https://www.wsj.com/articles/manufacturing-returning-united-states-11666275864

"Recouping the cost of reshoring isn’t easy
Some sectors, such as electric vehicles, vaccines, semiconductors and renewable-energy industries, are eligible for government support for their reshoring efforts. Industries that don’t get those incentives, however, might find the cost of reshoring
outweighs the benefits due to the higher cost of labor, among other things, as well as the need for new infrastructure.

Consider personal protective equipment, or PPE. All of the hospital executives we spoke with throughout the pandemic said they care about supply-chain resilience and prefer American-made products. This sentiment, along with the severe shortages of N95
masks in the U.S. in the months following March 2020, prompted U.S. mask manufacturers to invest in domestic production. But the demand for domestically made PPE was short-lived after low-cost Chinese masks flooded the market after April 2020.
...
U.S. manufacturers’ business model doesn’t mesh with reshoring
Over the past three decades, building a business case for moving manufacturing abroad was easy because of the lure of low-cost labor. Making a case for reshoring is difficult ...

A lack of supply-chain visibility

Today’s global supply-chain operations are so complex and opaque that only 2% of companies in a 2021 McKinsey survey said they had any visibility beyond their second-tier suppliers, or those that supply materials and parts to their direct suppliers.
This lack of transparency occurs even in highly sensitive industries in which reshoring is absolutely essential, such as medical supplies and defense equipment.

Without supply-chain visibility and transparency, manufacturers cannot prove the extent to which their products are domestically made. That could make it harder for them to justify charging higher prices or to receive recognition for their growing
reshoring efforts.
...
U.S. firms worry that reshoring will hurt their financial performance

For decades, Wall Street has convinced investors that asset-light business models are superior. This belief is deep-rooted enough that many U.S. companies are reluctant to reshore by investing in fixed assets such as factories, machines and
infrastructure.

Semiconductors, for example, were invented in the U.S., and yet many companies focus on integrated-circuit design and outsource chip manufacturing to businesses in Taiwan. This trend dovetails with Wall Street’s broader embrace of asset-light companies
whose intellectual property and brands offer potentially spectacular returns on minimal capital. Consequently, valuations of firms with tangible assets such as factories and equipment have suffered, which can make it harder for executives to commit to
reshoring."

--- SoupGate-Win32 v1.05
* Origin: fsxNet Usenet Gateway (21:1/5)

On Tuesday, October 25, 2022 at 7:52:22 PM UTC+8, ltlee1 wrote:

https://www.wsj.com/articles/manufacturing-returning-united-states-11666275864

"Recouping the cost of reshoring isn’t easy
Some sectors, such as electric vehicles, vaccines, semiconductors and renewable-energy industries, are eligible for government support for their reshoring efforts. Industries that don’t get those incentives, however, might find the cost of reshoring

outweighs the benefits due to the higher cost of labor, among other things, as well as the need for new infrastructure.

Consider personal protective equipment, or PPE. All of the hospital executives we spoke with throughout the pandemic said they care about supply-chain resilience and prefer American-made products. This sentiment, along with the severe shortages of N95

masks in the U.S. in the months following March 2020, prompted U.S. mask manufacturers to invest in domestic production. But the demand for domestically made PPE was short-lived after low-cost Chinese masks flooded the market after April 2020.

...
U.S. manufacturers’ business model doesn’t mesh with reshoring
Over the past three decades, building a business case for moving manufacturing abroad was easy because of the lure of low-cost labor. Making a case for reshoring is difficult ...

A lack of supply-chain visibility

Today’s global supply-chain operations are so complex and opaque that only 2% of companies in a 2021 McKinsey survey said they had any visibility beyond their second-tier suppliers, or those that supply materials and parts to their direct suppliers.

This lack of transparency occurs even in highly sensitive industries in which reshoring is absolutely essential, such as medical supplies and defense equipment.

Without supply-chain visibility and transparency, manufacturers cannot prove the extent to which their products are domestically made. That could make it harder for them to justify charging higher prices or to receive recognition for their growing

reshoring efforts.

...
U.S. firms worry that reshoring will hurt their financial performance

For decades, Wall Street has convinced investors that asset-light business models are superior. This belief is deep-rooted enough that many U.S. companies are reluctant to reshore by investing in fixed assets such as factories, machines and

infrastructure.

Semiconductors, for example, were invented in the U.S., and yet many companies focus on integrated-circuit design and outsource chip manufacturing to businesses in Taiwan. This trend dovetails with Wall Street’s broader embrace of asset-light

companies whose intellectual property and brands offer potentially spectacular returns on minimal capital. Consequently, valuations of firms with tangible assets such as factories and equipment have suffered, which can make it harder for executives to
commit to reshoring."

Investment cost is huge. High asset cost ended high tangible cost. Hence, Asset = costs. Reshoring cost is high. The variable high cost is labour cost. Wrong location worsens cost. The worsen cost is high support cost.

--- SoupGate-Win32 v1.05
* Origin: fsxNet Usenet Gateway (21:1/5)

On Tuesday, October 25, 2022 at 11:52:22 AM UTC, ltlee1 wrote:

https://www.wsj.com/articles/manufacturing-returning-united-states-11666275864

"Recouping the cost of reshoring isn’t easy
Some sectors, such as electric vehicles, vaccines, semiconductors and renewable-energy industries, are eligible for government support for their reshoring efforts. Industries that don’t get those incentives, however, might find the cost of reshoring

outweighs the benefits due to the higher cost of labor, among other things, as well as the need for new infrastructure.

Consider personal protective equipment, or PPE. All of the hospital executives we spoke with throughout the pandemic said they care about supply-chain resilience and prefer American-made products. This sentiment, along with the severe shortages of N95

masks in the U.S. in the months following March 2020, prompted U.S. mask manufacturers to invest in domestic production. But the demand for domestically made PPE was short-lived after low-cost Chinese masks flooded the market after April 2020.

...
U.S. manufacturers’ business model doesn’t mesh with reshoring
Over the past three decades, building a business case for moving manufacturing abroad was easy because of the lure of low-cost labor. Making a case for reshoring is difficult ...

A lack of supply-chain visibility

Today’s global supply-chain operations are so complex and opaque that only 2% of companies in a 2021 McKinsey survey said they had any visibility beyond their second-tier suppliers, or those that supply materials and parts to their direct suppliers.

This lack of transparency occurs even in highly sensitive industries in which reshoring is absolutely essential, such as medical supplies and defense equipment.

Without supply-chain visibility and transparency, manufacturers cannot prove the extent to which their products are domestically made. That could make it harder for them to justify charging higher prices or to receive recognition for their growing

reshoring efforts.

...
U.S. firms worry that reshoring will hurt their financial performance

For decades, Wall Street has convinced investors that asset-light business models are superior. This belief is deep-rooted enough that many U.S. companies are reluctant to reshore by investing in fixed assets such as factories, machines and

infrastructure.

Semiconductors, for example, were invented in the U.S., and yet many companies focus on integrated-circuit design and outsource chip manufacturing to businesses in Taiwan. This trend dovetails with Wall Street’s broader embrace of asset-light

companies whose intellectual property and brands offer potentially spectacular returns on minimal capital. Consequently, valuations of firms with tangible assets such as factories and equipment have suffered, which can make it harder for executives to
commit to reshoring."

It doesn't make sense to manufacture in the US. Why do US enterprises off-shore their manufacturing operations in the first place? It because of cost. Manufacturing in the US is not competitive, cost-wise.

In the US, land costs more, utilities cost more, labor and skills costs more. On top of this, there are the higher taxes. In the end, the finished product will cost much more in the US than if they were to be produced overseas. This has been known since
the 60's when US MNCs first moved their productions overseas.

--- SoupGate-Win32 v1.05
* Origin: fsxNet Usenet Gateway (21:1/5)