A producer of classroom furniture for schoolchildren, Artco-Bell Corp. of Temple, Texas, has transferred production of steel and polypropylene goods from foreign to domestic sources. Although that has meant an increase in unit costs, eliminating transoceanic shipping has reduced total expenses by as much as 20 percent, said Stephen Sykes, vice president of marketing.
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Over the past eight years, he said, the cost to ship a container from China increased from $2,200 to more than $7,000. “For a while, [the Chinese] were buying steel better than we could buy steel,” Mr. Sykes said. “But as the scales began to balance as far as what they were purchasing in raw and what we were purchasing in raw, then the freight became the issue. The great equalizer is the boat ride back over.”
Increased wages in China have produced a new middle class, Mr. Sykes said. If Chinese wage gains remain high, he said, his company’s shift to domestic production could become a long-term change.
“I don’t know how it’s going to slip the other way,” he said. U.S. labor costs are still higher than Chinese, but other factors help make U.S. production more tempting, said Mr. Kazazian. “You’re never going to have $2-an-hour labor” in the United States, he said. “But with quality, time, efficiency, you close the gap.” Mr. Sykes said he is happy that his company has reduced foreign outsourcing from 12 percent to less than 4 percent of total output in the past year and a half.
“Not only does it make it feasible, but it sure makes us feel a heck of a lot better to do business in the United States,” he said. Mr. Kazazian said domestic manufacturing helps his company keep customers satisfied while encouraging patriotic pride. “Given the opportunity, American workers are better than anyplace else,” he said. “The pride that they have when they come in and produce a product is something missing in a lot of other places. Because at the end of the day, there’s a lot of advantages to being made in the USA.” American Desk School Furniture