Since 2010, more than 4,700 companies have brought back some or all of their manufacturing operations and sourcing to the United States. Despite COVID-19, reshoring set a new record in 2020. The job total for 2020 is 109,000 for reshoring and 51,000 for foreign direct investment (FDI), which brings the total to over 1 million U.S. manufacturing jobs added from offshore since 2010.

Since March 2020, 60% of companies that are reshoring have mentioned COVID-19 as the reason for coming here. Approximately half of the 60% was directly with personal protective equipment (PPE) and pharmaceutical. The rest were other manufacturers that saw problems due to shortages or new opportunities.

In May 2020, Thermo Fisher Scientific received a contract from the U.S. government to provide a large quantity of critical viral transport media (VTM) for COVID-19 sample collection. They responded with a $40 million investment in a facility in Lenexa, Kan., that opened in August 2020 and created 300 new jobs.

“Thermo Fisher is proud to support virtually every aspect of the global COVID-19 response, and our colleagues in Lenexa have played a key role in those efforts,” said Gianluca Pettiti, senior vice president. “Thanks to their hard work, Lenexa significantly increased production of VTM units. The team has worked with unrelenting intensity to build out and open a new site in just about six weeks.”

Reshoring and Economic Growth

Reshoring enables risk mitigation, resiliency, agility, responsiveness and faster time to market. As the reshoring trend accelerates, it will drive more economic growth by creating jobs, reducing unemployment and balancing trade and budget deficits.

New York-based Hardinge is shifting the manufacture of its milling and turning machining center solutions from its Hardinge Taiwan plant to its facility in Elmira, N.Y. The company cites supply-chain interruption, natural disaster and political-instability risk as negative factors offshore and image/brand and impact on the domestic economy as positive factors that made reshoring attractive. Hardinge is modernizing and investing resources in new assembly capabilities and state-of-the-art heat-treat equipment.

“We are very excited to make this move, as it brings the products closer to the customers we serve and leverages the many years of experience we have in Elmira. It also enables us to bring capabilities back to the U.S., which we are extremely proud to do,” said Chuck Dougherty, Hardinge president and co-CEO.

The TCO Win Rate

Our biggest challenge is to convince companies to do the math correctly by using TCO (total cost of ownership). TCO factors in many of the hidden costs companies sourcing overseas often miss, such as travel cost, import duties and risk to intellectual property. We analyzed a 180-case sample of TCO calculations comparing U.S. versus China sourcing. Based on FOB price, U.S. sources were only competitive 8% of the time. Using the TCO Estimator, the U.S. win rate went to 32%!

The Reshoring Initiative’s resources can be found at www.ReshoreNow.org. Twenty recent related webinars can be found at https://reshorenow.org/videos/. If you or your customer has an opportunity to reshore or wants to find opportunities, contact us at info@reshorenow.org.