TRANSCRIPT
Lew: Day everyone. This is Lew Weiss with Manufacturing Talk Radio. I’m here with, Amy Nicholas, my co-host, and we’re here with also Harry. And everybody Loves Harry, right? Harry, Harry Moser, uh, reshoring Initiative. Welcome aboard again.
Harry: As long, as long as you continue to love him, I’m happy.
Amy: Well, we do Love your t-shirt
Lew: I love the t-shirt.
Amy: I mean, that’s the best way to do this.
Harry: it’s a, there’s a job shop, a fellow, I, I know Mitch, Mitch Free who, uh, who, who made ’em for me. [00:01:00] And they’re made in the US out of US cotton,
Amy: Oh, perfect.
Lew: It’s funny that you mentioned Mitch Free because I just reached out to him over the weekend. Uh, I’m looking to get him into a discussion. About manufacturing.
Harry: He’s done very well.
Lew: Have you ever met him?
Harry: Oh, yeah. Yeah. I, I knew him when he was, when he was, uh, something like Xometry, you know, connecting companies and so on, and, and then he, he got out of that and he started his own job shop and it’s really big now and successful. He is done, done very well. Well, I’m
Lew: I go back with him to the days of Thomas Register,
Harry: Yeah, that’s right. Yeah.
Lew: Anyhow, Harry. Reshoring Initiative. Let’s refresh the memories of our audience and our new listeners as to what you’re all about.
Harry: So our, our, our purpose is to, uh, bring manufacturing back to the us more or less what President Trump talks about. He calls it reindustrialization. We call it reshoring. [00:02:00] They’re exactly the same thing. And, uh, and, uh, because we’ve lost so much. There’s, there’s a huge benefit for the country by regaining that work.
Amy: I think it’s really important that you just said that because I think that reshoring is such a, a, a very specific way of, within the manufacturing industry, but to the layman and to the everyday consumer, really understanding that, you know, that that’s really bringing, just bringing industry back and making that connection is really important.
It really just simplifies. Exactly what reshoring is.
Harry: all to complicate it, just a just a little bit, we, we differentiate between reshoring, which is done by us headquartered companies, think General Motors or GE and FDI, foreign direct Investment, which is done by foreign headquartered companies, think Toyota or Siemens. But in, but in both cases, cases, they’re deciding that it’s in their interest.
To, to supply the US market with more product made here [00:03:00] rather than imported from there, wherever there happens to be.
Amy: Right.
Harry: so finally, the, the, the only way you can re industrialize, the only way you can, uh, produce more is, is to reshore is is to produce here the stuff that we’ve been importing from somewhere else.
Lew: Harry, correct me if I’m wrong, but I think the American public is beginning to really understand the reshoring, uh, aspect of our economy and how it directly impacts that. Because I think years ago, or not that many years ago, reassuring was just a buzzword and now it’s become critical to our economy.
Harry: I say yes, but on April 2nd. I read an article, I found an article in the New York Times by Jason Furman Forman, who used to be the head of the National Economic Council, I think under Obama, and he came, the article says something like. It’s never coming back. Don’t even [00:04:00] bother. It’s not worth it. so, I’m, I’m planning to write a, uh, rebuttal, you know, which I probably won’t get in the New York Times, but it would be, might be a very good episode.
To present. Here’s what Jason says, and here’s what Harry says in response. ’cause it’ll deal with, ’cause. ’cause there’s all kinds of learned people out there, Polk, Ruman, all, a lot of these top economists that say, forget it, you, it is history. Don’t even bother. Let’s just do all, do surface. And, and that just, that just rots my socks every time I hear it.
Lew: I think you’re right. I think, I think it would make a great, uh, conversation. Uh, and perhaps we can get Jason on here to talk about it with you.
Harry: That’d be wonderful if we could Sure. We could help him.
Amy: let’s just go back. So what is the actual mission of the trade? Shoring? Init of the Reshoring initiative?
Harry: The the mission is, is to balance the goods trade deficit.
Amy: Okay.
Harry: You know, the, the, [00:05:00] the, right now we have a trade deficit, which is the excess of our imports over our exports. And that amount last year was about 1.3 trillion with a T $1.3 trillion. So that, that result of that is that we’ve got all these supply chain gaps, PPPE, rare earth minerals, all all kinds of stuff where we, uh, pharmaceuticals, where we don’t make ’em.
So we’re dependent on other countries, and if you take the list of these categories in 90, maybe 80% of the cases, China that we’re dependent on. So our major adversary, if they cut us off on all that stuff, we, we, we’d like collapse overnight. and so our mission is to is to produce $1.3 trillion more.
Okay. And fill those supply chain gaps so we’re not so dependent on other people and, and provide about four or 5 million additional manufacturing jobs in the United States.
Amy: So how are we [00:06:00] doing on that mission?
Harry: Well, in, in terms of reshoring per set, you know, uh, so, so we track, I, I, I’ll call it gross. reshoring So we, we track the jobs coming back, but at the same time, there’s still some jobs moving offshore. There’s still productivity improvements, still other things happening. But we, so we, we track the announcements of jobs going back and, uh, in 2010 when I founded the Reshoring Initiative, we identified 11,000 jobs announced between reshoring and FDI in that year.
And then it’s progressed and. In 2024, it was in the year 244,000 jobs. So it’s going from 11,000 per year to 244,000, which is a compound annual growth rate of about 25%, which if we were, uh. A company, we’d be going public for a billion dollars and so it’s done very well. Now at, at the same time.
[00:07:00] And you’ll read articles by this firm and probably, I haven’t read it yet. They’ll say it, it is going nowhere. Manufacturing employment is, is flat for the last fif 14 or 15 years, which is, it’s, it’s up a little bit, half a million, something like that. And, and that’s true, but if you compare that to the past.
We went through a period of decline like this, you know, for 30, 40 years, manufacturing appointment kept going down, and now we’ve had, uh, 15 years of flat and 15 years of flat is better than continuing on down like this. So when I did a regression analysis on it, I concluded that we have five or 6 million more jobs than one would’ve predicted back in 2010.
And the reason is because we’ve had so much reshoring and so much. Uh, so much less offshoring than was happening in the past. So, so are, are we outta the hole? No, but we’ve stopped digging the hole deeper and we’re starting to clam our way up.
Lew: [00:08:00] It’s, uh, funny. This morning I ran across, uh, a, a news bite. it’s a little off track, but I think it’s worthy commenting because I found it absolutely shocking. And that is there’s one product in this country that we actually are looking to offshore. As opposed to onshore reshore. And that is Helium three.
Helium three produced in this country for the rocket ships going to the moon costs. Here comes folks, $20 million a kilo a determine, determined that it’ll be cheaper to manufacture it on the moon. So that’s what one of the things, one of the missions about the moon trip now and the landing in 2028 to see where they can get the most benefit of Helium three, which is a [00:09:00] extremely, extremely rare commodity.
And, but they say the moon is full of it, so if you’re full of it, you’re full of it.
Harry: the, the, the mission is also gonna be looking for water. Because the part, part of the mission plan is, is to get ready to eventually go on to Mars. And if you’re gonna go on to Mars, you need reaction mass, you know, for the rockets. So you need water. And there’s places under one of the poles where they think there’s a lot of water and they’re gonna be able to mine that and use it for the future.
Future flights further into space.
Lew: I think they’re calling it harvesting.
Amy: Yes. Well, speaking of harvesting, uh, one of the things that you mentioned, um, that I think is relevant is kind of bringing back, obviously with this leveling off of the jobs, hopefully an increase there. What does that mean for the. Jobs that are being offered as far as skills growth.
Harry: we did a survey last year. Of a reshoring survey got 500 good, good [00:10:00] responses. We were very pleased and we asked companies what would motivate you most to bring the manufacturing work back? And they, they were, they, they, they wanted lower taxes. They wanted deregulation, they wanted, uh, tariffs, they wanted, you know, all, all these kinds of things, but, but lower currency.
But, but most highest priority was, uh, a better quality and quantity of skilled workforce. That that got, they said un under that condition, they’d bring back 30% of the work, whereas the other ones were more like 20 or 15%. So they put their highest priority on having the workforce. And, and, and their, their insight is correct because if you, you know, even though the, our president and every president has said, we can out manufacture anybody, we’ve got the best workforce in the world.
You know, they have to say that to get reelected. but, but in reality, we do a horrible job of basic education for our kids. So, so many of ’em are not numeric or, or literate. [00:11:00] They, and then we don’t get the best kids to, to become the tool makers and the welders and the forgers. Instead we get those that, that somehow rather can’t go on to college.
And then you, you, you, you, if you try get the best of these, whereas in other countries like Germany and Switzerland, they take really top kids at the age of 16, they do internships and apprenticeships and they train ’em so well to get really smart kids, train ’em much better than we do and therefore they’re more productive, higher quality, better delivery, all all kinds of things.
And so we need that. We, we need to, if we’re gonna be competitive in the world, especially if we want to continue to pay. Three times as much as China and five, five times as much as Mexico. We’ve gotta have a team that’s at least as good or better than theirs,
Amy: Have you seen any growth with that?
Harry: president Trump came out about, uh, six months ago with an executive order for skilled workforce, and, and he called for a million more apprenticeships, and there’s various things be going on on that, and I’ve been talking to the Department of Labor and giving them my [00:12:00] suggestions on what they have to do to, to make that happen.
And, and at the same time, I, I, I get all the newsletters industry week and SME and so on, and almost every day I see an announcement of another community college that has an advanced manufacturing program. And, and so, uh, so yes, yes. I, I’m, I’m convinced that the, that it’s happening, the, uh, the, the number of manufacturing apprentices.
In the last, I think either five or 10 years has gr increased by 83%. I’m starting to see surveys where surveys five, 10 years ago said, should, should we have they asked people, should we have more manufacturing here? Everybody says yes. Are your kids gonna go into manufacturing? Everybody said no. And so, so, but, but now I’ve seen surveys that say.
We think that going into manufacturing, we think going into the skilled trades is an excellent choice for our kid. And, and part of that is [00:13:00] sort of a self-inflicted wound by the universities. ’cause they’ve gotten the tuition so high and they’ve sort of softened down the training so much that you spend hundreds of thousands of dollars and you, and you come out.
I, I read one, one study that said. 60% of the college graduates were cognitively indistinguishable from the condition when they went in as freshmen. So they spent hundreds of thousands of dollars, four years of their life and, and, and were not a better prospective worker than they were when they started.
Now that’s sad for a country.
Amy: It really is. I mean, I can’t tell you how many people that I know that I feel like had degrees in, like underwater basket weaving. And it’s like, okay, well what are you gonna do with that? You know?
Harry: Yeah.
Amy: You know, so, and then you just have to start figuring it out. So I, I think that that makes a lot of sense.
Harry: the, it’s the country’s own fault because we have this wonderful, uh, college loan system and, and, and almost anybody can [00:14:00] apply for it and get the money, and, and we, later on in life, when they want a car loan or a house loan, the, the, the bank says, show me how you’re gonna be able to pay it off.
But with a college loan, they don’t do that. And so what I think they should be saying is, where do you want to go? What are you gonna study? Are you qualified for that? Such that I believe you’ll graduate? ’cause a lot of ’em don’t graduate. Do so will, will the lender believe you’re gonna graduate? And if you do, will you make enough money to be able to pay off the loan?
And if you’re not gonna graduate and make enough money to pay off loan, you don’t get the loan. You go, Stu, go. Go study something else where you can get a good return on your investment. But our, our, our. And so as a result, we’ve had, you know, something half a trillion dollars of write-offs of the college loans because the people don’t pay them off.
And you and I are paying for it as taxpayers.
Amy: yeah. And whereas if you go into an internship for a, for a skill, you’re getting paid for your internship and then you’re [00:15:00] walking out in a much, much less amount of time making, you know, 140, $150,000 a year. One in a lot of these.
Harry: Certainly not all, not all making that the,
Amy: not all, but I’m saying there is a lot of growth opportunity and it’s much faster and there’s a need for it,
Harry: no question.
The, the best statistics I’ve seen are for fame, all caps, FAME, which is a, an apprenticeship system that came out of Toyota in Kentucky that, uh, Nam is now working with and their average, uh, grad apprentice graduate five years after graduation. This making about $98,000 a year, which is approximately the same as as the average of PhDs, which is pretty darn good.
Amy: Yeah, absolutely. All right, so that’s definitely a direction we need to start heading in.
Lew: to digress for a moment, Harry, uh, I, I know you won an award from the Association of Manufacturing Technology. Tell us a little bit [00:16:00] about that.
Harry: No, no. Uh, first it was, it was a great honor. It was back, uh, March 12th at, uh, in Fort Lauderdale and they, they, they, they do this like every other year or something like that, and they find somebody that they. They believe deserves it. And this, you know, they flipped the coin. He came up with Harry this time, but it was um, uh, just for background, A A MT used to be the National Machine Tool Builders Association.
So it’s machine tools plus. Uh, robots and tooling, you know, you know, cutting fluids, all this kind of thing. And, uh, they put on I MTFs, which is the, in, in, in a really good year, is a hundred thousand attendee trade show in McCormick Place, the biggest, biggest in manufacturing trade show in the Americas.
And, and the second or third biggest of any kind of trade show in. In, in the Americas. And so they put that on. And the, I was introduced by Doug Woods, who runs the association, good friend, and by Lee [00:17:00] Morris, who runs Morris Group, which is about the largest machine tool distributorship in the, in the country and, and believes supporter.
A supporter of our, which we appreci. And has done a, a, a, a great job, uh, supporting us manufacturing as a whole. And the, uh, I, I introduced a, a couple of concepts, one takeaways. I like people to go away with, something they can do as a result of having heard, heard the talk. And one, one is take care of customers.
When I, when I was the president of Charma, that was our mantra. Mantra. We just focused on still and delighting the customers. And, and as a result of that. We went in, in seven years, we went from being number seven in the industry to number one in EDM in North America and focused mainly on just, just ruthlessly, you know, taking care of the customer, delighting the customer.
And then the other other thing was the importance of always selling. And so I, I, I told the story about, [00:18:00] uh, uh, going to a wedding of my niece in, in a, uh, country club outside Cleveland and the. I’m talking to doctors and lawyers and Indian chiefs and I went to the bride’s mother. I say, aren’t there any manufacturers here I can talk to?
She said, yeah, bill over there. You know, so, so I went over to Bill and turned out that Bill’s company was in the market for EDM machine, which is what my company, you know, produced and sold and, and he had not been talking to us. He’d been talking to the competition. So, so that the next month in our international newsletter, it talked about the wedding lead.
Two months later, the newsletter talked about the wedding order, and so then I could go back to the salesman and distributor and say, I’m selling the damn machines on Saturday at the wedding. You can at least get up and sell really hard all week long.
Amy: So, you know, one of the questions that I had had, which will bring. Us all full circle, I think to some degree is that why do we have such a large trade deficit? And I think, you know, being competitive to your point, has been part of [00:19:00] that problem in other ways. But you know, what you’re talking about is really kind of how the construct, how you construct and do business.
But, obviously we, we struggle with some of the other things as far as competitiveness that I think have probably lent to, um, such a large trade deficit. But can you speak a little bit to that?
Harry: Well, the, the underlying problem has been cost. That the cost of making things in the US is. 15 to 20% higher than in the other developed countries like Germany, Switzerland, you know, France, et cetera, France, you know, and, and we’re 50 to 60% higher than China. Uh, maybe Indonesia, India, places like that, where the, where the wages are are substantially lower.
So, and that, that difference is. It’s enough to attract companies to, you know, to to, to, did they know their competitor’s gonna get product there and sell it at this price? And then therefore, if they try and make it here in the US sell at this price, they’re going outta business. So they follow the other guy to the, to those low [00:20:00] cost countries.
And so, so the, so then you say, why, why is our cost so high significantly? It’s because the dollar’s too high. So we have the reserve currency. Which is described as a, uh, as a privilege, and it is for a bank ’cause it attracts money to the United States. but for a manufacturer, that means that it, it means our wages are this much, this high relative to theirs instead of that high relative to theirs.
And so I’ve done a lot of studies on it, and the US dollar is overvalued by about 15 to 20% versus the developed countries and about. 50% versus, uh, China and so on. So j just by taking that, that excess out of a dollar, uh, and that, that, the question is do you do it like this or do you do it gradually like this?
’cause it has impacts. But if you do that, all of a sudden the companies would say, huh, there’s not so much difference anymore. Yeah. When you, when you add in the duty and the [00:21:00] freight and the carrying cost of inventory and, and the geopolitical risk. It’s not worth it anymore. And so I wouldn’t have to, I wouldn’t have to work so hard to get people to do it because, ’cause companies would see it more clearly on their own that, that, that it’s in their interest to bring their work back.
So, to me, to me, the dollar is the number one thing, but be because of the, the dollar having been so high. And, and it, and it being so attractive to get things offshore. Now we got these supply chain gaps that I talked about. So now there’s things you can’t get here. So now it’s gonna take years to, to, for companies to say, huh, now it makes sense to make it here.
Build a factory, you know, a billion dollars, two years, hire a thousand people. So Ty takes time and money to re to, to repair all those wounds that we’ve had from the past.
Lew: Isn’t it also true that, I think, anyway, a significant portion of the, the trade deficit is that there’s really no policy [00:22:00] concern over the debt.
Harry: Generally speaking, most economists, most politicians are trading in Ricardian economics. Which is make, get it where you can get it cheapest. and then, and there’s a logic to that. But, but, but it assumes, it, it doesn’t assume that the dollar is overvalued by 20 to 50%.
’cause that didn’t used to happen back in. The old, used to be if a country had a big trade deficit like it does now, their currency would come down until things got into balance. And it doesn’t happen anymore because we’re the reserve currency. And so, so what we say is. Get, get that excess out of the dollar and then let the market behave.
’cause the market can, it’s better that the market decides what companies, what products are the winners and losers, rather than having somebody having Harry, rather than having Harry decide. But, but you have to level the playing field enough so that the market can operate properly. So that’s what we push very hard for.
Is, Is [00:23:00] getting, getting the dollar down, and there’s mechanisms for that. There’s something called the Market access charge by Dr. John Hansen that would apply a little, uh, fee to money that’s coming in here just to be stored. Not to buy factories, but just to be stored and by reducing the demand for dollars, the dollar would come down, the other currencies would come up, and we’d get things back into better balance.
That that’s my first choice. Second choice would be a value added tax. Third choice would be the tariffs, but not, not the chaotic changing every week. Hard to understand tariffs, but something
Lew: There’s a problem with that, Harry, what does, uh, reshoring initiative, uh, do for company manufacturing companies?
Harry: Yeah. So I, I think. whatever’s needed. Uh, the, I think most important, we, we, we make the trend credible. So when I started this 16 years ago, it was not credible. Nobody believed it. Everybody said, Harry, don’t bother. It’s not [00:24:00] gonna happen. We’re too far gone, you know, blah, blah, blah. And, and so by documenting the trend, by, by being on how many 20 of your shows, by, by we, we’ve written hundreds and hundreds of articles, been interviewed a thousand times, what have you?
Made presentations. and by getting the word out reassuring became credible. Became believable, and it, it wasn’t inevitable. It, for companies, it wasn’t simple. But at least it was worth thinking about. It. It was, it was, it was credible enough for them, for them to try. So, so, so doc, you know, credibility for the trend and then specifically documenting the, the trend from 11,000 jobs per year up to 244,000, promoting it with all the talk and articles and so on.
Uh, we provide the, the, the TCO estimator total cost of ownership estimator, which is, which takes, starts with that. Factory price and as in the duty and the freight and the carrying cost inventory, the intellectual property risk, the geopolitical risk like China and [00:25:00] Taiwan and so on. and when, when you do that, it’s, first, it’s free to use online.
On our website. I know a thousand people have used it. if the company comparing us to China based on price, the US wins 8% of the time. Based on total cost 32% of the time. And if there’s a 15% tariff, then 46% of the time. So just by getting companies to do the math correctly, the US win rate goes up enough.
Like, I’ve talked to the White House, they said, what do you want us to do? Get President Trump? To ask every company to use total cost of ownership to make, when they make their sourcing decisions for, for free online on our websites, we’re not making money on it.
Lew: Why don’t you give us that URL so our audience could see
Harry: Yeah, If, just, just go to the website, which is reshore now.org, and in the bar at the top it says, total cost of ownership of estimator. Just, just, just click on it. but if, if companies would do that millions of jobs just, just by getting companies to do the math correctly, millions of jobs would [00:26:00] come back with no grants, no tax reductions, no.
No changing in currency. No, no. Anything. You know, but, but then you’d still need the workforce. You’d still need companies to do the investment. You’d still need companies to take the long-term perspective of growth and and success instead of the short term profit maximizing for the quarter and Wall Street.
So there’s still, there’s, there’s things that, you know, there’s this, it’s, that’s necessary, but all these other things have to have to fall into place. Uh, we have a, a geopolitical risk, you know, obviously we see we’re surrounded by it for what, the last month, I guess. and the, so we came out about a year or two ago with a geopolitical risk map that, that estimates the probability of a US company being decoupled, meaning cut off from its supplier in each of the other countries.
And the idea is for the, the company to say, well, what am I getting specifically from China? And, and if, if it got cut off ’cause of Taiwan, how long is that gonna [00:27:00] last? Six months or a year? How long is it gonna take me to find a replacement sewers? Well, they, they could say, well, there’s a lot of guys that have been trying to get me to bring the work back.
And I, and I tell ’em that, imagine the war starts yesterday and you call those suppliers today And you say, can you make those things for me in a couple weeks? And, and the supplier’s gonna say, well, bill. I could have a month ago, but I you’re the thousandths call I’ve had today after the war started.
I think it’s gonna be two or three years until I can build a couple of factories and buy the equipment, hire the people. I’m gonna take care of the people that gave me the work before the war started. I’m gonna take care of their needs first. See? so geo risk is significant consideration. we have a, a National Metal Working Reassuring Award. So, so companies that have brought work back, metallic work, you know, machined, forged, cast, what have you, the, uh, they can apply for that. And it’s been given this year at IMTS, the Big Machine Tool [00:28:00] show, and it will be done the odd years at fabtech, the metal fabrication show.
And so it gets lots of publicity. Last year was won by. Marlin Wire products. Drew Greenblatt, real, real great guy and by, uh, GE Appliances, which has, has reached, invested $6.5 billion to Reshore manufacturing from Mexico and China, and has now has, I think, 6,500. US suppliers producing all the components to go into the appliances.
So it’s so the big company makes a decision and then all these smaller companies benefit from that. ’cause that’s where most of the work actually gets done. if anybody out there that has, uh, has reached short, I’d love to hear about it again. Re info@reshorenow.org will be good. And if you have the opportunity to reshore in your own company, your own big, your own big company, or, or helping your customer [00:29:00] decide to reshore and give you the business, contact me and I’ll help you.
I want, I want, I, I need more. I, I wanna get to two 44,000, up to 300,000 a year.
Lew: Matter of fact, on your website you have the 2026 reshoring survey, which I think is important information for manufacturers to give to you. So you can come up with the new 20 26, 27, progress that’s being made, uh, within, uh, your. Sphere of influence. Uh, so I recommend that you go to, uh, Harry’s, uh, website, which is Harry.
I want to get it right.
Harry: Uh, reshore now.org. I could send you the URL for the survey and maybe you could post it somewhere on this. Uh,
Amy: will.
Lew: Sure.
Harry: And then, then that’ll be easier for people that, to get it directly. But we, we need hundreds of responses to make you critical, credible, [00:30:00] and, and the, the idea is to.
Is, is to have enough credible data on what it will take to get people to reshore what, why they’ve reshored so far, why they haven’t, and so on, and then feed that to the White House. So the White House can make better decisions to do the things that, that we all need, that the country needs.
Amy: Well, it sounds like the service that you offer is incredibly valuable in a time when there’s so much uncertainty. To help, you know, these companies really project and plan, so there seems to be a tremendous amount of value. So participating in a survey like that to give even more information would be very beneficial.
Not just for the companies themselves, but you know, for, for us as a whole.
Harry: And, and when? When the survey’s done. We’ve got the results, get me back and we will review the results of the survey.
Amy: Perfect.
Lew: thanks Harry for being here as usual. Uh, we’ll, we’ll gear up for your next appearance, uh, in, in the future sometime. I just wanna remind everyone, [00:31:00] uh, that, uh, manufacturing talk radio is a weekly. Podcast, uh, come to our website, which is manufacturing talk radio.com, and manufacturing is spelled out.
Uh, sign up, subscribe, and you’ll get notifications every time we do a show. Um, Amy, any parting words?
Amy: For more information on everything that Harry’s talked about today. You can also go to our website and the as well. As get links within our bio for this. So, uh, thanks so much and join us again next time.
Harry: You both look great in your yellow jackets.
Amy: Yeah.
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