U.S. manufacturers to benefit from increased auto production from foreign companies

August 14, 2012

The return of manufacturing work from China and Japan to the U.S. has been well-documented in recent months, but the pace at which this is occurring may have sped up past the projections of many industry experts.

Automotive companies from the island nation are leading the move back to the U.S., as several Japanese giants have targeted expansion in factories in America due to the availability of technical workers and infrastructure that supports a revamped business strategy.

According to the International Business Times, industry giants like Toyota Motor Corporation, Honda and Nissan are bringing work across the Pacific to the shores of America, both building new factories and expanding operations at existing facilities. These companies were drawn to the U.S. for a number of reasons, but one main benefit that they expressed was producing the vehicles in the market in which they would be purchased.

Guggenheim Partners Analyst Matthew Stover, noted that the increase was also sparked by the value of the Japanese Yen and "would have been done by adding shifts and line speed, which means hiring more workers."

Several recent announcements by these companies has led to increased confidence among workers at the respective North American plants for the firms, and production levels are expected to rise in the near future. Toyota upped its projections for the number of its autos and those of Lexus, which it also controls.

"This Lexus production increase, and the several announcements before it, reflects our growing optimism for an improving North American market and our intent to localize more production," Steve St. Angelo, executive vice president of Toyota Engineering and Manufacturing North America, told the Times.

This shift of operations to the U.S. is a symbolic move by the Japanese automakers, as the country that initially created many of the lean manufacturing principles is now looking to America to perform its work, according to Brand Channel.

The news outlet reported that the workers in the U.S. manufacturing plants are not the only ones who are receiving more work, as R&D employees in some of Honda's plants are beginning to see increased responsibility and power within the organization.

With the Yen likely to remain at a high level, and the technical expertise of American manufacturing workers likely to increase, this trend may not change anytime soon.