Made in America: A New Trend of Manufacturing Returning to US
Danville, VA - Companies sending their manufacturing jobs overseas is an unfortunate reality that is leaving people without jobs. But American companies are now saying "no thanks" to foreign labor, leading to a new "Made in America" wave.
As many companies are making the leap back home, they supply Americans with jobs, often well-paid ones. But experts say the way of making the products may look a little different. In fact, even the most simple products are often created by high-tech production and an experienced workforce.
Going from lumber into chair and every step in between, a southside furniture factory defines manufacturing. But the plant isn't located in China or India, it is right here in Virginia.
"They are making an investment here. So when it lasts longer, gets there on time, and it is exactly what they want...it's much easier for them to see that," said Greg Terrill, president of Frank Chervan Inc.
Over the past two decades, many companies moved overseas. American workers were left without jobs. Struggling to make ends meet.
But ask Director of Economic Development at Virginia Tech John Provo about the trend, and you get a different opinion.
"Companies make decisions about where they think they can make the most money doing what they do," said Provo.
For years, Provo says manufacturers thought the best job potential for their companies were overseas.
"There were certain calculations about labor, there were certain calculations about transportation costs that looked a certain way at the time. But increasingly, companies are finding that the calculations are a little bit more complicated," said Provo.
According to Boston Consulting Group, a decade ago, a factory worker in China made just 58 cents an hour. Today, the wages are closer to $3 an hour. Predictions add that wages could go even higher, to $6 by 2015.
Some analysts even say that American workers, combined with American technology, makes the American worker more than three times more productive than the average Chinese worker.
"China is growing in a way that particularly in parts of China it's a lot more expensive to hire folks, same thing in India," said Provo.
Provo also says the quality of products made here in the US often supersedes expenses.
"I think quality for cost is still easily the biggest one" said Provo.
It's that quality that has kept some companies from leaving in the first place. Frank Chervan, Inc. makes high-end chairs in mass quantities in Roanoke.
"A lot of times we will deliver hundreds of chairs that on Monday morning were lumber and on Friday we are making shipments to banks and hotels all around the country," said Terrill.
Industry executives say that is something they couldn't do from a factory overseas.
"There was always I think the temptation and a lot of our customers went in that direction, we even had a lot of our customers that pushed us to import," said Terrill.
But as Terrill explains, they held strong, standing by a feeling to keep their production in the United States.
"I think it's been a long hard particularly 10 years sticking with it but now is the time when it pays off for us and the opportunities for our people and our company," said Terrill.
Terrill says of their 80 years in business, this October was their best month yet, and their workforce of 160 employees continues to expand.
"I think this is a fun spot to be in. Those of us who have made the domestic investment, this is going to be the chapter we succeed," said Terrill.
And as for the future of "Made in America," many say it looks bright.
"I think we definitely are having what some folks are calling a manufacturing moment. Where we found niches that work for us, that make sense for us, that our advantages are paying off," said Provo.
As Terrill explains, their manufacturing in the US is felt beyond their factory doors. Many think the local economy depends on jobs like the ones at Chervan in order for local businesses to expand. And so this new wave of moving back is something the American economy really needs.