There really are several trends pushing US companies to consider moving at least some production back to US shores. Those include rising wages offshore, especially in China; pressures to shorten supply chains and become more responsive; and a new president who has vowed to rejuvenate American manufacturing might, and may change tax and other policies to encourage Made in USA. Companies are taking notice, and many are making the move back to the US - but the journey is often not be easy nor inexpensive.
For example, the Wall Street Journal recently told the story of a company called GAM Enterprises, an Illinois-based manufacturer of manufactuprecision mechanical components used in factory automation. The company started returning some manufacturing to the US three years ago, looking to reduce lead times. There were challenges. The move ultimately cost the small company almost $4 million and required technical and financial assistance from Illinois and the US Commerce Department's Manufacturing Extension Partnership. It also had huge troubles finding machinists who could operate new small-batch production technology. Even after resorting to a recruiter to fill the spots, the new hires required months of on-the-job training.
But despite all that, it is really happening at GAM. The company doubled its workforce to 30 employees and now makes more than half its components domestically, up from 11% four years ago. Reshoring is especially challenging for smaller manufacturers. They generally have limited funds, and maybe more importantly lack easy access to credit that most larger firms, especially public companies, enjoy. And many firms run into a lack of US suppliers for key components, as thousands of factories closed their doors over the past two decades, victims of the offshoring wave. As can be seen in the seen in the chart below, the number of US factories has declined from about 400,000 in 2001 to more like 340,000 in recent years, eliminating waves of potential suppliers in many sectors.