Wednesday, April 24, 2013

Manufacturing Jobs Coming Back To Indiana But Labor Is Not Ready

This past week's special report by The Economist highlights the reversal of outsourcing manufacturers bringing production back to the US from overseas. But as many Indianapolis area manufacturers already know, the local labor market is tapped out. The people necessary for advanced manufacturing, skilled trades, and modern logistics have been pursuing other careers. Not enough people locally are completing high school or enrolling at Ivy Tech or Vincennes in Machine Trades. And, the local area is flooded with people who either have a BS degree or who have pursued a BS degree in a field that really has no viable employment prospects. The result is advanced manufacturing jobs running high tech equipment, requiring some advanced math skills, are going unfilled. As The Economist points out, General Electric has, "returned production of fridge, washing machines and heaters from China back to Kentucky." That's Louisville, Kentucky's GE Appliance Park. ( Offshoring: Welcome Home ) The trend is boomeranging and outsourced jobs are now being put close to R&D facilities. Lenovo (China's Dell) is building at PC manufacturing plant in North Carolina near IBM R&D and HQ. But the manufacturing jobs coming back to the US are different from those 20 years ago. As The Economist articles point out, "lines of computer code and industrial robots have probably displaced as many or more call-centre operators and factory workers as cheap Asian hands have done." The economics and politics of outsourcing have shifted based upon several factors - 1) automation 2) rising labor costs in developing countries (wages are rising faster in China than anyone has predicted) and 3) rising cost of shipping. The Economist predicts by 2015 it will cost the same for an American firm to manufacture in America as in China. Outsourcing & Offshoring: Here, There, and Everywhere

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