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Work Cited
Fallows, James. "Mr. China Comes to America." The Atlantic. 310.5 2012: p54,10p.
Literature Resource Center. Web. 26 Feb.2015
Holm, Jeanne. "Made in America: Helping Revitalize U.S. Manufacturing."
Manufacturing. Data.Gov. 30 Apr. 2012.Web. 28 Feb. 2015.

<http://www.whitehouse.gov/blog/2012/04/30/made-america-helpingrevitalize-us-manufacturing>
Press Secretary, Office of the. "FACT SHEET: President Obama Announces New
Actions to Further Strengthen U. S. Manufacturing." The White House. 27 Oct.
2014. Web. 28 Feb. 2015. <http://www.whitehouse.gov/the-pressoffice/2014/10/27/fact-sheet-obama-announces-new-actions-furtherstrengthen-us-m>.
Sirkin, Harold, Zinser and Hohner. "Made in America, Again - Why Manufacturing Will
Return to the U.S". Boston Consulting Group - bcg.com. 2011. Info Trac
Newstand. Web. 26 Feb. 2015.
Sirkin, Harold, Zinser, Rose. "The Shifting Economics of Global Manufacturing."
Boston Consulting Group - bcg.com. 19 Aug. 2014. Info Trac Newstand. Web.
26 Feb. 2015.
. "The U.S. as One of the Developed World's Lowest-Cost Manufacturers." Boston
Consulting Group - bcg.com, 2013. Info Trac Newstand. Web. 26 Feb. 2015.
. "The U.S. Skills Gap: Could it Threaten a Manufacturing Renaissance?" Boston
Consulting Group - bcg.com. 2013. Info Trac Newstand. Web. 26 Feb. 2015.

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Smil, Vaclav. Made in the USA - The Rise and Retreat of American Manufacturing.
Cambridge: MIT Press, 2013. Print.

Sorrell, Steven
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English 1201-225
Vicki Stalbird, Professor
21 March 2015
Made In America
What will it take to bring manufacturing back to the United States?
China has experienced issues with their labor force, increase in wages,
reduced productivity, higher energy costs, transportation costs, currency
values, along with other factors that are eating away at Chinas cost
advantage. These trends are what is making the U.S. more desirable for
international businesses. The shift to a more advanced manufacturing will
require commitments from government, academia, and private investors.
The landscape of manufacturing is going to look much different than what it
ever has before. President Obama has appointed a committee, Advanced
Manufacturing Partnership (AMP), which has defined three specific key
elements that need to be addressed: 1) enabling innovation, 2) securing the
talent pipeline, and 3) improving the business climate. The United States is
becoming more competitive in the global market for advanced
manufacturing as a result of cheaper labor and more affordable energy.

In the past thirty years corporate manufacturing investments and


sourcing decisions were drawn to lesser developed countries because of
lower tax rates and cheaper labor. The

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Boston Consulting Group (BCG) analyized 25 of the worlds largest
economies finding wages rose in all 25 economies from 2004 2014.
However, China and Russia experienced the most significant increase from
10 to 20 percent increase annually where other economies wages increased
only 2 to 3 percent per year. (H. Z. Sirkin, The Shifting Economics of Global
Manufacturing) Sirkin, discusses the changes in labor, disputes, wages,
productivity, energy costs, transportation costs, currency values, and other
factors as the reasoning behind why global manufacturers are returning to
the U.S. for advanced manufacturing. The following Exhibit 1 from BCGs
report on (H. Z. Sirkin, The U.S. as One of the Developed World's Lowest-Cost
Manufacturers 3) shows the comparison of the top manufacturing economies
and the key elements of the cost advantage that the U.S. maintains.

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Labor is key to the U.S.'s global competitiveness. BCG says that The
U.S. has the world's most flexible labor markets and ranks as the most
favorable economy in terms of labor regulation among the 25 manufacturing
exporters. (H. Z. Sirkin, The Shifting Economics of Global Manufacturing)
The lower cost in energy is another major cost savings consideration for
manufactures. Natural gas is a key feedstock for chemicals and plastics and
is a significant const in the manufacture of primary metals, paper synthetic
textiles, and nonmetallic mineral products. (H. Z. Sirkin, The U.S. as One of
the Developed World's Lowest-Cost Manufacturers) Today the U. S. is sitting
well as a global competitor in manufacturing but the American people need
to continue to work hard to keep the competitive edge.

President Obama selected a steering committee to keep the U.S. on


the right track. The Advanced Manufacturing Partnership (AMP) consists of 19
members who are CEOs of materials and manufacturing companies,
Presidents and Chancellors of Univeristies, along with executives from
leading high tech industries. The AMP has laid the ground work for the
President as the key issues that they see need to be addressed. The
following are a few of the Executive Actions that the President has taken to
strengthen the advanced manufacturing in America. 1) Enabling Innovation:
Investing more than $300 million in emerging manufacturing technologies,
the Dept. of Defense, Energy, Agriculture and NASA are investing this money
in three concentrated areas, advanced materials, bio-based materials,
advanced sensors for manufacturing and digital manufacturing. 2) Securing
the Talent Pipeline: The Dept. of Labor has launched a $100 million in
American Apprenticeship grants to spur growth in advanced manufacturing
fields. 3) Improving the Business Climate: AMP recommends launching
services
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to assist small manufacturers in new start up businesses. (Press Secretary)
The AMP also recommended that the President address the future needs of
manufacturing skilled workers. The Dept. of Commerce Manufacturing
Extension hosted a National Manufacturing Day to inform educators,
students, and families about careers in advanced manufacturing.

Harold Sirkin, co-author of "The U.S. Skills Gap: Could it Threaten a


Manufacturing Renaissance?, denounces the skepticism of some that think
the U.S. manufacturing sector is not capable of absorbing so much work.
Some CEO's have expressed concerns that the U.S. will not have enough
skilled labors to fulfill manufacturing positions. BCG surveyed 100
companies and looked at data from job vacancy and wage data and they
came up with the following findings: a. they estimated U.S. is short 80,000
to 100,000 highly skilled manufacturing workers but that represents less
than 1% of the nations total manufacturing work force, b. the shortage
exists in localized areas, only 5 states out of 50 have manufacturing skills
gap, c. 90% of the biggest manufacturing areas do not show severe skills
gap. (H. Z. Sirkin, The U.S. Skills Gap: Could it Threaten a Manufacturing
Renaissance?) Where and when the skills gap could appear is in the long
term, as a result of retirement, companies not educating their current
employees and companies not utilizing local high schools, colleges,
government agencies and non-profits for recruitment. The data also suggest
that skills shortage at the national level have more to do with the corporate
hiring processes. Sirkin recommends that companies, schools, governments
and nonprofit agencies collaborate and expand training and recruiting
policies for the next generation of manufacturing employees. The AMP
recommended apprenticeship programs to the President, $100 million set up
for apprenticeship programs for the
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development of the future work force. The President also has a campaign to
inform educators, students, and their families of the value of promising
careers and education pathways in technical fields, like advanced
manufacturing. (Press Secretary)
Labor is not the only barrior seen as a deterient for the return of
manufacturing to the U.S.; but the heightened level of frustration with the
innovation process which paralizes businesses. Vaclav Smil, author of Made
in America The Rise and Retreat of American Manufacturing, quotes Carol
Pope, It is not the wage burdon that keeps me from manufacturing in the
U.S. Its everything else. Taxes, infrastructure, workforce training, permits
and health care. (Made in the USA - The Rise and Retreat of American
Manufacturing 155) President Obama has addressed the issues of the cost,
delay and inefficiency of innovation. (Press Secretary) There has been a Web
portal developed as a public resource of valuable datasets, tools, and
applications that will help entrepreneurs through the entire product
development process. The site already includes how to license property,
Federal funding opportunities, and additional Federal programs that involve
advanced manufacturing. The purpose of this website is to bring sources
together, in one location, which will make the process of designing and
producing new products easier in the U.S. (Holm) Local and State
governments have joined the Federal government in trying to entice
international manufacturing corporations. Tax incentives are being offered
as well as infrastructure established to enhance the business climate for new

business start-ups. All of the elements are in place for the U.S. to recapture
manufacturing.
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Sirkin with BCG projects that the U.S. will capture $70 billion to $115
billion in annual exports from other nations by the end of the decade. The
pull out of manufacturing companies from China to the U.S. will have a small
impact on the overall global position of manufacturing in China. (H. Z.
Sirkin) Americans are the largest consumers of manufactured goods and
manufacturers see the benefit of moving their products closer to their
consumers. James Fallows states it perfectly, Reliance on exports needs to
come into better balance with domestic consumption, economic growth with
environmental sustainability (Fallows, Made In America, Again) Some
economists say that the labor intensive production of clothing and shoes will
stay in China and continue to be exported overseas. Multi-international
companies will continue to produce products overseas to service China and
the growing Asian market. China will also be servicing Western Europe as a
low-cost export location. (H. Z. Sirkin, The Shifting Economics of Global
Manufacturing)
When manufacturing started to fade in the U.S. so did the middle class.
Currently employment opportunities are greatest for those individuals with a
higher education. However, some factories in Mississippi and South Carolina
are paying $17.00 - $20.00 an hour for positions that do not require a higher

education. As manufacturing and skilled jobs return to the U.S. the middle
class will do the same. The economy will rebound from not only
manufacturing jobs but the return of the support/service businesses in which
manufacturing businesses rely on such as, accounting, research and
development, engineering, and transportation. The economy will trend
upward as advanced manufacturing employment
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opportunities increase in America. As Americans we need to encourage the
youth in this country to consider a future in manufacturing employment.
Buying American-made products is a small piece of the overall
economic picture for the U.S. The Federal Government has taken an
aggressive approach to bringing manufacturing back to the U.S. Advanced
manufacturing may not look like the manufacturing of years past but it will
bring back the middle class. The supply and demand will become balanced
domestically and we will not be so dependent on other countries and their
exports. Manufacturing is on its way back to America.