The Pied Piper of Manufacturing

July 21, 2011
Harry Moser is trying to reverse the 'herd mentality' that propelled many U.S. manufacturers to bolt to China.

When I first interviewed Harry Moser in early 2010, the concept of reshoring was not much more than a glimmer in his eye.

Moser, who at the time was chairman emeritus at Lincolnshire, Ill.-based Agie Charmilles LLC, was planning his first reshoring fair later in the year. As he eased into retirement, he told me he was looking forward to having more time to devote to his passion: making the case for bringing offshored manufacturing jobs back to America.

Since then, it's safe to say Moser has made tremendous progress.

Moser, a 2010 inductee into the IndustryWeek Manufacturing Hall of Fame, will crisscross the country to give roughly 100 presentations on the virtues of reshoring this year. His reshoring initiative now receives funding from 15 corporate and association sponsors, and he expects a handful more by the end of the year (enough to hire a staff member).

In recent weeks, Moser has been interviewed about reshoring by the likes of Fortune and Reuters, and he has influenced proposed federal legislation aiming to encourage U.S. companies to bring manufacturing work back home.

The crux of Moser's argument is that if U.S. manufacturers take into consideration the "total cost of ownership" for products made in China but destined to be sold in America -- transportation costs, reject rates, foreign wage inflation, potential intellectual-property theft and other factors -- the United States compares favorably with China and other so-called low-cost countries.

To help quantify his argument, Moser has developed a software tool -- TCO Estimator V.5 -- that compares the costs of manufacturing parts and tools in 17 countries, based on 29 factors (such as freight and wage rates). The software can project manufacturing costs five years into the future.

Moser, 67, has become the face of the reshoring movement. Earlier this week, IndustryWeek caught up with Moser to get an update on his efforts to bring manufacturing jobs back to America.

IW: In May, the Boston Consulting Group got some media attention for an analysis that concluded that rising labor costs in China, coupled with higher productivity in America, will wipe out most of China's cost advantage within the next five years. Why is this kind of media attention so important?

HM: I think it's important because a major reason people offshored was because they read about everybody else offshoring, and figured it had to be the right thing to do. And so the more they see about reshoring, the more they're going to say, "Well I guess that's what everybody's doing."

In fact, in my PowerPoint presentation, I talk about how offshoring was a herd mentality to some extent. Big companies saw each other doing it, and maybe the company had a bad quarter and they told Wall Street, "Well we're going to solve this, we're going to fix this margin, we'll offshore a third of the work" kind of thing, to show that they were real men running the company and taking decisive action -- even if it was sometimes the wrong decision.

Benefits of Reshoring

IW: All eyes are on Washington right now to see if and how the government can remedy the debt crisis. How could reshoring help? I know you've estimated that bringing back offshored manufacturing jobs could add several hundred billion dollars in annual revenue ...

HM: First, the people who are working pay taxes and they don't take unemployment and Medicaid and these extended-benefit kinds of things. And the companies that are working here and have more work here are paying more taxes and there's more sales tax.

So reshoring probably could do as much as the Democrats and Republicans are fighting over -- and without any cost.

... The only negative [of reshoring] is on the Chinese or the Indians or the Mexicans, and that's their problem because they took those jobs away from us in the first place. So I always focus on reshoring as growing the pie so that we don't have to fight so much about how to slice the pie -- because everything in Washington is about how to slice the pie.

Obstacles to Reshoring

IW: What's the biggest obstacle to getting widespread buy-in of reshoring?

HM: When I look at my strategic plan or business plan, the single biggest problem is to get the attention of the big companies.

It's not even getting them to promise to not reshore, but just to promise to reevaluate offshoring and to think seriously before they offshore anymore.

IW: When we last spoke in early 2010, you were easing into retirement as chairman emeritus at Agie Charmilles after a 25-year career as an executive there. Are you officially retired now?

HM: Yes, at the end of last year. I no longer get a paycheck from Agie Charmilles. But they are one of my sponsors. They donate money, and I'm allowed to go in and use their Xerox machine to print my flyers. So they've been very helpful that way.

Celebrity Status

IW: How has your life changed since being inducted into the IndustryWeek Manufacturing Hall of Fame? Are you being trailed by paparazzi and hounded for autographs?

HM: My assistant at Agie Charmilles says all kinds of women have been calling from all over the country because my picture [in the magazine] was so good. She says it didn't look like me at all. [Laughs.]

... But it certainly it added credibility. I'm pretty well known in the industry but not universally known, and IndustryWeek is. Now I'm in a group that included Jack Welch and Steve Jobs and Michael Dell.

Normally if someone else introduces me when I'm doing a presentation, and they mention that I'm in the Hall of Fame, I say, "Well, [IndustryWeek] put all those other people in for what they've done. They put me in for what they hope I'll do."

And then for a little humor, I say that when my wife sees me working 70 hours a week on [reshoring], and not getting paid, she says, "You're supposed to be retired, why are you working so hard?" I tell her, "They put me in the Hall of Fame -- now I have to earn it." [Laughs.]

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