Tuesday, January 31, 2012

American Jobs in a "Made In The World" Era

I watched a good NBC Rock Center segment last night about returning jobs to America. A furniture company in Lincolnton, NC, started in the 1930s and closed in the 1980s, has reopened. The owner, the son of the founder, is beginning to be able to competitively manufacture furniture in America again. His decision is based on competitive labor costs with China, no shipping costs, higher productivity of American workers, and the high quality furniture he can manufacture. Seems the increasing cost of doing business in China, from labor to shipping, may be making it worthwhile to consider returning to America.

This is great news. But Thomas Friedman reminds us in today's piece that we live in a "world market" and that we are "citizens of the world." He says, "CEOs rarely talk about "outsourcing these days. Their world is so integrated that there is no "out" and no "in" anymore. They see more of their products today as "Made In the World" not "Made In America". Many of "our" companies see themselves as "citizens of the world".

The whole concept of "import " and "export" no longer applies. "Source everywhere, manufacture everywhere, sell everywhere." This is the reality. Friedman says, "Politicians see the world as blocks of voters living in specific geographies - and they see their job as maximizing the economic benefits for the voters in their geography. Many CEOs though, increasingly see the world as a place where their products can be made anywhere and sold everywhere. "

The job of a CEO is to maximize shareholder value. The job of an America leader or politician is to meet to needs of their constituency's. This leads to tension, frustration, and confusion. This is the world in which we live. Maybe to furniture CEO in Lincolnton is the tip of another change about to come in a very fluid world.

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