Why move production from the world's low-cost workshop back to a unionized U.S. factory where wages are six times higher than in China? Efficiency: The machine is about 30 times as fast as the Chinese factories the company had been buying from, more than making up for the difference in wages.
There is an element of irony here. The United States' sluggish economic recovery, coming at a time when emerging economies including China and India are enjoying brisk growth, is helping its manufacturers to close the cost gap on their foreign rivals.
China's inflation rate hit 5.5 percent in May, well ahead of the United States' 3.6 percent headline rate. With Chinese wages rising at 15 to 20 percent per year, the labor costs of manufacturing in the two countries could pull even by 2015, a Boston Consulting Group study predicted in May.
Rising oil prices, which drive up the cost of shipping goods by boat or plane, are also eating in to China's edge.
Automation also helps tilt the balance toward the United States. Bruce Crass, the Master Lock plant's general manager, estimated that his plant -- where the average worker oversees the operation of six high-speed machines -- produces 24,000 locks a day with about one-sixth the number of workers needed by the company's Chinese suppliers and rivals.
http://www.msnbc.msn.com/id/43569240...s-us_business/
There is an element of irony here. The United States' sluggish economic recovery, coming at a time when emerging economies including China and India are enjoying brisk growth, is helping its manufacturers to close the cost gap on their foreign rivals.
China's inflation rate hit 5.5 percent in May, well ahead of the United States' 3.6 percent headline rate. With Chinese wages rising at 15 to 20 percent per year, the labor costs of manufacturing in the two countries could pull even by 2015, a Boston Consulting Group study predicted in May.
Rising oil prices, which drive up the cost of shipping goods by boat or plane, are also eating in to China's edge.
Automation also helps tilt the balance toward the United States. Bruce Crass, the Master Lock plant's general manager, estimated that his plant -- where the average worker oversees the operation of six high-speed machines -- produces 24,000 locks a day with about one-sixth the number of workers needed by the company's Chinese suppliers and rivals.
http://www.msnbc.msn.com/id/43569240...s-us_business/
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