Why Reshoring Could Be More Profitable Than Offshoring | Ep. 107 [Harry Moser]

What if offshoring isn’t actually saving companies as much money as they think? In this episode of Industry Ignited, Dr. Leeanne Aguilar sits down with Harry Moser, founder of the Reshoring Initiative, to explore the true cost of offshore manufacturing and why bringing production back to the United States can make strong business sense. Harry explains why companies need to look beyond wages and purchase prices and consider freight, tariffs, inventory, supply chain risk, quality, communication, and the total cost of ownership.

The conversation also explores the future of American manufacturing, workforce development, skilled trades, apprenticeships, geopolitical risk, and the structural changes needed to make U.S. manufacturing more competitive. Harry shares practical insights for CEOs and business leaders evaluating reshoring opportunities and explains how the Total Cost of Ownership Estimator can help companies make smarter sourcing decisions. Tune in to discover why reshoring is about more than bringing jobs home;it’s about building stronger, more resilient, and more competitive businesses.

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Dr. Leeanne Aguilar 0:06

What if the real cost of offshoring has been underestimated for decades? And bringing manufacturing back home is not just patriotic, but more profitable. Welcome to Industry Ignited. I'm Dr. Leanne Aguilar, and today I'm joined by Harry Moser, founder of the Reshoring Initiative, a driving force behind the movement to bring manufacturing jobs back to the United States and restore global competitiveness. Harry, welcome to the show.

SPEAKER_01 0:32

Great to be here, Leanne.

Dr. Leeanne Aguilar 0:34

All right. Now, Harry, you've spent over 60 years in manufacturing leadership. What early experiences shaped your passion for rebuilding U.S. manufacturing?

SPEAKER_01 0:44

I grew up in Elizabeth, New Jersey, which is right across the river from New York City. And the biggest thing in town was Singer Sewing Machine. Singer had their largest factory in the world there. And in fact, that that factory, in its day around 1900, 1910, was the largest factory of any kind in the United States. Three million square feet, 5,000 workers. It was a huge factory today. And my grandfather worked there as a foreman. My father ran about a third of the factory. And I drove past 10, 15 years ago, and nothing's made there anymore. As far as I can tell, nothing that Singer sells is made in the U.S. They, as far as I note, can tell, they import everything from low-wage countries. They wiped out that company and big impact on my town, on the state, on the country, really. And the same thing happened throughout my career. I I I was selling foundry equipment and then CNC machine tools. And industry after industry, company after company, I wanted to sell to wiped out by these low-priced imports coming in from you know wherever. And so I experienced the decline of U.S. manufacturing. And I said, well, someone has to do something about this. And so I did.

Dr. Leeanne Aguilar 1:58

Yeah. So I'm hearing there was a huge impact not only on your community, but personally. I mean, you experienced, yeah, like you said, you know, your dad working in one of the largest company or manufacturing facilities in the nation, to that, then, you know, uh going away completely and being offshore, and then just seeing the loss of jobs and the impact on your community. So yeah, I can hear that impact. It wasn't just there.

SPEAKER_01 2:23

I've lived mostly in the Midwest and throughout the Midwest and elsewhere in the country. There's town after town, especially suburban and rural, where there was a company town, there was a company, one big factory, two big factories, and they got wiped out, and then devastation for the community for for decades, maybe forever. And so it's been a very negative impact if if one chooses to observe.

Dr. Leeanne Aguilar 2:45

Yeah. Now you led companies to industry leadership and later founded the Reshoring Initiative. What was the pivotal moment that made you shift from corporate leadership to national advocacy?

SPEAKER_01 2:56

Well, two things. Firstly, there was a this background that caused me to do it. But the the pivotal moment was actually that that uh my parent company of the company I was running, and that I'd been president for 22 years, decided it was time for me to retire. And so they you might say they pivoted me. And uh and so I I switched from president to part-time chairman and then chairman emeritus. And and therefore had the time, you know, to do to do this. And I had the contacts and the visibility and and I'd saved enough money that I didn't have to make any money so I could do what do what was the right thing for the country. And and so that that that opened up that window for okay.

Dr. Leeanne Aguilar 3:35

So the timing is right. And yeah, opportunity basically presented itself. Having witnessed decades of offshoring, what do you believe were the biggest misconceptions companies had when they moved production overseas?

SPEAKER_01 3:46

Aaron Powell Yeah, but based on our on our surveys and and studies by others, the the the companies tended to look um just at the wage rate. Here it's $20 an hour, there it's $2 an hour. It's a lot of difference. Or at the Xworks price, the selling price at the factory there. And as an example of that, there's a f famous case, I think, Jack Welch, who was the uh the head of GE for uh decades, I guess, very famous, very successful. And one time he said, We have problems that factories are in places and then the wages come up and then the factories are not competitive anymore. And I'd like to put my factory on a barge, move it into a harbor, let's say China, somewhere, huh? Get the cheap workers to come in, work, work hard, yeah. And then when their wages go up and they're too high, I'll move it to India. And and then after I move it to India and their wages go up, then I'll move it to Africa. Yeah, I don't know, maybe moon the moon eventually. I don't know where eventually. But but he he saw this as a as just a way of of uh gaming the the economies of the world to to get the lowest cost. But instead of looking at just that wage rate or just that that manufacturing cost, they should be looking at total cost of ownership, which includes all the relevant costs and risks. So so uh wage rate uh price, you know, the price at the factory, but also the duty, the regular duty, like the three, four percent kind of duty, the tariffs, like right now, huge, huge impact, especially from China. The freight, the carrying cost of inventory. Typically, when when you have a six or eight week delivery instead of a one or two-week delivery, you carry twice as much or three times as much inventory. That that ties up your money, that costs you money. And and and that doesn't work very well when the engineering's here and the and the factory is way over there. So, yeah, right.

Dr. Leeanne Aguilar 5:46

So there are other aspects of total costs, like you're saying, that that should be examined before determining such and to offshore.

SPEAKER_01 5:54

Also, the companies often just jump for that lower price instead of looking at their their own operations and saying, what can I do in terms of automation? How about how about training? If the people were better trained to use the equipment, how about lean? So I've got a good friend, Jim Womack, who's like the guru of lean. And and he talks about lean shoring. That when you when you bring the the work back, make sure you you don't put it in the old factory with the old equipment, with the same flow, with the same lack of training and lack of motivation. Instead, you you rethink all those things. And and if you do that, you're you're probably gonna succeed. And if you don't do that, you're gonna fail again. It's gonna it's gonna go offshore again.

Dr. Leeanne Aguilar 6:32

Yeah. Now you've been recognized as a key force behind the reshoring movement. What motivated you to take on such a large-scale economic challenge?

SPEAKER_01 6:40

The fact that the U.S. had lost so much. Like we have a 1.3 trillion, that's with a T, $1.3 trillion goods trade deficit. That so we import $1.3 trillion more than we export, which is a big number. But when you cut when you slice it down, you come out with hundreds or thousands of important products that we don't make. You know, we're we're dependent on somebody else. And and often it's we're dependent on China specifically, which is a long-term adversary for us. And you know, we hear all about rare earth minerals, PPE, pharmaceuticals, carbide, which is used to make the cutting tools that you need to make almost everything that we machine. A series of long, long I've got lists of hundreds of these product categories where where we essentially make nothing and we bring uh you know the difference in it and significantly from China. So like right now, uh President Trump and Xi are about to have a a meeting, and uh Xi can say, I'm gonna stop sending you all this stuff. And that'll hurt his factories, but it'll hurt us more because we won't have the have the products that we need, is pharmaceuticals, for example. So it's uh it's very we've put ourselves in a very vulnerable position relative to the rest of the world.

Dr. Leeanne Aguilar 7:55

Yeah, got it. Now, one of your most influential contributions is the total cost of ownership, the TCO estimator. Why do so many companies historically underestimate the true cost of offshore?

SPEAKER_01 8:07

It's it's simple to do what they do. They say, What's the price? Well, you know, let's say it's in many cases they're buying it in dollars, sometimes they're buying it in some other currency, and it's pretty easy to convert to dollars, because that's a you can find that in the internet right now. And so you have a very simple comparison. Whereas if you go to tot uh total cost, now you've got a uh you've got some numbers that are fairly easy to get, like duty and freight, but then some you have to calculate like total, like the carrying cost of the inventory. Well, on average, how much inventory will we have? What's a reasonable interest rate, 20%, something like that? Um, and then you have the risk of stocking out, you know, with a six-week delivery from there versus a one-week delivery here, how often are we going to stock out? And when we stock out, how much how many orders will we lose? How many customers will we lose? You know, what margin will we lose? And how do I balance that off again? So and then eventually the people in procurement are t are rewarded based on purchase price variants. I've been buying this basket of goods for you know $10 million last year. My job is to get that down to nine and a half this year, based on price. And they're rewarded on that. They're promoted, their boss is promoted on that. And and if they don't do that, if they go to the boss and say, well, I know what the I know what the objectives and the bonus system say, but I really think we should pay 10, 15% more for this, you know, and they're probably gonna lose their job. So the whole company culture has been set up to do this. As an example, um I had a friend who who sold uh he was a machine shop. They say they made parts and they were trying to sell to a big company that they had sold to a lot before, but the big company had gone off to China to replace them. And so the salesman says, Hey, hey, Bill, how about if I made those parts for you? And and the company says, Well, if you you'd have to match the Chinese price. And the salesman says, Well, I hear you've got quality issues and warranty issues, and you sometimes can't get the product and therefore you can't ship. And other times you've got too much inventory. How about that? And the buyer says, Those are not in my budget, those are in somebody else's budget. That's not my problem. So so the companies things have gotten so siloed in the companies that the the individual who makes the decision on the purchases is not considering all the relevant facts. And that's where total cost of ownership comes in, because then that helps get them to look at all the things they should be looking at.

Dr. Leeanne Aguilar 10:30

Yeah, that makes sense. Like it like you mentioned the silos. So the people who are making the decisions don't see the total cost of ownership. They're not they don't realize the impacts from other departments when they're offshore shoring. So when companies shift from price-based decisions to see TCO-based decisions, how dramatically does that change the outcome?

SPEAKER_01 10:52

Significantly, the So I took uh uh 190 cases where the users have gone in and input the data into our TCO estimator, which is free online to use, but they have to put in a lot of the data. So they put in the XWorks price here and the XWorks price there. And uh on these 190 cases, uh based on price, the US won 8% of the time, based on total cost 32% of the time, and if there happened to be a 15% tariff in place, then 46% of the time. So it goes from 8 to 46. And since China is really more like 25 or 50 percent, that would have gone up to 60% of the time the U.S. would win. And so a difference between 8% and 60% just on doing the math, you know, is i i is is extreme. Right. So so the uh as an example of that, there's a company outside Chicago in Woodbridge, Illinois, called Maury Corp. They populate printed circuit boards, a good sized company, $100 million a year. And I'd gotten to know them a bit, and they they they came to me uh 10 years ago now and said, Harry, we've got a big problem. Can you help us? I said, What's the problem? Lower price Chinese competitor, uh, aggressive offer to good customer. And I said, Okay, let's do the TCO. So we did that together, did the calculation, showed the customer that even though Maury's price was higher, the total cost to the customer was lower. And I got a letter from the VP sales saying that doing that was the key to Maury winning a 60, that's six zero million dollar order. So I, you know, obviously made my day. I should have asked for a commission, I guess, but I didn't. And I was smart enough to do that. But it showed that it can be done. And and for your readers, your your viewers, I'd love to help you get a million-dollar order or a half million dollar order. But and the and one way to do that when you're competing with imports is to use the TCO estimator as a sales tool to convince the buyer to consider all the costs and risks and see your offer in a more favorable way. Yeah.

Dr. Leeanne Aguilar 12:59

Now you've also highlighted that offshoring is often cheaper but not more efficient. Can you unpack that distinction for business leaders?

SPEAKER_01 13:07

Often see famous economists and gurus of various kinds, pundits, you know, columnists, saying, well, globalization, offshoring, is is more efficient, and we should always be more efficient. And I if I can get in touch with them, I say, no, you're wrong. Efficiency is output per unit of input. That that's a that's what efficiency is. And you want it to be higher, so more output, less input. And if you compare offshore offshore, meaning producing it there and shipping it here versus making it here, offshoring has more energy involved. You're moving things around. It has more inventory involved because you wind up with, say, twice as much inventory here, more warehouse, more all that kind of thing. You have more scrappage because either things get damaged in transit or or or you wind up with a big pile of it and then you go into it and you, oh, these aren't any good. Whereas if you're getting them every day or every week, you'd learn that sooner, wouldn't have such a big pile. So a whole whole variety of reasons like that why the um efficiency is higher doing it here. But no question that the FOB price, the manufacturing cost is is higher. You have you have to do the calculation though to figure that out.

Dr. Leeanne Aguilar 14:14

Right. And from your research and data, what are the most overlooked cost factors that executives should be paying closer attention to today?

SPEAKER_01 14:22

Having manufacturing near engineering, that advantage of being able to get together and optimize the product design and the process for making the product, geopolitical risk. China and the U.S. are seem like we're gonna be adversaries or disagreeing, you know, for for decades. And if if if anything ever happens, you know, if China invades Taiwan, which they say they will eventually, you know, then they're gonna take it eventually, it's gonna come home to them. And if they do that, then uh the U.S. either ignores it, maybe, or or it gets involved. If it gets involved, then then it's gonna be six months, a year, years before anything comes out of China and Taiwan to the United States in terms of product. So companies are gonna be decoupled. So we we we developed a geopolitical risk map that for each country, here's a map of the world, each country, and specifically China, this has the probability of a U.S. company being decoupled, you know, cut off from that country. And the idea is for them to say, if I got cut if I if everything coming out of that country stopped, which products does that mean for me? And if that happened, how long would it be until I could replace those products? And and that's gonna be a while because you're it's not gonna happen just to you, it's gonna happen to everybody else in the country at the same time. And so they're gonna call up their potential suppliers and say, uh, Bill, said you wanted to make these parts for me. Here's the opportunity. And Bill's gonna, can you do it in a couple of weeks? And Bill says, Well, the thousands call I've had today since the war started yesterday. You know, I think I'm gonna take care of the people that have been buying for me all along. And for you, I've got to build a new factory, I've got to buy more machines, I've got to hire 100 workers, and so maybe in three years I can take care of you. And so so we say the company should say, this happens with China, with you know, with anywhere. How long is it gonna take me to find a new supply? How how much sales will I lose? How much margin will I lose on the sales? What's the probability times that to have an expected value of margin loss? How much more should I be willing to spend now as insurance against that happening? That that's our recommendation on what to do.

Dr. Leeanne Aguilar 16:29

Now, reshoring has accelerated significantly over the past decade. What are the primary forces driving this shift? Are they economic, geopolitical, or operational?

SPEAKER_01 16:38

It's hard to break those categories down exactly, but I'd say at first they were operational, some combination of operational and economics, companies saying this isn't as good as I thought it was. So as an example of that, I've got a good friend, a professor John Gray at the Ohio State University, and he's a professor of management there. And he found four companies, mid-sized sort of companies, that had offshore, I think, to China, and then reshored. And done the reshoring within a couple of years. So he he studied them and said, Why did you offshore? Well, the wages and the prices were so much lower. I I couldn't afford not to do it. And then he asked them, well, why'd you reshore? And they said, Well, finally, all the extra costs, extra inventory, lack of delivery, difficulties in communication, travel costs, all that stuff turned out to be more negative than the positive was on the savings, and so we brought it back.

Dr. Leeanne Aguilar 17:32

Now, have you found that that reshoring is accelerated in current times?

SPEAKER_01 17:37

I started this in 2010. And in 2010, we identified about 11,000 jobs that came back in that year combination of uh reshoring by U.S. headquartered companies and FTI, foreign direct investment by foreign headquartered companies. And that has generally moved its way upward, peaked with Trump tax and regulatory cuts, fell off of the trade war, picked up under Biden with a hundred billion dollars of subsidies for chip and battery factories, and then fell off a bit as the money started to run out. And now it's been sort of flat around two hundred and fifty thousand jobs announced per year. Nice, nice numbers. And we're right now the projected numbers for twenty twenty-six based on the first quarter are about three hundred and thirty-eight thousand. So we're it'll be the highest level in the last two or three years. So it's uh you know, doing pretty well.

Dr. Leeanne Aguilar 18:33

So probably due to the geopolitical factors then in those tariffs like you mentioned. Yeah.

SPEAKER_01 18:40

It's hard to prove the tariffs, but there's maybe thirty, thirty thousand or so jobs where the companies explicitly mentioned tariffs. Okay. And and and announced they were going to act. And then there's there's maybe sixty big companies, you know, billion-dollar projects, thousand workers each, where they've said they're gonna do something, like Apple's six hundred and fifty billion. They've said they're gonna do something, but they haven't identified a product or a factory, and they haven't started to dig a hole in the ground for the factory. And many of them have at least implied that they're not going to act on that they're that their action would be based on the tariffs, and the tariffs are not firm enough yet for them to proceed with the projects, because if the tariffs don't come through, and then now now the relative cost benefit of doing it here has declined, that they can't then they'll they'll go bankrupt on the factory and and the and the executives will lose their jobs. So that's not very good. So the companies have said, you know, $100 billion, whatever, $10 billion. But you've got to get the tariffs in place firmly. So we believe that they'll last through the Trump administration, past the Trump administration. So right at the beginning, we've advocated that he should have gone to Congress, which has the basic responsibility for tariffs, should have gone to Congress with his proposals on the tariffs, gotten them to approve it, maybe have gotten a little less, but gotten it firm firmly in place. And now everything would be everything would be working now. I think my my 338 would be 500,000 jobs a year instead of you know 250,000, 300 would have your jobs per year. But it's this uncertainty as to what's happening that's that's slowing things down.

Dr. Leeanne Aguilar 20:18

Aaron Powell Okay. So that uncertainty is actually preventing companies from deciding to reshore? It's certainly slowing them down. You know, they're they're waiting for something to happen. Yeah. Okay. So you've pointed out that the U.S. cost structure can be significantly higher than global competitors. What structural changes are needed to truly level the playing field?

SPEAKER_01 20:38

Aaron Powell There's two considerations. One is capacity and the other is cost. So even if if we had a better cost structure, if we didn't have more capacity, we couldn't produce more. Because all the all the manufacturing workers that want to work basically are working. And so we need a much better, larger and better trained, skilled workforce. More, more toolmakers, welders, precision machinists, chemical technicians, all the electronic people. All these things where in the past 30, 40, 50 years, kids have all been told you've got to go to university if you want to get the head. And that the goal is that college is the route to a high income and blah, blah, blah. And instead getting them to think more about what's going to give me the best career opportunities, which often turns out to be what people call the trades. And so first we need to divert hundreds of thousands a year of kids who are now going to university to study liberal arts, whatever, and then having a real hard time finding a job when they come out and have a couple hundred thousand dollars in debt. Instead, we need more of them to go into an apprenticeship and see that they first no tuition, start making money when you're 18, make quite good money, eventually make as much as the average for for the bachelor's degree holder. And so the net present value or an ROI. Much more attractive than than the university track. And so we need kids to see that. And increasingly they are. So I've read surveys recently showing that uh that parents are increasingly enthusiastic about having their kids look at the trades, what I call the professions, but the trades, and because of all these economic factors, that they understand it's a better outcome. So I'm rather optimistic. So first thing we need is that. We need we need a skilled workhorse. If you don't have that, you can't produce more. But then you have to get costs down. And one reason our cost is relatively so high, one reason it's like 10 to 20% higher than developed countries and 50% higher than developing countries is that the dollar is overvalued because we have the reserve currency. And so the the challenge would be to stay, keep the reserve currency, but get the dollar down by 10 or 20%. And that's a challenge. But when when you do that, all of a sudden, if the price difference has been like this, all of a sudden the price difference gets like that expressed in dollars. And then the companies say, Oh, there's only 10% difference. It used to be 30%. It was easy when it was 30. Now there's only 10%. And now, yeah, Harry, your TCO estimator makes an awful lot of sense. We'll bring it back. And now as it starts to come back, IED sees it coming back. So ID sees the new factories. The kids and the parents say, Wow, it's like manufacturing once again is a good career. Let's speak this go into manufacturing. And all of a sudden you have this virtuous spiral and things go up instead of things coming down like they had done for the last 20 or 30 years.

Dr. Leeanne Aguilar 23:33

Yeah. Now, how important is proximity between manufacturing and engineering and driving innovation speed and competitive advantage?

SPEAKER_01 23:40

Yeah, there's been a lot of studies done by uh professors Pisano and she at Harvard Business Schools. They they've looked at that phenomenon and they they talk about the industrial commons that in a community, if you've got a number of companies working in the same industry, foundry, machining, you know, whatever it is, then they you develop people with skills and they can move around between the companies, the companies can expand, things grow, everything works out. But if you and if you don't do that, then then if you don't have both the manufacturing here and the engineering here to communicate, then it's very difficult to make that happen. And and so we we put a lot of emphasis on, I see the government. Government's trying to create hubs, batteries in one place, chips in another, polar here, and then so that there'll be universities doing basic research, community colleges training technicians, companies hiring people, and to have a you have that sort of team, private industry, private public cooperation, if you will, all making the thing happen.

Dr. Leeanne Aguilar 24:40

Right. Yeah. Yeah, that's interesting. I mean, I know as far as um junior colleges, a lot of them have programs, snickel programs even for the the skilled trade. And then I guess, yeah, com making sure that the universities are also supporting that specific manufacturing need with the electrical or the engineering portion. So yeah, you you need both in order to make it.

SPEAKER_01 25:04

And actually one of the best appeals now for the apprentice programs is for the kids to go into the apprenticeship, let's say right out of high school. And in the first couple of years, typically four four-year apprenticeship, first couple of years they're spending a lot of time at the community college getting trained on still, still some general background math and so on, but also getting theoretical training on the machines. Um and as they go through the program, more time working, less time studying. And so they wind up with an associate's degree, typically paid for by the company. And then when they've graduated, they have their apprenticeship, they have the associate's degree, and and then if they're if they're interested, try to get the company to send them nights to get the bachelor's degree, and they're halfway there because they have an associate's degree. So it's a in many ways they can wind up with the same outcome they would have had if they'd gone to directly into college, but with in a more practical, more usable field and without the tuition. Yeah, without the tuition making money when you're 18.

Dr. Leeanne Aguilar 26:03

Exactly. Yeah. Well, I know, I mean, uh here even, I mean, we have you know clients who have um training initiatives and they're they're recruiting right out of high school. And they have you know incentive programs and training programs with um steps along the way that where they earn more as they learn more. Yeah, exactly. So, what role should government policy play in accelerating reshoring? And where do you see the biggest gaps today?

SPEAKER_01 26:31

Yeah, so certainly basic education. Now, I talk about going on go is going to community college and studying machining and things like that. You have to be able to do math. And yet too many kids coming out of high school can't do math because because they're allowed to work their way through and get get get moved ahead each year with with without basic education, without without what I could do when I was in sixth grade, probably. And that's only capital for a country, especially when China and India and Israel and so on, the kids are all coming out like computer scientists, you know, and ours are coming out like dummies. Too many of them. So so good basic education, because without that you you don't have a chance. And then skills recruitment and training to show kids that that college isn't the only way to get ahead. And then the uh, you know, well, like I I visited the Department of Labor. They they called me down there to tell them how to get the workforce ready for reshoring. And so I'm in the Secretary of Labor's conference room and I say, well, first we have to get the department to stop being part of the problem and instead become the solution. They said, What do you mean? And I said, Well, I think you're responsible for the apprentice programs, right? And I said, Yeah, and the and you're responsible that we have the workforce we need. Yep. I said, Well, I pulled up one of their charts and it shows uh headline is million dollars more lifetime income with uh bachelor's degree versus high school degree, and income going up with number of degrees. And I said, Well, why don't you why don't you show in here that the average apprentice graduate makes as much as the average bachelor's degree holder? And then the parents can see that and they can make a better decision. The kids can see that. He said, Wow, that's a good idea. And I haven't quite gotten them there, but they they put some notes at the bottom that say there's other ways to win, like apprenticeships and blah, blah, blah. And I'm still in communication with them. And and they've said that President Trump has a very similar belief system and that they're going to do something more or less that I want. So I'm I gotta go back and hassle them a little more.

Dr. Leeanne Aguilar 28:34

Right. So just getting them to put the data out there to educate people and demonstrate that there is that outcome if if their children go into those apprenticeship programs instead of just yeah.

SPEAKER_01 28:46

Yeah, we need education, we need skills, and then and then we need cost. The the root cause of the cost being too high is the dollars overvalued. So we say the the solution is to take some of that out. And just by doing that, we'll can knock 10, 20 percent out of our out of the cost, you know, 10 or 20 points out of this difference, and that alone would bring back millions and millions of jobs. So over a time period. You know, nothing happens quickly.

Dr. Leeanne Aguilar 29:12

Yeah, right. Now looking ahead, what does a successful reshoring feature look like for the U.S. economy over the next like 10 to 20 years, say?

SPEAKER_01 29:20

Yeah. Well, I I think uh the the trend has shown that the base case is is maybe 250,000 jobs per year. And when I talk about that, I talk about announcements. It's typically a couple of years till the hiring. And I talk about what I'll call gross reshoring. So it's the it's the number of jobs that will uh will come back into those factories, but at the same time, you have some offshoring. You still have work going to Mexico, you still have some people moving work to China or Europe or somewhere else, you still have productivity reducing the number of jobs required to make given amount of output. So therefore, the U.S. actual headcount doesn't go up by the amount of the reshoring because there's drainage or you know, some losses there. But nevertheless, base case 250,000 jobs per year seems solid. If we get the major skills effort and some skills immigration, people that are clean, haven't had you know criminal issues, and they have skills that we need, let them in. Let in as many of them as you can get. Adding that to the base case, 250,000 goes to 350,000 a year. As I said, 2026 looks like 338,000, so it looks pretty good. If we also get the US dollar down by 20 percent, then then maybe it's 500,000 per year. But then everything has to work out. You have to have the workforce, you have to have uh the dollar, you have to have no companies being willing to be long-term focused instead of short-term.

Dr. Leeanne Aguilar 30:47

And the and the infrastructure and the energy and the whole thing.

SPEAKER_01 30:51

Everything's gotta work right.

Dr. Leeanne Aguilar 30:52

Exactly. Now, workforce development continues to be a major challenge. What needs to change in how we train and position the next generation of manufacturing talent?

SPEAKER_01 31:01

Yeah. I think things are actually moving in a in a good direction. I first the Department of Labor has to do what I described because they they have a dozen websites that make this case, and and then other departments of the government have that use the same data, and then universities use it to sell, to promote kids coming to the university, because as you get to get ahead if you get a degree, and insurance companies use the same data to convince people to buy insurance so that if the red winner dies, the kids can still go to college, which is the only way for them to survive and get ahead. So the people are inundated by this message, and I want to cut that message off right here. But there's some good news. In the last month, I've seen several studies, and and one said that parent 90% of parents are open to their kids going into the trades, broadly defined, could be carpentry, could be whatever, but but also manufacturing. And the attendance at community colleges is generally up, and the attendance at four-year universities is down. And in fact, some of the small liberal arts universities are closing because they can't bring in enough kids. And so there's a the U.S. populace is smart enough to see how to get ahead, and then they're doing it. And that's working out. So I'm reasonably competent. Now, if they could get the kids to study while they're still in elementary school and middle school, it would be easier.

Dr. Leeanne Aguilar 32:22

Right. So they're coming out of high school with the with the higher level of education, so going into a trade. It'd be better. Yeah.

SPEAKER_01 32:29

Yeah. Have the skills that you need to get to to do these other things. Yeah.

Dr. Leeanne Aguilar 32:33

So for CEOs and business leaders listening, what are the first practical steps they should take to evaluate reshoring opportunities in their own organizations?

SPEAKER_01 32:41

I'd say first identify pr at-risk imports. You know, what might you get cut off from? Because I've read a couple people saying, I don't care what the screw costs, I gotta have the screw because I can't put my product together without it. So make sure I've got the thing. So look at look at products that are at risk. Do the TCO, including geopolitical risk and tariffs. The tariffs on China, I think, go up to 50, 50%. On the average, the China FOB price is about 65% of the U.S. So you add 50% to that, you get to 97%, just about 100. So uh uh match. And then if you throw in regular duty and freight, carrying cost of inventory and travel and everything else. Way, way I mean anybody who's buying from China now, if if the product has those tariffs, they're crazy. So uh and should should you come to the U.S.? Yeah, I think so. Mm-hmm. But if you can't, then then Mexico or somewhere else might be a good solution.

Dr. Leeanne Aguilar 33:41

And where can leaders find that TCO calculator?

SPEAKER_01 33:44

It's on it's on our website, which is reshorenow.org, and there's a bar at the top and it says TCO estimator, and you click on that, then you have to sign up and sign in, but there's no charge. And you can you can email me and ask for help, and you can tell me when you succeed. In fact, if you're in metalworking, we have a national metalworking reshoring award, which will be given out this year at IMTS, which is the 100,000-person machine tool show. And we give it out there this year and next year at Fab Tech, which is the equivalent for metal fabricating as opposed to metal cutting. And uh a lot of publicity, visibility, chance to shake hands with Harry, you know, that kind of stuff. And and so we uh that's the kind of thing that they can do, and and and we we can we're happy to help them to move forward on their journey.

Dr. Leeanne Aguilar 34:31

And so what else does the initiative offer to companies to help them with their reshoring journey? Yeah.

SPEAKER_01 34:36

They I think first is basic, that that that we provide them confidence that the analysis is worth pursuing. So that if they do them, if they that it's worth looking for the products that need analyzing, the those that are at risk, because the odds are that they'll find some w where it'll be more profitable and certainly more secure if they bring it back. Yeah. So so we've changed that overall image in the country, that reshoring is worth at least thinking about doing. And then the tCO for buying, for selling, to convince your customers, like it, like I did with Moricorp. And also for plant sighting. So if you say, let's say that the Chinese price is 10 and the Chinese price is is seven, ours is ten, and and you say, let's build a factory here in the U.S., can I get 30% out of the cost here and get a good ROI on my billion dollar investment, that's pretty tough. But if you start off and say, well, the TCO difference is 5%, now the chance of getting a 5% out and getting a return on investment is much higher. So you use the TCO for buying, for selling, and for site selection. We have something called the import substitution programs. If a company is really good at making something and they think they could be competitive, more or less competitive with imports, they can come to us and define their product, what its HTS code is, so the import uh classification code is for the product, and we'll tell them who the biggest importers are of that kind of product. We'll help them do the TCO calculation, then they go to that importer and say, Hey, I see you're bringing in 50 tons a year of widgets. We're really good at making widgets. We've done the calculation, we think you ought to be buying from us instead. And you'll sleep better at night if you do that. The political risk I talked about. ESG, environmental, social, and governance. So there's a we've done several studies of product that if you compare made in China and shipped here versus made here, the uh CO2 emissions are reduced by 25 to 50 percent, partially from the shipping, but also because the electricity in China is much more coal intense, and therefore every kilowatt hour creates more CO2, and if the same number of kilowatt hours, then more CO2 plus the shipping.

Dr. Leeanne Aguilar 36:56

Right. Probably the manufacturing the standards or the you know, government regulations and stuff just on manufacturing, I would think.

SPEAKER_01 37:04

Or looser over there.

Dr. Leeanne Aguilar 37:05

Yeah, exactly.

SPEAKER_01 37:06

And then we we have a database of about 8,000 cases of reshoring and uh and and FDI for our direct investment. And so we have a a number of companies who who buy that from us and use it to identify people to sell to. Well, if they're building a factory to make this and that and that typically needs widgets, and I make widgets, I I should knock on their door before they get the thing going and become their widget supplier. So so we we sell that to manufacturing companies and to financial institutions who try to analyze where they can make more money and to a lot of uh academics who who want to see what the financial what the impact is on a company's stock of of announcing reshoring decisions, things things like that. So anyway, there's there's a lot more opportunities out there and love to hear from people that might might want the data.

Dr. Leeanne Aguilar 37:57

Well, Harry, thank you for joining us. How can listeners learn more about you and the reshoring initiative?

SPEAKER_01 38:02

They can email me harry.moser, M-O-S-E-R, at reshore now.org. Just like the website, if you find us on the website, I'd love to help you. You know, you you t tell me about your your either your successes or your opportunities. I can either make you more famous with the successes or help you achieve them in the future with reshoring. So I look forward to your email.

Dr. Leeanne Aguilar 38:24

Yeah, so it sounds like you have a lot of we offer a lot in the way of support, resources, tools, and yeah, just a lot of information for companies looking into reshoring. Well, thank you. Thank you, Harry, for joining me. And to our listeners, thank you for tuning in to Industry Ignited. Be sure to subscribe and join us for the next episode. Until next time, stay bold, stay curious, and keep igniting industry.