Allison Transmission is a firm based in US which manufactures automatic transmission and hybrid propulsion systems for trucks, and off road vehicles. The production of the double disc grinders in the past for the accurately sized parts earlier was done in Chennai but recently the jobs from India were cut off and reshored back to US. This is due to a reshoring initiative in the US that takes back the well paid jobs back to the US.
The political pressures created by a high unemployment rate and the linked reduction of wages greatly has been the prime reason for the reshoring of jobs by American companies. The jobs which were off-shored to other nations are all being called back to be offered in the nation itself. The trend however is in the very beginning stages in the IT field.
Big firms like General Motors have mentioned that they would reduce the outsourcing of the company from 90% to 10% in a small span of 3 years only. It instead outsources work to companies like HP/EDS, IBM, Capgemini, and Wipro for work including data centers to writing applications.
NCR corporation popular for the ATM machine manufactures has called back jobs from India, China and Hungary. These jobs have been moved to Columbus Ohio. Maine has the customer support center which earlier was situated in Delhi, India. Ford Motors has also similar solutions for the reshoring problems.
It is estimated that over 50000 manufacturing jobs have been reshored since the last 3 years. Harry Moser of Reshoring Initiative mentioned that US companies can add to the US economy by saving on several costs that are often ignored on in sending their manufacturing offshore, such as inventory carrying costs, traveling costs to check on suppliers, intellectual property risks and opportunity costs from product pipelines being too long. If the same were to be employed in US not only would they be a solution to the unemployment but also cut their own costs. Using solutions such as Ohio and Canada would be a cheap alternative to the high costs in other states of US.
However, all is not grim for Indian market. Several companies have been manufacturing units outside the big countries in India rather than other countries. Germany is a clear example. Italy's Lombardini that deals with diesel in the nation, has also one of its unit in India.
(AW- Anil)
