The Manufacturing Executive
The Manufacturing Executive

Episode · 4 months ago

Bring 5 Million Manufacturing Jobs Back to the U.S. w/ Harry Moser

ABOUT THIS EPISODE

If we want to balance America's $800 billion trade deficit, we need to bring manufacturing jobs back to the U.S. — 5 million manufacturing jobs to be exact.

The ancillary benefits would be enormous. We'd reduce CO2 emissions 40-50%, slash the budget deficit, improve unemployment, and bolster national defense.

What's stopping us?

In this episode of The Manufacturing Executive, Harry Moser, Founder of the Reshoring Initiative, talks about his mission to bring 5 million manufacturing jobs back to the U.S.

Here's what Harry and I discussed:

  1. Why the U.S. needs its manufacturing jobs back
  2. What Harry's Total Cost of Ownership calculator can tell executives about the benefits of reshoring
  3. How reshoring can help eliminate the trade deficit

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We calculate that every one percentreduction in our selling price relative to the competition will bring back ahundred thousand manufacturing jobs. Welcome to the manufacturing executivepodcast, where we explore the strategies and experiences that aredriving mid size manufacturers forward here. You'll discover new insights frompassionate manufacturing leaders who have compelling stories to share abouttheir successes and struggles and you'll learn from B to B sales andmarketing experts about how to apply actionable business developmentstrategies inside your business. Let's get into the show, welcome to another episode of theManufacturing Executive Podcast, I'm Joe Sullivan your host and a Co founderof the Industrial Marketing Agency Gorilla. Seventy six. When you hear theword reasuring what comes to mind, most people will immediately think about thejobs that will be created domestically, but the trickle down impact of thosejobs goes much deeper, both for our economy as a whole and for theindividual companies that make it tick. In today's conversation will explorethis topic of re shoring with someone who's arguably had more influence thananyone in recent years. In the effort to bring the manufacturing back home,Harry Moser is founder of the re shoring initiative, an organizationwhose mission is to bring five million manufacturing jobs back to the US.Previously Harry served as president of high end machine tool, supplier G, F,age, Charmi, starting as president in one thousand nine hundred and eightyfive and retiring in two thousand and ten is chairman. meredits largely dueto the success of the resorting initiative Harry was inducted into theIndustry Week Manufacturing Hall of fame in two thousand and ten. He wasnamed e quality magazines, two thousand and twelve quality professional of theyear as well as Fab shop magazines manufacturing person of the year Harryparticipated actively in President Obama's two thousand and twelve inSourcing Forum at the White House on the economist debate and out sourcingand off shoring received the Manufacturing Leadership Councils,industry, Advocacy Award in two thousand and fourteen and the maid inAmerica. Two Thousand and nineteen re Shoring Award Harry was recognized bySue Helper. Then Commerce, department, Chief Economist, as the driving forcein founding the re shoring trend and named to the Commerce Department,Investment Advisory Council in August, two thousand and Nineteen Harry isfrequently quoted in The Wall Street Journal New York Times, ForbesFinancial Times, New Yorker, Washington, Post and USA Today and seen on FoxBusiness Market Watch, PRI and PR manufacturing talk, radio and othernational TV and radio programs. Harry graduated, with a B S in mechanicalengineering and an MS in engineering from Mit and followed that up with anMBA from the University of Chicago Harry. That resume is no joke. Welcometo the show! Thank you, Jos, an honor to be here well now that we, hopefullywe have some of enough time left for the interviewer after I have readthrough all your achievements, it's it's pretty pretty impressive and I'mexcited to get into this and unpack some of what stored up there in yourbrain from all these experiences so well Harry. I was wondering if youcould just kick things off by telling us a little bit more about what exactlythe Resorte is and why you founded it. Well, as you mentioned, or our missionis to bring five million manufacturing jobs to the US, and we pick fivemillion because that's the number of jobs it would take to balance the tradedeficit to make import equal to exports five million, not a forty percentincrease in manufacturing, and we do that by a combination of documentingthe trend so that people can see how...

...well it has done. For example, when westarted in two twenda ten in that year, six sand jobs were announced comingback and in two thousand and seventeen a hundred ninety thousand wereannounced going back, so it going up thirty times partially because of us,but not entirely, and and then it fell off somewhat after that. So we don't.We document the trend, because the best way to get a company see to decide tore, evaluate its off shoring is to see the company's ANB heavery sured asuccessful in involve work for them. Maybe maybe we should try it so wedocument, and then we promote being with you today- is promotion I'll. DoSeventy Radi these this year, podcast Revenau Etcetera. You know we write anarticle a week. We know we're VI very visible, we eat make we showing visibleand then we enable so we have tools to help companies make the decision toreach oure on their own or to convince their customers to reassure and buyfrom them instead of importing. So we're sort of a think tank and an avehappy case group, but we're also out in the trench, is actually getting it done.It's fantastic Harry from your perspective. Why is it so important tobring manufacturing jobs back to the US? I think other people have a similarperspective. I hope I hope they do. I think they increasingly do but again toto bring the five million jobs back to balance a trade deficit, a fortypercent increase in manufacturing. Imagine all all the companies listening.Imagine if your business was forty percent better. I and, of course yourhas to be enough workers. You know you equipment and so to forty per cent morefor everybody would be wonderful self sufficiency for the country. We we'vebeen through this issue with Ovid, or we don't make the mass in the gowns andthe gloves and the ventilators and the PENISOLA. We decided that doesn't makeany sense for for the worlds let leading country and- and we see thesame issues in rare of minerals- the defense, a lot of defense material. Nowin clothing, we, ninety seven percent of our clothing- is imported five G, all kinds of stuff that weredependent on imports, income of quality. If you asked the youth, he say what'simportant, a lot of them were say: Income on quality ther's been on farthat some people don't make enough to live one and the best solution for themwould be a good manufacturing job with career opportunity, career advancement,opportunities of prenatural, et Cetera, the environment. Most everybody caresabout the environment when you shift manufacturing back to the US, dependingon the product, the co two emissions are cut by twenty five percent- thirty percent-something like that, and it's not bad defense preparedness. If, if we want tobe able to protect our country and we sort of protect a lot of the world, youneed to be able to make the material for that budget deficits we've seen now.We've got multi trillion dollar budget deficits going on almost indefinitelyand by bringing manufacturing back having those five million jobs in themultiplier effect jobs. The companies have been paying taxes of people, ll bepaying taxes, less unemployment and and some and safety net expenditures,budget ephesus come down t the US will be more financially stable. So Nice,emotional reasons, nice practical economic reasons. It's great a lot Imean so many great things there. It's it's a simplistic question. I guessthat I asked You, but probably things that people aren't necessarily you know,thinking about in their totality of how many benefits are bringing these jobsback home of her. I know you developed a really nice TC tool or which is shortfor total cost of ownership. Of course,...

...a calculator to compare off shoring todomestic manufacturing options, and I was wondering if you could just talkabout the concept of to in this context and what impact that tool has had formanufacturers who have put it to use, but to is essentially the concept of looking at all of the relevant costsand risks like when you're by a refrigerator, but one might be cheaper.But if it uses three times of much electricity over a ten year life, it'snot as good a deal. So so it's actually we're saying the same. Nayan, send kindof logic for when you're buying a testing or a machine part or a completeproduct of some kind of off shore versus domestic to comfort. Too manycompanies. We survey says about sixty six. O percent. Look only at the waytrade only if, through the EX works or FOB price, leaving the factorycomparing man and that's often twenty three percent less of sure, especiallyChina. India places like that. But when you add in the duty and the freight andthe carrying cost of inventory, the the travel cost, the intellectual propertyrisk the benefit of having engineering near manufacturing, able to discussthings in the same language in the same time zone to get together physicallyand work on the problem. When you reduce the chance of stocking out ofnot having the product when the customer wants to buy it so heading inabout twenty nine different factors like that, on top of the of the price you get to a different, often get to adifferent conclusion and other examples you have of that, you could sit of justyou know things you've heard from from manufacturing people of how impact thisis done for them to put this tool to use sure a lot of people talk aboutgeneralities that they've done out. I heard somebody from GENERAC chiefoperating officer talking about. I don't know if he's using hard tool, butjust talked about using to and bring some work back. So the the case wherewe were involved. The one one case where we were involved was Mary, Morey,Corp Outside of Chicago they're, a large ems company. They populatecircuit boards make some devices US assemblies using those circuit boardsand the the VP sales came to me. Maybe four years ago he said Harry we'regoing to lose this big water. Can you help us? I said? What's going on, hesaid Chi, a Chinese competitor offer a war price customers probably going todo it. So I help Tony do the TSO calculation he took it to the customerand- and he did it from the customers perspective- showed the customer that,even though Maurice Price was higher, its total cost to the customer would belower, and I got a letter from from Tony saying that was the key to winninga sixty that six zero million dollar order. You know so for the the peopleout there are that are listening if you're for sometimes competing withimports, or if you, if you know, if you have customers that you deal with theircompanies you deal with, and you know, they're buying off shore and you're,not getting a chance, then using CCOTT to show them the reality to. Let them see that ten,twenty thirty percent might not be enough price. Difference offshore couldcome to our website the TC maters free to use you you sign up, you sign in email and password. We don't even askyou your name on it, your company name, you know so because you want to protectyour information, but it's there to use both for buying we save or buyingsmarter and for selling smarter yeah. It's a really great tool. I have aclient of mine who was actually recently on the show who got into thisconcept of he's using Tso in the sales process. But you know when you havenumbers like this, that can put you know you can put all this intocontext. It just makes it makes it so...

...much more clear. You know at what youneed to do or what your options are. So I love that Yoo've got a tool andencourage anybody listening here to go. Go check that out. If you're kind ofyou know thinking about these, the cost differences here between off shoringand doing it domestically so doing it orbuying it. You know ISS both for making the decision about. What do I make inmy factory here versus my factory there, and what do I buy from somebody thereversus by from somebody here so Harry? I am no economist, and this is not notmy area of expertise by any means, but you know you kind of touch briefly. Afew minutes ago on, you know the trade deficit issue that that were facinghere and I'm just kind of curious. If you can dive a little deeper into thatone and talk about the role that reshoeing can play and alleviating thissort of compounding issue, we've got okay. I think it's important to firstunderstand why we have a trade deficit, because you can't fix something untilyou know know what it is and the Te trate deficit is the difference betweenour imports, an our export. So for the last several years, we've importedeight hundred or nine hundred billion, that's with a big billion dollars morethan we've export and and the overwhelming ly obvious reasonwhy that happens is cost or price differential that the US manufacturingcost. You know the the FO. The rexow price is too often not all the time,but too often twenty percent fifteen twenty percent higher than WesternEurope and forty percent higher than China, and maybe even more for Vietnam,Cambodia and so on, so so that and that to that price, that's what Ri peopledidn't go by from China to put a maiden China label on n they wend and andtwenty years froest years ago. You can get everything here in the US youwanted and therefore they didn't go because you couldn't get it here. Theywent for the price and the that's. The new question is well why why is theresuch a price? Your French, all a couple of things, I think, probablymost simplest. Is the US doll us all, almost every economist degrees, thistwenty to thirty percent higher than it should you know, why is it higher wherethe reserve currency individuals, companies, countries thathave excess assets at x, cash they put in dollars in the United States, whichsay by dollar forces up the dollar makes a dot you s a great place to be abank, but not such a good place to have a factory in so so, in effect, if weweren't the reserve currency and that and that premium came out of the dollaror prices you know relative to the other countries would come down byfifteen percent. Twenty percent on something like that. So it's asubstantial amount, you at least half of let's say half to twothirds of what it would take to balance the trade deficit. So so manyeconomists would agree, obviously get the dollar down andthere's there's several mechanisms for doing that, probably all acceptable with the WorldTrade Organization. So so we are shotes thing would be the skilled work force.Now Germany has wages as high as ours, and yet they have a huge trade surplusin it. And it's clear to me that much of that is due to the fact thatthey, sixty percent of their kids go into apprenticeships and- and you inthe US may be four percent, and here they're, mostly in construction, almostnone in manufacturing. So if we, if we had really smart kids, who who herewould obviously go on to university, but instead of were becoming a toolmakers? Well, there's precision, machinists chemical technicians,whatever they'd be better off, because...

...they'd be making more money and thecountry would do better off because we'd have the skills and the capacityto is all to both to be competitive and to produce the additional output. That's results from beingcompetitive, so dollar a coerce, get the skill of war force. You need. Youneed much better basic education, we're pretty far down the list, Chinesenumber one and reading math and science, and we're way down less so they'reworking for a third or fourth as much as we are and they're much bettereducated, better trained than we are know how you going to win that race,not not very likely corporate tact rates, we're way too high, now they'reabout average, and yet the government wants to raise them. That's not a goodidea regulations. We should have a value added tax. Of that typical fatrates are about. Fifteen percent, so hit prices can go up, so you have toadjust other taxes accordingly to be equitable, but the net result is whenanother country ships up stuff to us today. We do not apply a bad tax to itand they get a company gets a credit over there for they ship us. When weshift things to them. Our company does not get a credit,because we don't have a bad tax, but the that tax gets charged when it goesinto their country, so huge differential just due to not having aVAT. Our health care costs or fifty percenthigher than most com countries. Germany places like that. If you got our healthcare crossed down to Germany, where they is just as good health care, thenthat premium that extra medical cost would come out of our benefits whichreduce our labor costs, which your make manufacturing. You know a couple ofpoints more competitive and just to put that in perspective, we calculate thatevery one percent reduction in our selling price relative to thecompetition will bring back a hundred thousand manufacturing jobs. So when wetalk about well, that's only a percent, but it's a hundred thousand jobs onaverage, that's l, that's if you're one of those hunted thousand, you say yeah!That's that's important and I think just that, the for decades there hasnot been a concern about the trade devin. If that's what the market says,it should work out to with them, let it be, and that ud be fine if the dollarwere determined by the trade deficit, how it used to be, but now asdetermined by these trillions of dollars slashing around into the US. So what the government can do, Hey? Whatactionable advice? Can you give o MS or other manufacturers along the supplychain about how to start exploring re shoring options? Yeah, I think what youjust said. That is important. If I'm at a company say Harry whatshould we do? I don't say I don't found the table and say bring it all back.You know I I don't even say free back twenty percent of it. I say reevaluatednow, look! Look at what you're importing now now we're talking aboutthe buying decision. Look at what you're importing now and look for theparts or the products that are causing pain where there's late deliveries toomuch inventory quality issues, the intellectual property risk, a lot oftravel people go into the supplier to work out issues. All the people stayingup till midnight to make telephone calls because of the time ondifferences e and any of these kinds of issues identify a few of those partsbecause in each each of those cases, there's going to be a champion in thecompany, the guy is doing the travel and doesn't want to travel the themidnight telephone caller. You know the Service Department that has theWarrante experience they'll be a champion there to help provide theinformation to quantify what those risks and losses have been so that whenyou get to doing the actual calculation,...

...it's not poor, Harry they're trying tofill out the form you have people inside who are credible and haveexperienced the paint. So look look for pain and and and tell them, I'm nothere to help. You Re sure, I'm here to eliminate pain, I'm here to make lifebetter in the company kind of, and so do that pick three four parts and andhopefully one or two of them will turn out favorable and and implement thoseand then and then look for more. So we don't say turn everything over. Youknow today we say get the process started, do the re evaluation and then,over some months or years, bearing back what makes sense, that's good advice.Harry is what did I not ask you about here that you think is important tocommunicate around this topic of resorting specifically, I mentioned ourour Tso estimator. Now again, it's free online. Anybodyuse it to buy smarter or sell smarter, specifically that we can help companieslike companies that are flying and they're not sure how to get started.They can retain us to come out and help them. They don't shouldn't need us, butthey can do that in terms of the selling smarter. We have a programcalled the import substitution program, so a company can sign up for that thisdisrecollect and they identify a product. Let's say they say, I'm reallygood at making widgins, because he wage- and we tell tell them who the biggestimporters of widgets are, what tonnage to bring in whom they're buying themfrom offshore roughly what they're paying for it. And then we train ourpower company to use TC O to make the case to the importer that the importerwill be more profitable to you not total right now. The Tennessee is youwalk in. You see that importer if he happened to find him, because theydon't even know who a lot of more, but if you happen to walk in Dene any wayJes next year. Well, China was sort of sloppy during the crisis, but nowthey're. Okay, if we have a CR, have a shortage, will call you. Instead, youwalking and say I know, you're plying a lot. You find fiftytons of Idgits we've got this new multi tasking machine for making widgetswe've done the quest analysis labors. Only ten percent of our cost to ourprice can't be more than ten fifteen percent higher. Then what your Pan, ifwill be in China or India, and we we calculated all the hidden costs andthere's twenty points of costs. There were conventre going to be. Ten pointsbet are off flying from us than continuing to import and you're, goingto bring jobs back to your company and to your suppliers and your communityand you're going to improve the environment and kind of quality of theUnited States and helpful the puget deficit. So so there's got to besomewhere here that our two companies can make this work out for the bettermen of most be betterment of both of us and then once we do that it we'll letHarry know about it and he'll write a great article on us, so well I'll befamous for what you're doing so. So, let's, let's just keep going on this,so import, substitution, TC, import, substitution program, help companiesmake better buying decisions, and then we also have something calledthe Supply Chain Gab program. So we've identified supply chain gaps which arewhere there's a lot being important, say a hundred million or more yeardollars and nothing or almost nothing being made here think think. Two yearsago, mask gowns, gloves, Vanila, ors, penisola and stuff. All this stuff hasbecome far so we've created a list of hundreds of thousands of of items tofit those criteria and so for a stake. You Know New York, Wisconsin e. We canstart with that national list and then...

...narrow it down to products that areheavily imported into the state or neighboring states that are heavilyimported by the leading companies in the state. Okay, the ones that areindustries that the state would like to attract now we're down to maybe a listof twenty or thirty products, and then we can. We tell the state who thebiggest foreign suppliers are, the companies that are actually shippingthe product in and then the state goes to thosecompanies offshore starts with whichever one maybe number two whateverand says one or two put a factory right here in Ohio,because we've got all these companies near by nobody around here, making italmost nobody making it in the states. You've got ten percent of the market.Now, if you were the only company making it in the US, you probably havetwenty or thirty percent of the mark, and if you don't do that, I'm goingdown the street to your co Beter, I'm going to get them to do it and he'llkick your ass out of the market so come on. Let's get go on and do what's rightfor both of us. That's a it's really a powerful tool, though I mean what was anybody there if you're, ifyou work for the state, can you call email or or talk to the people? Youknow in economic development, in your state or or a big city, and you knowwe're here to help. You know. I've got this mission of five million jobs to bringback and- and you know, they're coming back right now at the rate of a hundredand fifty two hundred thousand a year and it's going to take years. So I needyour help in accelerating the trend. It's a great mission, Harry's oranything. You want to say to put a bow on this conversation first for so I've I've honored! Youknow that you do you have me here and and all the listeners we can help. Youknow we can help you fi smarter. We can help you sell smarter, but I can onlydo it if you contact me and so the URL was w w w shore now do HorgHarry Moser. You can find how to reach me at the website, and I look forwardto hearing from you and making your company more successful and the yourstate in our country a better place to beautiful, well Harry. This is a greatconversation. I really appreciate you doing this today than you joe and, asfor the rest of you, I hope to catch you on the next episode of theManufacturing Executive. You've been listening to themanufacturing executive podcast to ensure that you never missed an episodesubscribe to the show in your favorite podcast player. If you'd like to learnmore about industrial marketing and sale strategy, you'll find an everexpanding collection of articles, videos guides and tools, specificallyfor B to B manufacturers at gorilla. Seventy SICOT FLASH A warning. Thankyou so much for listening until next time. I.

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