Cheap labor fueled decades of factory building in China as America shifted production across the Pacific Ocean.

Cheap labor fueled decades of factory building in China as America shifted production across the Pacific Ocean.

The once nonstop flow to offshore plants and factories drained a generation of jobs from the United States.

Bill Browne, director of client services at the Corporation for Manufacturing Excellence in San Ramon, Calif., says the job drain has slowed to a crawl and in some cases has reversed.

"Manufacturing is starting to come back because the labor gap has closed in the last 20 years," said Browne, who will be the featured speaker at a Southern Oregon Business Conference Thursday at the Red Lion Hotel in Medford.

"Real wages in China have gone up in double-digits every year," Browne said. "When I lived there from 1992 to 1996, we were paying the equivalent of a buck an hour; it's a lot more than that now."

He said the pay differential will be down to 30 percent by 2015. "You figure in transportation costs and fuel, and flying people back and forth is not so attractive anymore," Browne said. "It's a golden opportunity for U.S. manufacturers to take a look at the total costs of making things offshore."

Operations involving intellectual property are primary candidates for heading home.

However, commodity-priced goods, such as toys and cheap apparel, likely will remain in China or move to other Asian locations with lower labor costs.

"When you go offshore, someone may be stealing your idea, and you lose (legal) control in other countries," Browne said. "Electronics will stay offshore, because of the high labor component. You have lots of folks to pay, and it's cheaper there."

He said small, niche manufacturers will spring up. In some cases, firms will be aided by the so-called Make it in America bill, which forces manufacturers getting federal dollars to acquire American-made components.

He said rail companies producing locomotives and rolling stock for Amtrak are scouring the country for such suppliers. "Neither California nor Oregon are in the top 15 for business-friendly states," Browne said. "What we have to do is work smarter and faster, but we're probably not cheaper than the guy in Texas. We have to have better quality, a shorter time to market and innovation to make us desirable."

Reach reporter Greg Stiles at 541-776-4463 or email business@mailtribune.com.