US companies feel govt pressure to save US jobs

By REUTERS

June 18, 2010 Updated Oct 12, 2010 at 4:03 PM EST

NEW YORK (Reuters) - U.S. companies increasingly
feel political pressure to save U.S. jobs by manufacturing in
the United States instead of in low-cost locations like China,
according to a quarterly survey.

The survey by AMR Research, a market research firm focused
on the global supply chain, found 10 percent of U.S.-based
manufacturers consider political pressure the primary reason to
manufacture in the United States, up from 4 percent that said
so in November.

Part of the shift can be attributed to the recent
government stimulus package, which comes with "strings
attached" to save or create U.S. jobs, said Noha Tohamy, AMR
vice president of research.

"With the Obama Administration, there is more awareness
about the need to bring jobs back," she said.

"This is driving some global companies to look at their
sourcing strategy, and instead of going for low-cost countries
like China, they are starting to either bring jobs back home to
the U.S. or closer, to places like Mexico and Brazil."

Tohamy cited the example of Intel Corp, which said
last month it would invest $7 billion over two years to build
next-generation chip manufacturing plants.

Meanwhile, Mexico, Canada and Brazil stand to benefit from
a trend toward "near-shoring," or setting up operations close
to the U.S. home market, Tohamy said.

The number of companies planning to increase such activity
is five times higher than those expecting a decrease, according
to AMR's survey, which includes responses from about 140
companies. The "blind" survey did not identify respondents.

Companies looking at their supply chain have to consider
not just the direct cost of operations but also political
factors and issues like product safety and failure rates,
Tohamy said.

Product quality failures remain among the top risks to the
supply chain, but more manufacturers now consider the slump in
consumer spending to be their biggest worry.

Thirty-seven percent of respondents identified lower
consumer spending in the United States as the top risk. Only 15
percent expect this risk to decrease by next year, according to
AMR, which works on supply chain issues with companies like
Procter & Gamble Co , Boeing Co, and Cisco
Systems Inc..

(Reporting by Nick Zieminski, editing by Dave Zimmerman)




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