The meme of the week seems to be outsourcing. For a good look at what that means to an economics oped writer, go read this post by Robert Samuelson. But don’t go off to that post until you finish here.
I spent over half of my career as an engineer designing stuff for companies that made products which were produced in large quantities. Companies that are profitable set up manufacturing where it makes economic sense, and, if they can’t get the cost of goods down to a profitable level, they will either outsource the production or stop producing and selling the product.
When I was running engineering and operations for a small lighting products company in the 1990s, I decided that we would be better off to use contract manufacturers rather than tying capital up in our own production facility. Our prototype and pilot run units were built at a local contract production house, but full-scale production was placed with a Mexican firm.
If you think about it, no American jobs were sent to Mexico. Building our widgets there created jobs there to the benefit of both countries.
When I was running engineering at a loudspeaker company on the West Coast in 1980s, several Japanese television set companies contracted with our furniture mill to build the cabinets for their larger TVs. They were building the sets in Southern California.
Honda, Toyota, Mercedes, BMW, Volkswagen, and other “foreign” brands all build cars in the U. S.
Outsourcing for one country is insourcing for another. Jobs are not a zero-sum game. A rising tide really can lift all boats–if they’re seaworthy.