Not Everybody Is Outsourcing Manufacturing

I generally disagree with people who believe in protectionism and try to create restrictions on outsourcing in any shape or form. This topic is very interesting to me, and I will probably write more about it in the future.

However, what prompted this post was a little story in WSJ from 5/16/2007 (page A19). BMW AG decided to increase its production at their Spartanburg, SC plant, and the story claimed it was done in part to “shield [BMW] from the weaker dollar.” Apparently, last year “foreign-exchange rates reduced earnings by $902.4 million.” The story goes on to say “By making cars in the US, where both costs and revenue are in dollars, the company insulates its US sales from currency swings.”

Markets can lead to outsourcing, but can lead to in-sourcing just as well.

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