America is now luring as many factory jobs back from overseas—a process known as reshoring—as it’s losing to continued offshoring.
Stanley Furniture employees at the company’s Robbinsville, N.C., factory. The factory is in the process of shutting down and shedding workers.
Shawn Poynter for The Wall Street Journal
That’s the assessment of the Reshoring Initiative, a Chicago-based nonprofit that encourages companies considering moving work back to the U.S. The group says 2013 was a turning point, with roughly 40,000 jobs added in the U.S. by the return of jobs that were previously moved offshore—equal to the number of jobs lost from the continued movement of work abroad. In 2003, an estimated 150,000 factory jobs left, while only 2,000 were brought back.
“We say the bleeding has stopped,” says Harry Moser, president of the group. “But the patient is still missing about 1 million workers—like liters of blood.”
A story in today’s Wall Street Journal details some of the difficulties companies find when bringing jobs back. In one case, a crib manufacturer misjudged the willingness of Americans to pay a premium for their U.S.-made goods and has faced far stiffer prices for wood and other raw materials than expected. Another company, a candlemaker headed by Chinese immigrants to the U.S., has struggled to find workers suitable for their assembly lines.
Even industry giants sometimes struggle. When Otis, the elevator division of United Technologies UTX -0.32% Corp., announced it would relocate a plant from Mexico to South Carolina in late 2012, it was hailed as a sign of the rebound of U.S. manufacturing. But the move led to production delays as Otis simultaneously reorganized two other U.S. facilities and narrowed its product line. Company executives have acknowledged that they struggled to set up a new supply chain and had trouble at first hiring a skilled workforce.
Mr. Moser warns producers to watch for such pitfalls. “If you go into most areas of the U.S.,” he says, “the really good skilled workers—the tool builders, those with computer skills—are already employed.” That can make it difficult to recruit staff, even in areas with high unemployment.
One of the companies Mr. Moser’s group works with has found an even bigger problem. Mr. Moser says the company shifted production overseas seven years ago and in the process outsourced the work to foreign producers. In other words, they stopped doing the manufacturing themselves—either in the U.S. or overseas.
“So to a certain extent, the company no longer knows how to make the product,” he says. In cases like this, the company has to redevelop its own capabilities.