Offshoring Debate

I’ve gotten a couple of emails recently from people who question the political debate about offshoring. Here is my response to one of these who questioned my stand.

I initially was very concerned about the impact of offshoring upon our economy, particularly since my company is focused upon industrial development. With over 4 million sf under lease to manufacturers in the Midwest, South and Southeast I looked at the issue in great depth. I’ve read numerous studies on the subject and talked to researchers about their findings.

I’ve also traveled to over 100 small towns in 27 states over the past year. Some of these towns have gone thru dramatic changes, due to being dependent upon only one company or industry. Let me give you some examples of a few of the towns that I have visited in the last 3 months: Galesburg, IL (population 33,000) which is in the process of losing Maytag with 2,000 employees and Butler Manufacturing with 1,500; Ponca City, OK (25,000) which lost the headquarters of Conoco; Greenville, MI (7,800) which is losing Electrolux with 2,700 employees; and Mooresville, NC (population 11,000) which lost 5,600 textile mill jobs. I’ve also lived thru losing our major employer of 600 jobs (average wage of $40,000+) in my hometown of 12,000 about 4 months ago.

I’ve seen and felt the pain that these closings can cause in a town and my heart goes out to each of the people who have to find new jobs, often after working at the same company for many years. It is a difficult time for many of these people. Going back for retraining and looking for a new job is not easy.

But, with that said, it is a process that a capitalistic economy goes thru over and over. It occurred to us with shoes in the past 30 years, when there were over a dozen manufacturers within 50 miles of my hometown, employing thousands. All closed. But, today our economy is better than ever and virtually all of the former shoe makers found better jobs that paid more. Sure, it was tough to go thru at the time, but the end result was for the better.

All of the towns I mentioned above are going thru a great deal of pain or have already done so. I’m convinced that each will end up better and in some cases much better than when they were dependent upon only a single company or industry.

Let me tell you of the example of Mooresville, NC. They had virtually all of their jobs in textiles. The city fathers saw the risk of having “all of their eggs in one basket” and started a new industrial park. Today, they’ve replaced the 5,600 textile jobs with a new diversified industrial base of over 5,000 employees. They also have developed a medical base with over 200 doctors, from only 7 MDs twenty years ago. They’ve diversified with NASCAR race teams (49), which have encouraged 150 entrepreneurial companies to develop around this cluster. Last year Lowe’s moved their corporate HQ there because of the great quality of life they found in Mooresville.

Each of these communities recognized that changes are going to occur, you’d better plan on these changes occurring, and develop ways to prosper when those changes happen. Not every town will survive, but I’ve seen many that have made the changes that are needed, and are developing a more diversified economy. They are creating some wonderful opportunities for their citizens.

We can’t stop progress. Some jobs will move overseas. However, we are also seeing manufacturers expand in today’s economy. From what I’ve seen, I’m convinced that our best days lay ahead. And, I think that we will look back upon the offshoring debate a little like we look back upon the political debate of the 1960 presidential campaign, which was that robotics were going to destroy our manufacturing base in this country. It was a purely political and not economic concern. And, it didn't happen.