Why Reshoring Stalls: Lead Times, Missing Suppliers and the Numbers Behind Bringing Manufacturing Home
Guardian Bikes moved its production from China to Seymour, Indiana, and the reason had almost nothing to do with labour cost. Ordering bikes from a Chinese contract manufacturer meant a six-to-eight month lead time, which meant carrying enough inventory in the United States to absorb it, which meant being out of stock in exactly the colours and sizes customers wanted. Building locally let the company assemble to demand instead.
That trade — cost per unit against lead time and working capital — is the real reshoring calculation, and it is the one most coverage skips. CNBC's documentary on the subject is worth watching precisely because it takes both sides seriously: the company that made it work, and the economists who explain why almost nobody else has.
Reshoring is a lead-time decision before it is a cost decision
The Guardian numbers are specific enough to argue with. The Seymour plant covers 540,000 square feet and employs about 250 people. Each assembly line turns out roughly a thousand bikes a day — one every thirty seconds — for around 12,000 bikes a week, on revenue the company puts above $100 million. A frame is welded in about three minutes; component-level parts are cut in five to nine seconds; one machine has produced 442,000 hubs in two years.
None of that is achievable at American wages without automation, and the company is explicit that automation was the precondition rather than a bonus. Operations lead Sam Markel's framing is that production had to be fast, highly specific and run with fewer people in order to make high volumes viable domestically. The payoff is the inventory position: with materials sourced locally, bikes get built essentially just in time instead of shipped in containers months ahead of demand.
The arithmetic everyone is arguing with
The case against reshoring is not sentiment either. It is a set of gaps that a single company's determination does not close.
| Measure | Figure |
|---|---|
| Average manufacturing wage, United States | ~$35 per hour |
| Average manufacturing wage, China | ~$4 per hour |
| Average manufacturing wage, Vietnam | ~$1.30 per hour |
| US manufacturing employment, late 1970s | ~20 million, over 20% of total employment |
| US manufacturing employment today | 12.7 million |
| Change in number of US manufacturing firms and plants, 1997–2023 | Down 25% |
| Open manufacturing positions in the US | Over 400,000 |
| Service jobs as a share of US non-farm employment | Over 80% |
| China industrial policy spending, 2019 estimate | ~$248 billion |
| US industrial policy spending, same estimate | ~$84 billion, 0.39% of GDP |
| China R&D tax benefit growth, 2018–2022 | 28.8% average annual rate |
| US CHIPS Act semiconductor support, 2022 | ~$39 billion, one industry |
| Typical lead time, bikes from a Chinese OEM | 6–8 months |
Read down that column and the binding constraint is not the wage line. It is the 25% of plants that no longer exist and the 400,000 vacancies. Guardian's founder Brian Riley describes the hardest part of the move as finding parts at all: the domestic supply chain for many bicycle components simply stopped existing, so the company had to approach firms making something else entirely and persuade them to make a different part. Where a factory operates, input suppliers cluster around it. Remove the factory for thirty years and the cluster goes too.
The counter-argument in the documentary is made most sharply by toy manufacturer Rick Woldenberg, who has looked at US production on and off for a decade: nobody wants to produce at his volumes, labour is expensive and not actually available, and so the option is closed regardless of intent. Economist Robert Reich adds the point that cuts across the politics — most of those jobs were lost to automation rather than to trade, so factories returning does not mean employment returning at anything like the old ratio.
"Reshoring" is the wrong word for most of what is happening
Rosemary Coates, founder of the Reshoring Institute, makes a distinction that clears up a lot of confused reporting.
"A lot of the manufacturing that happens around the world today was never in the US. So to say it's coming back isn't quite right." — Rosemary Coates, The Truth About Reshoring, Association for Supply Chain Management
Her example is the vast Chinese electronics assembly hall staffed by thousands of people doing hand work for ten hours a day. That process never existed in the United States at that scale and is not returning to it. What is actually growing, she argues, is nearshoring — and overwhelmingly to Mexico rather than Canada — while "friendshoring" describes an increasingly small set of countries.
That reframing matters commercially. If the movement is mostly work relocating to a nearer, friendlier supplier rather than returning to its country of origin, then the question for any manufacturer outside the US and China is not whether reshoring helps them. It is whether they are close enough, deep enough and quick enough to be the nearer supplier.
What it takes to be on the receiving end
Strip the politics out and the Guardian case is a list of requirements a supplier has to meet, in a specific order.
Lead time is the product. The customer was not chasing a lower unit price; it was escaping six to eight months of ocean freight and the inventory that lead time forces onto a balance sheet. A supplier who can quote weeks instead of months is selling working capital back to the customer, and that is worth more than a few percent on the part price.
Density beats distance. Guardian's frame tubing comes from a supplier 45 minutes north; another key component is made down the street. That proximity is not sentimentality, it is what makes a design change survivable. Regional industrial clusters win work that individual cheap factories do not.
Automation is what makes local viable. The plant was not built to employ the most people; it was built so that high volumes could be run with fewer of them. Any supplier arguing for local sourcing on labour cost alone is arguing on the axis they will lose.
Tariffs change the comparison, but not the capability. Riley notes that recent tariffs have brought some domestic parts to cost parity or better against Chinese equivalents. That opens a door. Whether a supplier can walk through it depends on whether they already had the machine, the tolerance and the quality record — none of which appear because a duty rate moved.
Sources
- What's Stopping Companies From Bringing Manufacturing To The U.S. — CNBC. Source of the Guardian Bikes production and facility figures, the wage, employment, plant-count and industrial-policy comparisons, and the interviews with Brian Riley, Sam Markel, Scott Paul, Colin Grabow, Rick Woldenberg and Robert Reich.
- The Truth About Reshoring — Rosemary Coates, Association for Supply Chain Management. Source of the reshoring, nearshoring and friendshoring distinction.
- Reshoring Initiative — the non-profit Coates founded, publisher of the 2026 USA Reshoring Survey and the total-cost-of-ownership estimator referenced in the debate.
Vesprr Group works across machining and fabrication, tools and equipment supply, and industrial software. If you are re-sourcing a component and the question is whether a supplier can hold the tolerance and the date rather than simply the price, tell us what the part is and we will say plainly whether it belongs with us.