The serial entrepreneur, Ken Rosenblood, boss of obVus Solutions, was in China in 2019. This American boss wanted to produce ergonomic desks there that can be used sitting or standing. He had placed an order for two containers, capable of carrying 16,000 units. And then he heard about the Covid-19. Its supplier closed its doors… and reopened them in March. Mr. Rosenblood then hoped to get his order back. But it was rather “the beginning of the great odyssey”he laughs.
The manager, who likes to control everything, has followed the route of his containers on the ocean. One day, he was told that they were “in Shanghai leaving for Vietnam. Then it was Beijing and South Korea”. Then transport prices exploded. The cost of the container has increased almost tenfold, from 2,500 dollars before the crisis to 20,000 dollars. That of the work and the materials used has also increased.
Mr. Rosenblood said to himself that it would be wiser to produce in the United States, by automating production as much as possible to reduce the cost of labour, which is comparatively very expensive in the United States. He bought machines in China, converted a showroom into a factory in Rochester, New York and found suppliers… in short, he organized the production of the three hundred components of his office. He now employs fifteen people in his factory. The cost gap between Asia and the United States has narrowed to 10%. And it manufactures in three weeks what would have arrived from China six months later.
Big boost from Washington
This return of production to the United States was not easy, but avoids stock shortages. And allows us to serve American customers more quickly. A choice that obVus Solutions is not the only company to have made. A growing number of American and foreign bands are settling on Uncle Sam’s soil.
Scott Paul, president of the Alliance for American Manufacturing (“alliance for American production”), notes the rise in power of local projects, relying on federal financial aid. Laws on inflation reduction, clean energy and the semiconductor industry have launched long-term billionaire investments.
Here the First Solar group is settling in Alabama to produce solar energy in 2025. Seven hundred jobs are announced. There, Micron plants its flag in New York to manufacture semiconductors, while Intel chooses Ohio and the Taiwan Semiconductor Manufacturing Company builds its factory in Arizona. Meanwhile, Archer Aviation promises to manufacture its electric planes near Covington Airport in Georgia. And French Pernod Ricard is expanding its whiskey and vodka production to Fort Smith in Arkansas.
You have 51.64% of this article left to read. The following is for subscribers only.