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The article is an excellent read but I feel it is also important to address how the US plans to prime the system with technically qualified personnel to support this growth. The school systems are decadent, drop rates are high and the number of students opting for engineering studies is dropping at an alarming rate as well. To sustain manufacturing and to remain productive innovation will be key, the current way of raising productive by mere headcount reduction is only a short term gain.

  • - vsrambikal
  • 04, Feb 2012 02:33 PM

This post is the second part of the lower one. Regarding low productivity, it is usually a problem of middle-management, rather than blue collar workers. I would consider to send here a few semi-retired middle-managers, maybe somebody culled in this or some previous recessions. They should not have a high opportunity cost, they would love the low cost of living in these countries, and they might be more sensible than young high-fliers when dealing with simple but culturally sensitive problems. And if you really need sophisticated line workers, you could always go to Costarica, as Intel did, although the cost is higher. Finally, there is the problem of "cluster advantages". The current environment is a bit of a desert, in terms of suppliers and business services. Something is already developing, especially around textile and automotive components, but I would not consider anything too complex at the beginning. Maybe component production, rather than assembly. Massimo@fahorro.biz

  • - massimo
  • 01, Nov 2011 03:02 PM

I do not understand why Hal and his team are not considering seriously Central America. Full cost for a blue-collar is about 300$ per month, and we are 3 days away by ship and 3 hours by air. Linguistically and culturally it is not too difficult for an anglo to do business with a latino. Tariffs and legal security are taken care of by CAFTA. I see basically 4 problems: a) dismal corruption, b) violence and phisical security, c) low productivity, d) "cluster advantages". The first is a problem only if you want to sell locally, especially to state-linked institutions, but if you just manufacture to export to the US, it is not really relevant. The second is mostly linked to where you locate, not only choosing wisely between countries, but especially between regions in any specific country. There are places reasonably safe. I'll continue in the next posting. Massimo@fahorro.biz

  • - massimo
  • 01, Nov 2011 02:45 PM

A similar development can be seen in the European Apparel and Luxury Goods Sector, where many Premium Brands re-shift their manufacturing to Central/Eastern Europe whereas the low end of apparel sourcing moves into other geograpies. As the premium segment does not move volumes this trend is not reflected in export statistics but we see this shift in capacity booking situations already this year.

  • - hilger
  • 19, Oct 2011 11:10 AM