Two years ago, Calibur11 in Duluth, Minn., did what any other cash-strapped manufacturer looking to prune costs would do: Turned to China.
Now, the maker of game console cases is shifting its manufacturing operations back to the United States, discovering that doing business overseas was more trouble than it was worth: One supplier lost the molds for the its decorative shells while another demanded a bribe — all on top of quality problems.
“We just kind of got kicked right in the teeth dealing with China. It wasn’t any fun by any means. But it helped us learn to bring stuff back to the United States,” said Calibur11 owner Coy Christmas.
The hassle of operating abroad has triggered some companies to move production stateside, a move called “reshoring.” Coming home not only bolsters the speed, quality and simplicity of doing business, it’s also more economical than it used to be. Average wages in China have jumped 10 to 25 percent a year, hitting $4 to $6 an hour in some plants. Add in shipping and high fuel costs, and offshore manufacturing is no longer a bargain.
The return of production to America has been somewhat of a surprise. The government doesn’t track corporate reshoring efforts, but experts say they are hearing of more companies bringing work home.
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Source: Minneapolis Star Tribune