ameri resources


Need an office in metro Detroit, Alabama or Toronto? Office suites, meeting rooms, virtual offices, network access




free downloads
USA: "10 misconceptions that can pave the road to distress for U.S. companies pursuing international

USA: "10 misconceptions that can pave the road to distress for U.S. companies pursuing international growth" report. 10-page report by Grant Thornton.

proceed to download
eJournals





back to index backAMERItalk September,  2016


Sorry China, the future of next-generation manufacturing is in the US

After three decades of dramatic growth, China’s manufacturing engine has largely stalled. With rising salaries, labor unrest, environmental devastation and intellectual property theft, China is no longer an attractive place for Western companies to move their manufacturing. Technology has also eliminated the labor cost advantage, so companies are looking for ways to bring their high-value manufacturing back to the United States and Europe.

China is well aware that it has lost its advantage, and its leaders want to use the same technologies that have leveled the playing field to give the country a new strategic edge. In May 2015, China launched a 10-year plan, called Made in China 2025, to modernize its factories with advanced manufacturing technologies, such as robotics, 3-D printing and the Industrial Internet. And then, in July 2015, it launched another national plan, called Internet Plus, to integrate mobile Internet, cloud computing, big data and the Internet of Things with modern manufacturing.”

China has made this a national priority and is making massive investments. Just one province, Guangdong, committed to spending $150 billion to equip its factories with industrial robots and create two centers dedicated to advanced automation. But no matter how much money it spends, China simply can’t win with next-generation manufacturing. It built its dominance in manufacturing by offering massive subsidies, cheap labor and lax regulations. With technologies such as robotics and 3-D printing, it has no edge.

After all, American robots work as hard as Chinese robots. And they also don’t complain or join labor unions. They all consume the same electricity and do exactly what they are told. It doesn’t make economic sense for American industry to ship raw materials and electronics components across the globe to have Chinese robots assemble them into finished goods that are then shipped back. That manufacturing could be done locally for almost the same cost. And with shipping eliminated, what once took weeks could be done in days and we could reduce pollution at the same time.

Most Chinese robots are also not made in China. An analysis by Dieter Ernst of the East-West Center showed that 75% of all robots used in China are purchased from foreign firms (some with assembly lines in China), and China remains heavily dependent on the import of core components from Japan. By Ernst’s count, there are 107 Chinese companies producing robots but many have low quality and safety and design standards. He anticipates that fewer than half of them will survive.

The bigger problem for China is its workforce. Even though China is graduating far more than 1 million engineers every year, the quality of their education is so poor that they are not employable in technical professions. This was documented by my research teams at Duke and Harvard. Western companies already have great difficulty in recruiting technical talent in China. This will get worse because advanced manufacturing requires management and communication skills and the ability to operate complex information-based factories. Ernst predicts that the increasing scarcity of specialized skills may be the Achilles’ heel of China’s push into advanced manufacturing and services.

Even if China solves its skills problem, builds its own high-quality industrial robots, and develops innovative industrial processes, it won’t be able to maintain its advantage for long. We could simply import the Chinese robots and copy its industrial innovations. I doubt that even Donald Trump’s immigration walls would keep the foreign robots out.

There is little doubt in my mind that over the next five to 10 years, manufacturing will return, en masse, to the United States. It will once again become a local industry. Yes, it won’t employ the numbers of workers that old-line manufacturing did, but advanced manufacturing will create hundreds of thousands of high-skilled, high-paying jobs. With its massive investments, China is only accelerating the demise of its export-oriented manufacturing industry.

Source: Quartz - GAI






previous page

go top
search our site


Loading

AMERItalk

Other articles from the same issue (September,  2016).

The Growing Role of Mexico in the North American Automotive Industry - Trends, Drivers and Forecasts
play read on

The Auto Industry’s Real Challenge
play read on

Autos: North America Build Reflects Stable Environment (download report)
play read on

Key facts about Canada's automotive industry
play read on

Federal Automated Vehicles Policy: 6 Key Issues for the Automotive Supply Chain
play read on

The Potential Effects of the 2017-2025 EPA/NHTSA GHG/Fuel Economy Mandates on the U.S. Economy
play read on

GM auto workers in Canada OK new contract
play read on

Sorry China, the future of next-generation manufacturing is in the US
play read on

NAFTA’s Impact on the U.S. Economy: What Are the Facts?
play read on

Manufacturers Challenge Overtime Rule
play read on

The Aggregate Economic Cost of New Labor Market Regulations
play read on

U.S. Companies Turn to German Training Model to Fill Jobs Gap
play read on

Don’t Blame A ‘Skills Gap’ For Lack Of Hiring In Manufacturing
play read on

Robots will eliminate 6% of all US jobs by 2021, report says
play read on

Ten Mistakes U.S. Businesses Make When Shipping To Canada
play read on

America’s Promise to Fund Manufacturing Education
play read on

Sourcing multi-year compensation, stock options, for foreign tax credit limitation
play read on

Canada: Are employers responsible for protecting their employees on social media? "Yes" according to a recent decision
play read on

Brexit: What now for US companies?
play read on

How to Bring Back Manufacturing Jobs
play read on

Ontario, Canada: Perception vs. Reality
play read on

Toronto is poised to become the next great producer of tech startups
play read on

Employment-at-Will Versus the Discharge-for-Just-Cause-Only Standard: A Critical Employment Law Distinction
play read on

EEOC Issues New Guidance on Retaliation
play read on

U.S.: Expatriate taxation - Don't be a cowboy!
play read on

Canada: Expected shorter wait-period for certain government benefits might affect employer plans
play read on

Bird's Eye View: Comparing Chinese Investment into North America and Europe
play read on

Labor Day Origins: Examining US And Canada Labor Laws
play read on

Notice 2016-52: Foreign tax credit related to foreign-initiated adjustments
play read on

How to move abroad: Practical advice for anxious Americans
play read on

U.S. Cities Slipping in Race for Global Competitiveness, According to PwC’s Cities of Opportunity 7
play read on


Our Free eJournals
GlobalAutoExperts

To visit GlobalAutoExperts Directory, click here.


©2008 GlobalAutoIndustry.com | HCI Group, Ltd.
101 West Big Beaver Road, Suite 1400 | Troy, MI 48084 USA
USA Tel: +1.248.687.1060 | USA Fax: +1.248.927.0347
Fax UK: +44.(0)845.127.4765 | Fax Europe: +31.20.524.1659 | Fax Asia: +852.3015.8120