Manufacturing Savvy

Insourcing Not Outsourcing Says President Obama

Last week President Obama was in Richmond Virginia visiting Rolls-Royce North America's Crosspointe plant.

The plant makes precision-engineered discs for jet engines for the Trent 1000, Trent 900 and Trent XWB – designed for the Boeing 787, Airbus A380 and A350 XWB respectively.

I had the privilege of visiting that same plant a few weeks ago. The new plant is part of a $500 million investment that the company is making in Virginia over the next few years.

The President is very happy to see manufacturing jobs coming back to the U.S. "More companies are bringing jobs back and investing in America," Mr. Obama said. "This facility is part of the evidence of what's going on all across the country."

What is interesting in this case is that it's a foreign-based company that is choosing to expand in the U.S. This is a reversal of the trend where U.S. companies were outsourcing abroad.

IndustryWeek has covered outsourcing over the past few years, with its 2011 Hall of Fame winner Harry Moser leading the cause. He wrote about the need for companies to consider the total cost of landing when making a decision on where to locate a plant in "Making the Case for Made in America."

Another interesting article on the topic is "The Case for Onshoring," in which Guy Morgan, BBK Managing Director, points out that over the next five years some U.S. states will become among the most cost-effective locations for manufacturing in the developed world.

The real issue, of course, is whether or not there are enough jobs coming in or staying to replace all that have been lost. See "Your Grandfather's Manufacturing Jobs 'Ain't Comin' Back'.

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