Stay Domestic Over Profits?

MacNeil Automotive Products Limited has a two page ad in AutoWeek magazine touting their “made in America” commitment.  Most of their supplies are from US or Canadian suppliers, as is most of their equipment.  The last sentence is: “Life is simple:  be good to your fellow man, be kind to animals and the environment, and place building a quality product, supporting your country and your fellow American worker before profit.”

I applaud the sentement and claimed commitment.  It’s important for companies to stand for something in addition to profits.  But how far should that commitment go?  That company can apparently still make an acceptable profit following its espoused commitment.  But what about the company that cannot? 

Is an EBITDA of 10% too little to justify offshoring?  How about 20%?  At what point is it greed?

I would guess that decision is a function of shareholders understanding of and interest in long term impacts.  On the one extreme, let’s say all US manufacturers offshore 100%.  Clearly that would devastate our economy and also any US sales they were hoping to get.  What if US manufacturers offshore nothing.  If the materials don’t exist here or we can’t make it using domestic resources, then a foreign company will have to export it to the US if we are to have access.  Not as obviously, but without the energy we import, that becomes almost the same as the other extreme.

Until we focus on energy independence, can we really complain about other types of offshoring?

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