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

[WCGreen]

1. Shipping costs are going to sky rocket so that it will

be cheaper to produce stuff closer to the market...

[valerief]

2. Doesn't that hurt the oil industry and doesn't the oil industry control everything? nt

[Urban Prairie]

3. Water shortages as well...

Which gives me some hope for the future of the Great Lakes region.

Unless, of course, caused by our loss of political power or clout in DC, our abundance of freshwater becomes pipelined to the more arid and populous states in the US.

[WCGreen]

7. that would be horrible....

I love living here...

[dixiegrrrrl]

4. So this is sorta good, yes?

Jobs here?
but at what salary?
Wonder if that plant was unionized before it moved to India.

[eilen]

15. Doubt it is now, TN is a "Right to Work" state. nt

[onethatcares]

5. well,shitonashingle,

I guess if you want to visit your plant overseas, you don't want to step in sewerage flowing in the streets or over dead folks, or maybe you'd like to have really clean sheets, drinking water that won't get you sick, or sumpin.

You won't find all of that in Bangledesh, or Bangkok.

[dkf]

6. Interesting piece. Thanks!

"Customs taken for granted in the United States often don't apply overseas. For example, an American considers the bargaining over once an agreement is signed, but Bailey said there is a saying in Asia that "the negotiations begin after the contract is signed."

U.S. firms find that Asian companies will sign most any agreement because they expect to bargain for what they want later, he said.

"As Americans, we hold a lot of value to structure and written agreements," he said. "In their way of thinking, they are more interested in the relationship they have with you. They put a very high value on the relationship.""

[napi21]

8. I hope this is a fast rising trend! The only thing I can imagine

"could" remain cheaper to produce off shore is clothing because most of the not onlyy severely underpaid workers, but also made from inferior materials. It also doesn't weigh much & compacts well so shipping should be negligible on a per unit basis.

It never made sense to me how co's could actually product heavy products off shore and save any money primarily because of the shipping costs and the loss of hands on quality control.

[dkf]

11. Even cheap plastic toys got messed up with bad materials.

[dkf]

9. This article has so many great points. It beats me why these barriers weren't known and

Promoted in the American media.

[The Northerner]

10. K&R

[Turbineguy]

12. I've always wondered about the Boeing 787

off shoring. Close to $300 million tied up in two jets to transport parts plus operating costs. And the delays due to the non-US manufacturers. How many Americans were laid off to pay for that?

[Sen. Walter Sobchak]

14. That is the least of their problems

Airbus has been using enormous freighters for forty years to fly airplane parts around, the problems with the 787 are all management with a little shoddy workmanship in Seattle and elsewhere for good measure.

[northernlights]

13. the company I work for brought their offshore work home from India too

after there was a demonstration down the street, which turned into a riot. Half their workforce stood up and walked off the job to join the demonstration/riot. A significant portion of them never returned. :rofl::rofl::rofl:

The company then discovered that India has nukes. And is next door to Pakistan with nukes and al Qaeda. And India and Pakistan are enemies. They didn't know this before. Seriously. Typical beancounters just looked at the cheapest place to store their paper. :eyes:

And they moved their call center to its current location because they could get a highly educated labor force for way less money than, say NJ. And then discovered we responded to being treated like dirt by not giving a fuck. Near 50% turnover, quality plummeted, plus 2 more call centers came into the area, so they were spending a fortune recruiting and retraining. Then they figured it out suddenly they were nice as pie and gave us all 20% raises (still paid way less than in, say NJ). In the meantime they have a 10-year lease so they're kind of stuck with us. :D

A little at a time, we will take our country and our jobs back. They just need to learn that ol' lesson about grass and fences.

[Skittles]

16. non-stop complaints about Inda offshore shit

endless

[HEyHEY]

17. As in dealing with them on a business level? Or quality? Or you mean people on DU complaining?

[superconnected]

20. A company I've worked for moved our devs from India to Germany because of the problems with the

code. They almost sank us in the 6 months they were in India. I don't think they were listening to what we wanted though. The Germans worked out much better.

I should point out that the code started in America and was fine. It moved to India because it looked like cheaper devs.

[LiberalAndProud]

18. Perhaps this is the beginning of the end of a failed experiment.

We can hope so, anyway.

[raccoon]

19. ""But there is more to doing business than finding the cheapest place for labor costs," Murray said.

At least one person finally realizes this.

[Scurrilous]

21. Good news.

:kick: