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Tue. Apr 16th, 2024

Some US-based manufacturing companies have recently alarmed that lack of local suppliers has made it very difficult to cope with Chinese automobile manufacturing companies.  This was particularly disclosed by Alex Keechle, the CEO of Monster Moto, a mini motorcycle and go-cart manufacturing US company that relocated in 2016 from China to Louisiana, the United States.

“Consumers won’t give you a free pass just because you put ‘Made in USA’ on the box. You have to remain price competitive. There’s just no way to source parts in America right now. But by planting the flag here, we believe suppliers will follow,” said Monster Moto Chief Executive Alex Keechle during a tour of the company’s assembly plant.

It becomes more challenging for the company because no company has the control of the consumer’s purse. They decide on what to buy base on fanacially abilities and capabilities. For instance, Monster Moto’s bikes, sell for between $249 and $749. It is difficult for the company to raise the prices, perhaps some of the company’s price sensitive prospective customers might turn to less expensive rivals made in China.

The company’s experience is a good example of the challenges a lot of American  manufacturing companies face as they try to rebuild American manufacturing along Donald Trump’s administration. Most of these U.S. manufacturing companies and their suppliers, for example, have already invested billions of dollars in plants abroad and would face an expensive and time-consuming transition to buy thousands of American-made parts if President Trump’s proposed border tax on imported goods were to become law.

The loss of nearly one out four U.S. factories in the last two decades means parts for its bike frames and engines must be purchased in China, where the manufacturing supply chain moved years ago.

Cindi Marsiglio, Wal-Mart Stores Inc’s vice president for U.S. manufacturing and sourcing added, “Finding U.S.-based suppliers remains one of the top challenges across our supplier base.” Perhaps this might be the major reason why Wal-Mart partnered with Monster Moto and several other U.S. manufacturing companies in a drive to increase spending on American-made goods by $250 billion by 2023 in response to consumer demand for American-made goods.

Since taking office, Trump has continued promises to resurrect U.S. manufacturing’s bygone glory days and bring back millions of jobs. On March 31, Trump directed his administration to clamp down on countries that abuse trade rules in a bid to end to the “theft of American prosperity.”

However, some business owners believe that it would take decades to actualize Trump’s mission in this regards.

“It’s almost as if people think you can just unplug manufacturing in one part of the world and plug it in to the U.S. and everything’s going to be fine. It’s not something that happens overnight,” said David Abney, Chief Executive Officer of package delivery company United Parcel Service Inc (UPS), which helped Monster Moto reconfigure its supply chain to bring its Chinese-made parts to Ruston.

“We recognize that the manufacturing jobs that come back to America might not all look like the ones that left, and we are taking steps to ensure that the American workforce is ready for that,” a White House official said.

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