September, 2025- On July 16, the U.S. Department of Labor and the U.S. Small Business Administration signed a memorandum of understanding to support American manufacturing, aiming to enhance collaboration and cultivate a pipeline of skilled workers to support domestic producers—98 percent of which are small businesses. The agreement will also involve expansion of registered apprenticeships and other hands-on training programs.
Lori Chavez-DeRemer, Secretary of Labor, said she was eager to partner with SBA Administrator Kelly Loeffler “to usher in a new Golden Age of American manufacturing.”
The National Science Foundation recently announced a $25.5 million investment to support the future of U.S. manufacturing through fundamental research and workforce development. The grants will support projects that have the ability to create transformative manufacturing capabilities.
“The program targets critical technical gaps and lays the foundation for emerging sectors, including technologies that haven’t yet been imagined,” said Brian Stone, who is performing the duties of NSF director. “NSF is investing in teams that bring together scientific, engineering and manufacturing expertise to equip the American workforce for leadership in advanced manufacturing.”
Jensen Huang, CEO of chipmaker Nvidia, said in an interview with CNN that “the ability to make things is valuable for economic growth; it’s [of] value for a stable society with people who can create a wonderful life and a wonderful career without having to get a Ph.D. in physics.”.
INVESTMENT
Harry Moser, founder and president of the Reshoring Initiative, says that as companies consider all the costs and risks, including “total cost of ownership (TCO), not just the free on board (FOB) price,” they are returning manufacturing operations to the United States. Recent factors contributing to reshoring include “geopolitical risk and grants from the last administration for EV batteries, chips and solar.”
Over the last 15 years, “there’s been a greater awareness of the opportunities for reshoring work,” says Scott Paul, president of the Alliance for American Manufacturing. He points out that moving overseas to low-labor-cost destinations “worked for some companies for a period of time, but a lot of factors have changed. As work has become more automated, the labor cost difference comes down and is a less important factor.”
Compared with most other economies, “the U.S. is going to have relatively low-cost energy, which is a pretty big consideration,” Paul adds. “And then the frequency and scale of supply chain disruptions―whether it’s Suez Canal blockage or COVID supply shocks―have added more proof points that localization is important to smooth supply chains.”
According to the National Association of Manufacturers (NAM), every $1 spent in manufacturing has a total impact of $2.64 to the overall economy. And for every one worker in manufacturing, 4.8 workers are added overall.
General Motors will begin production of the Cadillac Escalade, Chevrolet Silverado LD and GMC Sierra LD at its Lake Orion (Michigan) Assembly facility in 2027. The production shift is part of GM’s broader commitment to invest $4 billion over the next two years in its U.S. manufacturing operations.
“Michigan’s economic progress is undeniable, and we are proud to be a top 10 state to do business in the country, said Governor Gretchen Whitmer in a statement. “Together, let’s keep bringing manufacturing home, growing the middle class and making more stuff in Michigan.”
Aerospace, power and propulsion technologies manufacturer Rolls-Royce also is expanding its U.S. operations with a $75 million investment in its engine plant in Aiken, South Carolina. Rolls-Royce said the expansion “will increase machining capabilities and grow the facility’s footprint,” creating 60 new jobs. And GE Appliances, a Haier company, is reshoring production of washers and dryers from China, investing $490 million and creating 800 new full-time jobs in 2027.
General Motors Chair and CEO Mary Barra celebrates the grand opening of the GM Factory ZERO EV in 2021. Below: GE Appliances plans to reshore production of the GE Profile Ultrafast Combo washer/dryer and the GE and GE Profile Ultrafresh front load washer lineup.
WORKERS WANTED
At the 14th annual John Hazen White Manufacturing Forum at the Brookings Institution, Charles Crain, NAM managing vice president of policy, said that even if the U.S. “were operating at full capacity,” it would still require imports from other nations, making commonsense trade policy a necessity.
More than 400,000 manufacturing job openings means the sector is not operating at full capacity, and “in practice, manufacturing in the U.S. is only making about 67 percent of inputs required for finished goods,” Crain said, “so we really need to solve for that 30-ish percent of outstanding inputs that we need to make things here. Manufacturers need inputs to make things, and we need export markets to sell things.”
” Moser says that companies increasingly are investing in workforce training, and that “improved quantity and quality of workforce is the No. 1 driver of reshoring.” He also notes that automation is “necessary but not sufficient,” saying that companies “have to invest much more to not fall behind China and others.”
Automation alters manufacturing jobs more than it displaces them. “Workers need digital skills and computational skills that go beyond the trade skills of welding, soldering or industrial maintenance,” says Paul. “I think automation is going to hit other industries harder, and there’s a lot of opportunity there for manufacturers. Automation is something that manufacturing has been able to live with for a long time.”
Paul points out that it’s also an easier sell to bring an employee into manufacturing “if they are going to be operating a CNC machine and doing computational and numerical manipulation.”
He says it’s “hard to be in a room of manufacturers without hearing concerns about skills or workforce shortages” but more companies are investing in training programs, partnerships, technical training and apprenticeships. “There’s more deployment and it’s not just the outliers that are doing this. It’s much more systemic throughout the industry.”
The upfront cost of such programs often gets paid back quickly in terms of productivity and worker retention. Companies who have a collaborative, happy, well-paid workforce also reap the benefits of a network effect, filling open positions through word of mouth, says Paul. “The employers who have a great workforce have a much easier time tapping into talent.”
CLOSE COLLABORATION
Companies choosing to manufacture products with favorable TCO close to home can achieve better availability, less inventory, more cooperation between engineering and manufacturing, and a vastly reduced risk from geopolitical events, natural disasters and pandemics, according to Moser.
“As OEMs and Tier 1 suppliers reshore, it creates opportunities for domestic suppliers to become valuable contributors to these newly restructured supply chains,” according to a white paper from the Manufacturing Extension Partnership at the National Institute of Standards and Technology. The MEP indicates OEMs are looking for capabilities in addition to specific parts and components, including precision manufacturing, component assembly, packaging, testing and validation, quality control and compliance with stringent regulations.
Paul says that being able to express to OEMs or higher-tier manufacturers that localization is the best practice is a great strategy to boost business, highlighting fast adjustments and tight quality control―“we’re just across the park, rather than across the ocean.”
He also notes that “local sustainable production is a bigger factor than it has been in the past in the public marketplace, and more companies have goals related to that. Having a partnership with a U.S.-based manufacturer is more of a stakeholder relationship than a transaction, and these firms are committed to communities and workers.”
All the resources circulating around the U.S. are going to create more customers for those products, Paul says, “and the innovation is going to get returned into the supply chains. Obviously, you have to compete on cost, but if a company can get cost to within a margin, it’s definitely worth it for larger manufacturers to do local sourcing.”
CRYSTAL BALL
The chaotic nature of the current tariff environment has put a damper on many reshoring or construction plans, however. “There is a huge backlog of projects that will become official if 10 percent to 15 percent tariffs are firmly in place, long-term, on almost all products from almost all countries,” Moser says.
According to a June industry survey from the Reshoring Initiative and Regions Recruiting, “as the Trump administration implements tariffs and contemplates new economic policy for U.S. manufacturing, manufacturers are navigating complex decisions about costs and planning for potential supply chain disruptions and workforce shortages.”
OEM respondents to the survey indicated that the percentage of imports they will reshore based on currency, taxes, regulation or tariffs ranges from 17 percent to 23 percent.
Long-term sustainability is a top priority for OEMs, followed by short-medium term profitability.
“In 2024, the U.S. imported $3.3 trillion worth of goods. Assuming that a moderate mix of those four polices yields the lowest, 17 percent, response, the companies would reduce imports by over $500 billion per year. If exports increased by $100 billion/year, the goods trade deficit would be reduced by 50 percent and manufacturing employment would rise by 2 to 3 million,” according to the survey report.
Paul also says that tax legislation, particularly the expensing provision and the bonus depreciation, have the potential to help a lot of manufacturers. “The fact that part of the capital investments that they’re going to be making can be recovered through the tax code should provide a framework for a surge of investment.”
