“There’s a business case to be had for manufacturing here in the U.S.,” Lenovo’s North American President Jay Parker told ABC News’ “World News” in an interview at the new facility. “Some customers desire to have products that are assembled in the U.S. and so we believe it’s a competitive advantage for us.”
New Jobs, New Business Model
Lenovo, which is the second-largest PC manufacturer in the world, began production of its ThinkCentre M92p desktop and its ThinkPad Helix convertible ultrabook at the plant in January but will ramp up full production by the end of this month by adding the ThinkPad Tablet 2.
The Nances are just two of the 115 new employees to work on the manufacturing lines in the 240,000-square-foot facility. And as Lenovo expands production into tablets and then servers by the end of the year, Parker says the job numbers will go up.
“This is our first step. If we continue to grow, we’ll continue to scale up that facility,” he said.
Lenovo hopes to assemble several hundred thousand units in the first full year of production with two eight-hour shifts five days a week. The products will be made primarily for the U.S. market and will be shipped throughout the country.The computers will be assembled in North Carolina, but much of the parts and components, including the processor and RAM, will be made overseas and imported.
Lenovo, which was started in China and is headquartered in Beijing, will still make the majority of its products in its native country. It, along with many of the other major computer makers, moved production offshore when overseas labor became cheaper.
But that trend is reversing, even if it is on a smaller scale.
“Over time, and this isn’t just true of China, but the labor rates around the world have been compressing to some degree with the U.S.,” Parker said. “The labor rate difference isn’t quite what it was at one point. And when you’re talking about having to ship products from China or anywhere overseas, then there’s a logistics cost there that you can save partially by doing it here in the U.S.”
Motorola’s Moto X Phone Will Also Be Made in America
Parker said that doesn’t mean it is less expensive or even comparable in expenses to make products in the U.S., but the company does see other advantages, including speed of delivery, customization, and then the “Made in America” marketing message.
Google, Motorola and More
And Lenovo isn’t the only consumer electronics maker that sees it that way. Motorola announced last week that its plans to build its forthcoming Moto X Android smartphone in Fort Worth, Texas will result in 2,000 new jobs. Google has also started to assemble its Google Glass in California. Apple has also announced its plans to make a version of a Mac computer in the U.S. later this summer.
HP, Lenovo’s closest competitor in the PC market and the No. 1 maker of PCs, has made a select few of its enterprise desktop and workstations in a facility in Indianapolis, although hasn’t made any consumer-aimed computers there. Dell also says it has had a U.S.-based manufacturing presence, and that its server systems are made at its campus in Austin, Texas.
Whether those other companies will grow computer manufacturing in America remains to be seen, but Lenovo has made it very clear: This is just the start for the company. “For manufacturing, it’s a start,” Parker said. “And as long as we’re continuing to grow at the rate we’ve grown at, we look to add to that over time. We believe that it’s possible and probable [to grow].”
That promise of more growth makes Stephanie Nance excited as she puts on more stickers on the Made in America hardware. “It’s not some job that can just be sent anywhere,” she says. “We can do the same thing that they can here just as good as quality as overseas.”