If every Fortune 500 company moved all of their manufacturing plants to the US, how many plants would be "reshored"?
Hi, and thanks for your question about the number of plants that would be "reshored" if every Fortune 500 company moved manufacturing operations back to the U.S. The short answer is that no fewer than 16,000 plants would be reshored. I elaborate on my findings below.
I began by calculating how many U.S. manufacturing plants have actually been lost due to offshoring. I took the results and used them to analyze the Fortune 500.
U.S. MANUFACTURING LOSSES
There were 364,000 manufacturing establishments in the United States in 1996. By 2012, that number decreased by 22% to 285,000. The United States has lost no fewer than 80,000 manufacturing establishments since 1996. The confluence of increased globalization (1993's NAFTA, for example) and the Great Recession of 2007-2009 is the likeliest culprit.
To determine which share of this 22% decrease is due to offshoring as opposed to the Great Recession, I analyzed the average number of domestic manufacturing jobs per year from 1939 to 2016. I found that the “new normal” began around 1996-1997 and accelerated in the early aughts before it plateaued around 2003-2007. Based on my calculations, which derive from this chart, 60% of the losses in U.S. manufacturing jobs since 1996 should be attributed to offshoring, while 40% should be attributed to the Great Recession. If we accept that jobs are an acceptable, albeit rough, proxy for establishments, then I estimate that no fewer than 48,000 (60% of 80,000 manufacturing establishments) plants would be brought back after "reshoring."
These findings are complicated when we consider the Fortune 500 in particular. One complication is that our count of manufacturing establishments includes "lone operators all the way up to large businesses." Clearly, the number of plants brought back by Fortune 500 companies would be far fewer than 48,000 because of their size. Additionally, many Fortune 500 companies are startlingly fond of reporting their properties in terms of square footage, like IBM did right here. They refuse to state the number of plants and opt for square footage across 14 countries instead. Not to mention, the vast majority of Fortune 500 companies don't actually making anything! Only 38% (193 companies) of the Fortune 500 actually made anything in 2015.
Of this 193, I analyzed 14 of them and tallied the total number of manufacturing plants outside of the U.S. they reported in 2015. These companies reported that they operated 1,140 plants outside of the U.S, which is an average of 81 plants outside of the U.S. per company. We can estimate that roughly 16,000 plants would return to the U.S. if they all "reshored" their operations (193 companies x 81 avg plants per). This 16,000 doesn't account for the plants that would be "reshored" if Fortune 500 companies stopped outsourcing their manufacturing, a notorious example being Apple's relationship with Foxconn. Apple, for example, owned only one manufacturing plant offshore in 2015 but if they were forced to forgoe their outsourcing practices the number of plants "reshored" would increase further.
Additionally, I've compiled a spreadsheet of the 193 Fortune 500 companies that manufacture goods, for your personal records. The spreadhseet includes their number of employees, 2015 F500 ranking, and other information.
In summary, we calculated the number of manufacturing establishments lost in the U.S. due to offshoring. We also estimated 16,000 as the number of "reshored" manufacturing plants if every Fortune 500 company moved its manufacturing operations to the U.S.
Thanks for using Wonder and I hope this research puts you on the right track!