By Bruce Kettelle
Caterpillar is the latest company to announce plans to bring a manufacturing plant back to the US. Economists call this onshoring, the opposite of offshoring. Offshoring has been blamed for taking jobs out of the US and Ohio since the free trade agreements took effect in the 1990’s.
The difference today according to an article in yesterday’s Wall Street Journal is the economics are shifting to make domestic production attractive again. They cite shipping and logistics costs, quality control, loss of intellectual property, and a highly skilled underemployed US workforce.
The main attraction for Caterpillar and others to move production offshore were lower labor rates available in Mexico and China. Those labor rates have begun to creep up as the workforce in those countries begin to expect higher standards of living.
Another major factor influencing the onshore movement is dollar exchange rates. The weak dollar makes US goods more attractive to other countries.
In Ohio and Trotwood this should be viewed as good news. In the case of Caterpillar this area may be an attractive location to build a new manufacturing plant. It would be close to their new Clayton distribution facility due to open near the end of this year and surrounded by an experienced manufacturing workforce.
It looks like onshoring should become part of Trotwood’s economic development vocabulary.
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