Tech firms move to USA manufacturing: Public Relations? or Global Competitiveness Shift?

Is East Asia loosing its competitiveness advantage back to the USA? Perhaps, as more and more USA firms move back to start manufacturing in the USA. The competitiveness of American factories is being helped by rising labor costs in East Asia, though wages there are still much lower than in the United States and falling energy costs, says Washington Post Tech. But meanwhile, the latest is that Google, throught its Motorola subsidiary, is to make its mobile phone in the USA. Motorola Mobility, once a pioneer in shifting manufacturing to China, is opening a smartphone factory in Texas, the company said Wednesday, joining a small but growing movement toward bringing technology jobs to the United States. The decision follows announcements by major tech firms, including Apple and Lenovo , planning to add U.S. manufacturing capacity after more than a decade in which the flow was almost exclusively in the other direction — with millions of jobs going to East Asian factories known for low wages and minimal labor protections.Tim Cook offered his thoughts on wearables, and a hint about what his company may bring to the market. The shifts to the United States are fledgling, and some industry experts say the companies are motivated less by long-term manufacturing needs than by public relations strategy. At a time of rising governmental scrutiny of technology companies, analysts say, there are few better ways to acquire allies on Capitol Hill than to create manufacturing jobs in lawmakers’ home districts. But Motorola Mobility officials said they see significant business logic to having a factory close to the engineers who are designing a new flagship smartphone and the customers they hope will buy it. Officials say it aids innovation while allowing for leaner inventories and lower shipping costs. “Doing that work of actually assembling the phone close to home will allow us to fix things faster, innovate faster,” said Dennis Woodside, chief executive of Motorola Mobility, a division that was bought by Google last year for $12.5 billion. East Asia remains home to most suppliers of electronics components, a long-term advantage that will make it difficult for a large percentage of high-tech manufacturing jobs to move to the United States, some analysts say. Previous pushes to attract more factory jobs have largely fizzled in the face of competition from East Asia and Latin America. “This is Groundhog Day, big time,” said Timothy Sturgeon, an MIT researcher on globalization. “On the other hand, this doesn’t mean that this isn’t significant news.” The United States lost 5.5 million manufacturing jobs, about one third of the nation’s industrial workforce, between 2000 and 2009, said the Alliance for American Manufacturing, an advocacy group founded jointly by industry and the United Steelworkers union. The outward flow of jobs has stabilized in recent years, with the numbers of factories opening and closing roughly equal (Source).

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