Mississippi getting the nod in reshoring decisions

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Published: August 26,2012

Tags: AirGuide, China, manufacturing, Mexico, reshoring

Panelists Dewel Brasher of Navistar, Glenn Dennis of Mississippi State University’s CAVS Extension, Guy Lipscomb of Southern Motion, Paul Jones of Multicraft International, Ray Purnell of Southwire Co., and John Moore of Mississippi State University’s CAVS Extension.

Florida-based HVAC equipment maker AirGuide Manufacturing’s recent announcement that it would shift a handful of factory jobs from Mexico to Clarksdale hardly moved the needle on the news meter.

But watchers in Mississippi of America’s “reshoring” effort noticed. They took AirGuide’s relocation decision as another sign of a coming “convergence” by which the cost of operating outside the United States has converged with the cost of operating within it. In the instance of AirGuide, the Miami-area company concluded that it made both fiscal and competitive sense to come home.

AirGuide’s move is designed to “to better serve our customers and further improve our competitiveness manufacturing our HVAC and energy-efficient lighting products,” said Doug Marty, company president, in a press statement detailing the consolidation of 40 manufacturing jobs from Mexico and Texas in a new plant in Clarksdale.

Like AirGuide, Pelahatchie’s Multicraft International has brought in jobs from Mexico. The 30-year-old maker of automotive electrical and electronic equipment gained the jobs through convincing Chrysler Corp. it could do a better job making a brake switch that had encountered manufacturing flaws in Mexico. Chrysler gave the 1,000-employee company the nod over other U.S. bidders and parts makers from Korea, Europe and Mexico, said Paul Jones, executive vice president, a panelist at last Monday’s Mississippi State University conference on Reshoring, Retaining and Growing Mississippi’s Manufacturing Jobs.

Multicraft has also won Chrysler’s hemi-magnetic assembly and wire harness work previously done in Mexico, Jones said, attributing the contract awards to its long relationship with Chrysler, its “zero” defects record, successful implementation of automated and semi-automated assemblies, a strategic support partnership, competitive pricing and — most important — confidence in the company’s leadership and workers.

“The buyer indicated that it came down to trust,” Jones said in listing the final reason for the contract awards.

Rather than gaining business from outside the country, Southern Motion Furniture’s victories have come in showing wholesale retailers Mississippi can make competitively priced reclining furniture Americans will buy, said Guy Lipscomb, co-founder, chairman and CEO of Southern Motion Furniture and a panelist at the reshoring conference.

The company has an 800,000-square-foot factory in Pontotoc and since 2007 has grown its workforce from about 500 workers to 1,300.

Lipscomb said beating back pressure from retail buyers to take his manufacturing to China had been a regular part of his work day over the years. That doesn’t happen much anymore, he said.

“We had urging from our customer base in 2004 to take our cutting and sewing jobs to China,” he said. “We decided not to. We basically took a stand…. We got beat up pretty good.”

Lipscomb did have to turn to Europe and China for fabric and leather materials because “virtually all of the manufacturing facilities” for those products in the U.S. “have shut down.”

But otherwise, Southern Motion “is not doing anything” in the way of offshoring, Lipscomb said, adding he is confident in the quality of the company’s workers and pleased that he has kept his workforce intact even with the arrival of well-paying jobs at Toyota in nearby Blue Springs.

Of the six or seven workers who departed for Toyota, four have returned, he said.

“My opinion is that the people in Mississippi know how to work,” he said. “The ones who want to work will.”

While Southern Motion is not going anywhere, Lipscomb does expect to have see new companies relocating to Mississippi from foreign soil over the next few years.

“Our state is going to be elite in the reshoring process,” he said.

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