International Law

Alabama Company Cuts Production in China, Brings Work Back Home

In the past six months, production in China has, for some foreign manufacturers, become too expensive. At present, I don't hear this as any more than a minor rumbling, but it could be, possibly, a precursor to a trend.

A drop in the dollar, rising transportation and labor costs, and the added difficulties inherent in overseas production have convinced some to pull production out of China and bring it back home. Remember our post on companies shifting production capacity back home to Germany from China?

Read this story on an Alabama sleeping bag manufacturer which has reduced production at its joint venture in Shanghai and now produces more of its products in the US than anywhere else.

To be fair, production has been shifted to the US only on this one product, but note the skeptical attitude towards the value of production in China:

While sleeping bags are three-fourths of its business, Exxel also makes tents and ski vests that are still cheaper to produce in China. Even so, ``every product we make is up for study now,'' {founder and CEO Kazazian} said.

In other words, something has changed.

Full post as published by Asia Business Intelligence on October 14, 2008 (boomark / email).