Made In the U.S.A. Again?

I just saw an uncharacteristically hopeful story on the U.S. economy on MSNBC today. Apparently a report that has just come out says that manufacturing jobs, contrary to what Bruce Springsteen and Michael Moore have been saying, are coming back to America.

Specifically, they're coming back from China, where new economic conditions have made it more prohibitive to make things there. Chinese workers have seen their wages rise, plus the yuan is rising in value. Also, transpacific transport of goods is costing companies as much as a 10 percent loss in any savings gained from outsourcing - which, of course, adds up - while productivity improves here and allows quicker delivery of goods to market.

It's not a cause for celebration - yet. Most of these new jobs aren't going to return overnight. Most of the new manufacturing jobs that are returning are for big-ticket items a lot of people can't afford right now. Are there any jobs making small-cost items that are coming back? Yes - they're making Hula-Hoops and Frisbees here again.

What is this, 1955?

Okay, it's a start. And the study group that released this report, the Boston Consulting Group, believes that, while the economy won't fully recover until 2015, factories that get a head start now should be ready to go when the economy has returned to pre-recession strength.

Manufacturing in China started to pick up steam in the mid-eighties, as more Western companies found profit opportunities through the reforms of Chinese leader Teng Hsiao-p'ing. One such company mirroring both the earlier trend toward manufacturing in China and the emerging trend of manufacturing in America again is not an American company but a German one. In the 1980s, Volkswagen, under the leadership of its beloved CEO Carl Hahn, cut a deal to begin making cars in China. The factory started out making very few cars, but Hahn believed - correctly -that demand for cars in China would grow exponentially. This was at a time when the company's plant in Pennsylvania had lost a billion dollars over eight years. Many of VW's U.S. cars have been made in Mexico - another country benefiting from outsourcing - since the Pennsylvania plant closed in 1988, but much more recently, Volkswagen has participated in the return trend toward manufacturing in America, with its new factory in Tennessee ready to produce midsized cars for the American market.

It only goes to show you how manufacturers will invest in America, so long as it makes good business sense.