Pennsylvania reshores jobs from China but catches no 'elephants'
HARRISBURG, Pa. (KDKA) — Pennsylvania reshored 4,581 jobs in 2022, among a record 364,904 jobs reshored – or brought back to the U.S. from other countries – nationally, according to a report released Friday by the Reshoring Initiative, an organization that tracks and advocates for reshoring.
The figures also include jobs created through what's known as foreign direct investment, or FDI, such as when a Japanese or German automobile manufacturer builds a factory in the U.S.
Pennsylvania's 4,581 reshored jobs were more than 30 other states but significantly less than two of its neighbors: New York, which reshored 43,491 jobs in 2022, and Ohio, which 29,561. Those two states ranked No. 1 and No. 2, respectively, in all of America.
A few big "elephants" drove the lopsided figures in those states, said Harry Moser, president of the Reshoring Initiative. For example, New York and Ohio both managed to land semiconductor factories – Micron in New York's case, Intel in Ohio's – which will hire thousands of people each.
Pennsylvania's biggest catches in 2022 were 600 jobs – classified as FDI – at a new Shell chemicals plant in Potter Township near Pittsburgh and 327 jobs, classified as reshoring, added by Ann Arbor, Michigan-based Cabinetworks Group, according to Reshoring Initiative figures provided to CBS News.
Moser cited The Rodon Group – a plastic injections molding company in Hatfield, near Philadelphia, which more widely-known consumer products companies contract to produce their goods – as an example of an onshoring success story.
Michael Araten, Rodon's president, said Lincoln Logs, produced for the toy company Hasbro, are one example. Hasbro wanted to make the toy in America.
"So we found a company out of Maine to do the wood," Araten said. "We found companies in our region, New Jersey and Pennsylvania, to do the other aspects of the production."
After decades of moving manufacturing to counties where labor is cheaper, why are some companies doing the work in America again?
Moser and Araten both said some companies found they weren't saving as much as they thought, considering costs like shipping and import duties plus what Araten called the "hidden cost" of companies having to over-order from overseas to avoid running out of products because of long lead times for shipments.
"Think about the holiday season," Araten said. "You want a product. It's a hot seller. If you ordered from overseas, you're done – you can't get any more. If you order it from me, you can get it the next week."
Araten calls himself a "patriotic capitalist." He said American companies should manufacture what they can in America, which he conceded isn't as much for some companies as for others.
"If every business owner does as much as they can here, we're a stronger country," he said. "For some companies, that'll be 100%. We're pretty close to 100%. Some companies might only be 20%, but anything above zero helps."
Moser said the pandemic and current geopolitical tensions have also contributed to onshoring.
Companies that manufacture critical supplies like masks, he said, will never again want to have as little control over their supply chains as they realized they had during the pandemic. And he said the war between Russia and Ukraine – and tensions between China and Taiwan – have convinced companies they need to "insure" themselves against what might happen next.
"So if the companies want to survive, they need to take out that insurance, be willing to pay a little bit more to produce and source here in the U.S. instead of continuing to depend upon China," Moser said.
Despite the recent reshoring trends, the U.S. still imported far more in 2022 than it exported: $318 billion in imports compared to $250 billion in exports, according to the U.S. Bureau of Economic Analysis, leaving a trade deficit of $67 billion.