Category Archive: manufacturing jobs

Manor Tool’s Internship Program Helps Close the Manufacturing Skills Gap

Back Row: Kevin Segebarth (General Manager) and Dmitry Balabanov (Corporate Maintenance Manager) Front Row: Tom Simeone (President), Fred Torres (student- Senior), Mario Perez (student – Junior), Lucy Lopez (Quality Assurance Manager), Dan Kiraly (Tool Room Manager)

For high school students on spring break, it’s a time for rest, relaxation and new experiences. For the 3rd year in a row, Manor Tool & Manufacturing welcomed a group of local Chicago high school students to our facilities to provide hands-on, real-world experience in the manufacturing sector.

By supporting these motivated high school students and helping them to enhance their knowledge outside of the classroom, we’re doing our part to decrease the manufacturing skills. We’ve even been able to offer students with career opportunities upon graduation.

Educating Tomorrow’s Workforce

Manor Tool offers an annual internship program over spring break to honor our commitment to growth in the Chicago manufacturing industry. We work with local high schools and trade associations in an effort to increase interest and knowledge about our industry and the many career opportunities it offers.

Our internship program has two main goals. First, we aim to give interested students the chance to learn more about manufacturing by allowing them to be a part of our team for a week. Second, we intend to create an interest in manufacturing to help build and grow tomorrow’s workforce.

We received numerous impressive resumes of students interested in joining our internship program. This year, two students from Leyden High School stood out among the highly qualified candidates: Fred Torres, a senior, and Mario Perez, a junior. These students were chosen based on their history of mechanical and engineering based classes and extracurricular activities. From looking at their resumes, we could tell they would be a great fit with the Manor Tool team.

Their week consisted of learning every facet of what Manor Tool does, starting with a tour of our facilities to learn how a punch press operates. Over the next few days, Fred and Mario learned about all the departments and how each one impacts Manor Tool, including: Engineering and Design, Sales, Customer Service, Accounts Payable, and Ownership. We gave them a glimpse into the many departments and team members it takes to offer high-quality stamping, machining, designing, and engineering services.

Looking Forward

As the need for qualified engineering and machining employees greatly increases, our team at Manor Tool hopes to help decrease the manufacturing skills gap by expanding our role to include more education and opportunities to prospective engineering students.

We enjoyed our week getting to know Fred and Mario, and we look forward to welcoming more interested students to our internship program in the future.

Top Reasons for Reshoring in Manufacturing

Reshoring: A Reversing — and Growing — Trend

Reshoring—the trend of bringing manufacturing jobs from overseas back to the United States—has become increasingly common in the past few years.

It marks the beginning of a reversal of jobs leaving the U.S. for cheaper labor and enterprise costs in developing Asian countries like China, Vietnam, and the Philippines, which in turn translated into cheaper prices for consumer goods like cell phones and flat-screen TVs.

reshoring manufacturing jobs

Many companies now, however, including such massive manufacturers as Ford, General Electric, Whirlpool, Apple, and Wal-Mart, are heavily investing in reshoring. The Boston Consulting Group recently conducted a study that found that executives at over half—54%—of companies based in the U.S. with more than $1 million in sales are either planning on or actively considering bringing back production from China to the U.S. A similar survey in 2012 found that only 37% of executives were planning to reshore.

According to these executives, economic conditions seem to favor reshoring. Although specific circumstances and the benefits are unique to every company, there generally are three main reasons to reshore.

Top Reasons for Reshoring in Manufacturing Download Now >>

1. Narrowing Gap in Pay

A significant factor behind offshoring to countries like China has been lower costs of labor which led to lower manufacturing costs overall. This pay gap, however, has been recently shrinking. The International Labor Organization found that real wages in Asia were up by 7.1%-7.8% every year between 2000 and 2008.

In addition, according to the Boston Consulting Group, the average Chinese worker received 10% higher pay and benefits every year between 200 and 2005, which jumped to 19% every year between 2005 and 2010. The Chinese government has even set a target to increase the minimum wage by 15% every year until 2015.

The Economist reports that, following a 2010 strike, Honda gave its workers a 47% raise in pay, while the Foxconn Technology Group, manufacturer for big tech firms such as Apple, doubled the wages for their workers.

By contrast, the McKinsey group reports that pay in advanced countries grew by only 0.5%-0.9% from 2000 to 2008. Real wages in America—declining annually 2.2% since 2005—are comparatively more favorable to manufacturing firms.

2. Lower Energy Costs in the U.S.

Energy costs are critical to any company considering reshoring. Since 2005, wholesale prices for natural gases have fallen by 50% thanks to a rise in large-scale deposits from underground shale deposits yielded through hydraulic fracturing. In contrast, natural gas is three times more expensive in France, China, and Germany, and prices are expected to remain that way for several decades.

It is expected to take between five to ten years before the infrastructure can be put in place for large-scale export of American natural gas. This means that domestic energy prices will remain more cost-effective over other countries.

According to the Boston Consulting Group, natural gas is estimated to account for only 2% of average American manufacturing costs, while electricity is expected to account for 1%. Natural gas and electricity in China, by contrast, is expected to account for 6%. The energy advantage is also expected to create 1 million more jobs as more factories are built.

3. Shorter Lead Times

Due to the 2008 financial crisis, order sizes for U.S. manufacturing companies have decreased, while those for companies overseas have increased. However, this leads to longer lead times, especially as supply chains can become complicated depending on the method of shipment, such as by cargo ship.

Manufacturing here in the U.S. can be far faster than offshoring. Products can travel quickly and reach customers sooner. It can also lead to more collaboration between marketing and engineering teams, helping improve time-to-market as well as resulting in a better product.

The Reshoring Forecast

According to Forbes, reshoring will continue in 2015-2016, but mostly for manufacturing companies that have access to cheap natural gas and global markets, such as chemicals and metals. Reshoring will also grow for industries that see rapid change, such as technology and fashion apparel, where the value of the product compared to weight ratios make it difficult to justify the cost of air freight.

Products that require little labor are also expected to reshore. Chemical plants, for example, will bring jobs back, although most of these jobs never left the U.S.

Advances in Reshoring

reshoring initiative websiteFurther enhancing reshoring efforts in the U.S. is the Reshoring Initiative. Founded in 2010, the organization is a collection of manufacturers dedicated to bringing manufacturing back to the U.S.

According to the Reshoring Initiative, the forecast looks even better for the return of jobs.

  • Since January 2010, there have been 25 known cases of fabricated metal products reshored, involving 1,749 U.S. jobs.
  • Thanks to reshoring and foreign direct investment, there are now more jobs coming back each year than are being lost to offshoring. In 2003, there an estimated 150,000 jobs offshored and only 2,000 reshored. In 2013, there were an estimated 30,000 jobs offshored while a calculated 40,000 jobs reshored. The projections for 2016 predict 20,000 offshored jobs compared to over 50,000 reshored jobs.

Reshoring is ultimately beneficial to the U.S. economy. The IEEE states that the key to successful reshoring is to perform comprehensive Total Cost of Ownership (TCO) calculations, which reveal the true cost of offshoring.

The TCO calculates the cost of products sold, “hard” costs such as prototyping and shipping, risk-related costs such as quality, opportunity cost, and branding, as well as strategic and environmental costs. Using these calculations reveals that through reshoring, an estimated 2 million jobs can be created in the U.S. in 2015 alone.

TCO analyses help manufacturers clearly see the benefits of bringing these jobs back to the U.S., especially when compared to rising costs shipping costs and wages overseas, and the resurgence in popularity of American made goods.

The Reshoring Initiative offers a free TCO calculator so you can aggregate of cost and risk factors into one cost.

The organization also has various tools and resources such as the Reshoring Library, the Economic Development Plan, and the Skilled Workforce Development Plan to help companies see how reshoring can be beneficial across the enterprise.

Sensible Domestic Manufacturing

The message seems to be clear. Based on narrowing pay gaps, rising energy costs, and complicated supply chains, manufacturing domestically seems to make the most sense as jobs return to the U.S.

Manor Tool has been located in Illinois since our founding. In many ways, our capabilities illustrate the very real benefits of reshoring. Due to our domestic headquarters, we can fully partner with our customers, ensuring constant transparency, meticulous attention to quality, and most importantly, rapid turnaround times.

Our stamping, tooling, and design capabilites are all subject to the highest quality standards. These services were instrumental in quickly providing clients across a range of industries with solutions such as an aluminum alloy drawn basin for the medical industry, and a steel dimpled annular for the automotive industry.

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At Manor Tool, we have seen—and are proud to be a part of—the rapid and continuing growth in the manufacturing, fabrication, and time-to-market capabilities of companies right here in the U.S.

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