August 13, 2020

Hidden amid the announcement of a democrat VP candidate, the endless, gloomy roundup of stalled school openings and Covid counts was one of the most fascinating—and important—manufacturing developments in years. If you missed it, it’s worth a look.

On Tuesday, Bloomberg reports, Young Liu, chairman of Hon Hai Precision Industry Co., aka Foxconn, Apple’s key iPhone maker and a main supplier to a dozen other tech giants, said that the company would be splitting the company’s supply chain between the Chinese market and the U.S., and declared China’s days as the world’s manufacturing hub to be over.

“No matter if it’s India, Southeast Asia or the Americas, there will be a manufacturing ecosystem in each,” Chairman Young Liu said, adding that while China will still play a key role in Foxconn’s manufacturing empire, the country’s “days as the world’s factory are done.”

The announcement comes as tariff-driven moves away from Chinese production are already hitting the country’s 290 million migrant workers hard, increasing tensions inside the country. In response, President Xi Jinping has been laying out plans to prioritize “domestic circulation” and keep their economy moving. Meanwhile, the push for more reshoring and local production, driven by both tariffs and Covid, continues to gain traction globally.

Coming amid all of this, the Foxconn announcement sure feels like a milestone. While it may not be the exact end of an era, it certainly seems close. — Dan Bigman, editor, Chief Executive dbigman@ChiefExecutiveGroup.com

Capacity constraints have driven up rates for international shipments this year, complicating matters for supply-chain managers dealing with the effects of Covid-19 on their businesses. The cost of moving goods by ship, for instance, has climbed 12% in 2020 to the highest level in 5 1/2 years. (Bloomberg)

Eastman Kodak's unlikely deal with the federal government to dive into drug manufacturing has raised eyebrows—not only for the size of the loan itself but also for Kodak's lack of experience. Now, with investigations mounting, the U.S. is pumping the brakes.  (FiercePharma)

General Motors chief financial officer Dhivya Suryadevara jumped ship on Tuesday for Silicon Valley and the technology sector, where she was named CFO of Stripe, the online payments startup. (Reuters)

Nearly half a year into the pandemic, 740,000 factory workers are still out of work, and many of these layoffs are becoming permanent rather than temporary, writes Alliance for American Manufacturing President Scott Paul. Meanwhile, he says, virtually nothing has changed in Washington. (AmericanManufacturing.org)

Mercedes-Benz is testing a new digital production system at its assembly plant in Tuscaloosa, Alabama. If successful, the automaker plans to implement the MO360system at its factories worldwide. (Assembly)