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June 07, 2013

Look for the American Label: Lenovo's North Carolina Plant Fires Up

By Steve Anderson, Contributing TMCnet Writer

For much of the early 2000s, into the late 2000s, the story of the day was one of constant downsizing. Assembly, factory and other jobs were pulling up stakes from the United States and making for other countries like Mexico and China. But now, a new trend seems to be coming into play, and it's a trend personified by a new Lenovo factory in Whitsett, N.C. – computer manufacturing is, at least slowly, coming back to the United States.



Lenovo's (News - Alert) Whitsett factory has been rolling out goods since January in something of a soft launch, but now, the line is officially open and running at a much heavier tilt than before. Lenovo actually leads the way on this one, but reports suggest that both Motorola (News - Alert) and Apple will be bringing some production back to the United States soon. The Whitsett plant is currently handling the ThinkCenter M92p desktop as well as the ThinkPad Helix ultrabook, but by the end of the month, the plant will also handle the ThinkPad Tablet 2 when production gets fully stepped up.

The plant is hoping to run two eight-hour shifts five days a week, and hopes to yield several hundred thousand units in its first year. Mainly, the products will be made for the United States market, and many of the components will be made overseas for final assembly in the United States.

As for why the move is on to bring production jobs back to the United States, there are actually several reasons. When the outsourcing moves began in earnest, there were two separate inputs making an impact on the decision: labor costs and shipping costs. Labor costs, which were often much lower in those other countries, are starting to trend upward in those countries as those who work hard at building products want to make wages that would allow those workers to actually purchase the products made. As for shipping costs, well, a quick trip to most any gas station will show what's happened to shipping costs. But when a company with a super-efficient supply chain like Lenovo looks to move production, it's a safe bet that others will follow suit.

Lenovo's North American president, Jay Parker, elaborated further, suggesting that there was another reason involved: the interest in “buying American.” But there are also issues of speed of delivery and customization, as a weak economy prompts manufacturers to find new ways to increase the value proposition posed by a product line. That's got several companies looking to bring at least some production back to the United States; American workers may be more expensive, but on a sheer cost basis, it's starting to be cheaper to make products in America for sale to Americans than it is to make products in, say, China and ship to America for sale.

This is a reasonable response to soaring energy prices; the United States is still one of the largest markets on Earth, so making products for sale here isn't a bad idea at all. Though there are still issues with manufacturing here, the idea that “made in America” could start becoming a thing again is welcome news for many.




Edited by Alisen Downey
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