10 Things America Lost To Overeas Manufacturers

Photo: brewbooks / flickr

Rising energy prices and increasing overseas labour costs have caused many manufacturing capabilities to return to the U.S.  Many are touting this as America’s manufacturing renaissance.However, “companies located in some places have advantages over others by virtue of their access to the appropriate set of workers, engineers, managerial talent, suppliers, and universities,” write Harvard Business School’s Gary Pisano and Willy Shih in their new book  Producing Prosperity: Why America Needs a Manufacturing Renaissance

In it, the authors identify 10 industries that the U.S. has lost or is at risk of completely losing.  These are the industries that’ll require more than just labour and shipping cost advantages to bring back.

“The rough and tumble of international competition means we should expect industries to come and go,” write the authors.

LCDs

'All of the flat-panel display factories in the world are located in Korea, Taiwan, Japan, and China.'

Source: Harvard Business School

Ultra-heavy industrial sized casts and casings

'Pressure forging is a way to make high-strength large structures, such as for nuclear reactors or
steam generators. The outer vessel of a reactor can weigh over 500 tons and is typically made of
seven very large forgings...This means the steel mill needs to produce ingots that are 500 to 600 tons each. US mills stopped producing these very large ingots, and US industry gave up on large forgings 40 years ago. Only Japan, Korea, China, France, and Russia produce these today.'

Source: Harvard Business School

Metalworking machines

'There was a 43 per cent decline in overall metalworking machine shipments from 1990 to 2009, a 40 per cent decline in metal cutting, a 62 per cent decline in grinding and polishing machines, a 43 per cent decline in lathes, a 77 per cent decline in station type machines, and a 51 per cent decline in the overall metal forming category.'

Source: Harvard Business School

Industrial magnets

'Of the 10 to twelve suppliers of permanent magnets, eight to 10 are in China, none in the United States.'

Source: Harvard Business School

Rare earth production

'The refining of rare-earth elements left the United States with the shutdown of Molycorp's Mountain Pass mine and the relocation of production to China.'

Source: Harvard Business School

Rechargeable batteries

'The market is dominated mainly by South Korean, Japanese, and Chinese manufacturers.'

Source: Harvard Business School

LED displays and lights

'Of the top 10 worldwide producers of LEDs in the first quarter of 2010, only one was in the United States--Cree, ranked fifth with a 6.7 per cent global market share. Growth in China, Taiwan, and Korea was accelerating.'

Source: Harvard Business School

Semiconductors

'70 per cent of the world's semiconductor foundry capacity is in Taiwan.'

Source: Harvard Business School

Precision glass

'Precision glass manufacture is dominated by Japan, with a rapidly emerging capability in China. Some capabilities still exist in Germany.'

Source: Harvard Business School

fibre optic components

'As a key part of the electronics supply chain for communications devices, most of the manufacturing of these critical components has been localised to China.'

Source: Harvard Business School

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