Some factory work is returning to the U.S., thanks to a narrowingwage gap with low-cost countries and to the rising risks posed by long supply linе.

America’s manufacturing industry is in terminal decline, right? Smokestack America has been battered for decades by low-cost foreign competitors. Steel furnaces went cold, assembly lines shut down, and factory production moved overseas–especially to China, the world’s epicenter for mass production. A common refrain on the political stump and the nation’s op-ed pages is that “America doesn’t make things anymore.”
To paraphrase Mark Twain, the demise of U.S.manufacturing has been greatly exaggerated. Thecountry remains a globalmanufacturing powerhouse, accountingfor one-fifth of the world’s manufacturing output in real terms. U.S. manufacturers exported$1.3 trillion in goods in 2010–a sum about equal to the size of Australia’s economy. If current trends through August hold, 2011 will be an even better year.
The problem is that all this activity doesn’t create as many jobs as it used to. Far from it: American manufacturers have been producing much more with many fewer workers. U.S. manufacturing output has grown by 2.5 times since 1970, even as employment shrank by 30 percent. Manufacturing jobs were decimated during the Great Recession and the anemic recovery thatfollowed, plunging by 2 million positions, to 11.7 million jobs, from December 2007 to August 2011. (Manufacturing employment is up 2.5 percent, or 285,000, from its 2009 nadir; in keeping with the productivity story, however, manufacturingproduction has risen 13.2 percent from its 2009 low.)
Still, there are intriguingsigns that the manufacturing job picture could stabilize orperhaps improve in the coming years, thanks to a combination of forces unleashed by the Great Recession and by globalization. Specifically, the impact of rising labor costs in key emerging markets, higher logistics costs, and a greater appreciation of the risks embedded in extended supply chains is driving management to reconsider the benefits and costs of keeping–and adding to–onshore production. “Taken altogether, the global manufacturing strategy is shifting to more of a regional strategy to sell to local markets,” says David Simchi-Levi, professor of civil and environmental engineering at the Massachusetts Institute of Technology.
Productive Jobs are Repatriating
Take Ford Motor ( F ) . The tentative agreementreached with the United Auto Workers on Oct. 4 would have the automaker adding 12,000 hourly jobs in its U.S. manufacturing facilities by 2015, including moving work to its U.S. manufacturing facilities from Mexico, China, and Japan. (This is5,750 jobs, in addition toa previously announced addition of 7,000 U.S. positions by yearend 2012.) Ford will also invest $16 billion in the U.S., including $6.2 billion for retooling and upgrading American plants.
It isn’t just Ford. In October 2009, NCR ( NCR ) decided to move production of its ATMs from overseas factories to Columbus, Ga., creating some 870 jobs. Ashland ( ASH ) , a specialtychemical company, plansto invest $39 million to expand its Hopewell, Va.,plant after having considered investments in China and Europe. Procter & Gamble ( PG ) held the grand opening of it 600,000-square-footBox Elder Family Care plant in Utah with approximately 200 employees on Mar. 16–the first plant it has built in the U.S. in 40 years. Charmin toilet paper is rolling off the line there.
The lure of cheap labor persuaded many U.S. companies to move production offshore. Now managers have to take into consideration rising labor costs in many key emerging markets. For instance, average annual wage gains in Brazil from 2003to 2008 were 21 percent,according to Simchi-Levi.The comparable figures for Malaysia and Mexico were 8 percent and 5 percent, respectively Most important, China’s wage rates have been growing at a 15 percent to 20 percent yearly clip. In 2010, China’s average productivity-adjusted production wage rate in U.S. dollars was $7 an hour, 31 percent of the U.S. average manufacturing wage, according to Boston Consulting Group. That’s up from $3.80 an hour, or 23 percent of U.S. manufacturing wages, in2000. BCG expects the wage gap to narrow to 43 percent by 2015. The bottom line: “All of a sudden, the costs in the U.S. don’t look as high,” says Harold L. Sirkin, senior partner at BCG.

For all the attention paidto wage competition between countries, managers locate factories according to many further factors, some of which are also moving in the U.S.’s favor. The risks inherent in relying on far-flung factories to supply key components became all-too apparent in the aftermath of Japan’s earthquake and nuclear accident in April. Supply chains were disrupted, especially for the automotive and electronic-equipment industries. For example, a dearth of Japanese-made parts after the earthquake caused General Motors ( GM ) to temporarily shut down its Louisiana truck plant. Oil prices have pulled back from their near-$100 high of last July on fears of a global double-dip recession and are fluctuating around $86 a barrel. Still,shipping costs over long distances are likely to rise sharply, along with oil prices, once the global economy regains its vigor.
Can ‘Made in America’ Make Jobs?
How many jobs might a “Made in America” movement create? Taking into account this country’s high manufacturing productivity, scholars at the Georgetown University Center on Education & the Workforce expect a marginal shrinking, from13.6 million jobs in 2008 to 13 million in 2018. This projection isn’t as gloomy as it initially appears because it accounts for roughly 2 million manufacturing job openings resulting from the projected retirement of Baby-Boom-era factory workers.
The consultants at BCG paint an even-more-optimistic picture in a recent report, “Made in America, Again.” They project that a less-competitive China will in itself translate to 600,000 to 800,000 additional U.S. manufacturing jobs. What’s more, they estimate that the trend will produce a further 1.7 million to 2.4 million jobs in related businesses. (A wide range of studies suggest that each domestic manufacturing position supports about three additional workers.)
Not everyone buys the notion of a brighter future for manufacturing, measured by job growth. American companies aren’t about give up their hard-won battles to produce more with fewer workers. Skeptics also point out that there are still many low-cost production regions to expand into, such as Mexico, Vietnam, parts of Africa, and elsewhere. The search for cheaper places to make things is eternal, from industry’s mass movement from expensive northern states to cheaper southern ones in the 1960s and ’70s to the massive shift toward factory work in China in the 1990s and 2000s. “It has been a worldwide movement to the lowest-cost location,” says Uday Karmarkar, professor of technology and strategy at UCLA’s Anderson School of Business. “So itit’s not a simple picture.”
Simple or not, for the first time in decades, it seems that a number of underlying economic trends favor American manufacturers keeping more production business at home. That could be a relatively bright spot in a gloomy U.S. jobs picture.

Texas Governor Rick Perry says he would kick start economic growth by unleashing the energy industry.
His plan, unveiled Friday, calls for creating 1.2 million jobs by tapping unexplored supplies and loosening regulations on oil and gas producers.
"I believe one of the quickest ways to create jobs and restore investor confidence in America is to expand energy production in America," the Republican presidential contender, who plans to roll out other parts of his economic plan in coming days, said in his proposal.
But there's at least one big problem with Perry's plan ... it could take years for these jobs to materialize, energy and labor experts say.
"It's not going to be overnight," said David Dismukes, associate executive director for the Center for Energy Studies at Louisiana State University. "These are big capital-oriented investments. People don't turn on a dime with these investments."
The heart of Perry's plan is to open oil and gas fields for exploration that are currently off limits. This includes drilling in the Gulf of Mexico, Alaska, the mid-Atlantic and the American West.
He estimates opening up Alaska alone could create 120,000 jobs, while ramping up production in the Gulf could result in another 230,000 positions.
Perry stressed that he would speed the process because he could largely cut Congress out of the system. He would accomplish much of his goals through executive orders and by "getting the EPA out of the way."
"It can be done without being mired in Washington gridlock, because a president has all the authority he needs to roll back intrusive regulations, create energy jobs and make our nation more secure," he said.
But his proposal also acknowledges that creating the bulk of these jobs will not be so speedy. For instance, Marcellus shale development in Pennsylvania could create up to 250,000 jobs. But it would take until 2020 to hit that number. Same goes for the 500,000 jobs in the American West

It's my opinion that a return to old school industry is the wrong move to make.

Lowering our EPA standards so that industry can continue to polute is not worth the new jobs - not when others can be created.

We currently have the greatest college enrollment and greatest number of college graduates who are not working or are underemployed than we have ever had.

We could be putting all that education to work in fields that would allow the U.S. to continue to lead the world into a new era. If the wars we're currently involved in were ended we would also have a great number of troops returning to civilian life who will need employment.

The money we currently spend on military initiatives could be more wisely spend developing better technology for the industry we do have and will need in order tighten EPA standards. Once developed, that technology would be marketable to the rest of the world.

The same holds true for research and development of renewable energy sources. NEW industry would occur from both EPA restrictions and renewable energy. Those two fields alone would require a diversty of employable individual, the highly educated to the teen who wants summer emplyment.

The more we develop and rely on education the greater our potential for regaining the ability to lead the world into new and better directions.

We have the people-power and we have the education, what we don't have is a leadership with vision,what we do have is leadership that allows itself to continue to be controlled by the corporate capitalists.

Hard times mean that we have to pull together and work toward a future and that future cannot include bowing to the few who currently own the means of production.

If the governments (fed and state)invest in development of future ideals, the means of production will begin to transfer to the people - possibly in the form of cooperatives - which will help to balance wealth, power, and control between the corporate intersts and the people.

At this point, a return to older industry practices will result in greatly reduce income at all levels employment. With greatly reduced income consumerism will diminish as technology becomes unaffordable and food and shelter take priority. Those corporate capitalists will either be forced to sell for less with a reduced bottom line or they will continue to use their influence to change the laws that have been created to protect our human rights and slave labor will be the result if they are allowed to succeed.

We cannot go backwards in time,we must envision a better future and make plans by which to attain that vision.

Most of our current governments (fed and state) not only lack vision, but they are easily manipulated by those who own the means of production which our current government assemblies are convinced is the ony way back toward solvancy as a nation.

One of the first steps to be considered at this time should be major changes to the way we choose our political candidates and the way in which they are allowed to campaign. The voting system is key to regaining power that will more aptly serve the needs of the people (the 99%).

I deplore the fact that this current administration is making desicions based on the influence of the corporate sector and thowing money in that direction. I would like it if both the Republicans and the Democrats of this current administration never see eye to eye and continue to oppose each other to point of doing nothing and advancing no agenda short of addressing the shortfalls of our democratic process. The hope is that they cause no further harm by implementing industrial policies that will be more difficult to correct for a future administration of people who want to serve the interest of 99% above the interests of the major corporate capitalists.

I gotta agree with that.

The longer we stay in this situation,,as to not passing any bills that will give jobs and HOPE,,we shall have more people become victims of being booted out of their homes,,people turning to crime as a means to EAT,,and the World watching it all turn,,and WE THE PEOPLE shall no longer be seen as THE LEADER in this worlds economy

Wall Street stocks will start a declining roll,, fast and not ending,,,and we shall be BROKEN,,,and in a stalemate to pass ANY bills before we have a collapse of EVERYTHING we know as everyday living here..