What might be is a small but growing movement by companies to bring at least some of their manufacturing back to the United States. The strategy is called "reshoring."
Google Inc. made big news last year when they announced plans to build their new media streamer, Nexus Q, in the U.S. That's a rare thing in the world of electronics manufacturing. Other big companies that have opted to make some of their products at home, instead of overseas, include General Electric, Caterpillar Inc., Ford Motor Co. and Apple with one of its iMac lines.
It's happening here in Snohomish County, too.
Leviton Network Solutions, part of the larger company Leviton, just brought back production of its popular QuickPort datacom wall plates from a plant in China to its facility in the Canyon Park area of Bothell.
Leviton began in 1906 when a father and son began producing brass mantle tips for natural gas lamps in the New York borough of Manhattan. The company, named for its founders, is one of the largest privately held manufacturers of electrical wiring equipment in North America. Nine out of 10 homes in America have some kind of Leviton product in them.
There's a good chance the product now being made in Bothell is attached to the wall near your office desk. The datacom wall plate is a hub for all the various networking cables that snake from the back of computers and other electronics into the wall.
Moving production of the wall plate from China to Bothell fit neatly with Leviton's "green" philosophy: The move reduces waste and the machines here use cleaner energy sources and are more efficient, said Tim Lockard, a senior director of operations for Leviton Network Solutions. Company leaders like the idea of supporting American jobs, too.
The decision also just made good business sense, Lockard said. The company performed a cost-benefit analysis and executives found they could produce the wall plates in the U.S. without losing any competitive price advantage.
Not long ago, overseas production was a better deal for companies because of reduced labor costs, Lockard said. That's not necessarily true anymore, particularly compared to Chinese manufacturers.
Leviton found other benefits, too. The company could save money on shipping as well as get the product distributed faster by skipping the four-week float across the Pacific Ocean from China. The company also has tighter control over the quality of the product here.
If there's a sudden spike in demand, managers can react quickly to step up production.
Take this scenario, for instance: It used to be if Lockard needed to address some issue with the wall plate, he would have to wait until afternoon to make a call to China. The folks in China then might take another day or two to get back to him.
Now, that conversation is as simple as stepping from his office onto the factory floor.
Made in America does carry considerable weight with consumers. If a potential big-box retailer, for instance, has the choice to sell two similar products that both cost the same in their stores, they'd probably choose the one made in America, Lockard said. Some government contracts require it.
That said, Leviton still does some of its manufacturing overseas. That's where many of the company's customers purchase and use the product, Lockard said.
Countywide, what's happened at Leviton is not unique, said Troy McClelland, president and CEO of Economic Alliance Snohomish County.
Companies are considering "reshoring" for a host of reasons: the ability to get products to market faster, better customer service and response time, more control over product quality, savings on transportation and better cost control.
"I've seen it as a trend," McClelland said. "Some folks are deciding not to outsource, while at the same time, manufacturing is moving back from overseas."
No statistics are kept, but McClelland estimates that decisions by local companies to not send jobs overseas or move production back home translates into hundreds of jobs.
That's particularly important in Snohomish County, where more than 22 percent of the workforce is associated with manufacturing -- the highest concentration of manufacturing jobs in the state.
More from The Herald Business Journal: www.theheraldbusinessjournal.com
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