The manufacturing jobs that went offshore are not necessarily the same jobs coming home.
Master Lock Co., the unit of Fortune Brands Home & Security based in Milwaukee, Wisconsin (USA), attracted a great deal of attention— including a visit from US President Barack Obama—when it disclosed in 2012 that it had brought 100 jobs back to Milwaukee that it had previously offshored to China and Mexico.
The company said its decision was motivated by rising labor and logistics costs in Asia, labor shortages in China, and a stronger Chinese currency. Meanwhile, overall costs at Master Lock’s Milwaukee plant have not risen as much as they have in China, thanks in part to union concessions. Bringing the work home also gives the company greater control over its manufacturing, improving service to its customers.
But Master Lock isn’t hiring the same low-level assembly line workers it laid off when it moved jobs overseas. Instead it needs skilled laborers who can operate Master Lock’s lean- production facilities and oversee its sophisticated automated production systems, which have lowered costs and allowed higher-end manufacturing to remain in Wisconsin.
The company also is seeking to greatly improve its supply chain structure in North America, which requires sophisticated skill sets. What may limit further “backshoring” by Master Lock is that those skills are in short supply. “The skilled labor workforce is aging, and the number of young people exposed to skilled labor trades through education or family and friends is declining,” Master Lock Chief Executive John Heppner said.
To help fill the gap, Master Lock has established partnerships with local technical colleges to recruit workers and develop a manufacturing curriculum to train them. But Heppner said that the overall climate for US manufacturing needs to be further improved.
“It took a long time for us to erode the manufacturing base, and it’s going to take time to rejuvenate and revitalize it,” said Willy Shih, a professor at Harvard Business School. Although the new jobs will demand skills the old ones didn’t, Master Lock is proving it can be done.