Reshoring in Action: How Aerospace Sparked a Manufacturing Revival

Since building a single jetliner can involve more than 200 direct suppliers that are scattered across the globe, aerospace firms are rethinking their approach. By bringing production and supply chains closer to home, they’ve sparked a revolutionary shift called “reshoring.” And it isn’t limited to aviation as the movement is spreading to semiconductors, pharmaceuticals, and beyond, reshaping how the world makes and moves its products.

Key Takeaways

Reshoring is reshaping global manufacturing, as firms bring production home, reversing decades of offshoring driven mainly by cost savings.
Aerospace leads the comeback, reshoring critical supply chains to boost reliability, oversight, and national security.
Momentum is spreading fast, with semiconductors, energy, healthcare, and electric vehicles reshoring in response to crises and new incentives.
Reshoring benefits are clear with stronger resilience, better quality, more jobs, fewer hidden costs, and lower carbon supply chains.
Challenges in reshoring remain tough, from higher labor costs and skills gaps to automation needs and risks of reduced global flexibility.

What Is Reshoring and Why It Matters

Reshoring is the process of moving manufacturing and production from far-off facilities back to the home country, or at least to trusted allied regions, through practices often called nearshoring or friendshoring. While offshoring dominated the late 20th and early 21st centuries as companies chased cheaper labor in Asia and beyond, the weaknesses of that model have become increasingly clear.

At its core, reshoring is about control and resilience. By keeping production closer to end markets, companies reduce the risks of global disruptions, cut logistics costs, and stay aligned with domestic regulatory and environmental standards. It is also about rebuilding industrial strength, restoring capabilities, and jobs that had been lost during decades of offshoring.

reshoring drivers

A study by the Reshoring Institute revealed the main drivers behind reshoring:

Supply chain resilience and logistics costs: Rising international shipping expenses and frequent global disruptions have made long supply chains fragile and costly. Reshoring shortens supply lines, cutting risks of delays and bottlenecks.
Proximity to customers and markets: Companies want production closer to their end users for faster delivery, greater responsiveness, and tighter alignment with demand.
Total cost of ownership: Beyond labor, firms are recognizing hidden costs in offshoring, from tariffs and shipping to quality failures, making domestic production more cost-competitive overall.
Risk mitigation: Geopolitical tensions, trade disputes, and intellectual property concerns are driving companies to relocate production to more secure environments.
Quality improvement: Offshore production often came with quality issues. Reshoring allows tighter oversight, higher standards, and reduced chances of defects slipping through.

These forces are turning reshoring from a reactive measure into a deliberate strategy. Nearly 70% of U.S. manufacturers are either reshoring or planning to, reporting gains in stability, efficiency, and control. And as companies act on these drivers, the advantages of reshoring are becoming clearer and more measurable.

The Advantages of Reshoring

Reshoring has become a strategic pathway to stronger, smarter, and more sustainable industries. Companies that bring production closer to home are discovering that the shift delivers tangible rewards that go well beyond risk management.

More Reliable Supply Networks: Regional production reduces exposure to shipping delays, congestion, and political risks. By sourcing closer to markets, manufacturers secure steadier inputs and respond faster to disruptions. This flexibility helps keep schedules on track and preserves customer trust.
Higher Standards and Safer Products: Domestic oversight allows stricter quality control and better compliance with safety, labor, and environmental rules. This produces safer, more dependable goods and lowers reputational risks tied to offshore lapses.
Revitalized Local Economies: Reshoring creates advanced manufacturing jobs and strengthens local supply ecosystems. New facilities also partner with schools and training centers, building the talent pipeline and fueling community growth.
Fewer Hidden Costs: Offshore operations often carry unseen expenses like tariffs, delays, recalls, or IP theft. Reshoring reduces these risks, giving companies more predictable cost structures and often a lower total cost of ownership.
Environmental Gains: Shorter supply chains cut transport emissions and energy use. For companies under climate pressure, producing closer to home supports sustainability goals and can boost brand credibility.

The Challenges and Trade-Offs

Reshoring offers clear benefits, but it also comes with difficult realities that companies must manage carefully:

Higher labor costs: Domestic wages and benefits are far higher than in many offshore regions, which strengthens local economies but challenges competitiveness. Companies respond by absorbing costs, automating, or passing expenses to consumers.
Pressure to automate: To counter high labor costs, firms accelerate investment in robotics, Artificial Intelligence (AI), and smart factories that boost efficiency and precision. However, the steep capital requirements make automation harder for smaller players.
Workforce readiness and skills gaps: Advanced manufacturing relies on specialized skills in mechatronics, materials, and digital systems, but many regions lack skilled labor. Businesses bridge this gap through education partnerships, though results take time.
Transition and restructuring costs: Reshoring demands rebuilding supplier networks, contracts, and logistics, which involves high upfront costs and temporary disruptions. Efficiency gains may take years to materialize, testing financial resilience.
Risks of over-localization: Concentrating production domestically can expose firms to regional disruptions like disasters or strikes. Balancing local control with global flexibility is essential for supply chain resilience.

The shift is not a simple reversal of globalization. Companies that succeed will be those that offset higher costs with innovation, build skilled workforces, and design supply chains that are both local and adaptable.

These trade-offs are shaping industries everywhere, but the stakes are highest in aerospace, where precision, safety, and resilience make it the frontline of the reshoring movement.

Why Aerospace Is the Frontline of the Reshoring Push

Aerospace is at the forefront of reshoring because its production demands are unlike any other industry. Every part, from turbine blades to avionics systems, must meet uncompromising standards, with tolerances so fine that even microscopic flaws can jeopardize safety. This level of precision requires closer oversight and tighter integration between manufacturers and suppliers, conditions far easier to achieve when production is closer to home.

National security makes the case even stronger. Defense aircraft, satellites, and advanced propulsion systems are strategic assets, and governments are investing heavily to ensure they are sourced from trusted supply chains. Domestic reshoring programs are expanding capacity for critical aerospace components, from composite materials to advanced electronics, to reduce reliance on foreign sources.

I’ve encountered recent cases that highlight this shift, such as major aircraft programs facing delays and safety concerns tied to fragmented global supply chains. In response, U.S. manufacturers are consolidating supplier networks and expanding regional capacity, while the Department of Defense (DoD) channels investment into domestic production to secure critical technologies.

For aerospace, reshoring ensures national readiness and safeguards technological leadership. That urgency is why the sector is setting the pace, with other industries watching closely and following its lead—a pattern I’ve often observed when safety and oversight are at stake.

How the Reshoring Momentum Is Spreading Across Industries

The same pressures that pushed aerospace to the forefront of reshoring are now cascading across other sectors. Supply chain fragility, geopolitical tensions, sustainability demands, and government incentives are no longer abstract drivers because they are also shaping real-world decisions in industries as varied as semiconductors, energy, healthcare, and consumer goods. What began as an urgent fix in critical defense and aviation programs is fast becoming a template for global manufacturing strategy:

Force at Work	How It Plays Out in Other Industries	Illustrative Case
Supply chain fragility exposed by COVID-19	Companies are redesigning supply networks to reduce dependence on single regions and long logistics chains.	In 2021, global automakers lost an estimated $210 billion due to semiconductor shortages. The crisis showed how reliance on far-off suppliers could halt entire industries, prompting moves to reshore chip production capacity.
Geopolitical tensions and energy insecurity	Businesses are diversifying away from politically risky regions and insulating against energy shocks.	Taiwan Semiconductor Manufacturing Company’s (TSMC) $40 billion investment in Arizona fabs, backed by U.S. incentives, reflects efforts to move chipmaking capacity out of Taiwan amid U.S.–China tensions. As chips underpin nearly every modern product, this shift reduces strategic exposure to conflict or sanctions.
Sustainability and carbon mandates	Shorter supply chains help meet emissions targets and rising consumer expectations for greener products.	The European Union’s Carbon Border Adjustment Mechanism (CBAM), phased in starting 2023, adds carbon costs to imports like steel and aluminum. By penalizing long, carbon-heavy supply chains, it pushes manufacturers to bring production closer to European markets.
Government incentives and subsidies	Policy packages are directly funding local capacity in strategic sectors.	The U.S. CHIPS and Science Act directs $52.7B into domestic semiconductor capacity, spurring projects like Intel’s new Ohio fabs. Such subsidies are tipping the economics back toward domestic production, especially in high-tech industries.

These shifts show that reshoring is no longer confined to defense or aerospace. Several industries are now recalibrating their global footprints, not simply to cut costs, but to secure resilience, comply with new regulations, and tap into government support.

Industries Reshaping the Map

What once seemed theoretical is now materializing in factories, plants, and gigafactories that bring production closer to home in strategic sectors. Aerospace, pharmaceuticals, and electric vehicle batteries show how governments and manufacturers are deliberately moving production closer to home to secure critical supply chains.

Airbus

Airbus has steadily expanded its U.S. footprint with the Mobile, Alabama assembly site, where it now produces both A320 family jets and A220s. In July 2025, the facility delivered its 100th A220, a milestone that underscores how quickly this hub has scaled to serve the North American market. The plant employs over 2,000 workers and continues to grow, showing how local assembly shortens delivery timelines, avoids tariff exposure, and anchors a broader aerospace ecosystem with skilled jobs and industrial capability.

Civica

The U.S. is actively rebuilding domestic pharmaceutical capacity after COVID-era shortages exposed overreliance on overseas suppliers. Civica is constructing a 140,000-square-foot facility in Virginia to produce low-cost insulin and sterile injectables for hospitals. Backed by $100 million in federal and philanthropic support, the project was launched to address persistent shortages of essential drugs and to reduce reliance on offshore suppliers.

The facility is expected to begin operations mid-decade and will serve hospitals across the United States, making it a cornerstone of efforts to repatriate critical pharmaceutical production. Its significance lies not only in securing a steady domestic supply of lifesaving medicines but also in demonstrating how targeted investments can rebuild strategic health infrastructure at home.

BlueOval

The $5.8 billion BlueOval Battery Park in Glendale, Kentucky, officially began production in 2025, establishing one of the largest EV cell hubs in North America. The complex is designed to supply next-generation batteries for U.S.-made electric vehicles and will ultimately house two massive plants employing thousands of workers.

By anchoring such large-scale capacity in the American South, BlueOval strengthens regional energy security, reduces reliance on Asian imports, and ensures automakers have steady access to the batteries required for the fast-growing EV market.

Reshoring Without Regret: A Practical Framework

Reshoring will succeed only if industries pursue it with balance. That means investing in training so workers can solve problems confidently, while also addressing the retention challenges faced by many manufacturers. It also requires closer collaboration with regulators such as the Occupational Safety and Health Administration (OSHA) and the Environmental Protection Agency (EPA) to embed safety and sustainability into operations, even amid policy uncertainty.

The payoff is clear: safer workplaces, stronger supply chains, and significant job creation. Early evidence from high-tech reshoring shows the momentum is real.

Aerospace offers the model. By combining human empowerment, cross-sector collaboration, and advanced technology, it shows that reshoring can deliver more than security. It can also rebuild resilience, trust, and innovation across the industrial landscape.

FAQs

How does reshoring work?

Reshoring means relocating production from offshore sites to the U.S. or allied nations, shortening supply chains, improving oversight, and reducing risks from global disruptions.

What are the incentives for reshoring?

Governments offer subsidies, tax breaks, and policy support, while firms benefit from fewer hidden costs, stronger security, faster delivery, and compliance with environmental standards.

What industries are reshoring to the US?

Aerospace leads the way, followed by semiconductors, electric vehicle batteries, and pharmaceuticals, with other sectors like energy and healthcare rapidly adopting the same model.

What challenges come with reshoring?

Firms face higher labor costs, skills shortages, and large automation investments, along with transition expenses and the risk of overconcentrating supply chains in single regions.

How does reshoring affect jobs?

It stimulates advanced manufacturing employment, supports training programs, and strengthens local economies by anchoring long-term industrial hubs and innovation clusters.

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