Any discussion of reshoring manufacturing jobs from China to the U.S. runs headlong into two realities.

First, American OEMs and brands outsource manufacturing for a reason: the combination of skilled labor, infrastructure, and materials in China is often unavailable onshore. As good as it sounds to reshore production — and the benefits of domestic manufacturing are compounding — companies must first ask the question, “Exactly what am I reshoring to?”

An inadequate supply chain in the U.S. provides an easy answer for many companies. Or, as Phunkshun Wear president Jay Badgley told me, “Reshoring was a term I heard frequently when the tariffs were announced, but I haven’t heard any manufacturer use it in months. I don’t know of any apparel brand that’s reshoring.”

Badgley’s outdoor industry apparel brand manufactures in Denver. He’s an outlier in an industry that found qualified, cheap labor in Asia decades ago, and that hasn’t looked back. Today the factories in China — and Vietnam and Bangladesh and other Asian outposts — that make shoes, apparel, accessories, and components used in the assembly of any of a thousand products, are world-class, funded by brands in America and around the world.

This, then, is the other barrier: As much as they’re demonized here, China’s a rational actor — and a manufacturing superpower. Meaning, they won’t give up manufacturing jobs easily. The Chinese have used U.S. investments in people and factories to build a highly advanced manufacturing ecosystem. As Badgley says, “Look at a jacket from The North Face. It’s a thing of beauty. The stitching, the technology, the quality. That coat couldn’t be made here, for a reasonable price.”

China is also incentivized to maintain superpower status by its staggering demographic conundrum. Sarah Rathke, a partner at Squire Patton Boggs and speaker last week at CompanyWeek’s Supply Chain Reality Check webcast, turned me on to James Kynge’s China Shakes The World.

Kynge says this about what he calls China’s “population paradox”: “Even when the economy grows at 9 or 10 percent, it fails by a margin of several million to create the 24 million new jobs required each year. So while China appears to the rest of the world to be enjoying an amazing growth bonanza, the officials working behind the high walls of their leadership compound in Beijing feel trapped in an endless employment crisis.”

Rathke says these are primarily manufacturing jobs, noting, “The 24 million annual figure covers both new entrants into the job market, and a certain amount of transition by rural citizens, each year, to urban manufacturing work.”

Facing the daunting prospect of creating 20+ million jobs every year, it’s a certainty China will redouble efforts to keep every single American brand happy, and every job in China.

What, then, can we do to reshore a mere 5 million manufacturing jobs, a number that according to the Reshoring Initiative‘s Harry Moser, would balance American trade deficit and set the U.S. back on a path to providing companies here more domestic options.

Reduce costs, for one. Moser estimates that through a combination of workforce training, more deliberate management of the value of the dollar, and a cohesive pro-manufacturing industrial policy, the U.S. must lower its across-the-board manufacturing costs by 20 percent to be competitive with China. (Hear Moser outline the numbers in the CompanyWeek webcast.)

Moreover, it’s clear we can’t displace China as the global manufacturing leader. We can’t make everything. China moves millions of citizens into manufacturing work every year. Manufacturing, and manufacturing alone, is the engine that moves millions of Chinese into the middle class.

If we can’t make everything, what should we make?

It’s here that a new U.S. industrial policy must be more nuanced than the current dialogue. We know products and components purchased with federal dollars will be a priority, especially in biotechnology, defense, and other national security-related industries. We know a new generation of consumer-led manufacturing in consumer categories — like food and beverage, as well as transportation — is already powering a U.S. manufacturing comeback.

What then, of other industries manufacturing offshore and dependent today on outsourced labor and infrastructure? The current thinking is that some just aren’t “strategic,” or that barriers are too great to justify investing in more U.S. production.

It’s the wrong approach. Public and private actors should collaborate to find ways to encourage more domestic production in even the toughest industries — like apparel. Moser’s cost formula is a foundation.

And who would argue that the outdoor industry, for example, isn’t a “strategic” economic sector? Very few in America’s West. But if we can’t cut and sew, what should we do here to help companies bring production home, even incrementally? What can be accomplished here, with American assets, ingenuity, and inspiration?

With the idea that no job that can be done here should be left offshore, this is the question that should occupy manufacturing advocates across a dozen industries.

No soldier left behind. Booyah.

Bart Taylor is publisher of CompanyWeek. Email him at btaylor@companyweek.com.

The business leaders who navigate America’s diminished supply chain to successfully manufacture in the U.S. also carry with them a hard-edged realism about domestic production.

The facts on the ground are these: It’s damn hard in many cases to travel the last mile, to see it through with U.S. fabricators and suppliers when so many core manufacturing capabilities, materials, and expertise are elusive. Or offshore.

Pete Wagner makes award-winning skis from an idyllic perch in Telluride, Colorado. His innovation is changing the sport: Skiers provide a full range of biometrics to optimize the performance “fit” of a ski, information that’s processed by Wagner’s technology suite to fully customize the product for a buyer. It’s every bit the digitization of American manufacturing we read about weekly.

Yet to the extent manufacturing’s digital evolution is key to its future, it’s not the primary barrier for Wagner to make skis in the U.S.

“Our company, our brand, is all about American-made and sourcing everything we possibly can in the U.S.,” Wagner says. “But occasionally we run into an issue that speaks to what U.S. manufacturing has lost.”

Wagner offered the example of his national search for a key component. “We buy an anodized aluminum alloy from a company in Austria that’s used in our skis. I wanted to source the material from a U.S. company,” he explains. “I figured it must be available for aerospace or other applications. I talked with some great people in the U.S. aluminum industry. After getting material analysis done, I was told that we can’t get a similar type of high performance alloy material in that configuration from a U.S supplier.

“It makes you question how much we value manufacturing in the U.S.,” he adds. “Or, it’s just a smart business decision, given the global market. Either way, it makes it tough.”

Wagner’s frustration plays out by orders of magnitude for other companies, and for entire industries, including his own. Wagner Custom Skis is an anomaly in America’s burgeoning outdoor industry; few of its leading companies are committed to U.S. production. Some can’t. Some don’t try. So the topic is largely avoided, or relegated to the back burner by other more positive story lines.

Others are less sanguine about America’s industrial state, including the Pentagon. Metalcraft Industries CEO Larry Caschette pointed me to a U.S. Department of Defense Industrial Capabilities Report to Congress with this rather grim assessment:

“[The] Department of Defense is still the colossus of the federal system, i.e., the single biggest buyer of goods in the U.S. government. But unless the industrial and manufacturing base that develops and builds those goods modernizes and adjusts to the world’s new geopolitical and economic realities, America will face a growing and likely permanent national security deficit.”

Caschette is encouraging manufacturing enthusiasts to tag the report in messages to elected officials to reinforce the findings. Framing U.S. manufacturing as a “national security” issue certainly gets the attention of elected types.

It’s also hard to imagine how the DoD’s prescription comes to fruition without more vigorous public sector support. Per the report, a “national defense industrial strategy” is needed, a four-part program to:

1. Reshore our defense industrial base and supply chains to the United States and to allies, starting with microelectronics, and restore our shipbuilding base.
2. Build a modern manufacturing and engineering workforce and research and development (R&D) base.
3. Continue to modernize the defense acquisition process to fit 21st century realities.
4. Find new ways to partner private sector innovation with public sector resources and demand. All these steps will be necessary to create a robust, resilient, secure, and innovative industrial base.

It’s stuff we write about every week.

But how much will government intervention truly help, even with a new and exciting “industrial strategy,” to reshore our industrial base? Can the U.S. government also build a modern R&D ecosystem?

American companies in part funded China’s world-class supply chain. Cheap labor and short-term profits were too hard to pass up. Now it’s up to us to bring it home. Let’s earmark substantial public sector support to hasten its reshoring as we take matters into our hands.

One good outcome would be locating anodized aluminum alloy for an intrepid American manufacturer. Let’s work on a thousand more. One company at a time.

Bart Taylor is publisher of CompanyWeek. Contact him with a source or supplier for Wagner Custom Skis, or reach him at btaylor@companyweek.com.

In February 2020, I said this about California manufacturing employment:

In sum, California is well-positioned for growth in the industries that promise to reshape U.S. manufacturing; to capture a higher percentage of the domestic jobs that do materialize in the 2020’s. For every job lost in apparel manufacturing, others are materializing across the region. Will they materialize here?

Since then, we know that COVID-19 has accelerated trends that were favoring domestic manufacturing before the pandemic, and that California stands to benefit. Here, then, are five predictions for California manufacturing in 2021, a year that stands to end much better than how it’s beginning, with a percentage guess as to the likelihood of each coming true:

1. Manufacturing’s beachhead expands as more companies evaluate domestic production options

The local and regional manufacturing comeback we chronicle every month is now a national story. In “Five Predictions For The Manufacturing Industry in 2021,” Forbes columnist Amar Hanspa belatedly forecasts:

We’ll see a shift to localized production. In 2021, the industrial manufacturing sector will take a page from the consumer-driven “farm to table” trend that has taken hold in the agriculture industry over the last decade, with a shift to localized production. This will primarily be driven by the threat of ongoing trade war/tariffs threatening global supply chains, encouraging manufacturers to move production activity closer to the customer. In the future, manufacturers will want to build where they sell for several reasons, including faster time to market, lower working capital, government policies, and increased resiliency. This won’t be an easy or overnight shift.

The “shift” is already underway. In California, that spells growth. The state is already an epicenter to companies in established industries like food, beverage, aerospace, and energy. Expect growth in new industries and sectors that have been more resistant to onshore production, like consumer and medical products, outdoor industry, and precision-machined parts.

Harry Moser, founder of the Reshoring Initiative and an authority on the economics of domestic production, ranked his top three sectors for CompanyWeek: “The hottest items in 2020 and 2021 are PPE and other medical products such as antibiotics,” he says, noting that “60 percent of companies reshoring production since March 2020 mentioned COVID as one cause.”

Moser continues, “Second, other essential or politically timely items with supply chain gaps, such as rare earth minerals, defense materiel, electronics, solar, and wind. Then, anything else now coming from China. Biden has said he will not end the China tariffs soon” — meaning companies manufacturing in China will be in the hunt for domestic options.

It adds up to a growth year for U.S. — and California manufacturing.

Likelihood: 80%

2. Free trade is dead

Even before COVID, tariffs exposed America’s sub-par manufacturing supply chain, but more, the lack of a trade strategy. As The Wall Street Journal noted, Trump tariffs resulted in a mishmash of outcomes that benefitted well-connected companies, but left others wanting.

Forget the notion of unfettered globalization — even for a top 10 global economy like California’s. State officials should lobby for targeted protection in promising local industries like bioscience, where cheap and subpar Asian products handicap manufacturers and force healthcare buyers to choose products made offshore.

President-elect Joe Biden has signaled a renewed commitment to manufacturing through the invaluable NIST MEP network. It’s a great start. California Governor Gavin Newsom and his team at the Office of Business and Economic Development (GO-Biz) must also take the lead on a regional plan that protects and accelerates promising manufacturing industries.

Likelihood: 15%

3. A small but influential cadre of pro-California manufacturers will push back on the relocation narrative

More a wish than a prediction, perhaps, but one silver lining from the steady stream of high-profile exits is that pro-CA companies begin to push back on the narrative.

And why not? As manufacturing’s brand ascends, California’s manufacturing assets become more valuable. Its R&D ecosystem is second to none, spinning off both technologies and companies that are changing domestic production to the core. But the depth and expertise of businesses in CA’s supply chain, in key industries like aerospace and transportation, is the state’s unheralded attribute.

With such quality companies, captained by California advocates like Pamela Kan at Bishop-Wisecarver, and Hale Foote at Scandic (read Inside the Tesla supply chain: Hale Foote and Scandic), and others that comprise CompanyWeek’s cadre of California Leaders, manufacturing in California is in a position to make positive noise.

Will it?

Likelihood: 50%

4. Workforce health will become big business, and manufacturers will play a leading role

Manufacturing’s stock rose in ’20 in part because U.S. companies rushed in to fill the void in PPE. The trend continues in ’21 as manufacturers innovate to build solutions that keep our public places safe, but more, keep factories and consumer-facing production facilities like breweries and restaurants open.

It’s the latest noble endeavor for a sector that built the arsenal of democracy and landed a man on the Moon. Coronaviruses have no chance.

Likelihood: 60%

5. The FDA will finally provide regulatory certainty for hemp cannabis producers — and the cannabis industry will explode.

It’s unfathomable that we lack official data as to how many employees work in the state’s billion dollar cannabis industry; how many work in manufacturing vs. other functional areas; how many work at state-regulated, federally illegal THC producers vs. unregulated but federally legal hemp companies; or how much of the growth manifest in chemical or food manufacturing the past few years is attributable to cannabis.

When, in 2021, the FDA regulates hemp-derived CBD products as a dietary supplement or food additive (or both), California’s cannabis ecosystem will leap forward, again. For suppliers and service companies, ambivalent about cannabis today, it will be too late to jump on the bandwagon. Get aligned, find industry partners, advocate for the Golden State’s homegrown industry — or watch from the sidelines.

Likelihood: 90%

Bonus forecast: CompanyWeek will report on 300 manufacturers in 2021

Here’s how we can help your company in 2021: If you haven’t been featured in CompanyWeek, send a note to Editor Eric Peterson to get on the editorial schedule.

The CompanyWeek “tribe” will expand in ’21 and along with it, contact and connections with new business and trade partners.

Likelihood: 95%

Buh-bye ’20. Hello ’21.

Bart Taylor is publisher of CompanyWeek. Reach him at btaylor@companyweek.com.