Are U.S. Manufacturers Coming Home or Not?
There's some evidence that pandemic supply-chain disruptions are inspiring companies to bring factory work back to America. But only some.
It’s fashionable for manufacturing CEOs to talk about “reshoring,” but is it actually happening?
Photographer: Luke Sharrett/Bloomberg
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Speculation has swirled this past year that supply-chain disruptions from the U.S.-China trade war and Covid-19 pandemic would inspire companies to bring manufacturing work back to North America. Is it actually happening, though? There’s some evidence that it is: Taiwan Semiconductor Manufacturing Co. in May unveiled plans for a $12 billion chip factory in Arizona and Samsung Electronics Co. is reportedly contemplating spending more than $10 billion to build a rival cutting-edge plant in Austin, Texas. Becton Dickinson & Co. is investing in additional factory capacity for syringes in Nebraska (with some help from the government). Tool-maker Stanley Black & Decker Inc. has had a “Built-in-the-USA” initiative for years that appears only to have accelerated in the wake of Trump’s myriad trade battles.
But that's more or less where the examples end. The industrial companies spending the most time talking about “reshoring” these days seem to be the factory-automation equipment makers, and they have a vested interest in making this trend a reality. That’s because most manufacturers would need to invest in robots and software to make a move to the U.S. cost-effective. And it may just be too early: Many industrial companies plan to increase their capital spending this year back to pre-pandemic levels and perhaps some of that money will find its way to new manufacturing lines. But at this point, it’s hard to tell if we’re looking at a paradigm shift or just some tinkering around the edges in select industries.