Reshoring Institute advises companies on returning to America

In the latest Bring It Home podcast, Rosemary Coates, executive director of the Reshoring Institute, spoke on economic and supply chain factors influencing a company’s decision to bring production back to the U.S.

Bring It Home celebrates the manufacturing renaissance, reindustrialization and reshoring taking place across North America. Its co-hosts are Craig Fuller, founder and CEO of Firecrown Media, and JP Hampstead, strategic analyst at Firecrown.

The Reshoring Institute

Coates has been a management consultant for 30 years, working with clients who were interested in moving to China during the late 1990s and early 2000s. In 2009, she authored “42 Rules for Sourcing and Manufacturing in China,” explaining how businesses can move operations to the country.

“I helped a lot of companies offshore with sourcing or manufacturing in China and kind of became an expert at it,” she said. “I wrote a book about sourcing and manufacturing in China that became a bestseller. Everybody wanted to do it, basically because there was an understanding that it would be cheaper in terms of labor and also operational costs.”

She said that attitude began to change during the 2012 U.S. presidential race when candidates Barack Obama and Mitt Romney both campaigned against China “stealing” U.S. jobs.

“I’m like, ‘Holy cow, I can’t tell anyone what I do for a living. This is bad,’” Coates said. “ I think it actually, though, sparked an initiation of conversations with executives regarding the potential of bringing manufacturing back to the U.S.”

These conversations would lead to Coates starting the Reshoring Institute in 2014 with the goal of providing research for companies trying to bring manufacturing back to America. Today, the institute is affiliated with 18 universities across the U.S.

Coates explained that the idea of reshoring became much more popular after the pandemic when many companies started to recognize how much risk there was in long global supply chains.

“We’re really interested in de-risking those supply chains and trying to figure out how to be in a steady state of production going forward,” she said.

A challenger in the East – but not an enemy

Coates said China is more of a competitive “challenger” than an enemy of the U.S.

“The world has globalized,” she said. “We can’t just turn a spigot and say we aren’t going to do this anymore. We don’t have the economic profile or the structure to bring back all the manufacturing.”

She said some markets – like T-shirt production – aren’t necessarily wanted back in the U.S. due to their low wages, necessitating welfare supplements.

“That is not what we want to do,” Coates said. “What we want to come back is the more sophisticated kind of manufacturing that requires higher skills with the workers at a higher pay point, and drives the economy in a reasonable way in terms of rebuilding the middle class.”

While the economics around the global supply chain and its relationship with reshoring are complicated, Coates suggested thinking of China as a place where low-cost goods might be made in the future.

Meanwhile, she suggested that the U.S. can compete on a higher level in industries like AI, semiconductors, pharmaceuticals, EV batteries and rare earth elements.

“We don’t want to fight so much and put the world at war,” she said. “We want to figure out a pathway where we can continue in America to drive leadership and take the reins in terms of industrialization – but not fight everybody along the way.”

Other headlines and topics discussed in this episode include: 

• The U.S. Department of Commerce finalized a $6.1 billion award to computer memory manufacturer Micron Technology for factory projects in New York and Idaho.
• Japanese multinational investment holding company Softbank made a $100 billion commitment to invest in American businesses following the election of President Donald Trump.
• Taiwanese silicone chip maker GlobalWafers was awarded $406 million to support fabrication facilities in Sherman, Texas, and St. Peters, Missouri.
• Tier 1 auto parts supplier Bosch received $225 million to support its $1.9 billion total investment in production of silicon carbide power conductors in California.

The Bring It Home podcast is currently on YouTube and will soon be available on other platforms.

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