Re-Shoring: feasible or just a pipe dream?

[Jeff Roltgen]

Seems, as this pandemic mess persists, one ponders a world where we build things for ourselves, here, in America again. We just celebrated 245 years of independence last month, yet reality is quite the opposite.
Fatigued by being at the mercy of the rest of the planet for almost everything we need, for years now, while the current state of affairs is a stark reminder of the price we're paying by evolving into the worlds fussiest, cheapskate consumers, and getting better at it all the time.

What if there were none?

Seems we're catching a glimpse now, aren't we.

Where is the tipping point, when it's actually worth considering manufacturing for ourselves again?

[George Yetka]

When you say for ourselves do you mean domestically or in the garage?

I'm very guilty of consumerism. It is primarily for my 2 hobbies (woodworking and shooting) Now that I have all this "stuff" for these hobbies I have the ability to Hunt/protect and build/repair with these I could trade and barter for other items. At least this is how I justify it to myself. Most of these items are domestic.

Outside of that there are still a lot of great companies that produce in America so the knowledge is still here.

I think it will always be about cost. If China were to drop communism or pay a living wage the cost to produce items and ship around the globe would be cost prohibitive and we would be forced to go back to making it here. I dont believe we choose not to make stuff here we just cant be competitive with it so it happens too seldomly.

[Jerry Bruette]

I work for a company that uses a mix of foreign and domestic components to make our products, just like a lot of companies do. I've watched the dependence on foreign products increase over the years and there's been a lot of talk about what we would do if we couldn't get the goods from the vendors "just in time". And you're right we're catching a glimpse. So we bring the production back in house for a while until they unstick a freighter from a canal or get the asian vendor to get us the goods.

I think George hit the nail on the head with his last sentence. It's not that we don't want to but we can't make enough profit without outsourcing to foreign countries.

When I say outsource to foreign countries that also means their labor coming here to do jobs. How much do you think fruits and vegetables would cost if the growers paid the pickers a living wage in California? I've read articles where corporate hospitals were contracting with RN's from foreign countries because they agreed to work for less than RN's that are citizens.

[Brian Elfert]

United States manufacturing output continues to increase in dollar volume just about every year. the USA still manufactures a lot of stuff, but a lot of it is industrial products. Many (maybe most) consumer products that people see every day are made overseas so many Americans think the USA doesn't manufacture anything anymore. I try to buy Made in the USA products when I can, but if I need something the same day I often have to settle for overseas.

Studies have shown that automation has cost Americans many more manufacturing jobs than imports have. My employer manufactures a product here in the USA. In the last 15 years probably 25% of our work force has been replaced by automation. Back in the 1970s my employer had 400 employees doing a manual process. By 1980 that process had been computerized and less than 100 employees were required. Today that process is done by about ten employees.

I bought an Oral-B electric toothbrush with a lithium-ion battery recently. (My old one was dying after a decade.) The toothbrush itself was made in Germany and the charging base was made in the USA! I was expecting China for the whole thing. I knew an electric toothbrush made in the USA was not going to happen. I much prefer Germany to China if USA is not an option.

[Jim Becker]

Brian is correct...where things are very price sensitive, manufacturing is necessarily global in nature (with a lot of automation) and that's on "us". We've conditioned ourselves (as a society) to largely buy consumer goods based n price so the companies that make and sell consumer goods reacted to that as they have. And we (as shareholders in the corporations) expect them to be increasingly profitable so that just feeds into it more. The free market works that way.

----

Putting on my moderator hat...do NOT take this thread political. It will then disappear.

[Jeff Roltgen]

No politics intended. Impetus is over the fact that almost* no woodworking machines, specifically planers, are made in this country.
Of note:
1> Other threads pointing out steady, hefty increases in machinery costs, particularly from Taiwan, mostly related to container shortage.
2> Email from Hafele yesterday: "In June we were already experiencing increases of +300% in container fees and the rates are escalating with each passing week" and will now utilize a "pass through rate" as they are unable to continually re-write their price schedules.
3> Taiwanese machines are rapidly approaching high-end European machine pricing.
4> Once here, these machines cost a lot to ship. Pallets I've received in the past few months are averaging $800-900. Sometimes 500 miles, sometimes 2,000. Sometimes 250 Lbs, sometimes 1,200. You got a pallet? better have a grand on reserve to move it. (Except for the monster distributors, like Grizzly, doing it for $250-$500)

We manufacture automobiles here, with foreign sourced parts, of course - it's a world economy, not knocking that. Why not make high end machines here? They are approaching half the cost of a new car anyhow. Quite loony to have to pay the Taiwanese to build new copies of old machine castings that were our own engineering in the first place. Is innovation and superior quality exclusive to Europe? Wondering where the pain of dragging iron across the ocean overcomes the pain of setting up to manufacture and innovate right here. I believe we have the talent.

Just feels like it's time to re-think this situation. It's purely optimism driving me to say, I think we could.

*to my friends at Safety Speed- no offense- if you offered a planer, I'd certainly be considering adding it to my collection of your equipment!

[Jim Becker]

for $250-$500)

We manufacture automobiles here, with foreign sourced parts, of course - it's a world economy, not knocking that. Why not make high end machines here? They are approaching half the cost of a new car anyhow. !

It comes to economy of scale. Woodworking machines and the like have a very limited market compared to products like automobiles, to stay with your example. The costs to the end buyer would have to be "way up there" to be able to economically manufacturer the relatively small number of machines (comparatively speaking) compared to the contract manufacturing that's used currently. It's not even a quality factor because honestly, all those contract manufacturers out there that make the stuff have the ability and do the job of producing to the quality specifications they are given by the "brand" using them. It's been that way for a very long time. The woodworking marketplace has also changed a lot in the last couple of decades. For the pros, they also have moved to more automated solutions using CNC and other adaptations, so there's less demand for the more traditional machines in the cabinet shops and furniture manufacturing settings. The hobbyist market, IMHO, is a lot smaller these days, too, which also has reduced demand for "more traditional" machines. The numbers are what dictates what and where for machinery production and the numbers unfortunately do not support doing mass market in North America. Basic economics remains at play here.

[roger wiegand]

Jim, I think your argument does not support the apparent success of SCM, Felder, Martin, Festool, etc. They work with tax, labor, and regulatory costs much higher in the EU than US manufacturers yet appear to be selling a lot of product and making money.

I believe the failure of the North American companies like Delta and Powermatic was largely a management and strategic failure. They chose to engage in a "race to the bottom" against very low cost producers and, not surprisingly, failed. The US stock market with its focus on quarterly earnings aided and abetted this process. The EU companies chose to compete on quality (like, for example, Robust, a successful, albeit boutique, US manufacturer) and appear to have found a welcoming and successful market.

The coming conversion to electric vehicles is giving US manufacturing another shot on goal, with strong traditional competitors like Toyota seemingly lagging. It will be interesting to see what they do with the opportunity or if any of the big companies are agile and open-minded enough to get out of their own ways to take advantage of it. History (and many of their early offerings) does not support much optimism for the big guys, it will be fun to watch the smaller players.

[Doug Garson]

Can't help but be reminded of a CBC radio discussion decades ago on the economy, similar to the idea that you don't grow bananas in Alaska, you build what you build where it makes sense. An example given was you can't expect to make a middle class income making an item like a toaster that a third world person can make, you need to make something they cannot. If we tried to make all the consumer goods we rely on in the US or Canada most of us couldn't afford them so there would be no demand for them and no jobs to make them. So it's kinda a catch 22, if we want a middle class standard of living we need to be able to afford the consumer goods that go with it but if the people making those goods are paid a middle class wage they would be unaffordable to a middle class wage earner.

Another consideration is world wide pandemic mentioned in the original post ( and freighter stuck in the Suez Canal) are extremely rare so yes we need to be able to react to them but we can't react to them as if they are the norm.

[Brian Elfert]

General was making tools in Canada, plus they had an import line called General International. General closed up shop a number of years back. I have a General drill press made in Canada that is very nicely made. I think General was the last consumer grade stationary power tool manufacturer still producing is the USA or Canada.

Delta and Powermatic seemed like they were selling to a customer that wasn’t willing to pay the cost of USA made products. SCM, Felder, and the like are not really competing in the same market as Powermatic and Delta. Northfield Machinery still seems to be in business, but I don’t know who is buying their products. Northfield hasn’t really changed their designs for decades and their stuff is very high priced.

China, Taiwan, and other countries bought all new equipment to make their machinery. Companies in the USA often use old equipment that in some cases was producing back in WW II.

[Jim Becker]

Jim, I think your argument does not support the apparent success of SCM, Felder, Martin, Festool, etc. They work with tax, labor, and regulatory costs much higher in the EU than US manufacturers yet appear to be selling a lot of product and making money..

They do a great job, and they compete on quality..very well, too. But I'm not sure that they are completely comparable to the "mass market" brands that have been the focus of folks here in North America, particularly from a price point standpoint. I do agree with your premise that the management of the "former greats" didn't do the business any favors over time. And yes, there are North American based "boutique" companies like Robust that make mighty fine machinery. I don't think they can be considered mass market, however, and they command a price that's up there, too. I'd sure like to see a lot more companies like them for sure!

[andrew whicker]

But it's not just one company building a product, it's the entire food chain. Where does an American tooling company buy castings and forgings? Where do they buy electronics? Buy machined parts? By now, all of it overseas. Maybe they could assemble it here, but the vendors don't seem to exist.

I was in a high cost industrial machinery world (oil and gas). There are local suppliers, but as far as I could our American suppliers are supplying either quality or speed (vs shipping overseas). Even then, we were pushed to go with a Mexican forging shop. All of us engineers called into their engineers thinking "great, here we go" and left thinking "well,they really know their stuff and they are cheaper..."

What are you going to do? No one wants to spend extra money just for the sake of it. And why is some US multi national corporation something I care extra about? They're all jerks at that level anyway.

The buy local thing basically only applies to things that are super easy to be local (coffee shops, etc) or are extra high quality (clothing). Maybe a super high quality American manufacturer could exist. It has to have been tried many times. Isn't Oliver still around?

I'm not totally sure (other than climate change reasons) why it matters if a woodworking tool is produced in US. I think we all need to be thinking about cradle to grave carbon costs,but otherwise I'm not super inclined to care about multi nationals.

[Brian Elfert]

I care about tools, including woodworking machinery, made in the USA because tools made in the USA provide jobs for Americans rather than jobs in other countries. I will often spend more to buy an American item. All of my polo shirts are American made even though they cost $25 each. The same shirts from Kohls would be maybe $15. I wear Burlington socks because they fit my feet well and they are made in the USA. I still own plenty of imported stuff simply because the product isn't made in the USA, or I needed something right away and didn't have time to wait for an American made item. I bought a Fluke 177 electrical meter for around $250 simply because it is at least assembled in the USA. A Chinese meter that meets my needs would have been maybe $50.

Americans used to be able to graduate high school and get a good middle class job working in a manufacturing facility without a college degree. The big 3 auto manufacturers were places that people wanted to work as they knew they could make a good living that paid well enough to buy a house and raise a family.

My employer manufactures a product here in the USA and raw materials come from America or Canada. (I work in the office, not on the production floor.) Unfortunately, most of our newer equipment is from overseas. In many cases there aren't any American manufacturers left making the equipment. We replaced the controls for our equipment a while back. Only European companies were interested in the project. The primary American company in that market declined to even bid on the project. The company that did the project is out of Germany. It was hard to believe that the low bidder could send an engineer from Germany to do the installation and still make a profit. The engineer was on site for months.

[Roger Feeley]

My experience with domestic products has been almost uniformly good. I find that “made in USA “ is a selling point and they tend to use the very best material. They know that labor costs make them non-competitive on price so adding a little better material really doesn’t raise the price much more. At least that’s what Vermont Flannel told me. They make their stuff in Vermont but the flannel comes from Portugal.

I haven’t bought jeans in a while because mine are so well made. It used to be that allamericanclothing made jeans in America from cloth woven in America fro thread spun in America from cotton grown in America. They would send you a card with your jeans that would trace them all the way back to the cotton farm. They did admit that the zippers came from YKK and were imported.

[Brian Elfert]

I'm looking for a pair of American made cargo shorts right now. Most are $75 to $100 which is more than I can justify. All American Clothing is out of stock on most cargo shorts right now. I found a place that has American made shorts for $16. Either the material is imported, or they are military surplus for that kind of price. (They look similar to some military surplus pants I bought off Ebay for $10 a pair.)