I appreciate any company in America who is trying to stay competitive and choosing NOT TO OUTSOURCE jobs to foreign countries.
In Daily Tech the other day, I read an article about Ford’s decision to move its hybrid transmission plant from Tokyo and begin building them just outside of Detroit in a plant that some feared would soon get the ax.
Apparently, instead of closing, Ford made some compromises with their local UAW union leaders and opted to have them construct transmissions instead of non-unionized Chinese or Japanese labor overseas.
In the article, titled “Ford’s Hybrid Transmission Plant Uses Flexibility to Beat Outsourcing,” author Jason Mick reported that companies like Ford are starting to understand the full monetary impact and the “hidden costs” of outsourcing:
Some may wonder why Ford is forced to choose between relatively expensive U.S. and Japanese labor. One factor is that cheaper labor regions like China present a hostile intellectual property environment and human rights issues. Again, the true cost at the end of the day is often far higher than the quick and dirty figures that have led some to jump at outsourcing bids … estimates that an assembly that cost $77 USD to produce and ship from Japan will be produced at the plant for only $58 USD, a nearly 25 percent cost reduction, and a blow to those who have villainized American trade unions in recent years.
I liked the numbers Mick cited, and the clear-cut goals that Ford is projecting for this particular effort:
The new plant will add 225 new manufacturing jobs, a notch towards Ford’s goal of 12,000 new hourly jobs by 2015. Ford plans to spend an addition $412M USD to grow the remaining domestic manufacturing jobs over the next three years.
Frankly, I am ecstatic about this. Although it doesn’t represent a huge jump in jobs to a largely depressed capital of our once-great America industrialism, it’s coming from a company that was once an manufacturing giant that other companies looked up to. If a company like Ford is starting to say that their bottom line can be maintained and they can stay competitive using American workers, other companies may re-examine the ROI of bringing production back to U.S. soil.
I’m very hopeful, indeed, and I am certainly going to be watching how this develops.