Insourcing boom?

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The decline of manufacturing in the US has been lamented for more than a decade. Now authors like Charles Fishman from the “Atlantic” forsee a return of some of the outsourced labor from the Far East. His argumentation raises objections however like the one by Alan Tonelson, who sees no reason to hope.
 
The increased use of a big industrial park in Kentucky, designed by General Electric (GE) in the early 1950s, appears to be a potential paradigm for US manufacturing in general according to Charles Fishman. The park employed at its peak 23,000 people, but became close to obsolete later when GE started outsourcing to Asia. Now GE has installed two assembly lines and will invest US$ 800 mn to revive it. This could be the first sign of a more general trend. First, hi-tech products need closer proximity between design, production, and marketing. Secondly, the labor and transportation costs of productions in Asia have risen considerably over the years and will continue to do so. Finally, the time and money connected to the necessary coordination efforts of complex outsourced production have long been underestimated and management is now aware of these previously hidden costs. Therefore, the US has a chance to fare better in the future with regard to hi-tech production staying home and possibly other manufacturing coming back. Not so, argues Alan Tonelson, who represents an influential US business association. From the statistical side the outsourcing trend continues. In 2011, foreign producers contributed 37.7% to US industrial purchases, a rate comparable to 2010 (37.07%) and much higher than 15 years before (24.49%).
 
In fact, it remains to be seen if the blossoming plant in Kentucky indicates a  return of manufacturing to the US. Costs will certainly rise in Asia in the next years and the outsourcing hype ended when besides the lack of proximity bureaucratic hurdles and the perils of complex partnerships became evident. Asia, especially China, is, however, also the market of the future with its huge population still in need of many goods and becoming more affluent. Production there may be far from home but close to the customers.