Small U.S. Manufacturers Give Up on "Made in China"

By David Rocks and Nick Leiber

When Sonja Zozula and Jerry Anderson founded LightSaver Technologies in 2009, everyone told them they should make their emergency lights for homeowners in China. After two years of outsourcing to factories there, last winter they shifted production to Carlsbad, Calif., about 30 miles from their home in San Clemente. “It’s probably 30 percent cheaper to manufacture in China,” Anderson says. “But factor in shipping and all the other B.S. that you have to endure. It’s a question of, ‘How do I value my time at three in the morning when I have to talk to China?’”

As costs in China rise and owners look closely at the hassles of using factories 12,000 miles and 12 time zones away, many small companies have decided manufacturing overseas isn’t worth the trouble. American production is “increasingly competitive,” says Harry Moser, founder of the Reshoring Initiative, a group of companies and trade associations trying to bring factory jobs back to the U.S. “In the last two years there’s been a dramatic increase” in the amount of work returning.

An April poll of 259 U.S. contract manufacturers—which make goods for other companies— showed 40 percent of respondents benefited this year from work previously done abroad. And nearly 80 percent were optimistic about 2012 sales and profits, according to the survey by MFG.com, a website that helps companies find manufacturers. “A decade ago you just went to China. You didn’t even look locally,” says Ted Fogliani, chief executive officer of Outsource Manufacturing, the San Diego company working with LightSaver. “Now people are trying to come back. Everyone knows they’re miserable.”

There’s a growing sense, with the economy doing what it’s doing, of U.S. companies wanting to produce in the United States. It’s very important to them to have ‘Made in the U.S.A.’ on their label again.

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