JustGav Posted June 25, 2008 Share Posted June 25, 2008 Interesting article and would certainly reshape the economy a little.. http://abcnews.go.com/print?id=5235731 Oil Price Fallout: Jobs Coming Home? As shipping costs rise, businesses jump ship. By SHARON ALFONSI June 24, 2008 — As the cost of shipping continues to soar along with fuel prices, homegrown manufacturing jobs are making a comeback after decades of decline. While it once cost $3,000 to ship a container from a city like Shanghai to New York, it now costs $8,000, prompting some businesses to look closer to home for manufacturing needs. Watch "World News" tonight at 6:30 p.m. EST for the full report. Furniture designer Carol Gregg used to have her signature Chinese chests assembled in China, but such a luxury no longer seems viable, considering that some of her pieces now cost five times more to ship. So now Gregg is having the chests made in North Carolina, simply because its cheaper. Some large companies like Crown Battery are cutting expenses by moving jobs from Mexico to Ohio. And hair care company Farouk Systems plans to shift all of its production from China to Houston this summer bringing with it 1,000 jobs. Globalization, in Reverse The rise in transportation costs are fueling what some economists are calling "reverse globalization." For instance, DESA, a company that makes heaters to keep football players warm, is moving all its production back to Kentucky after years of having them made in China. "Cheap labor in China doesn't help you when you gotta pay so much to bring the goods over," says economist Jeff Rubin. Some local manufacturers have suddenly found themselves in the thick of boom times. "In December, we had three employees here. We were just getting set up. Now it's 14," says Casey Hearn, who owns a furniture manufacturing business in North Carolina. Other sectors of U.S. manufacturing may see a boost in jobs as well. Rubin says the U.S. steel industry is poised to reap benefits. "It's not just about labor costs anymore," says Rubin. "Distance costs money, and when you have to shift iron ore from Brazil to China and then ship it back to Pittsburgh, Pittsburgh is looking pretty good at 40 bucks an hour." And after decades of watching manufacturing roll out of North Carolina, Hearn feels encouraged by the trend. "If the price of oil goes up, then I think we'll get more and more calls," says Hearn. Copyright © 2008 ABC News Internet Ventures Link to comment Share on other sites More sharing options...
outatime Posted June 25, 2008 Share Posted June 25, 2008 Fingers crossed. I'm in the CNC Turning business and we have taken quite a battering from the Chinese and Indians. China also has a lot of catching up to do in terms of quality, and we have seen a fair amount of work come back on that basis. Link to comment Share on other sites More sharing options...
ivan Posted June 25, 2008 Share Posted June 25, 2008 Let's hope it ripples over to here too. It would be good to reinvogorate the UKs manufacturing industry. Link to comment Share on other sites More sharing options...
Ark Posted June 25, 2008 Share Posted June 25, 2008 It's just a shame that other job exports like IT and call centres aren't oil dependent Link to comment Share on other sites More sharing options...
supra dan Posted June 25, 2008 Share Posted June 25, 2008 trouble is lots of people work for forign owned companies also. if they take the work home leaves us without jobs. luckily i work for an oil company Link to comment Share on other sites More sharing options...
Ian C Posted June 25, 2008 Share Posted June 25, 2008 It's just a shame that other job exports like IT and call centres aren't oil dependent isn't it We might get slightly better than 0% right-first-time rate then. Link to comment Share on other sites More sharing options...
robin Posted June 25, 2008 Share Posted June 25, 2008 The good thing with IT is that you cant beat on site support. Remote working and call centres can be done but I have yet to meet somone who prefers to call a helpdesk then walk round and have a chat. Link to comment Share on other sites More sharing options...
Tom Posted June 25, 2008 Share Posted June 25, 2008 so if the worlds manufacturing moves closer to home and away from China what will happen to China's economy? a dramatic slow down of growth? Link to comment Share on other sites More sharing options...
JustGav Posted June 25, 2008 Author Share Posted June 25, 2008 so if the worlds manufacturing moves closer to home and away from China what will happen to China's economy? a dramatic slow down of growth? The way I see things and this only with the exposure I have.. Currently the global markets have found a cost saving manufacturing partner in China (for good and bad quality), which HAS had an impact on in country manufacturing. China's main draw is the cheap labour however resources are being shipped there and not manufactured there. Transportation costs are now escalating and this is passed back to us. The break even point where on-shore and off-shore costs start coming together is now getting smaller and smaller. So while it does mean that commodities will not get cheaper it does mean local economies start gaining strength again and off-shore goods will only really be considered where they are unavailable locally or the cost is prohibitive. I don't believe this will help the economy, other than ensuring that more people will have a chance of employment which in itself is a good thing. As far as China goes, it's market will certainly get smaller. Link to comment Share on other sites More sharing options...
Whitesupraboy2 Posted June 25, 2008 Share Posted June 25, 2008 Problem with the UK is we still get in alot of the raw materials via Import. It may be a case of the items are just made in the country of origin of the raw materials as UK labour is still high, then shipped here as items. Who knows what the future holds. Link to comment Share on other sites More sharing options...
Pete Posted June 25, 2008 Share Posted June 25, 2008 I've been saying this for ages now. Shame we can't actually sustain ourselves anymore. I believe we'll start to see a shift back to smaller market towns and communities too. Link to comment Share on other sites More sharing options...
gaz1 Posted June 25, 2008 Share Posted June 25, 2008 the oil cost won,t help us with them pesky foreign call centres though:rolleyes: Link to comment Share on other sites More sharing options...
Pot Posted June 25, 2008 Share Posted June 25, 2008 It's just a shame that other job exports like IT and call centres aren't oil dependent isn't it We might get slightly better than 0% right-first-time rate then. the oil cost won,t help us with them pesky foreign call centres though:rolleyes: I agree (I work in IT too, and even our 'Help Desk' is in India...) What it might do though is strengthen the demand for 'everything' to be brought back in house (I know that not everything can be) It probably won't happen, but there's nothing wrong with wishful thinking Link to comment Share on other sites More sharing options...
steb9780 Posted June 25, 2008 Share Posted June 25, 2008 Fingers crossed. I'm in the CNC Turning business and we have taken quite a battering from the Chinese and Indians. China also has a lot of catching up to do in terms of quality, and we have seen a fair amount of work come back on that basis. I am a CNC machinist mate, we no longer have any in-house turning, as it's cheaper to be done elsewhere They now concentrate on 5-axis milling, as poorer countries can't afford to buy the machinery and engineering time. I would love for the 3-axis milling and CNC turning to come back in house. It was what we used to call our bread and butter. Link to comment Share on other sites More sharing options...
grahamc Posted June 26, 2008 Share Posted June 26, 2008 Can only help end child labour as well... Link to comment Share on other sites More sharing options...
penguin Posted June 26, 2008 Share Posted June 26, 2008 Can only help end child labour as well... primark mockumentry? Link to comment Share on other sites More sharing options...
outatime Posted June 26, 2008 Share Posted June 26, 2008 Agreed, we have seen a lot of work go - mainly the basic 2 axis stuff and multi/single spindle work to India. However, certain customers just aren't interested in holding the stocks that are required when sourcing from China and/or have been let down quality wise. We operate a lot of consignment and kanban systems for customers now and do a lot of nasty metals to ridiculously tight tolerances. We are investing in plant as and when we can, just trying to keep ahead. Things like 10 axis + CNCs. It has kept our t/o steady, despite employing 15 less people. I am a CNC machinist mate, we no longer have any in-house turning, as it's cheaper to be done elsewhere They now concentrate on 5-axis milling, as poorer countries can't afford to buy the machinery and engineering time. I would love for the 3-axis milling and CNC turning to come back in house. It was what we used to call our bread and butter. Link to comment Share on other sites More sharing options...
steb9780 Posted June 26, 2008 Share Posted June 26, 2008 Agreed, we have seen a lot of work go - mainly the basic 2 axis stuff and multi/single spindle work to India. However, certain customers just aren't interested in holding the stocks that are required when sourcing from China and/or have been let down quality wise. We operate a lot of consignment and kanban systems for customers now and do a lot of nasty metals to ridiculously tight tolerances. We are investing in plant as and when we can, just trying to keep ahead. Things like 10 axis + CNCs. It has kept our t/o steady, despite employing 15 less people. Yes we get alot of Chinese firms tendering for Airbus work, we can't compete cost wise. But Airbus know there quality isn't the best, so they still come back to us. They are buying loads of massive 5-axis Starrag's for machining titanium, and loads of 5-axis Ecospeed's for machining Dural. They are pretty impressive 30,000rpm spindle speed and upto 30m/min feedrate. These are costing millions of pounds, but it's what they are having to do to keep ahead of the rest technologically. Link to comment Share on other sites More sharing options...
steb9780 Posted June 26, 2008 Share Posted June 26, 2008 Yes we get alot of Chinese firms tendering for Airbus work, we can't compete cost wise. But Airbus know there quality isn't the best, so they still come back to us. They are buying loads of massive 5-axis Starrag's for machining titanium, and loads of 5-axis Ecospeed's for machining Dural. They are pretty impressive 30,000rpm spindle speed and upto 30m/min feedrate. These are costing millions of pounds, but it's what they are having to do to keep ahead of the rest technologically. Just found a film of the Ecospeed's, the table layout is different on our the table is vertical and about 4/5 metres long and about 3 metres tall. A load of sales b/s on the film but it does show some of the machining. The photo's after a minute are at our place, well most of them are. http://www.youtube.com/watch?v=7gJPZUG_Od0 Link to comment Share on other sites More sharing options...
s1monjh1208 Posted June 26, 2008 Share Posted June 26, 2008 Outatime and steb9780, where do you both work? We're always looking for standard milling and turning companies? Are you small batch runs or mass production? Link to comment Share on other sites More sharing options...
outatime Posted June 26, 2008 Share Posted June 26, 2008 Outatime and steb9780, where do you both work? We're always looking for standard milling and turning companies? Are you small batch runs or mass production? Bit of both, we have still have multi spindles for longer runs and various CNCs for smaller batches. If you are in the market for turning, email/fax me some drawings and i'll get some prices to you. Contact details are on our website: TTP Precision Ltd Link to comment Share on other sites More sharing options...
AndyT Posted June 26, 2008 Share Posted June 26, 2008 Can only help end child labour as well... Excellent observation Graham. Amen to that. Link to comment Share on other sites More sharing options...
Snooze Posted June 26, 2008 Share Posted June 26, 2008 If more jobs are coming back over here (esp. low-skill manual jobs), and we have an "open doors" immigration policy, isn't that going to bring even more immigrants into the country? Link to comment Share on other sites More sharing options...
steb9780 Posted June 26, 2008 Share Posted June 26, 2008 Outatime and steb9780, where do you both work? We're always looking for standard milling and turning companies? Are you small batch runs or mass production? I work at BAe Link to comment Share on other sites More sharing options...
s1monjh1208 Posted June 26, 2008 Share Posted June 26, 2008 I'll take you up on that outatime. Thanks Link to comment Share on other sites More sharing options...
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