[TimothyFarrar]

Chris,

I wish you were right but somehow I don't see that happening.

In the range of 2-5 years ago there was a tremendous increase of manufacturing jobs moving out of the mid-west. You could see it simply by looking at the machine tool auctions. And it wasn't just the high volume (millions of parts) manufacturing going out, it was the middle (100,000 parts) and low volume businesses as well.

With the union pressure and price advantage and ease of out-sourcing, the large volume work had no choice but to leave over the years. Yet the risk and investment required to out-source kept many of the medium volume manufactures out. Now there are a whole set if businesses working simply as out-sourcing liaisons for medium volume manufacturing businesses.

The whole manufacturing industry is inter-connected. You have casting and forging outfits feeding both large, middle, and low volume customers, you have small volume tool and die shops doing work to support the large volume industry, you have small volume outfits producing components for large volume manufactures, etc. So as the larger volume manufactures get up and leave, it also drives a lot of the medium and small volume support industries out as well. The ripple effect simply wipes everyone not in a niche market out. People have to drastically cut costs to stay in business, which cuts quality which further removes the US advantage.

Also keep in mind the out-sourcing options are not just China, you have India, Mexico, and others.

The sad thing was that in all the cases I saw while working as a manufacturing engineer, manufactures in China and India could easily provide the part for under the raw material cost in the US.

So say China lets its currency float a lot (which they are not). Perhaps enough to get the cost of raw materials somewhat similar between US and China. You still have a huge problem.

The cost of labor will still remain polarized. The social burden in the US is just too high (many cases easily 30 times higher). China will still have such an advantage that the work will stay out-sourced.

The fact is that the total taxes and other burdens (labor cost, social security, osha, insurance, legal fees, etc) in the US only have a upward trend line. So even as China, India, and others start to stop basically enslaving their own population, they will eventually stabilize at a level way under ours. So there will always be a large labor cost difference. Any attempt to subsidize the industry would ultimately raise the labor cost more, and just quicken its demise.

Sure a small number of manufacturing jobs might come back to the US, but the vast majority is now gone for good just like the textile industry.