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It's Only Common Sense: Good News

Editor's Note: To listen to Dan's weekly column, as you've always done in the past, click here. For  the written transcript, keep reading...Good news is on the horizon: Things are looking a little brighter for North American board shops. Some analysts say this could be the last year shops will have to struggle as they have for the past five years. Here's why:

First of all, onshoring or reshoring (whatever you want to call it) is real and it’s here. Making the rounds among my contacts and secret informers last week, I heard a number of encouraging facts. Motorola is setting up a factory to build cell phones in this country for the first time in years--in this millennium, actually. The company is now hiring employees to work at the new factory in Fort Worth, Texas. And lest anyone be mistaken, the company is, in fact, calling it an “onshoring” effort and doing so on purpose. This is just one example of business coming home.

One contact told me he is seeing much more automotive work than he's seen in a long time. This makes sense when you think that Honda, BMW, and others are already building cars in this country--why not use local suppliers?

Then there's Mexico. No, this is not a misprint. Companies are looking at Mexico again. The country has matured since the last time we tried this just after NAFTA was passed--the prospect of taking some work out of Asia and bringing it back to North America looks very promising. A number of companies are already there and others are seriously exploring the idea. This bodes well for board shops as there are no board shops (that I know of) in Mexico.

The economy is also improving. More new products are being invented, and the prototype, pre-production, and even some small- to mid-volume production of new products is being assigned to North American board shops. My friends in the quick-turn business are picking up more new customers and building more new products--a very good sign.

China is not as appealing a source as it once was according to just about everyone I talk to these days. Workers there are quickly climbing into the middle class, and much more quickly than anyone could have anticipated. That means their wages are going up, which means that the costs of their products are going up, so their prices are certainly not as appealing as they once were. China will always have lower prices, but they need to be much, much lower than ours. China must make up for all of the other inconveniences of doing business there: Much higher shipping costs, language and communication issues, and just the difficulty of doing busines, not to mention that ever-ticking time-bomb of communism.

America is also experiencing more nationalism than ever. The recent recession scared the bejesus out of all of us to the point where we no longer think it’s such a great idea to buy stuff offshore and not support our local and national economy. When was the last time you heard someone bragging about buying offshore? People are doing what they can to keep business on this continent. Every day I hear of someone who has made a point of buying his products here in the good old U.S.A.

Then there is the trend, albeit a small one, of European shop owners setting their sights on the West. My friends in the mergers and acquisition segment have related a growing interest from Europeans to buy shops in the U.S. on both coasts.

I think these are all good signs that the times are changing for the better. Now, I’m not an idiot; I know there are segments of the board business that will never come back. The megavolume stuff, for example--we just don’t have those resources. That ship has literally sailed. Then again, some of the high-tech work, the quick-turn work, and the defense and security work is here to stay and it is growing. But I am seeing larger quick-turn orders. Where quick-turn orders were once only three panels, now they can often be 100 panels or more--that’s good business for the companies that can handle it.

It’s all good news if we can just hold on a little longer. I can’t help chuckling at the thought that Motorola is one of the first American companies to announce plans to bring manufacturing back to the states. It’s pretty ironic, since Motorola lead the Asian invasion in the first place. What goes around comes around. It’s only common sense.