Herman Trend Alert: Reverse Migration of Manufacturing Base - aftermarketNews

Herman Trend Alert: Reverse Migration of Manufacturing Base

For years, manufacturing jobs have migrated from developed countries to third world countries, most notably in Asia. Movement within the past year suggests that this trend is reversing. Some jobs that moved are coming back, and some third world companies are establishing manufacturing facilities in developed countries.

From "Herman Trend Alert," by Roger Herman and Joyce Gioia, Strategic Business Futurists

GREENSBORO, NC — For years, manufacturing jobs have migrated from developed countries to third world countries, most notably in Asia. Movement within the past year suggests that this trend is reversing. Some jobs that moved are coming back, and some third world companies are establishing manufacturing facilities in developed countries.

What is causing this reverse migration? Sources within these companies report they can beat current Chinese prices with efficiencies they can achieve in developed countries. Wise employers, who measure and monitor their costs — tangible and intangible — are discovering that it’s more cost-efficient to keep the jobs at home. Assumptions that it is cheaper to manufacture overseas have been exposed as more myth than reality.

We have learned about companies returning their manufacturing to the United States from Taiwan, Turkey, India, China and other low-cost production countries. The anecdotal intelligence we have received is reinforced by Richard Martin, International Market Assessment (IMA) Asia. His company services more than 700 clients across 14 countries in Asia. In mid-June, his team met with clients around the region to examine Asia’s manufacturing outlook.

In early July, as results of his firm’s research were compiled, Martin delivered a presentation to the Lowy Institute for International Policy in Sydney. (http://www.lowyinstitute.org) He argued that “the restructuring of Asian manufacturing now appears to be moving into a new stage, one characterized by fast-rising costs in China as well as a drive into areas of higher value-added production. Martin contends this second phase could see a reversal in the winners and losers that were created by China’s first shock wave of ultra-low cost manufactured goods from 2000.”

In an effort to compete with manufacturers in the United States and other developed countries like Australia, New Zealand and the United Kingdom, China is rapidly upgrading its technology. These improvements have great potential to increase productivity, but usually require new facilities and fewer employees. Both requirements clash with current Chinese culture and policies. Many construction projects are already prioritized, drawing equipment, materials and labor. New processes require fewer workers, with greater skills, generating new demands for training and putting more people out of work.

Copyright 2006 by The Herman Group — From "Herman Trend Alert," by Roger Herman and Joyce Gioia, Strategic Business Futurists. (800) 227-3566 or http://www.hermangroup.com

The opinions expressed in "Herman Trend Alert" articles appearing on aftermarketNews.com do not necessarily reflect the opinions of AMN or Babcox Publications.

You May Also Like

Continental, Synopsys Team Up on Automotive Software Development

The collaboration aims to accelerate the development and validation of software features and applications for the Software-Defined Vehicle.

Continental announced a collaboration with Synopsys to accelerate the development and validation of software features and applications for the Software-Defined Vehicle (SDV).

"This new collaboration integrates Synopsys’ industry-leading virtual prototyping solutions for virtual Electronic Control Units (vECU) within Continental’s Automotive Edge (CAEdge) cloud-based development framework. The results are digital twin capabilities for software development that help automakers accelerate software development and speed up their time to market," Continental said.

Epicor Unveils Digital Cataloging, Future Plans

The new catalogs use Epicor-validated, ACES-compliant data and an “Intelligent Search” feature to find the right part quickly.

Epicor digital catalog
Epicor Launches Automotive B2B eCommerce Platform

The Epicor Commerce for Automotive platform features multi-seller support and parts lookups for distributors and their customers.

Epicor commerce for Automotive
Marelli Launches Fuel System for Hydrogen Propulsion Systems

Marelli will present a variety of new technology at the CTI Symposium in Germany, Dec. 5-6.

The Automotive Aftermarket’s Role in a Circular Economy 

Take a deep dive into the factors driving the automotive aftermarket toward a more circular economy.

Circular economy

Other Posts

AI in the Aftermarket: Endless Applications Yet Hurdles Remain

The automotive aftermarket is delving into AI and ways it can help businesses be more productive and effective.

Intellias to Showcase HMI, ADAS and More at CES 2024

The company also will unveil the next generation of its IntelliKit, a portable fully-integrated digital cockpit.

Anyline Partners with Treads to Simplify Car Ownership

Anyline has partnered with Treads, an AI-driven car management subscription service, to enhance analytics for car owners.

Anyline Trends partnership
Unifying Your Parts Technology to Eliminate Channel Conflict

Harmonizing various channels in your eCommerce strategy through unified technology helps build an agile business model.

ecommerce channel conflict auto parts suppliers