Losses from flight of manufacturing have to be offset
About 30 years ago, the center of global manufacturing started moving from the West to Asia, most noticeably to China. Now the pendulum has started swinging in the other direction, to Western Europe and the United States, with sports goods giant Adidas announcing it will establish new factories in Germany and the US.
The possibility of manufacturing flowing from China to the West has been in discussion for some years now but few seem to have taken it seriously, with most Chinese dismissing it as a false alarm. Well, the alarm was not false.
Adidas CEO Herbert Hainer recently told the Nikkei Asian Review that the company will soon open a factory in Germany to meet the additional market demand for its shoes and set up another in the US next year. Automation and 3D printing technologies will greatly lower the cost of labor in the relatively expensive Western countries, he said, and thus make the shift worthwhile.