U.S. manufacturing: To China and back

Moving jobs overseas hasn't exactly fallen out of style, but there are signs that major manufacturers are reconsidering the wisdom of shipping so many jobs from the United States to China and other supposedly low-cost countries.

Among them is Farouk Systems, the maker of a popular line of hair-care products. Its founder, Palestinian-born hairdresser Farouk Shami, recently decided to move all of the company's production from China to a new factory in Houston.

Shami told The Wall Street Journal there are multiple reasons for the move, including a desire to gain greater control over distribution, inventory and quality.

Shami, whose $1 billion company produces a hairstyling iron known as the "Chi," said he was also weary of spending $500,000 a month fighting Chinese-made counterfeits of his products. The fakes threatened company sales because consumers in the United States and elsewhere couldn't be sure they were buying the real thing rather than a knockoff.

"We'll make more money this way - because we'll have better quality and a better image," Shami told The Journal.

Other companies - Emerson, NCR and General Electric, among them - are also shifting some jobs back to the United States.

NCR, which produces automated teller machines in factories on four continents, recently opted to bring some operations back to the United States because outsourcing proved too costly and cumbersome, particularly as the company tried to implement new products and designs.

Delays in production and distribution frustrated U.S.-based customers.

"By outsourcing, we just couldn't move as quickly," CEO Bill Nuti told Business Week.

GE Chairman Jeffrey Immelt, whose company has decided to return some manufacturing jobs to the United States, has become a major proponent of rethinking outsourcing.

"Many bought into the idea that America could go from a technology-based, export-oriented powerhouse to a service-led, consumption-based economy - and somehow still expect to prosper," he said in a speech this summer in Detroit. "We must make a serious commitment to manufacturing and exports. This is a national imperative."

The United States has an abiding economic interest in pursuing globalization, of course. Ideally, it's a two-way street that opens up new markets for American-made products and also brings affordable goods to the United States.

But, in the rush to cut production costs, it appears manufacturers are finding downsides - expensive downsides - that they hadn't counted when they moving operations overseas. In that regard, the aphorism "Think globally, act locally," still applies.