Frustrated by the additional expense and difficulties with slower shipping, Seesmart feels it is very important to have more control over the manufacturing process. Combined with their desire to create jobs for US citizens, the 15 year old company started building factories in Simi Valley, California, and Crystal Lake, Illinois.
"When we do the numbers we're actually ahead manufacturing here instead of paying for air freight and dealing with the logistical issues that we're having in China," said Raymond Sjolseth, the company's president and co-founder.
According to an interview with CBS news, Seesmart has pursued grants and incentives from federal agencies that might assist companies like theirs, who manufacture energy-efficient technologies and believe that employing our own workers is a key component in improving our current economy. Even know they have not been able to cut through the red tape, they are still committed to bringing jobs home.
The company today makes 20 percent of its products in the United States, a number it aims to push to 75 percent by the end of next year. Successful completion of this goal could result in hundreds of new jobs for US employees.
With the continued success of large orders in numerous sectors of commercial business such as Pasadena College, SL Green Realty Corp., Memorial Sloan Kettering Cancer Center, Zyloware Eyewear and Cambridge Security Seals increasing production in the US would certainly provide an obvious advantage for local clients.
Most manufacturers have learned to operate factories with fewer workers. Many of these jobs consist of keeping high-cost, high-speed machines running smoothly, rather than assembling goods by hand. Many have found that wages are a less critical issue in choosing a adequate factory site.
At Seesmart, shifting production from China to the United States is cutting logistics costs by about 30 percent as it no longer needs to fly merchandise across the Pacific. Products can also be made and shipped to customers more quickly, Sjolseth said.
"The LED business involves a very compulsive buy, and many clients will not tolerate long lead times," he said. "So if you're not delivering in four to six weeks, it's not going to happen. You're going to lose the deal and they're going somewhere else."
Higher wages have not been a roadblock for the company because its automated factories mean that labor costs represent less than 2 percent of the cost to manufacture lighting.
With $11 million in revenue last year, Seesmart Technologies is a relatively small company, but it is one of many manufacturers of all sizes to increase production in the US.
Honda (HMC), General Electric (GE), Catepillar (CAT), NCR, Avago (AVGO) and Texas Instruments (TI) are among some, that are expanding production in the United States.
Honda's decision to further expand its Civic plant in Greenburg, Indiana., adding 500 workers and expanding capacity by 50,000 vehicles a year. The company laid out a big plans for North America this week. It has spent $1.6 billion at its North American factories in the past 18 months as it prepares to mark its 30th anniversary of making cars in the U.S. That officially happens on Nov. 1, the day in 1982 when the first Accord rolled of the line in Marysville, Ohio.
According to a recent article in USA Today - Faced with rising costs, General Electric is moving production of its new energy-efficient water heater halfway around the world from China to the US, bringing 400 jobs and a newly renovated factory.
CAT, which has announced nine new plants or expansion projects in the past year alone, said it has chosen to grow in the United States both to meet local demand and because it has been able to find a steady supply of workers able to run the advanced equipment that powers its plants.
NCR was similarly motivated by a more nuanced view of costs when it decided to move manufacturing of ATMs sold in the U.S. from China, India and Hungary to a new 260-employee plant in Columbus, Ga., last October.
AVGO is said to be planning to buy as much as $130 million in manufacturing equipment to expand in Fort Collins, Colorado. Previously, IHS iSuppli has reported that Avago makes a part for the iPhone 4S used to connect to multiple wireless networks. Meanwhile, TI is ramping up production at the chip factories in its home state.
One source claims that TI's power chip business gets large orders from Apple, which has contributed to "thousands of jobs" being created in the US. A number of these are said to be high-salaried jobs demanding engineering degrees, especially at a fab in Richardson, Texas.
After decades roaming the world in search of lower costs, U.S. manufacturers are finding that factories at home can compete with China, India, Mexico and other low-cost countries. Other costs such as higher transportation costs and wage inflation in China could drive more production back to the United States.
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