A US manufacturer's Readme: China taught me a lesson

"International Financial Times Beijing," a North Georgia State button manufacturer made a puzzling move: the closure of factories in China. "Hey, America is always the best," said Angie Kastner, assembly line director of Scovill Fastener. "I don't want anyone to lose their jobs." But I'm really glad that Americans have a few more jobs. "It is a rare cautionary tale that Scovill withdrew from the cheap Chinese market and withdrew to the US.　　China is not a paradise for all manufacturing. Scovill's president was the first to say that he had failed in mainland China.　　But it is true that the growth of China's economy has raised wages, corporate expectations and living standards, making it increasingly difficult for US companies to profit here. The so-called "China price" (the cost of saving 30% to 50%) is no longer in the mouth of American manufacturers. Scovill the company out of China, immediately found in Caraxville (Ohio city) more cost-effective than in China.　　Meanwhile, as it withdrew to the United States, 170 Americans were able to keep their jobs. "But don't expect the withdrawal from China to be able to reverse America's employment situation," the experts said. Each company faces different challenges in the global marketplace.　　Scovill's Mexican customers, for example, have never moved to China as expected. "Five or six years ago, everyone was flocking to China, and we thought we should go to stay competitive," said Michael Lowery, plant manager, "so we learned a painful lesson." We failed in China and we were at a loss for the environment. But our decision to return to the United States will be a successful start. "Scovill is one of the oldest companies still operating today. Founded in 1802 in the United States Connecticut State, the United States Navy in the 1812 campaign for the production of uniforms.　　Caclaxville's factory, 90 miles north of Atlanta, opened in the early 50, and a decade ago 500 workers in the North Georgia State factory made buttons, hooks, buttonhole, buckle and zipper. At present, Scovill Fastener Company has 250 employees in Georgia State.　　They produce buckles for baby Siamese clothes, buttons for Wrangler jeans, and leather chin bands that produce rugby helmets. Since China's accession to the World Trade Organisation (WTO) in 2001, Scovill customers have moved into China, and jeans customers are also planning to share a slice of China's cheap labor market. In 2004, Scovill built a factory, several dormitories and a restaurant in Shenzhen.　　They hired about 500 people, and the hourly rate was 2.2 dollars, a pretty tempting figure at the time in China. "Manufacturers and management think that jeans will be produced in Asia in the future, but not entirely," Scovill president Stewart Little said.Sigo's factory is already very efficient. Producing these jeans in the Western Hemisphere is still profitable. "The owner of Scovill, a private equity firm in New York, decided to turn it into a wholly foreign-owned company with greater profit margins. This brought him trouble. Scovill's field administrator is a highly educated, English-speaking Hong Kong person. But workers from mainland China do not like the boss. And another Chinese custom has taken them by surprise: Chinese New Year.　　On this day, tens of thousands of workers will go home to spend a week of vacation. "About 20%-25% of the workers don't come back and we lose a lot," Lowery said. "In a year, we lose most of the workers." This is a problem beyond our expectation. "China's fast-rising middle class has a higher demand for income," he said. Good people can pick jobs, especially in highly competitive SEZs.　　In the process, Scovill lost a group of elites who had to spend time nurturing new employees. In addition, not only is Scovill, many companies have encountered the macroeconomic aspects of the problem. The appreciation of the renminbi, the rise in oil prices and transport costs have led to an increase in the cost of exporting schovill to Mexican jeans factories.　　Lowery described Mexican tariffs as "outrageous". In the end, Scovill closed down the Shenzhen factory. It makes no sense for them to run two of factories that manufacture the same products. Little, who has been CEO since 2007, says Scovill has lost tens of millions of dollars in China. "Luckily we were at the end of the pain of cutting the meat," Lowery said, "If we drag on for 5 or 6 months, we will be annihilated." "Scovill had considered moving to Burma, Bangladesh or Vietnam, where the labor force was cheaper, as other multinationals did, but in the end they decided to return to Georgia. Now it is relatively cheap to run a factory in Caclaxville. The wages of the employees were reduced by 10%, about 13-14 dollars/hour.　　Productivity has also increased dramatically over the past few years, and the number of workers has been cut by half. According to a recent study by the Institute of Economic Policy, Georgia State has lost 60,400 jobs since 2001.　　Scovill has planned to shrink Georgia's workforce from 250 to 80, so the decision to finally withdraw from China has saved 170 American jobs – a big consolation for a country with a jobless rate of 11.1%. "China is not a utopia," said Judy Taylor, chairman of the Habersham County Chamber of Commerce (Georgia State), "This event conveys an important message to us: we ourselves have better employees, and we should keep our money and jobs in our own territory rather than building a place for other countries." "Like other respondents, Taylor suspects that other American companies have been withdrawn from the Chinese market," he said. ButNo one-the American, Georgia and Atlanta Chambers of Commerce, the National Manufacturers Association or the Georgia State Economic Development Department-can list the specific names of these companies. "There may not be a revival here, and even if it is not China, American companies will look elsewhere," little, without denying the possibility of a manufacturing return to Asia, "the unemployment rate is likely to stabilize and decrease." But if companies in China think they are losing competitiveness, they will shift their positions to another developing country in Asia, rather than back to the US. "This article is translated from the Atlanta Charter (AJC) April 25 article, the original title: Business brings jobs back from Chinese author: Yue translation