Did you know that Airbus has already started to move more of their production operations to the United States?
The time for Americans lamenting the country’s economic clout is declining and the overflow of “Made in China” goods into the US markets is expected to be completely over soon. The Americans may just have to find other reasons to complain about the economic downturn.
Boston Consulting Group Report
A report made by the Boston Consulting Group or BGC revealed that the United States is fast becoming as one of the lowest-cost countries for manufacturing in the developed world. According to the BGC the average production costs in Germany, France, Japan, Italy and the United Kingdom will be 8% to 18% higher than those in the US by 2015.
The same BGC report found that the US is becoming increasingly attractive for foreign businesses to shift to because of lower labor costs, which were adjusted for productivity. In August, manufacturing activity hit a five-month high as hiring picked up and new orders increased at their fastest pace since January, as reported by Markit. This observation according to BGC is indeed a sign that a major shift in global manufacturing is beginning.
Global Manufacturing Returning To The US
Harold L. Sirkin, a co-author of the BGC report observes that the economics of global manufacturing are dynamically changing and the pendulum is starting to swing back to where it should be. Looking forward, Sirkin said that America could be on the receiving end of production shifts as more companies refer to the US as a low-cost export platform.
Returning From China And Other Low-Cost Countries
It is predicted that by 2020, more production will shift back to the US from China allowing the creation of between 2.5 to 5 million American factory and service jobs for the manufacturing sector. This could subsequently drop the unemployment rate. Although it is becoming obvious that production operations have been returning to the US from China or other low-cost countries, there is no time frame as to the re-emergence of the US as a powerhouse when it comes to manufacturing.
Aircraft Manufacturer To Open Production Facility In The US
Airbus, for instance said that lead time is one of the main reasons why the aircraft manufacturer was opening a factory in Mobile, Alabama. With the new factory most of the major components of aircraft production including finishing jobs such as installation of aircraft lamps are expected to commence in the US.
Benefits Of Having A US Production Facility
A spokesperson for Airbus, Mary Anne Greczyn said that airline operators spend considerable time and money resources going to Europe every time they need an aircraft delivered. As the new production facility in Mobile becomes operational, clients like JetBlue or American Airlines need not travel halfway around the world and instead will only need to travel to Alabama to negotiate their A320 Family aircraft.
Greczyn made the clarification, however, that Airbus is simply expanding its production facilities and not moving or shifting construction to the USA.
There are other foreign manufacturers that have made the same move as Airbus. Do you know which companies they are?