Crisis in the Workforce: Can Reshoring Continue Despite Our Skills Gap? - Industry Today - Leader in Manufacturing & Industry News
 

June 30, 2025 Crisis in the Workforce: Can Reshoring Continue Despite Our Skills Gap?

A Reshoring Strategy for an uncertain trade war in unsettled times – actionable strategies for today’s turbulent environment.

By Harry Moser, Founder/President, Reshoring Initiative®

Trump’s on again-off-again tariff volatility has caused widespread uncertainty, compromising strategic decision-making. The defunct ‘move fast and break things’ business model, originally devised by Mark Zuckerberg in 2012, that is being implemented by the administration today, is creating turmoil.

Companies do not have control over unpredictable tariffs and geopolitics. However, as manufacturing leaders navigate the best approach to responding to trade developments, workforce training stands out as a clear, fully controllable competitive advantage. Without a skilled workforce, tariffs will fail.Control what you can control — workforce recruitment and training, innovation and operational efficiency i.e. competitiveness.

Here’s what I think

When you have business uncertainty, companies tend to not act. They don’t buy equipment, they don’t build factories — they have to know what the rules are going to be. Companies will not seriously commit to investment in America unless U.S. policies are firm and long-term.

Look, after six decades of offshoring it’s going to take more than tariffs to re-establish the U.S. industrial base. We need a comprehensive strategy with workforce recruitment and development as the centerpiece. We must re-establish a robust manufacturing workforce, while creating a favorable environment for meaningful long-term investment.

Rather than focusing on tariffs, the Trump administration should be looking at competitiveness — lowering the value of the dollar to both reduce imports and increase exports, and investing in workforce training. With these two actions, tariffs would not even be needed.

workforce training
Control what you can control. Workforce training stands out as a clear, fully controllable competitive advantage

What the studies say

The April 2025 Philadelphia Federal Reserve’s Manufacturing Business Outlook Survey showed the diffusion index for current general activity dropped 39 points to -26.4 in April 2025. This sudden plunge marked the fourth-largest monthly decline in history, just behind the drop-offs in 2020 and 2008.

Fictiv’s 2025 State of Manufacturing & Supply Chain report of 254 manufacturing and supply chain leaders found that 96% of respondents have concerns over Trump’s supply chain policies. Respondents were con cerned about the impact of costs and profitability (57%), business uncertainty (48%), and a likely escalation of trade wars in the next few years (93%).

A pivot to reshoring to the U.S is underway. But, the Fictive study also found that about 68% of manufacturing leaders are pivoting to reshoring as a key supply chain strategy in 2025. The 2025 Thomas Automotive Forecast found that 41% of automotive manufacturers plan to reshore this year. And, a November 2024 Bain & Company study found localization plans jumped to 81% (2024) from 63% (2022).

The increasing advantages of producing near the customer have driven companies to bring approximately 2 million manufacturing jobs to the U.S. from offshore since January 2010. The inflow of jobs now roughly balances the losses to offshoring and automation. However, to just balance the country’s $1.2 trillion/year goods trade deficit will require adding at least five million U.S. manufacturing jobs, a 40% increase. There is much work to be done.

A manufacturing leaders’ consensus

A recent Reshoring Initiative survey of 500 U.S. manufacturers found that a sufficient quantity and quality of workforce within the U.S. would bring back more manufacturing than any of the other surveyed options presented — including tariffs, a lower value for the U.S. dollar, lower tax rates and fewer regulations.

The group consensus of the survey was that a 15% additional tariff applied to everything from everywhere would enable them to reshore 24% of what they now import. With that said, the same group believed an abundant U.S. workforce with higher skills would enable them to reshore 30%.

Leverage the synergy of reshoring and skilled workforce

Achieving our goal goes way beyond tariffs. The reason we have such a big trade deficit is cost. Manufacturing cost in the U.S., on average, is 40 percent higher than China, 10 or 20 percent higher than France, Germany, Japan, South Korea and other competitors. We have trade deficits with almost every other country, primarily based on price/manufacturing cost. So, we’re just not competitive.

The successful integration of reshoring and a skilled U.S. workforce results in a synergy that leads to increased efficiency and cost savings making the U.S. more globally competitive.

To balance the trade in goods you’d have to increase U.S. manufacturing by about 40 percent. However, if you’re going to accomplish that, even with automation, you need 30 percent more people, and we have shortages already, especially skilled workers.

Therefore, our No. 1 priority is definitely creating a robust skilled workforce, which should be driven by a world-class apprenticeship system.

Apprenticeships

Within the apprenticeship framework, companies experience reduced turnover and better recruitment, gain a talent pipeline of skilled workers, develop future managers, and increase global competitiveness and reshoring preparedness.

A number of the prominent industry figures we’ve highlighted have combined a college degree with apprenticeship training. The combination can provide a practical basis for theoretical studies, increase job opportunities, create a more competitive job contender, and lead to faster career advancement. And, the apprenticeship training may cover initial college tuition fees, saving students a significant amount of money.

In April, President Trump signed an executive order directing the Department of Labor, Education and Commerce to create a plan, within 120 days, aimed at expanding U.S. apprenticeship programs with a goal of reaching over a million new apprentices annually. We are cautiously optimistic.

Investment in training

Investment in training enables the implementation of new technologies, which can help to reduce the domestic cost gap, enhance productivity and reduce downtime, making it more economical to reshore. New technology could add percentage points to annual productivity growth.

For successful U.S. reindustrialization, manufacturing output would have to increase by at least 30%, and that’s not possible unless the federal government and industry work together to resolve the manufacturing skilled labor shortage. Industry needs to see a strong start on workforce to be willing to make the investments in buildings and equipment. We need a higher quantity of workers to increase output and a higher quality to increase competitiveness.

If we do everything else to boost global competitiveness — tariffs, lowering the dollar, providing incentives — but companies can’t find anybody to work in the factory, it’s all purposeless.

Site selection and the impact of a skilled workforce

Skilled workforce availability is the #1 criterion for site selection and, specifically, for reshoring site selection. The 39th Annual Corporate Survey and 21st Annual Consultants Survey agrees, with the availability of skilled labor rated ‘very important’ or ‘important’ by almost 100% of respondents. The success or failure of training millions of workers could skew the outcome of the U.S. reindustrialization momentum in either direction.

Workforce development challenges

Recruitment and retention are a key challenge. Sixty five percent of respondents in a recent Deloitte study stated that attracting and retaining talent is their primary challenge. Many people still mistakenly view manufacturing careers as the dirty, outdated jobs of the past.

It’s important to share the message that the fastest growing ‘new collar’ manufacturing careers are in clean energy, aerospace, automation and semiconductor sectors known for high-level technical skills in clean environments. Manufacturers need skilled technicians that can collect and analyze data, design in CAD, program sensors, utilize automation, and maintain robots and 3D printers.

Tech-proof manufacturing careers

The unprecedented speed of technological developments that require new skills to fill advanced manufacturing roles has outpaced many traditional educational institutions. A lack of critical technical skills in advanced manufacturing — such as AI, machine learning, CNC programming, robotics, data analytics, and cybersecurity — hinders the ability of U.S. operations to achieve the cost-efficiency required for global competitiveness and reshoring.

A silver tsunami

The accelerating retirement of baby boomers— often coined the “silver tsunami”—is creating serious quality and productivity challenges across industries. With nearly 10,000 baby boomers retiring each day, companies are losing decades of institutional knowledge faster than they can replace it with skilled talent.

Skills based training and hiring

Skills Reset – skills-based hiring. At the heart of the workforce skills dilemma is a critical gap: the disconnect between traditional education and the evolving needs of modern business. Closing this gap requires a shift toward broader recognition of credentials and skills-based training and hiring — approaches that directly align talent development with the competencies industries demand. According to a recent Harvard Business Review study, this ‘reset’ could have major implications for how employers recruit new talent and grow the U.S. workforce.

Turn uncertainty into opportunity

Invest in competitive positioning. As companies consider investing in automation, new technologies and digitalization, to improve efficiency, streamline operations, and boost global competitiveness, they are going to need the skilled workforce that can run these operations. Fostering partnerships between industry, academia, and government is crucial for addressing workforce development challenges and driving innovation.

Let’s run the numbers

TCO analysis. Let’s run the numbers and find what we can bring back now, tariff or no tariff. Modern automation. TCO analysis. Smarter sourcing. Even without policy clarity, you can move on the first 20–30% that is reshorable now. If more tariffs come, you’re ready. If they don’t, you’re still ahead.

Total Cost of Ownership (TCO) is the best metric to use for comparative analysis. The Reshoring Initiative’s TCO Estimator is a free online tool that helps companies account for all relevant factors to compare the true total cost of domestic and offshore sourcing and siting. https://reshorenow.org/tco-estimator/

Are you thinking about reshoring?

Our main mission is to get companies to do the math correctly using our free online Total Cost of Ownership Estimator® (TCO). By using TCO, companies can better evaluate sourcing, identify alternatives and even make a case when selling against offshore competitors. For help, contact me at 847-867-1144.

Have you reshored a metal component or product? As an OEM or a supplier? Apply for the National Metalworking Reshoring Award.

harry moser reshoring initiative

About the Author:
Harry Moser is Founder/President, Reshoring Initiative®. Harry founded the Reshoring Initiative® to bring five million manufacturing jobs back to the U.S. after serving as president for high end machine tool supplier GF AgieCharmilles. Harry was inducted into the Industry Week and Association for Manufacturing Excellence’s (AME) Halls of Fame and was named FAB Shop Magazine’s Manufacturing Person of the year. Harry participated actively in President Obama’s 1/11/12 Insourcing Forum at the White House and won The Economist debate on outsourcing and offshoring. He was recognized by Sue Helper, then Commerce Department Chief Economist, as the driving force in founding the reshoring trend and named to the Commerce Department Investment Advisory Council in August 2019. Harry testified at the June 9, 2022 Senate commission Hearing on U.S. supply chains and China.

Harry is regularly quoted in the national business media and seen on national TV programs. He received a BS in Mechanical Engineering and an MS in Engineering at MIT in 1967 and an MBA from U. of Chicago in 1981. Harry Moser Reshoring Initiative®

web: http://www.reshorenow.org

blog: http://www.reshorenow.org/blog/

https://www.linkedin.com/in/harry-moser-58a8024

Moser on Manufacturing


 

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