Yes, manufacturing jobs are coming back, but they are fewer than advertised . . . and better

Is China really stealing our jobs, or is it technology? And would we even want to bring back those jobs, anyway? Rosemary Coates has been helping U.S. companies offshore operations to China and, more recently, advising them on exit strategies for more than 20 years, giving her some well-informed insights on domestic and foreign manufacturing issues. Currently Executive Director of the Reshoring Institute (Los Gatos, CA), Coates will be speaking at PLASTEC East in New York in June on navigating reshoring and she also will participate in a panel discussion on supply chain challenges in Asia versus the United States. In advance of the event, she shared some thoughts on the current manufacturing landscape with PlasticsToday.

On the reshoring phenomenon, Coates says that it can be a successful strategy as long as companies adhere to a realistic business model. Americans are willing to pay more for a product that is labeled and manufactured in the United States, but only up to a point. “There are a number of studies showing that U.S. consumers are willing to pay 15 to 20% more for those products.” It goes to follow that companies reshoring production to the United States that are able to contain cost increases within those parameters have a shot at being successful. Even so, that success may not have a noticeable impact on employment. Don’t blame China, blame technology (if you absolutely, positively have to find a scapegoat).

Automation and technology are displacing far more jobs than China, and “that’s alright,” stresses Coates. “It’s a metamorphosis we have to go through.” The United States doesn’t need low-wage, low-skilled assembly line jobs that don’t push manufacturing into the future, says Coates. “We want you to run the robot that does the assembly. We want you to understand geometry, so that you can run a machine tool that is computerized.” What we don’t want, she adds, are jobs that don’t pay a living wage and create a dependency on the welfare state. Coal mining is a good example.

“Pick-and-shovel coal mining is not coming back. The coal mining industry is very automated. The jobs today are different—they are fewer, but they are better,” says Coates. The skills required for every industry are changing. So, shouldn’t we be focusing our efforts on training—and retraining—workers so they have the skills that will serve them well in the new manufacturing economy?

Community colleges are stepping up to the plate in this regard, says Coates, as are forward-thinking companies like GW Plastics, which has developed a program called School of Tech to promote careers in advanced manufacturing among young people. “Community colleges are setting up machine shops to train students—which is the stuff of trade schools—but they also provide an education in English and basic math, skills that are needed in an advanced manufacturing environment. A lot of people surprisingly don’t realize the amount of math that comes up on a shop floor,” says Coates. “A lot of geometry is involved. And you need to know how to communicate effectively and use a computer, and that’s where community colleges are providing a real service.”