Manufacturing Costs Changing Around the World

As basic things such as raw material, labor, and energy have become more expensive, the cost of manufacturing has naturally risen in response. These costs are expanding faster in some countries than in others; this causes a change in where goods can be manufactured more cheaply. The manufacturing costs rose from 2004 to 2014 in most of the top 25 exporting countries. Countries thought of as cheap places to manufacture goods such as China, Taiwan, and Russia now have costs comparable to those in the United States.

In response General Electric (GE), who have been outsourcing manufacturing of complex water heaters to China since 2009, have now brought production back to the United States. GE ripped apart one of six massive factories in Louisville and created a new highly efficient assembly line with lower wage structures for employees and experts to help reduce waste and time. Hundreds of companies have already returned and major companies such as Ford and Whirlpool have also brought back some of their products.

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