Serial entrepreneur, Ken Rosenblood, head of obVus Solutions, was in China in 2019. This American boss wanted to produce ergonomic desks there that could be used while sitting or standing. He had ordered two containers, capable of carrying 16,000 units. And then he heard about the Covid-19. His supplier closed its doors… and reopened it in March. Mr. Rosenblood therefore hoped to get his order back. But he was quite “The Beginning of the Great Odyssey”he laughs.
The manager, who likes to check everything, has been following the course of his containers on the ocean. One day he was told they were “in Shanghai leaving for Vietnam. Then it was Beijing and South Korea”. Then transport prices exploded. The cost of the container has almost tenfold, from $2,500 before the crisis to $20,000. The amount of work and materials used has also increased.
Mr. Rosenblood told himself that it would be wiser to produce in the United States, automating production as much as possible to reduce the cost of labor, which is relatively very expensive in the United States. He bought machines in China, turned 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. Now he employs fifteen people in his factory. The cost gap between Asia and the US has narrowed to 10%. And he produces in three weeks what would arrive from China six months later.
Big push from Washington
This return of production to the United States was not easy, but it avoided inventory shortages. And it allows us to serve American customers faster. A choice that obVus Solutions is not the only company to have made. An increasing number of American and foreign bands are settling on Uncle Sam’s soil.
Scott Paul, president of the Alliance for American Manufacturing, notes the growing power of local projects, relying on federal financial aid. Inflation-reducing laws, clean energy, and the semiconductor industry have launched long-term billion-dollar investments.
Here the First Solar group is setting up in Alabama to produce solar energy in 2025. Seven hundred jobs are announced. There, Micron plants its flag in New York to produce semiconductors, while Intel chooses Ohio and the Taiwan Semiconductor Manufacturing Company builds its factory in Arizona. Meanwhile, Archer Aviation promises to produce its electric planes near Covington Airport in Georgia. And Frenchman Pernod Ricard is expanding its whiskey and vodka production in Fort Smith, Arkansas.
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