Is Manufacturing Coming Back?

August 10, 2009 in the New York Times. General Electric has committed to building not 1 but 2 new U.S. factories.

Jerry Carney is quoted as saying “We haven’t produced a new product here (in Louisville KY) since the 1950’s. This new product happened to a hybrid electric water heater.

So how did this come about? Labor gave some major concessions to GE in the form of two-=tiered wage structure, where new GE workers would ear 37% less that most current workers and in return the GE pant in Louisville will recapture work now being done in Chine and will employ 420 people and in addition to that the firm is also building a battery plant in Schenectady, NY.


As noted in the San Francisco Business Times, “companies are reshoring manufacturing . . . for reasons that vary as widely as the types of goods returning to American factory floors.” This article goes on to explain why CP Lab Safety recently shifted production of more than 80 of its products to a California contact manufacture, after more than 7 years of using a contract manufacturer in China. Yes you can manufacture in the US at a cost comparable to China!

I have to take my hat off to both GE for reshoring the jobs and the Union for accepting a two year wage freeze in addition to the lower wage tier for new employees. Also it should be noted that Jeffrey Immelt, GE chief executive officer has NOT taken a pay race and in fast his take-home pay dropped by 64% in 2008 vs. 2007.

Even as the recession ends feed your factories with new hard won business not just business as usual.

Designers, engineers, reashers and developers all are up for the challenge. Are you?

Larson note: Is this the time both service and manufacturing companies go to war? Or will we just sit back and let a handful of companies like GE do it all? For us at Larson we are committed to the US and use US workers. Period! My company does battle on a daily basis with companies out of India, Philippines and even Jordan. I intend to win not just the battle but the war. Who’s with me?

Howard Larson
Larson & Associates
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Making good businesses great and great businesses even better
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