There are two major influences on the manufacturing industry today: where the end-market is, and where assembly can be carried out at the lowest cost. Transportation costs are often less important than real estate and wages, so manufacturing often moves to the cheapest source of labor. For example, the shift of manufacturing nearer to the end-market has led Japanese automotive firms to develop facilities in the United States and Europe. Lower labor rates have led to movement of jobs from traditional manufacturing powerhouses to developing nations like China, Taiwan, Turkey, Poland, Romania and other nations.
Manufacturing jobs have been leaving the United States for the last 50 years. Western industrial giants got caught napping in the late 1990s when jobs growth was fueled by a robust economy. With a strong economy, the movement of jobs overseas was masked, but the weak economy of the past three and a half years has exposed the losses. The near future outlook is not very encouraging, unless business and government begin to adapt.