needs into ShopBot fabricators’ shops with his 100,000 Garages. He’s doing it as a means of turning his customers’ idle capacity into opportunity but the notion can be generalized. We still produce more than anyone, but it’s automated and inaccessible via the Cloud.”

Cloud-based manufacturing is a concept advocated by CloudFab founder Nick Pinkston. He, too, doesn’t see much impact from Foxconn’s move, but down the road, that could change if more production moves to the US.

The long-term implications are more interesting: i.e. if the supply chain starts to migrate back to the states, then China’s advantage there is diminished as well. If you ever go to Shenzhen, there are electronics component places everywhere. That could happen here, too, and would cut a lot of costs for small companies.

There’s a value-add with products made in the US because creators and designers can be more intimately involved in the manufacturing process and potentially ensure better quality, not to mention better labor conditions. Brooklyn Bakery founder Matthew Burnett says he switched to American manufacturing for his apparel company

“Domestic manufacturing is now the only way I like to operate,” he wrote on Maker Row’s blog. “It allows me to move fast with an idea and have the product in hand within a fraction of the time that it used to take me with foreign factories.”

In a well-received piece for Fast Company, Bruce Nussbaum details what he sees as the emergence of a homegrown “indie capitalism.”

“Indie capitalism,” he writes, “is local, not global, and cares about the community and jobs and says so right up front. Good things come from and are made locally by people you can see and know.”

Are you a maker headed to market? Where are you looking for a manufacturing partner?

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