Reasons for Enthusiasm Real

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Even the most pessimistic industry-watchers should be curious at least over the shifting attitudes toward bringing production back to the US.

The New York Times today published an extensive piece looking at the top-down change — from President Obama on down — in the nation’s outlook toward manufacturing. Researchers at MIT and elsewhere are promoting the benefits of keeping makers and thinkers together. “The manufacturing process itself is going through an innovation revolution,” said Stephen Hoover, chief executive of Xerox PARC, noting the emphasis on smaller numbers of highly skilled techs who run sophisticated and heavily automated lines.

Earlier this week, Mike McNamara told listeners at an investment conference that higher (and unabating) labor costs in Southeast Asia is making the decision process over where to put its plants “more interesting.” The Flextronics chief executive said he could see production coming back to the US. “[O]ver time, as [labor]  costs continue to go up, you’ll probably see more things get pushed back in the USA,” McNamara said.

Even Foxconn is showing some appeal (for a change) for its push toward automating its factories. Maybe Jim Raby’s vision for true lights-out manufacturing will finally be realized?

A decade ago, at Wall Street’s urging, companies followed the herd to China. Not enough thought was given to the ramifications of chasing lower labor costs, and my guess is that we will be feeling the pain of these short-sighted decisions for some time to come.

But given the prospects for higher levels of automation and a more balanced approach to regionalization, it’s been years since the industry was so exciting.

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About Mike

Mike Buetow is president of the Printed Circuit Engineering Association (pcea.net). He previously was editor-in-chief of Circuits Assembly magazine, the leading publication for electronics manufacturing, and PCD&F, the leading publication for printed circuit design and fabrication. He spent 21 years as vice president and editorial director of UP Media Group, for which he oversaw all editorial and production aspects. He has more than 30 years' experience in the electronics industry, including six years at IPC, an electronics trade association, at which he was a technical projects manager and communications director. He has also held editorial positions at SMT Magazine, community newspapers and in book publishing. He is a graduate of the University of Illinois. Follow Mike on Twitter: @mikebuetow

2 thoughts on “Reasons for Enthusiasm Real”

  1. Yeah so. That’s all good and well in that noise is being made about moving production back to the US (more likely it will be North “America” which is a bit misleading). However, the trend then becomes to significantly amplify the use of automation in factories. This does nothing to address the screaming requirement to provide jobs which is what is really driving the anger and unrest for those that are angered by outsourcing in the first place.

    The world’s population will continue to grow while automation will increasingly reduce the need for a workforce. These two dynamics – moving in opposite directions – should be a major cause for alarm.

  2. @Jagade: What’s interesting to me about the (coming) dynamic you note is that futurists have for years been predicting exactly that. What they also predict, however, is that while the needed workforce ultimately will be a fraction of what it is today — some predict as few as 10% of the able-bodied adults will be employed — the main issue for the “leisure” class will be how to spend their time. Working will be a luxury, they say, not a necessity.

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