Mestek Machinery is returning two product lines from China to its southwest Cedar Rapids plant that account for about $1 million in annual sales.
Such a turnabout of the usual tale — jobs going from the United States to China — is becoming more common, said Timothy Lowe, professor of operations management at the University of Iowa Henry B. Tippie College of Business in Iowa City.
Lowe said companies with manufacturing operations in Asia face challenges in terms of carrying excess inventory, shipping costs and other considerations.
“Some companies are discovering that there’s more to consider than just direct labor costs,” Lowe said. “We’re hearing of a number of companies that are moving production back from China because it’s good business.”
Mestek, 5480 Sixth St. SW, produces machines that transform rolls of coil steel into duct-
work for heating, ventilating and air conditioning. It also manufactures plasma and water cutting tables used to fabricate sheet steel.
Scott Sloan, Mestek operations manager, said the Cedar Rapids plant will again manufacture single and duplex sheet-metal roll forming machines and components for the plasma and water cutting tables.
Sloan said moving the product lines from its FormTek Asia-Pacific sister company in Beijing where they were transferred in 2006 will potentially add three to six jobs to the Cedar Rapids plant’s 69-person workforce over the next six months.
“The roll formers are two units in a 10-station sheet metal line,” Sloan said. “With this move, we will manufacture all 10 machines in the United States. As we exhaust inventory made in China, we will ramp up production here in Cedar Rapids.”
Sloan said product quality was not the issue that led to bringing the product lines back from China, adding that FormTek Asia-Pacific will continue to make the same items for the European and Asian markets.
“It was more cost effective to move the product back here from China” as efficiencies improved at the Cedar Rapids plant, he said. “Ocean and land freight shipping costs also were a factor, along with inventory carrying costs.”
Two-and-a-half years ago, Mestek Machinery transferred production to Cedar Rapids from a non-union plant in St. Louis. While that move initially was expected to create additional jobs at the Sixth Street SW facility, the recession sent residential and commercial construction into free fall.
Joel Emery, chief union steward at Mestek Machinery for Sheet Metal Workers Local 263, welcomed the news of the returning product lines.
“As the economy grows, we’re going to grow, too, and definitely add some more people,” Emery said. “At one time, we had over 70 employees here in the union on the floor. We’re down to 29 now, but it does look encouraging.
“I believe that the union needs to work in partnership with the company, so that the company survives and everyone has a job.”
Sloan said a lot of people at the Cedar Rapids plant thought it would never get the production lines back from China.
“I always felt that we had a shot at it,” he said. “When we made the call in March to move the product lines here, it was the proudest moment in my career.”
Whirlpool Corp., with a plant in Amana, is another example of a company with East Iowa ties bringing jobs back to the United States.
Whirlpool earlier this year moved production of its KitchenAid hand mixers back to a plant in Greenville, Ohio, from China, where they had been manufactured for six years. That shift will mean new business for suppliers of the mixers’ injection molded parts.