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Re-shoring to the US Examples:

Re-shoring to the US Examples:. Large Companies; Caterpillar announced a new 600k sq.ft facility for hydraulic excavators in Victoria, TX – 500 jobs NCR moved production of ATMs to Columbus, GA – 870 jobs Coleman Company’s production of Coolers to Wichita, KS –

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Re-shoring to the US Examples:

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  1. Re-shoring to the US Examples: Large Companies; Caterpillar announced a new 600k sq.ft facility for hydraulic excavators in Victoria, TX – 500 jobs NCR moved production of ATMs to Columbus, GA – 870 jobs Coleman Company’s production of Coolers to Wichita, KS – Ford Motor Company – 2000 jobs back to the U.S. after a favorable labor agreement GE created a new factory in Batesville, Mississippi to manufacture the engines for the new 787 Dreamlinerand Bringing jobs back to GE Appliance Park in Louisville, KY for total of 15,000 new jobs Small to Medium- Sized Enterprises Sleek Audio – high end headphones to Manatee County, Florida Peerless Industries – AV mounting systems – Illinois Outdoor Greatroom – firepits and outdoor shelters – back to the U.S.

  2. EIU Business Growth Survey

  3. EIU Survey of Sourcing

  4. U.S. – China Wage gap is Decreasing

  5. U.S. – China Productivity Differences

  6. …Reinvestment in the US?

  7. Non-Wage/Productivity Factors • Utilities – China’s electricity cost has increased by 15% since 2010 and due to increasing demand has seen rolling blackout/brownout situations • Industrial Land Cost • $11/$15/$17 sq.ft. in Ningbo/Nanjing/Shanghai respectively • National average in China $10.22 • US: Alabama ($1.86-$7.43); Tennessee and North Carolina ($1.30 -4.65) • Transpacific Shipping Costs • Inventory Carrying Costs • Quality Control Issues • Expedited Freight • Unanticipated Travel • Intellectual Property Theft • Trade Disputes/punitive Duties

  8. Where are we competitive?

  9. Shifting Curves of Competitiveness

  10. Takeaways: • Wage/Productivity scale tipping toward the U.S. • Other manufacturing costs rising rapidly in China • Localization of manufacturing to service domestic markets increasingly biggest reason for localization in Chinese and U.S. markets • Industries with very high IP content and shipping weights will be re-shored first (or never off-shored) • As wage and other costs rise in China (and Mexico), breakeven curves rise for outsourcing for “marginal industries” – Total Cost of Ownership • U.S. needs to continue to create favorable environment for Manufacturing • Lower cost/flexible/higher productivity labor • Lower land/rental cost • Reasonable regulatory and tax environment • Incentives where appropriate

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