Issue link: https://iconnect007.uberflip.com/i/1538100
AUGUST 2025 I SMT007 MAGAZINE 19 What actions should America take to reshore more successfully? Moser: There's a takeaway section of the report that makes it clear that the reason for so much offshor- ing was that the cost of doing things in the United States is dramatically higher than almost everywhere else in the world. Manufacturing costs in the U.S. are, on average, 50% higher than in China. For much of the developed countries, the U.S. is 10–20% higher. That's why companies went offshore. As a result, Chi- nese manufacturing built up, and we shrank. Now there are components you can only get elsewhere, which gives buyers another reason to offshore. At the root, it's a cost problem. So, what should the country do? We can do one of two things. First, we can overcome the cost problem. Either we cut the dollar by, say, 20%, or have tariffs. Lowering the dollar makes sense; there are var- ious mechanisms for reducing its value. Lowering the dollar has an advantage relative to tariffs. Another way is tariffs, which will reduce imports. But they'll also reduce exports because other countries will impose retaliatory tariffs. In con- trast, getting the dollar down will help create fewer imports and more exports. I favor a lower dollar and investment in programs to build a skilled workforce. We need a change in the national philosophy to provide a good career for everyone and to push apprenticeship systems. There would be fewer college loans, especially for fields that are already oversupplied with peo- ple. Instead, have loans to help the apprentice live a good life while doing the apprenticeship, and reducing some of the expense to the employer. In the reports, there are three or four questions diving into this topic. We think some combination of those programs could flip the script from hav- ing 5% of U.S. young people in apprenticeships to something closer to the 60% we see in Germany and Switzerland. If we could just get our num- ber up to 20–30%, that would be a huge shift. We would have the workforce that we need. To increase production enough to balance the trade deficit, the U.S. needs to increase production by about 40%, which means it needs another four or five million workers. Those are huge numbers, and you can't achieve that with robots next year. Maybe 10 or 20 years from now, but not next year. The U.S. needs quantity of people to get the quantity of output. Then the U.S. needs the quality of people to get the competitiveness, and the pro- ductivity to help level the playing field. Kathy, as a recruiter, does a move toward apprenticeships and more trade skill-based train- ing make things easier for you to do your job? Nunnally: It makes it easier for my clients. Most of our placements are at the leadership level and above. I've been hearing for years about the short- age of skill sets, especially when we work with engineered products, manufacturers, and their suppliers. I told Harry, "I'm the daughter of an academic and yet I wholeheartedly stand by what you are proposing." We need a coordinated policy between the federal and state governments. I see little things happening: companies taking things into their own hands, with interesting strategies to attract young people into the industry. I also see some developing skills training partnerships with technical colleges. How do you envision the information in this report helping contract manufacturers and OEMs understand their marketplace or their role in it? Nunnally: I'd emphasize the total cost of owner- ship approach to costing. Harry's been coaching and educating OEMs and contract manufactur- ers on this; it could really help them be competitive. I also advocate going beyond that. Con- tract manufactur- ers can be the solutions pro- vider to the OEMs, not just the component part provider. One of the top answers for why OEMs reshore is having engineering close to manufacturing to encourage collaboration and innovation. The con- tract manufacturers can be that collaborative partner. Kathy Nunnally