60 seconds with Harry Moser, Reshoring Initiative

Harry Moser
Reshoring Initiative
Title: Founder and president
Location: Kildeer, Ill.
Experience: 45 years in manufacturing. Founded the Reshoring Initiative in 2010.
Primary Focus: Educating companies about the costs and factors associated with off-shoring. The objective is to bring manufacturing jobs back to the United States.

Modern: Tell us a little about the Reshoring Initiative.
Moser: What we’re doing is documenting the trends of the companies that are bringing manufacturing back, why they’re coming back and how many jobs they’re bringing with them. Then, we promote it. I give about 100 presentations a year, and we write about 15 articles a year. We try to get companies interested in reshoring, and we help them evaluate their decisions. The crown jewel is our software, which allows companies to make an estimate of the total cost of off-shoring compared to manufacturing here.

Modern: From what you’re seeing, is reshoring for real?  
Moser: If you look at the numbers, total manufacturing employment has gone up by about 500,000, which isn’t a lot in a recovery. So, you can’t prove that a renaissance has arrived. However, I can prove that reshoring is real because we calculate the jobs. We calculate that about 80,000 have come back since 2010 and that jobs are coming back now at a rate of about 30,000 a year.

Modern: Have we turned the corner on off-shoring?
Moser: Not quite. If you look back 10 years, we were off-shoring 150,000 jobs a year and reshoring about 3,000 a year. Now, we’re reshoring about 30,000 a year, and off-shoring 30,000 to 50,000. We’re close to balancing the scales. The necessary thing is to convince companies to re-evaluate their decisions about where to manufacture. To do that, we have to convince them that it’s happening. I’m the enabler and the cheerleader.

Modern: If production is coming back, what’s driving the trend?
Moser: There are three factors. One, Chinese wages have been going up about 18% a year over the last 10 to 15 years while U.S. wages are going up 2%. We believe that by 2015, the manufacturing cost in China will be high enough that, when you throw in the cost of transportation, it will be more expensive to manufacture many items there than here. Number two is shale gas. Compared to China, we have high priced labor, but low cost energy. Finally, U.S. consumers increasingly prefer the “Made in the USA” label compared to the “Made in China” label.

Modern: Finally, tell us how the Total Cost of Ownership Estimator works.
Moser: It’s a software application that quantifies all of your costs. A manufacturer might find that their manufacturing costs are 20% higher here than off shore. But their overhead, including transportation, may be considerably less. The question then is whether overhead comes down enough to offset the higher cost of manufacturing it here. If the cost is close, we urge them to call in the consultants. If there’s a 30% difference, it’s unlikely that a lean initiative is going to close the gap. But, if there’s a 5% to 7% difference, perhaps lean or automation can make the difference.