Globalization & Automation

US corporations must compete to survive and grow. Therefore, in a global economy, they look to serve specific markets utilizing lowest landed cost (LLC) models that facilitate competitive cost structures.

If the US is the LLC location, then the jobs may move back to the US. However, typically, US corporations, in an attempt to avoid the US China tariffs, have looked to move the work to lower cost environments such as Mexico, Vietnam, or other low cost countries rather than back to the US unless there is another benefit that outweighs the cost advantage (ie. Specific customer requirements).

As a consequence, to date, the US China tariffs are ineffectual in bringing back manufacturing jobs to the US.

AUTOMATION

US corporations like to be able to move work around the world easily to support their LLC models. It’s not easy to match Chinese worker discipline, focus, and cost. As a consequence, automation provides for predictable and repeatable work output and may create the equalizer if the returns and payback support the investment.

China based manufacturing organizations have been systemically focused on implementing automation in order to compete and attempt to maintain their demand/ production levels. The cost of their automation (engineering and build) is significantly lower than other geographies and facilitates their competitive advantage.

Therefore, the future of American manufacturing may be tied to the ability of US corporations to engineer and source flexible automation outside of the US and to be able to move it to the US for manufacturing and fulfillment.

As a consequence, American workers need to become educated to support, run, and improve automated processes in order to compete.

The US government could help drive this effort by supporting US worker education and certification to support US corporations and their automated manufacturing necessary to support their US market.