'Made in USA' label beginning to pay off again

Monday, September 22, 2008

It seems a minor victory in light of recent developments in America's economy, but a recent Fortune magazine story is pointing out that domestic manufacturers are finding a way to hold their own against China.

They can thank the Chinese and other developing economies who have pushed up the price of oil along with demand, as well as the same labor pressures that have hurt U.S. competitiveness over the years.

As the story points out, cheap Chinese products aren't so cheap when you add in the price of transportation to U.S. markets, which has doubled in just two years.

And, Chinese manufacturers have had to pay 15 to 30 percent more each year just to attract the managers and technicians they need to keep their factories humming.

The magazine cited Thomasville Furniture and Exxel Outdoors, a maker of camping gear, who have brought production back to the United States because of the soaring cost to transport goods.

But even with high production costs, retailers can make more money on domestically produced products because of lower inventory requirements and faster turn-around times.

Regal Ware Inc., for instance, gave up on manufacturing its high-end cookware in China, because it gets delivery in 24 to 48 hours from its Wisconsin plants, rather than the 30 to 60 days it takes from China.

While retailers pay 8 to 10 percent more for U.S. made cookware, they can improve cash flow by 10 percent because of the quicker inventory turnover, according to the Fortune story.

None of this should be news to Southwest Nebraska, home to competitive, quality manufacturers such as Parker Hannifin, Valmont and others.

With transportation of finished products becoming more and more of an issue, our location in the center of the United States puts us in a prime position to respond.

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