Oil Price Fallout: Jobs Coming Home?

Oil Price Fallout: Jobs Coming Home?
As shipping costs rise, businesses jump ship.
By SHARON ALFONSI

June 24, 2008 —

As the cost of shipping continues to soar along with fuel prices, homegrown manufacturing jobs are making a comeback after decades of decline.

While it once cost $3,000 to ship a container from a city like Shanghai to New York, it now costs $8,000, prompting some businesses to look closer to home for manufacturing needs.

Furniture designer Carol Gregg used to have her signature Chinese chests assembled in China, but such a luxury no longer seems viable, considering that some of her pieces now cost five times more to ship.

So now Gregg is having the chests made in North Carolina, simply because its cheaper.

Some large companies like Crown Battery are cutting expenses by moving jobs from Mexico to Ohio. And hair care company Farouk Systems plans to shift all of its production from China to Houston this summer, bringing with it 1,000 jobs.

Globalization, in Reverse

The rise in transportation costs are fueling what some economists are calling “reverse globalization.” For instance, DESA, a company that makes heaters to keep football players warm, is moving all its production back to Kentucky after years of having them made in China.

“Cheap labor in China doesn’t help you when you gotta pay so much to bring the goods over,” says economist Jeff Rubin.

Oil Price Fallout: Jobs Coming Home?.

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