Japanese Manufacturers Looking for US Locations

For years, global manufacturing companies have moved operations to countries with low labor costs, such as Pakistan and China. Now, however, more than one Japanese manufacturer is checking out potential manufacturing locations in the United States. For domestic businesses, the fact that foreign companies are considering US sites may indicate that manufacturing in America is making a comeback.

According to the General Consul for Japan, Kazuo Sunaga, at least one Japanese manufacturer has expressed interest in looking at potential manufacturing locations in the US. Sunaga singled out North Carolina, along with several southeastern states, as particularly attractive.

In the past, more than one Japanese manufacturer has pulled out of the US because of high electricity and labor costs, but now, energy costs are coming down and green energy technology is on the horizon. In addition, the US gives Japanese companies access to a skilled, competent workforce, translating to more effective and efficient production. Relatively low labor costs in the US are also a big draw for foreign companies.

In comparison to countries such as Pakistan, where the government is unpredictable and volatile, the US offers a stable political climate. For a Japanese manufacturer, American democracy and political stability create a safe atmosphere in which to conduct business. Moreover, the US government has expressed a specific interest in increasing manufacturing in America, creating an ideal situation for business growth and development.

Japanese manufacturer Bridgestone led the pack when it built a manufacturing plant in South Carolina. Bridgestone's move was in reaction to the infrastructure instability in Japan that resulted from the 2011 earthquake and tsunami. Other manufacturers, including Toyota and Nissan, also increased their American production capacities.

For US manufacturing professionals, increased interest from foreign companies signifies a positive shift in the industry. After years of industry instability, manufacturers are finally seeing signs that the market may be turning around. Low natural gas prices enable manufacturers to cut operation costs, particularly in comparison with European manufacturing sites. The US also experiences a comparatively low number of natural disasters, particularly in the southeastern part of the country, ensuring manufacturers won't need to deal with frequent disruptions to operations.

Many foreign manufacturers are also heartened by the excellent performance of the US manufacturing industry. According to a recent story from "Businessweek," American manufacturing has been growing at a faster rate than expected, giving foreign investors confidence. 

As the Japanese manufacturer Bridgestone builds production in South Carolina, other Japanese firms are following suit. The increase in foreign interest in US manufacturing sites indicates that the industry is gaining strength, which is a crucial factor in building the national economy.

(Photo courtesy of freedigitalphotos.net)