My first column talked about why manufacturing matters most for our country. This month, I want to discuss how chasing cheap prices is not only hollowing out domestic manufacturing but, in many cases, it’s making the companies that offshore less profitable. For decades, consultants and MBAs have told companies to focus on their core competencies—mostly R&D, finance and marketing—and outsource manufacturing offshore. Now, companies are discovering that strategy was often wrong.
NEW YORK—The United States sits just behind China in terms of manufacturing competitiveness in 2016, and is expected to overtake the country by 2020, according to a study by consulting firm Deloitte Touche Tohmatsu.
GREENSBURG, IN—Honda Manufacturing of Indiana is investing $52 million and creating 100 jobs at its assembly plant here. The jobs and investment will support the production of the Honda CR-V, which the company announced in January would be moved to Indiana from Mexico.
BOSTON—More manufacturers are bringing production back to the U.S. in an effort to cut costs and move closer to customers, according to the latest figures from the Boston Consulting Group. Seventeen percent of manufacturers are moving operations back to the U.S., up from 13 percent in 2013.