More U.S. businesses abandon outsourcing overseas

[Newsjock]

Source: Knoxville News Sentinel

The story of Bailey Hydropower Private Limited might sound like that of many U.S. manufacturers, except it happened in India — one of the world's top destinations for offshore operations.

Bailey Hydropower was a 100,000-square-foot manufacturing plant in Chennai, India, producing hydraulic cylinders. Anticipating costs savings from an overseas operation, parent-company Bailey International built the plant in India in 2000 from the ground up to meet its own specifications and fitted it with the latest equipment.

... But in October 2009, Bailey sold the plant and started returning production to Knoxville, Tenn.

Bailey joined the emerging trend of re-shoring — companies bringing back overseas operations because the expected cost savings in less expensive countries didn't happen.

... Matt Murray, associate director of the University of Tennessee Center for Business and Economic Research, said re-shoring is a developing trend across the country.

Companies may have moved production overseas chasing the lure of cheap labor. "But there is more to doing business than finding the cheapest place for labor costs," Murray said.

Read more: http://seattletimes.nwsource.com/html/businesstechnology/2012712273_reshoring29.html