Electronics Onshoring Expected to Net $2.5 Billion

By: Barbara Jorgensen, EBN In the grand scheme of the manufacturing industry, $2.5 billion is not a lot of money. But for electronics companies and workers in the US, it’s a bonanza. Within the next three years, reports the IPC, both OEMs and EMS companies are expected to bring more than $2 billion worth of manufacturing services and jobs back onshore. Respondents to IPC’s survey of more than 200 electronics companies indicated they would establish both new operations and repatriate offshore manufacturing through 2015. If past trends continue, most of that value will come from OEMs: Survey results showed that original equipment manufacturers (OEMs) were largely responsible for operations returned to North America from overseas since 2009, accounting for more than 90 percent of the value and number of jobs brought back. The electronics manufacturing services (EMS) industry was also a big contributor. One-quarter of operations that returned to North American since 2009 came from China, with other countries making up the other 75 percent. The EMS industry accounts for the largest share of overseas operations that participating companies plan to bring back to North America in the next three years. New operations, however, represent a much larger share of future North American production, and these planned new operations were reported primarily by OEMs. The reasons cited most often for onshoring include quality control and customer proximity, the IPC finds. Other research found that rising labor costs in China are also driving the move back to the...

Apple, Offshoring and the Decline of the American Middle Class

By: James A. (Jim) Smith Ph.D. ABD, Assembly magazine Working conditions continue to be an issue at the Foxconn factories in China where Apple makes its best-selling electronic gadgets. On June 19, a young man who worked at one factory jumped to his death from a neighboring apartment building. Shockingly, it was the 19th such suicide since January 2010. Opinions on the issue fall into two camps. Human rights activists condemn Foxconn for exploiting workers. Globalization apologists claim life would be harder in China without all the jobs that have been outsourced from the West. However, neither camp has addressed the issue of what offshoring has meant back here. I have had my fill of the sanctification of Steve Jobs who, after all, merely gave us shinier toys and bad manners. To be fair, however, offshoring isn’t entirely an Apple story. If it’s electronic and produced in batches of more than a few thousand units, odds are it came out of a factory in Asia. Apple didn’t invent outsourcing to China, but it did make the practice chic, and Apple has made Foxconn what it is today (and what it is, isn’t pretty). There’s a noteworthy passage in Walter Isaacson’s 2011 biography of Jobs that recounts an exchange between the Apple CEO and President Obama: “Apple had 700,000 factory workers employed in China, he [Jobs] said, and that was because it needed 30,000 engineers on-site to support those workers. ‘You can’t find that many in America to hire,’ he said. These factory engineers did not have to be Ph.D.s or geniuses; they simply needed to have basic engineering skills for manufacturing. Tech schools, community colleges, or trade schools could train them. ‘If you could educate those engineers,’ he said, ‘we could move more manufacturing plants here.’” That’s more than a little disingenuous. It’s more truthful to say that America doesn’t have 30,000 engineers and 700,000 factory workers who are willing to work more than 60 hours a week, live in squalid dormitories, get pulled out of bed in the middle of the night to change a critical part, and earn $3,000 or less a year. And we shouldn’t have. We do have thousands of...