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Oil Price Spike Brings Jobs Back to US

Rising costs curb manufacturers' outsourcing

By Matt Cantor,  Newser Staff

Posted Jun 13, 2008 11:30 AM CDT

(Newser) – As costs for overseas production and shipping soar, US companies are growing reluctant to outsource manufacturing—and some are even bringing their plants back to America, the Wall Street Journal reports. “In a world of triple-digit oil prices, distance costs money," said an economist. But it’s not just the transport: Raw materials are getting pricier, and workers abroad are calling for more money.

One foundry president says shipping costs were “the straw that broke the camel's back." But even domestic transportation is expensive, and for some companies, there are industry-specific reasons to work abroad. “A decent amount of production could come back into the States within five years, not everything,” said a shipper.

A ship is moored by oil tanks in Tokyo Bay in Kawasaki, near Tokyo, Japan, Tuesday, April 1, 2008.
A ship is moored by oil tanks in Tokyo Bay in Kawasaki, near Tokyo, Japan, Tuesday, April 1, 2008.   (AP Photo/Itsuo Inouye)
A visitor stands in the lobby of Emerson Electric's headquarters in St. Louis, Nov. 28, 2007. Emerson has brought some jobs from Asia to Mexico and the US amid high transportation costs.
A visitor stands in the lobby of Emerson Electric's headquarters in St. Louis, Nov. 28, 2007. Emerson has brought some jobs from Asia to Mexico and the US amid high transportation costs.   (AP Photo/Tom Gannam, file)
In this June 10, 2008 file photo, a woman walks past the price board at a Shell gas station in San Mateo, Calif.
In this June 10, 2008 file photo, a woman walks past the price board at a Shell gas station in San Mateo, Calif.   (AP Photo/Jeff Chiu)
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