Bringing back production from China
A lot of companies once offshored their production to countries with low wages like China. Today, there is a movement going against this offschoring. “Bring back production jobs and help the disabled on the labour market” says labourmarket specialist Martin Verduyn.
The Netherlands is aiming for a knowledge- driven economy. Therefore, chances for people searching for more simpler jobs are decreasing. These people, often with a disability (physical or mental) are becoming more and more disctinct from the labour market. They get isolated from society.
If the Dutch government give more attention to this problem, more jobs can be created for them, says Martin Verduyn, managing director of Callant. Callant is a company that searches for jobs for disabled people, often found in the production sector.
Offshoring is when a company offshores their production line to low labour cost countires overseas. This process won’t continue forever since wages are increasing rapidly in these countries says Martin. He suggests Reshoring: bringing back production to the Netherlands.
In the Netherlands, the government promised to create 125,000 jobs for people who are disabled in any way. This promise, which was made together with businesses, is a challenging one. The government does not have a clear plan how to live up to this promise. The problem: due to the knowledge intensive economy created by the government, simple work is scarce. Often, people who are disabled are only able to do simple work. This impasse is growing and growing because the level of education required for jobs is increasing. The disabled group gets less chances on the labour market and therefore gets isolated from society.
So, Martin says, we need to create more simpler jobs, especially for this neglected group of disabled people. Since China isn’t the cheap labour country it was 10 to 20 years ago, bringing back manufacturing jobs to the Netherlands is getting more and more interesting. Wages in China are rising 10to 20 percent per year, so it is only a matter of time before producing in the Netherlands will be cheaper again (taking into account wages, shipping costs, risks and cost of control).
In the United States, this is already the case because wages in the US are lower compared to the Netherlands. But also in the Netherlands the first examples are showing positive results. Take Capi Europe for example, they reshored their production and are now working with disabled people to make the same product at the same price, but with having all the advantages of producing in the Netherlands. VDL Groep, Dorel, Ferro-Fix, Philips and Look-o-Look are examples of successful reshoring cases in the Netherlands. Right now, Callant is working on a case with an organization in Rotterdam that is considering reshoring hundreds of jobs.
This reshoring movement is getting accelerated by the efforts of Martin Verduyn. “We must make reshoring a theme on the national political agenda. Next to this VNO NCW, the biggest network association of the Netherlands is contacted and are interested in spreading the word. Last November, we organized a seminar about the theme, which got a lot of attention. So we are doing everything we can to stimulate reshoring in the Netherlands”.
Americans take the lead in Reshoring
Martin Verduyn isn’t alone in his mission to bring back production from China. The Americans have taken the lead in this field a couple of years ago. This work is done By Harry Moser, founder of the Rehoring Initiative. He and Martin speak to each other on a regular basis.
Moser is a former manager with over 45 years of experience in various businesses. The reshoring Initiative has developed a method for calculating the consequences when bringing back production from the Far East. His organization advises companies in the process of reshoring.
In the US a movement called ´Made in the USA´ emerged. Big companies take the lead in this movement, mainly for image-purposes. Also, President Obama is an ambassador for bringing back production to the US. Retailgiant Wal mart has announced to buy goods made in America for the next ten years for the amount of 50 billion dollars. Apple wants t lead in this movement, mainly for image-purposes. Also, President Obama is an ambassador for bringing back production to the US. Retailgiant Wal mart has announced to buy goods made in America for the next ten years for the amount of 50 billion dollars. Apple wants to move their iMac production plant to Texas. General Electric has a new factory in Louisville, creating 1300 jobs. Motorola produces its mobile phone in Fort Worth, creating 2000 jobs.
According to the Reshoring Initiative, 1 out of 3 businesses in the US is considering bringing production back to the US.