So, stupid question time. Knowing all the issues and costs with shipping from China nowadays, even factoring in the higher cost of labor in the U.S., at what point do some companies start to think about bringing at least some manufacturing back to the states, and for what products?
We are in the middle of this conundrum right now.
In a nut shell, it's not coming back to the US. There really isn't that price point where it comes back, because to get to that point there would have been a total economic collapse. You might see some big bulky cheap stuff like furniture come back, but that's about it.
I'll give you an example. One of our customers wanted a made in the USA trailer ball coupler. Big EAUs, big project. So this wasn't some little production run...Anyway, we already have that style and model of coupler they're looking for in any number of combinations. But this customer was dead set and adamant that it's 100% made here. No, "made in the USA from global components."
Well here's the problem...no one in the USA makes couplers anymore. No one. Every ball coupler you buy on any trailer you buy in the states is made in China. Curt, Reese, Pull-Rite, etc...basically if you have a trailer made in the last 25-30 years for anything weather it's a camper, boat, utility trailer, flat bed...it's coupler and most everything else on it is Chinese. And that's no exaggeration.
So what we had to do is go find a company willing to make a casting mold which has a lot of cost. I think it was somewhere like $55K just for the tooling and the mold (we didn't pay for it, the customer did). Then we had to pay for samples, run them through our testing, and after approval we got quotes. Our cost buying like 20,000 year ended up being like $53.00 a piece and change. We buy the identical coupler from China for less than $6.00 SHIPPED to our door. And that is no lie.
I've been over there to tour factories and inventory our tools (I'll make a side post about this, it's pretty interesting), and until you see it first hand you can't understand how there's such a disparity. Basically there's absolutely no worker protections whatsoever. There's no OSHA, child labor laws, no minimum safety standards other than what would keep people from getting killed because the government needs workers.
They pay a 16 year old girl in flip flops a few bucks a day to sit in a freezing cold factory and push buttons on a hundred year old punch press for 12 hours. They don't have to pay work comp insurance, health insurance, taxes, retirement funding, etc. They don't have to spend money on safety training, PPE like gloves, safety glasses, blah blah blah. One plant we were in they were burning pallet wood in barrels for heat. In-fucking-doors.
In the US you have to pay 3 people $28.00 an hour plus overtime and health insurance and taxes and work comp insurance and 401K contributions and PPE and training and machinery maintenance and wellness programs
and PTO and a million other things to do the same job. That's no exaggeration. It's literally like stepping back into the 1920s factory conditions.
And you know what happened? Mr rah rah rah USA #1 company saw the price and told us to stick it up our asses and they bought the Chinese slave labor one instead. At least they saved money not having to buy the "Made In USA" decals.