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Because Oil Prices are High Will Manufacturing Return to the US?

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I really find this ironic.

Rising costs are starting to eat into what American managers fearfully call the China Price, the once-formidable 40% to 50% cost advantage enjoyed by Chinese manufacturers-and demanded by customers. “Fuel prices just shot up so fast that everyone was caught flat-footed,” says Allen J. Delattre, who heads Accenture’s (ACN) global supply chain practice. “Now logistics costs are an overarching priority.” Richard Sinkin, a San Diego consultant who scouts manufacturing sites in the U.S., Mexico, and China for multinationals, also senses a major strategic shift. “A lot of clients who were thinking about going to China are now saying, Not at these prices,’” says Sinkin. “The high cost of fuel is going to radically transform the way people look at the geography of their manufacturing.”

Well I guess the rise in oil prices has a silver lining in an otherwise dark cloud. However, if manufacturing were to begin to return to American shores, don’t think that corporations won’t still be looking to cut costs at the expense of workers anyway. I think too many of them got used to what they were able to get away with in China.

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Written by Jason Gooljar

June 20th, 2008 at 5:38 pm

Posted in Economy

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