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The CEO of General Electric on Sparking an American Manufacturing Renewal

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About 30 years ago, as its appliances business became less profitable, GE began moving manufacturing to low-cost countries in a combination of joint ventures and outsourcing. But competitors soon emerged in developing markets; shipping and materials costs rose; wages increased in China and elsewhere; and GE didn't control the supply chain. Finally, core competency was an issue: the company's most innovative appliance-design work is done in the United States, and at a time when speed to market is everything, separating design and development from manufacturing no longer made sense. Around 2008 GE came to the conclusion that outsourcing was outdated as a business model for its appliances business. It set about to build in-house innovation capability, lean manufacturing, and a new approach to labor relations in that business and others, creating thousands of jobs and investing billions of dollars.
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