Executive Briefings

American Companies Consider Moving Operations Back Home

America's largest companies have been rushing offshore for many years and international sales now account for 60, 70 or even 80 percent of their total sales. For many CEOs of these large companies, it's been almost an article of faith to go offshore to take advantage of more rapid economic growth in China, India and Brazil. Often, their companies receive tax incentives to locate in these countries, which also offer little environmental opposition and rare class-action lawsuits. Companies like Apple, Dell, and Hewlett-Packard have long supply chains extending around the world and manufacture relatively little on U.S. soil.

But recent moves suggest companies are rethinking that strategy. For example, NCR decided to "backshore" the manufacturing of its high-end ATMs, meaning that it brought the production from China to a former battery plant in Columbus, Ga. In fact, signs suggest CEOs should give greater consideration to "onshoring," meaning never moving some critical functions offshore in the first place. Instead, they should deepen their investment in clusters that state and local regions have already created, or are willing to create.

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America's largest companies have been rushing offshore for many years and international sales now account for 60, 70 or even 80 percent of their total sales. For many CEOs of these large companies, it's been almost an article of faith to go offshore to take advantage of more rapid economic growth in China, India and Brazil. Often, their companies receive tax incentives to locate in these countries, which also offer little environmental opposition and rare class-action lawsuits. Companies like Apple, Dell, and Hewlett-Packard have long supply chains extending around the world and manufacture relatively little on U.S. soil.

But recent moves suggest companies are rethinking that strategy. For example, NCR decided to "backshore" the manufacturing of its high-end ATMs, meaning that it brought the production from China to a former battery plant in Columbus, Ga. In fact, signs suggest CEOs should give greater consideration to "onshoring," meaning never moving some critical functions offshore in the first place. Instead, they should deepen their investment in clusters that state and local regions have already created, or are willing to create.

Read Full Article