You can't chase cheap labor forever. The way it's going, it won't be long before everybody is going to get their manufacturing done in the middle of Africa.
Every week, you see some special report on India that demonstrates how that country is robbing Americans of their jobs and livelihood.
Last month, there was a story about an American company that was shutting down its plant in Mexico and transferring the jobs to China. Mexican labor is too expensive these days to compete with China.
Everyone is looking for the cheapest labor costs. They are more than willing to scour the world seeking somewhere that they can find the lowest-cost labor.
Something about this seems absurd. The idea that every manufacturer is willing to jump from country to country looking for a low-cost labor base seems too simplistic.
Now, I grant you, if you happen to be making items that represent high labor costs and low investment, you don't need to build an expensive factory to get your product made, and globetrotting might be worthwhile.
But today, so much of the investment for a new factory seems to be higher than the cost of labor. So it would be ridiculous to move around the globe to save some costs on labor.
When you've got billions of dollars of investment in high-tech facilities and you're selling to a market nearby, it just seems to make a lot of sense to factor into your manufacturing plant much more than just your labor costs.
First they were leaving the Midwest because it was too expensive, so they set up shop in the South. In fact, many German and Japanese companies built factories all over the South not just for inexpensive labor, but to be near their market.
But then as pressure continued on companies to lower their prices, they shipped a lot of jobs to Mexico. And now it would appear that China is the latest low-cost supplier. Unless, that is, you're taking a look at India or perhaps even Russia.
The quest to find the lowest-cost producer is an ongoing search.
There will have to be some sort of rationalization sometime to stabilize the global rush from one country to another in the quest for the lowest and ever-changing labor cost.
Sooner or later, companies are going to run out of lower-cost producers. Then, perhaps, the entire process will have to begin again.
Keith Crain is chairman of Crain Communications Inc., parent company of Tire Business.