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Mounting layoffs fire up offshoring debate

Posted: 25 Mar 2009 ?? ?Print Version ?Bookmark and Share

Keywords:U.S. offshoring? lay off downturn? outsource job?

Regional shift
Despite the grim job picture both domestically and overseas, one electronics industry group has discovered that some of its members are shifting jobs from Asia back to North America and Europe. IPC, which represents the PCB and interconnect industries, reported that 42 percent of the 50 member companies responding to a recent survey said they had pulled manufacturing operations out of Asia over the past two years.

"We definitely saw some evidence of regional shifts," said Sharon Starr, IPC's director of market research. "Quality concerns were the issue that affected their decision the most."

Transportation costs ran a distant second, followed closely by long supply lines. Communication issues were also listed as a reason for the regional shift, Starr said.

She added that interconnect companies initially shifted manufacturing to Asia to take advantage of cheaper labor costs and a generally lower cost of doing business in countries with loose environmental regulations. Those advantages are now evaporating in host countries like China, Starr said.

Asked whether the survey had picked up on any altruistic motive, such as a desire to retain U.S. manufacturing jobs, Starr responded that the motivation of members companies was "logistics, mainly," adding that the member survey didn't generate anecdotal data.

High-density interconnects, which have become a larger portion of the pc board business, could be the next manufacturing segment to pull out of Asia. "There is an opportunity for North American manufacturers" in high-density interconnects, Starr added.

And that could help create more jobs for U.S. technology workers.

- George Leopold
EE Times

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