The Case for Reshoring: Bringing Quality Manufacturing Jobs to USA
Good news for U.S. manufacturers: stateside production and employment opportunities are on the rise.
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American Made: What is it & Why It Matters
Historically there has been a lot of hype around the American-made topic, but there is a heightened awareness in recent years, which has drawn more attention to this subject now more than ever. This is primarily due to reshoring by major manufacturers, the US Government with SelectUSA and STEM programs, and all of the issues we face with counterfeiting and sub-par products.
Almost every day, I find an article or a label that says, “Made in USA” or “American made.” Products I see with the Made in USA label range anywhere from batteries, hand tools, and hardware, to outdoor furniture and household appliances, to groceries and dog food — not to mention the Made in USA mandate for many government-driven programs. This is similar to every time I communicate with my wife and kids because whenever there is a lot of talk, there are also a lot of misunderstandings, misstatements, and misconceptions.
Related: Buying American Made: Ways To Express Your Values with Your Pocket Book
What exactly is American-made, and why does it matter?
If we want to get technical, American-made can mean many things. Is it South American-made? North American-made? Is it made in Mexico? What is it?
What exactly is Made in USA?
According to the Federal Trade Commission, a product is made in the USA if it is “all or virtually all” made in the USA. What does “all or virtually all” mean? That phrase “means that all significant parts and processing that go into the product must be of US origin. That is, the product should contain no — or negligible — foreign content.” My interpretation is that, most importantly, you be honest. Say so if it is made in the USA with domestic and imported components. Say so if it is manufactured in the USA and packaged in Mexico. Say so if it is designed and assembled in the USA but manufactured in China.
Now on to the heart of the subject, why does it matter? Why should I care? I want the best price … It matters more than we accept.
RELATED: If you are a manufacturer, a service provider, a producer of goods, or if you employ American citizens and are creating jobs, find out how a MAM partnership will help you
Why it matters
- The manufacturing powerhouse After WWII, the US was almost 50% of the global economy, bringing manufacturing to its peak. We produced 80% of the world’s automobiles during America’s manufacturing peak. Almost all of the products we used were manufactured in the US. We manufactured steel, textiles, furniture, planes, appliances, and shoes, to name a few. Well, since 2001, more than 56,000 factories have left the US. Now, I am not suggesting every single product we use needs to be manufactured here in the US, but we need to be and remain the world’s manufacturing powerhouse.
- Manufacturing employs people — At its height, US manufacturing employed more than 19 million people. Over the last couple of decades, along with losing our factories, we have lost our jobs. According to the National Association of Manufacturers (NAM) and the Bureau of Labor Statistics (BLS), manufacturing in the US currently employs just over 12 million people. Although losing more than 7 million jobs is alarming, what is more alarming is that, unlike the service sector, for every manufacturing job, there are approximately 1.6 jobs created. For example, in The American-Made Movie, we see the Louisville Slugger, an American-made product supporting a great American tradition. To create one baseball bat, there are loggers to cut trees, truck drivers to deliver them to the mill, mill workers to create billets, truck drivers to deliver them to the factory to manufacture the bats, marketers to market them, and retailers to sell them. Manufacturing employs people.
- Manufacturing keeps the US competitive — According to the NAM review of National Science Foundation reports, manufacturers in the US perform two-thirds of all private sector R&D in the nation, driving more innovation than any other sector. Our engineers, techs, and science professionals keep us abreast of technological advancements and developments.
What are your thoughts? Does it matter to you? Does it matter enough to consider a change? Let us know in the comments below.
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Manufacturing Day Highlights Opportunities to Bolster US Manufacturing
“American manufacturing is back!” breathlessly exclaim the ebullient cheerleaders in locales such as Forbes and the Boston Consulting Group. But while U.S. manufacturing may have bounced back slightly from Great Recession-lows, the reality is that America’s manufacturing recovery remains tenuous. On this National Manufacturing Day, policymakers can and should be doing much more to stimulate the growth and competitiveness of America’s manufacturing economy. Read more
Chair Pad Manufacturer Earns Made in USA CERTIFIED® Seal
CERTIFIED, Inc. (madeinusa.net), the nation’s leading independent, non-governmental organization (NGO) certification company Made in USA claims, reported today that KLEAR VU CORPORATION of Fall River, Massachusetts has earned a Made in USA CERTIFIED® Seal for its quality Delightfill® chair pad and chair pad gripper line, fully documenting these products comply with the qualification and quantification that all or virtually all of the product components originate in the United States. Read more
Beverage Company Earns Product of USA CERTIFIED Seal on Apple Cider
CERTIFIED, Inc. (madeinusa.net), the nation’s leading independent, non-governmental organization (NGO) certification company for Country of Origin claims, reported today that ZEIGLER’S has earned a Product of USA CERTIFIEDTM Seal for its natural Apple Cider, the first such cider to qualify after a detailed supply chain audit that documents all components and processes. Such certification will reinforce to consumers the quality of ZEIGLER’S Apple Cider. Read more
Check Out New Balance’s Latest ‘Made in the USA’ Sneaker Collections
A “Made in USA” label is becoming a more actively coveted item. But local footwear brand New Balance has long been crafting a number of their sneakers domestically. Read more
The Case for ‘Made in America’
It’s about pride in what we do, not about protectionism. BY MARK DWIGHT
The Case for ‘Made in America’
I proudly add the “Made in USA” label to every product I manufacture in my San Francisco factory. Making bags in this country is fundamentally important to me and to my company–but maybe not for the reasons you think.
Here at Rickshaw Bagworks, making our own products celebrates our passion for making things, not a protest of outsourcing or offshoring. I’m not a protectionist, and I’m not a Made-in-America zealot. We live in the modern global economy–I get it. In fact, my original plan was to import partially made bags from China and do only the final assembly in our shop.
But, alas, I’m a stubborn maker at heart. We soon found ourselves designing products we could produce from scratch in our own factory and getting excellent customer feedback for our made-in-San-Francisco goods. So we encouraged letting our manufacturing story be our crucial point of differentiation: We don’t just design what we sell; we make what we sell.
That’s always been my true love. In high school, I took wood and metal shop classes and started my own stained glass business, crafting windows, lampshades, and terrariums for my parents’ friends. Then I headed off to college, got a degree in engineering, and started working in Silicon Valley. My crafting days were over–or so it seemed. Twenty years later, I entered the bag-making business and reconnected with my dormant passion for making things. As fate would have it, that happened at a time and in a place particularly challenging for makers–but also full of opportunity.
Photo Credit: Rickshaw Bagworks
We live in an age when production is more often than not outsourced to anonymous contract manufacturers, predominantly in low-cost labor markets. There are good reasons for that and some horrific and well-publicized downsides. Though economies of scale and low-cost labor have yielded tremendous cost savings for consumers, it seems we may be approaching the limits of this business model, especially after factory disasters abroad have focused more attention on the poor working conditions and environmental impact of these practices. A small but growing group of “conscious consumers” care about the who, what, why, where, and how behind the products they buy. These customers want to connect with the companies they purchase goods from and share their enthusiasm with others like themselves.
So, does it really matter where it’s made? Yes, and no. I believe it’s less about precisely where we manufacture–though San Francisco has fabulous geographic cachet–than about making our own products in our own factory under our own brand name. It’s about connection and accountability–knowing and dealing directly with the maker and trusting the brand. Here at Rickshaw, we design and make what we sell. We own it. The buck starts and stops right here. Making what we sell is our primary differentiator. “Made in USA” is the where of our brand story.
Photo Credit: Rickshaw Bagworks
As a conscious consumer, I’m concerned about the environmental and social justice issues of manufacturing in less-developed, poorly regulated countries. As a maker, I’m optimistic that there’s a promising future for small-scale, innovative specialty manufacturing in America. In my bags, those “Made in USA” labels are shorthand for “quality products, made with integrity by a company that’s accountable and that cares for its employees, customers, business partners, and community, and for our shared planet.”
This is not something that’s exclusively American. Nor is it universally American. But I like to think it’s fundamentally American.
Photo Credit: Rickshaw Bagworks
FROM THE NOVEMBER 2014 ISSUE OF INC. MAGAZINE
Mark Dwight foundedhttps://www.rickshawbags.com/ Rickshaw Bagworks, a San Francisco maker of custom bags, and SF Made, a nonprofit focused on building the city’s manufacturing sector.
“MADE IN USA” CLAIMS TRICKY FOR RECYCLED MATERIALS
Manufacturers of products made with recycled materials can’t claim offerings were “Made In USA” unless they can show that the materials originated domestically, according to the Federal Trade Commission (FTC) making it the “Made in USA” claims tricky for recycled materials. Read more
‘Made in USA’ True Again
A number of positive factors came to light in April to give credence to the fact that the U.S. manufacturing sector, which has been subject to severe attrition since the early 1980s, is rebounding impressively.
Since that time, manufacturing, in concert with construction, had been a major mainstay of America’s solid economic underpinnings, with their combined workforces providing employment for a sixth of the U.S. workforce. But in the wake of major sectors such as textiles, leather goods, electronics and transportation vehicles (cars and airplanes), as well as industrial equipment, heading overseas, those employed in the hands-on industrial arena have been cut almost in half.This was particularly the case with conglomerates and major publicly held corporations lured by the low-cost manufacturing opportunities, first in Japan, and subsequently in most of developing Southeast Asia. But up-to-date information released lately by industrial sector analysts indicates that this decades-long period of attrition may now be in sharp reversal. The following salient factors make this case, even though still in its early stages:
- Of the world’s 25 leading global industrialized nations, the U.S. ranks No. 8 in overall productivity and cost-effectiveness.
- A combination of the accelerating natural gas expansion, and record domestic oil production, coupled with dormant employment costs, and contributary technological production improvements, has given America’s overall cost effectiveness a new lease on life.
- With the U.S. export sector reaching a peak among world leaders China, Japan, Germany, the U.S. brand-name quality reputation has created a preference, even among export-oriented nations in Southeast Asia that are in various stages of consumer demand development.
- Although in the early stages of reversion to American shores, this return to U.S. production is starting to make itself felt among major corporate chemical manufacturers, benefited by the nation’s lowest global cost of natural gas, a major resource for this sector.
Also beneficial to U.S. domestic user and consumer demand requirements are the rising costs incurred by labor and management in China, and to a lesser extent in other dynamic manufacturing sector nations such as Taiwan, Vietnam, India, Bangladesh and Indonesia.
This redounds to the benefit of America’s manufacturers, not only in shrinking costs, but lessening the need of huge advance orders to get the best price from foreign exporters. Also, the ability of domestic U.S. manufacturers through its distribution, to keep inventories current, without overburdening supply, definitely tilts the advantage increasingly to the domestic industrial manufacturing sector.
Although this obvious rebound of the U.S.A.’s industrial sector benefits the American economy as a whole, it probably will do little to alleviate the chronic unemployment, as tightening government regulations and advanced tech, plus increased use of part-time workers do not translate into a torrent of substantial additional production employees.
Morris R. Beschloss writes a regular blog at www.desertsun.com/beschloss and a column that can be found Sunday in The Desert Sun.
What do you think?
Do you agree or disagree with Morris Beschloss? Let us know via comments below.
SOURCE: The Desert Sun
Why U.S. Manufacturing Is Poised for a Comeback (Maybe)
Photo Credit: Lincoln Agnew
Some Say a Renaissance Is Already Under Way. Here’s the Case They Make—and the Skeptics’ Response
Manufacturing in the U.S. is starting to make a comeback, and is poised for even bigger gains in the years ahead.That, at least, is the way the optimists see it.Driven partly by more competitive labor and energy costs and companies’ desire to produce goods closer to their customers, the number of factory jobs has started to rise after plunging for decades, edging up by about 600,000 over the past four years to more than 12 million. Some U.S. companies are bringing jobs back home, and foreign businesses are setting up shop. Newspapers are trumpeting investments in American production, and advertisements—such as the nostalgia-drenched Chrysler TV ad shown during the Super Bowl and featuring Bob Dylan —celebrate a resurgent U.S. manufacturing sector.”The economics of the world are changing in favor of U.S. manufacturing,” says Hal Sirkin, a Chicago-based senior partner of Boston Consulting Group.
That’s the case made by the bulls, but plenty of skeptics argue that there are lots of reasons to doubt it. For all the positive trends and statistics, they cite numbers pointing the other way. And, the skeptics argue, the U.S. government needs to overhaul its policies and industry must invest more heavily before any real change can happen.
With that in mind, here are four reasons to bet on U.S. factories—and four reasons to be cautious.
THE OPTIMISTS’ CASE, PART 1: U.S. costs are getting more competitive
While wages soar at double-digit rates in China and some other emerging countries, they have stayed roughly level in the U.S. in recent years, narrowing the gap between America and Asia. Boston Consulting Group estimates that China’s overall manufacturing-cost advantage has shrunk to just 4%. When wages are adjusted for productivity and the costs of shipping and inventories are included, it can be more economical to make some products in the U.S. than in Asia.
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Meanwhile, the surge in U.S. production of oil and natural gas, made possible by hydraulic fracturing, or fracking, has pushed down energy costs in the U.S. In 2012, German industrial companies paid more than twice as much for electricity as their U.S. counterparts and four times as much for natural gas, according to International Energy Agency data.THE REBUTTAL: It isn’t just about costs. It’s also about workers’ skills and the availability of suppliersBoth atrophied over the past two decades as U.S. companies shifted production to Asia. U.S. manufacturers complain they can’t find enough people skilled in operating or repairing sophisticated machinery, and U.S. students do poorly in international comparisons of math and science skills.Euro-Pro Operating LLC, based in Newton, Mass., designs its Shark vacuum cleaners and Ninja blenders in the U.S., but it has them made by partners in China. The issue isn’t labor costs, says Mark Rosenzweig, Euro-Pro’s chief executive officer. It’s about the profusion of suppliers in China for such things as small motors and electronic parts, and the speed with which Chinese factories and suppliers can gear up to make new or redesigned products.
Replicating those skills and supply chains in the U.S. is conceivable, but it would require many years of heavy investment. The big question is whether U.S. companies, which are typically focused on pleasing Wall Street with quarterly results, will make those long-term investments. As for cheaper energy, sure, low-cost natural gas is spurring huge investment in some U.S. industries, such as petrochemicals and fertilizers. But energy costs aren’t the decisive factor for most manufacturers. In an August 2013 survey of 216 U.S.-based manufacturing executives, Boston Consulting Group found that only 7% ranked energy costs as being among the most important factors in deciding whether to locate production in the U.S., behind factors like access to skilled labor. THE OPTIMISTS’ CASE, PART 2: Companies are more eager to produce near their customers |
These days, companies are increasingly focused on reacting quickly to changes in demand—such as, say, a sudden fad for orange sunglasses instead of pink ones. Being nimble reduces the risk that companies will be stuck with excess stocks of unsalable items or a shortage of items they could sell.It’s a lot easier for companies to act quickly when they’re making their products close to the customer. Manufacturing in the U.S. can reduce the time needed to obtain goods to days or weeks from the two months or so needed to ship goods across the Pacific and get them through customs. Whirlpool Corp. cited such advantages when it moved assembly of hand mixers from China to Ohio three years ago.Manufacturers also got a lesson from nature in 2011, when an earthquake in Japan and flooding in Thailand temporarily halted production of vital parts for cars, electronic goods and other products. That shock reinforced the desire to reduce dependence on supply chains stretching across the Pacific.THE REBUTTAL: China and India have more consumers
Most companies still see their greatest long-term growth opportunities in Asia, Latin America and Africa, as hundreds of millions of poor people move up to the middle class. Emerging markets are likely to remain a higher investment priority than the slower-growing markets of North America and Europe.
Just look at where corporations are increasing their investments. In 2011, according to the latest data, U.S. multinational manufacturers did $116 billion in capital spending overseas—up 68% from a decade before, according to the federal government. During the same period, their capital spending in the U.S. declined 2% to $189 billion.THE OPTIMISTS’ CASE, PART 3: The political climate for manufacturing in the U.S. has improvedAmerican manufacturers have often grumbled that government subsidies and incentives are more generous overseas. But state and local governments in the U.S. now are competing fiercely for investments and offering some rich packages. Electrolux AB of Sweden received more than $180 million of incentives, including tax breaks, to build a $190 million cooking-appliance plant in Memphis, Tenn., that opened last year. Politicians are so eager to talk about jobs that they will show up to celebrate even minor expansions: In April, Missouri Gov. Jay Nixon attended a ceremony to hail the creation of 22 jobs in an expansion of a 3M Co. plant that makes graphic films.The declining power of U.S. unions also encourages some manufacturers to set up in the U.S. rather than Europe or elsewhere. Caterpillar Inc. closed a railroad-locomotive plant in Lon
don, Ontario, in 2012 after union members there refused to accept pay cuts of about 50%. Production moved to a new nonunion plant in Muncie, Ind.
don, Ontario, in 2012 after union members there refused to accept pay cuts of about 50%. Production moved to a new nonunion plant in Muncie, Ind.
THE REBUTTAL: The political climate still isn’t that great
The top federal income-tax rate for U.S. corporations, 35%, is the highest among major industrial countries. U.S. tax rules also give American firms an incentive to keep large amounts of cash invested overseas rather than at home.
Meanwhile, political gridlock in Washington leaves companies highly uncertain about future taxes, health-care costs and repairs to the nations’ crumbling roads, bridges and ports. Caterpillar says capacity constraints and outdated technology at U.S. ports have prompted it to use Canadian ports for about 40% of the company’s imports and exports.
THE OPTIMISTS’ CASE, PART 4: Foreign companies are betting on U.S. manufacturing
Germany’s BMW AG in March announced a $1 billion expansion of its car plant in Spartanburg, S.C., aimed at increasing production capacity 50%. Michelin of France last year opened a plant in South Carolina to make giant tires for earth-moving equipment. China’s Lenovo Group is making personal computers in North Carolina.
Even the U.S. footwear industry, after decades of decline, is showing signs of life. Merchant House International Ltd., headed by Hong Kong entrepreneur Loretta B.H. Lee, has been making work boots in China and selling them in the U.S. since the early 1980s. In May, the company started producing some of its boots at a new plant in Jefferson City, Tenn.
China remained the No. 1 destination for foreign direct investment in 2013, according to estimates from the Organization for Economic Cooperation and Development. But China’s total last year rose just 2% from a year earlier to $258.2 billion. The U.S. attracted $193.4 billion, up 16%, to rank No. 2.
THE REBUTTAL: The flow of jobs goes both ways
Harry Moser, president of the Reshoring Initiative, a nonprofit that encourages companies to consider bringing production back to the U.S., estimates that such moves are creating at least 40,000 U.S. jobs a year. But he says the number of jobs moving from the U.S. to other countries is probably around the same level.
Briggs & Stratton Corp. moved all its production of horizontal-shaft motors for portable generators from the U.S. to China last year. Todd Teske, the Milwaukee-based company’s chief executive officer, says production costs for that type of motor were lower in China. (Briggs still makes more than 85% of its motors in the U.S., a spokeswoman says.)
Critics also point to some other numbers that aren’t so rosy. Trade figures, for instance, don’t back up the idea that the U.S. has become much more competitive. U.S. manufacturing exports—excluding agricultural items, petroleum and coal—rose just 1.6% last year to $1.16 trillion, according to data from Global Trade Information Services Inc., a Geneva-based data provider. China’s manufacturing exports increased 7.7% to $2.06 trillion. Meanwhile, U.S. imports of manufactured goods also grew 1.6% last year, reaching $1.63 trillion.
Nor is there any sign of a U.S. factory-building boom. Daniel Meckstroth, chief economist at the Manufacturers Alliance for Productivity and Innovation, a research organization in Arlington, Va., says his analysis of government data shows that there are about 304,000 manufacturing plants in the U.S., down from 375,000 in 1998. The good news is that the number appears to be leveling off after a long fall.
Experts who are more sanguine about manufacturing say the statistics need to be put in context.
Boston Consulting Group’s Mr. Sirkin says the U.S. manufacturing recovery he sees is “just in the beginning stages” and should start improving the trade performance in 2015 and beyond.
As for factories, one reason the number isn’t rising is that the U.S. still has plenty of spare capacity at underused or vacant plants, says Mr. Moser of the Reshoring Initiative.
All in all, says Mr. Meckstroth of the Manufacturers Alliance, it is too early to say whether the U.S. will have a major recovery in manufacturing. “The potential is there,” he says, but the U.S. needs to do a lot more—including a more competitive tax code and better vocational training. He also thinks the U.S. needs to try to get other countries to reduce trade barriers and let their currencies float freely instead of keeping them artificially weak.
Mr. Hagerty is a Wall Street Journal news editor in Pittsburgh. He can be reached at bob.hagerty@wsj.com.
SOURCE: Wall Street Journal
Surprise! The U.S. is Poised To Be a Rising Star in Manufacturing
After years of hand-wringing about the expense of making things in America, a new report from the Boston Consulting Group says that’s all changing. The shift is due in part to stagnant wages — at least that’s potentially good for something — and to a greater extent, the abundance and declining cost of natural gas.
In fact, there’s a bit of a role reversal underway.Five economies generally regarded as low-cost bases for manufacturing — China, Brazil, Czech Republic, Poland and Russia — are getting relatively more expensive. The reasons: wage increases, slowing productivity growth, currency swings and steep increases in energy costs. The U.S. is getting cheaper, along with Mexico. The reasons: wage stability, increasing productivity, a stable currency and, most dramatically, a sharp decline (50 percent) in the cost of natural gas since 2005, a result of the boom in shale gas. In a press release accompanying the report, BCG’s Michael Zinser said:
While labor and energy costs aren’t the only factors that influence corporate decisions on where to locate manufacturing, these striking changes represent a significant shift in the economics of global manufacturing.
There are few signs that the news has caught up with U.S. companies that continue to shun the U.S. for supposedly cheaper nations. According to a recent report by the Congressional Research Service:
China displaced the United States as the largest manufacturing country in 2010, as the United States’ share of global manufacturing activity declined from 30% in 2002 to 17.4% in 2012.
“Many companies are making manufacturing investment decisions on the basis of a decades-old worldview that is sorely out of date,” wrote Harold L. Sirkin, a BCG senior partner and a coauthor of the analysis. “They still see North America and western Europe as high cost and Latin America, eastern Europe, and most of Asia — especially China — as low cost. In reality, there are now high- and low-cost countries in nearly every region of the world.”
SOURCE: Washington Post
Brand Building on Made in America Foundation
STRONG SELLER: Single’s “Janessa” jumpsuit
When Gala Inc. founders Galina and Michael Sobolev began shifting their production for their contemporary line,Single, back to the United States about six years ago, there were several compelling reasons to bring manufacturing home.
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FAMILY BUSINESS: Galina & Michael Sobolev, pictured with their sons, Evan (far left) and Julian (far right). Daughter Sara not pictured.
LA LABEL: Every piece in the Single collection has a label that reads “Single Los Angeles,” and the company’s hangtags read “Made in USA.”
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Domestic production gave them the ability to produce quickly and fill reorders. There is an existing production base in the region and the move could help retain U.S. jobs, which was important for the Ukrainian-born Sobolevs, who both emigrated as children from the former Soviet Union, meeting many years later in Los Angeles.“I’m from Odessa and Michael is from Donetsk,” said Galina Sobolev, the designer behind Single. “We’ve lived in this country for 37 years. We both felt very strongly about giving back to the community and giving back to this country.” The company had always kept a portion of its production local to allow for quick turn and reorder business. “The majors really loved that we could do that,” Galina Sobolev said. “[But] at one point when the production of all our silks got really huge, we were doing maybe 60 percent domestically and our China production went up to 40 percent.” The husband-and-wife team began investigating what it would take to move all production back to America. “We started pricing some of the product,” Galina Sobolev said. “The difference was so insignificant that we decided to absorb it into the cost. [We said,] ‘For the amount of profit that we’re going to lose by producing in the U.S., we’d rather forgo the extra money and create jobs here for local factories.’” |
These days, 100 percent of the Single collection is produced in the United States with the exception of a few labor-intensive items in the Holiday collections, such as beaded dresses made in India. And the move has paid off—particularly among Single’s international retailers.“We have a lot of Canadian customers who are very interested in the fact that the product is made in the USA,” Sobolev said. “And we have a lot of European customers. In Belgium and Germany, they are very adamant. If the whole collection is made in USA, they triple their orders.”
Domestic manufacturing has allowed the company to fill reorders when a style suddenly takes off for a retailer. “Our edge is the fact that we can turn goods in two to three weeks, which nobody in China can do,” Sobolev said. “For clients such as some of the onliners, they can chase business.”
That was the case recently for one retailer that purchased a few stock inventory pieces from a previous collection to sell online. The retailer bought 18 units of one dress style—“That’s all we had in stock,” Sobolev said—and oversold it by 390 units. Fortunately, Sobolev was able to secure the fabric from the original local vendor and quickly put the reorder into production.
“From the day of the order to the day it [left] our door it was 11 days. And we just got another reorder from them for, I think, 460 pieces of the same dress,” she said.
Neiman Marcus’ Cusp department had a similar situation with Single’s “Janessa” jumpsuit, Sobolev said.
“They had an 83 percent sell-through, and they even sold out of it online,” she said. “We were able to do a quick reorder for them for 60 or 80 units. Just the fact that we can do this so quickly and they’re able to reorder, it’s very exciting for them. This is the kind of edge domestic manufacturing allows us.”
Spread The Word
Every piece in the Single collection has a label that reads “Single Los Angeles.” Each item has a hangtag that reads “Made in USA,” although Sobolev said she’s planning to change that to read “Proudly Made in USA.” The linesheets, lookbook and website will also soon have “Made in USA” prominently displayed. At the Single showroom in Atlanta, the sales staff display signs that read “This Collection Is Made in USA.”
“The buyers get very excited when they find out that the collection is Made in USA—especially in our Midwest territories and in the South and Southeast,” Sobolev said. “At the regional markets, it’s the first thing my sales team tells every buyer that walks in.”
Sobolev frequently attends the regional markets in Dallas and Atlanta, as well as the New York Market five times per year.
“In New York, nobody cares where things are made, honestly. It’s all about the price,” she said. “I’m getting the most support for made in USA from Texas, from Louisiana, from specialty stores in the Carolinas.”
Much of the Single collection is made using European fabrics, but Sobolev looks for domestic resources, as well. “We have one lace that we have been running for about 10 years now. It’s a very vital part of our Holiday collections,” she said. “It’s made in this little factory in New Jersey. The machine itself is about 200 years old [and] imported from England. And it’s a beautiful re-embroidered lace. It looks like [a high-end Italian] lace, but it’s a lace that can be worked into our contemporary price points.”
Sobolev said some retailers ask if the company will source a style overseas to reduce the price.
“Of course, everyone is price-sensitive these days,” she said. “But sometimes we have to put our foot down and say, ‘Sorry, we can’t make it at that price. However, we can do it at this price, and you can have a product in your store that says ‘Made in USA.’”
California Sportswear
Founded in 1994, Single sells in higher-end department stores such as Saks Fifth Avenue and Neiman Marcus, as well as higher-end specialty stores and boutiques around the world such as Tootsies in Texas, Montmartre in New York and Mendocino and Want in Canada. Although the company started as a sportswear maker, over the years it became well known as a dress resource. For Fall, Sobolev is returning to the brand’s sportswear roots with a collection of luxe separates Sobolev calls “California dress-up casual.”
“If you look at the way people are dressing today, it’s a lot easier for a girl when she’s going on a date to run in and buy two new blouses to wear with her favorite leather legging or skinny jean,” she said. “Unless she needs a dress for a specific occasion, I’m seeing more of a turn to an easy, casual kind of dressed-up sportswear. It doesn’t mean we’re not doing dresses anymore. There’s still two or three dresses in every group, and we still have
our assortment for our customers that are very much into dressing that career gal.”
Private-label businessIn addition to Single, the company has a strong private-label business manufacturing for a handful of brands and retailers.
The company also produces exclusive Single collections for retailers such as the White Single Dress label, which sells at Rue La La.
“We do thousands of structured dresses for Boston Proper, and we have for the last 15 years,” Sobolev said. “That’s the beauty of being able to turn a 600-unit reorder in three to five weeks domestically.”
The Sobolevs’ private-label business has grown organically as word gets out that the company is a resource for brands looking for domestic production. “We have become kind of like the Intelof the fashion community,” Sobolev said. “[People will say,] ‘You want to make something domestically? Call the people at Single. They can turn things in two to three weeks.’”
New Brand Extensions
The company recently added plus sizes for Saks and has since expanded the offering to other retailers, such as e-tailer Madison Plus. Although still in the early stages, the plus-size capsule collection fills a void in the contemporary market for plus sizes.
“There aren’t a lot of choices for the [contemporary plus-size] consumer,” Sobolev said. “We really invested in developing the blocks, and we got a great fit model.”
Sobolev hopes to expand Single’s plus-size offerings into a stand-alone collection.
“I would love to turn this into more of a proper business—have it not just be a small capsule segment but really expand it on various levels,” she said.
Another new concept in the works is the Single men’s underwear line developed by the Sobolevs’ 24-year-old son, Julian. Still in the test stages, the collection features the Single name and an American flag on the elastic waistband.
Just as Single is committed to domestic production, Galina Sobolev said she wishes more manufacturers and retailers would commit to Made in America product. Retailers, in particular, could highlight American-made products in their stores, she said.
“Why not have a section for Made in USA?” she said. “The manufacturers today have a responsibility—we all, as Americans, have a responsibility—to this country and the security of its economy and the future for our children.”
SOURCE: Apparel News
Polo Ralph Lauren Clothing Line to be Made in Rochester
Before a throng of cheering Hickey Freeman Co.employees, company officials and Sen. Charles Schumer Monday announced a $1 million manufacturing deal with Polo Ralph Lauren and declared that there are more such deals to come.
“We’re no longer interested in survival,” said Stephen Granovsky, CEO of Toronto-based Grano Retail Holdings, which bought the famed Rochester clothing company last year. “Now we’re interested in growth.”Schumer said, “We were looking for quite some time for the right parent (for Hickey Freeman). Now we’ve found it. We’ve come home, in a sense.”
Under the contract with Polo Ralph Lauren, Hickey Freeman will manufacture the company’s “Blue Label” line of tailored suits and sport jackets. The work — which could lead to more Polo contracts for Hickey, Granovsky said — is expected to begin next month.
The deal will increase Hickey’s revenue by at least 10 percent, Schumer said.
Granovsky said the deal was worth about $1 million. He said there will be at least two other such contracts with major clothing labels in the coming weeks.
“There is stability now at Hickey Freeman,” Granovsky said.
Schumer said, “To be able to bring together two dynamic, trailblazing American clothing brands is a huge step forward for Hickey Freeman.”
Officials declined to provide details about the pending contracts, but said the additional work will help Hickey achieve its goal of full factory employment by 2015. The workforce now numbers 415.
Schumer said Hickey’s fortunes improved when Grano bought it in part because Grano also owns the Canadian high-end men’s clothier, Samuelsohn, and understands the importance of quality tailoring over quick returns on investments.
The new deal, and the stability Schumer and Granovsky cited, is in contrast to Hickey’s tumultuous business life over the past several years.
After longtime owner Hartmarx Corp. filed for bankruptcy in 2009, the British private equity firm Emerisque Brands and SKNL, an Indian clothing manufacturer, bought Hartmarx’s assets. Then the holding company they formed, HMX Acquisition Corp., itself filed for bankruptcy in 2012.
Months later, Authentic Brands Group LLC bought Hickey Freeman and turned running Hickey Freeman and sister clothier Hart Schaffner Marx over to W Diamond Group Corp., a private company created by HMX CEO Doug Williams and his wife.
W Diamond Group then sold the Hickey to Grano.
Granovsky said his company is committed to Rochester. “Hickey Freeman isn’t going anywhere,” he said.
The move to Hickey is part of Polo Ralph Lauren’s “Made in America” initiative whereby some of its production will be brought back to the United States, Schumer and Grano company officials said Monday.
The Blue Label brand has been manufactured in Italy. The deal and others to come could boost production and add up to 50 jobs in the next three years.
No one from Ralph Lauren attended Monday’s news conference at the factory on North Clinton Avenue in Rochester.
Granovsky said Lauren is bringing the jobs back from Italy because of the preference American shoppers have shown for products made in this country.
“When Ralph Lauren made the uniforms for the U.S. Olympic team, he became aware of the importance of American-made,” Granovsky said.
Lauren designed and made the uniforms and other clothing for the U.S. Winter Olympics team that competed this year in Sochi, Russia.
SOURCE: Democrat & Chronicle
New York Manufacturing Soars for 2014 Start
Comprised of surveys from around 100 New York executives, The Empire State Manufacturing Survey attempts to determine whether certain components of manufacturing have experienced growth (positive number), or contraction (negative number). Investors watch New York manufacturing (and other regions, as well) as a possible signal of larger economic upswings or downturns.
For January, the survey’s general business conditions index clocked in at 12.5 points, up from December’s revised 2.2 reading. . Analysts were pleasantly surprised by the index, having expected only a slight uptick in growth to 3.3.
Source: New York Federal Reserve
Digging deeper, new orders made a major turnaround, bouncing back to 11.0 from December’s -1.7 contraction. As a sign of longer-term confidence and growth potential, the “number of employees” component headed from 0.0 in December to 12.2, while average workweek numbers flipped from -10.8 to 1.2 this month.Manufacturers’ six-month outlook remains solid, little changed at 37.5 compared to December’s 39.0 reading. New orders added on nine points to reach 39.1.
SOURCE: The Motely Fool
POTUS announces Manufacturing Innovation Institute
RALEIGH– Air Force One landed at RDU Wednesday afternoon, kicking off President Barack Obama’s visit to the Triangle.
His visit began with a stop in RTP to tour Vacon, a company that designs drives used to power everything from elevators to exhaust fans. President announced the Manufacturing Innovation Institute, a new manufacturing venture for the country. The announcement is being made at NC State University, which is the school he has picked to lead his initiative.
(Entire speech, 21 minutes long, is linked at the end of this article) “I’m here to act, to help make Raleigh-Durham, and America, a magnet for the good, high-tech manufacturing jobs that a growing middle class requires and that are going to continue to keep this country on the cutting edge,” he said. The President said the institute’s goal will be to create new energy solutions using wide bandgap semiconductors to improve efficiency, reduce size and improve reliability. He also said two more “innovation hubs” will be launched in the coming weeks. Wednesday’s speech centered around strengthening advanced manufacturing and attracting good paying jobs. The idea is to do this through a public private partnership that will include 18 companies and 6 universities. NCSU will be the lead university in this venture, known as the “next generation power electronics innovation institute.” It will focus on energy efficient, high power electronic chips. “NC State couldn’t be more proud to have been selected to lead this new institute, which truly embodies everything that our university stands for – from our think and do mentality, to our collaborative spirit and unending commitment to solve to the grand challenges of society,” NC State Chancellor Randy Woodson said in a statement released Wednesday. Chancellor Woodson will travel back to Washington with President Obama on Air Force One. Woodson, along with UNC Chapel Hill Chancellor Carol Folt will attend an event hosted by the president and first lady Thursday on making college more accessible. They are part of a group of university leaders from across the country selected to attend. President Barack Obama is traveling the country over the next few weeks highlighting some of the ideas we will hear in his State of the Union Address at the end of the month. Watch the entire 21 minute speech.
SOURCE: NEWS 14
Maker’s Row and Cotton Incorporated Partner to Bring Back "Made in USA"
Maker’s Row and Cotton Incorporated have announced their partnership that aims to further educate and connect textile brands with U.S. cotton suppliers and manufacturers. Through the efforts of their partnership, Maker’s Row, an online platform providing product-based businesses direct access to domestic manufacturers, and Cotton Incorporated, the research and marketing company representing America’s cotton producers and importers, will be able to reach and inform a far larger, more diverse audience on the cotton production process and associated benefits with domestic sourcing.
“The partnership with Cotton Incorporated was a natural choice. This partnership provides brands with a deeper understanding of one of the principal materials used in apparel today. With that understanding, brands have a greater opportunity to push the boundaries of their own products with our manufacturers on Maker’s Row.” said Matthew Burnett, CEO, Maker’s Row. Maker’s Row and Cotton Incorporated Bring Back Made in USA.
To steward their efforts, Maker’s Row and Cotton Incorporated have created a video titled, American Cotton Part 1, designed to assist businesses in the understanding of cotton production as it moves through the supply chain. By revealing the production process, businesses–from first-time entrepreneurs to big brands–are now able to make more informed decisions which will ultimately curate a better product.
“There are more than 70 cotton producing countries in the world and the United States is the third largest. And in the United States, we have more than 10,000 cotton farmers committed to high standards of cotton production. That starts at the farm and continues all the way through the grading and classing systems that exists for every pound and every bale of US cotton.” – Mark Messura, Senior Vice President, Cotton Incorporated.”This is such a great collaboration and we are very excited to finally launch the campaign. What we loved about the Maker’s Row team is their passion and enthusiasm for American manufacturing coupled with the fact that they are great storytellers through their video documentaries. We have a great story to tell about U.S. cotton and you will see from American Cotton Part 1how passionate the cotton farmers are about their crop and the many things the U.S. cotton industry is doing to produce the most responsible and traceable cotton in the world. Everyone who sees this campaign should feel good about using American cotton as an ingredient in the products they create or source.” – David Earley, Sr. Director, Supply Chain Marketing, Cotton Incorporated.
Maker’s Row has also launched a page (makersrow.com/cottoninc) which features over twenty domestic cotton mills and suppliers of cotton-based materials that all comply with Cotton Incorporated’s stringent quality and responsibly-produced cotton requirements. The added platform will generate a larger community for businesses to discover and communicate with cotton-based suppliers and manufacturers across the United States.
Maker’s Row (makersrow.com) is an online marketplace that connects American manufacturers with product-based businesses. Their mission is to make U.S. manufacturers universally accessible, and the production process simple to understand. Maker’s Row has created a community of makers, entrepreneurs, designers and businesses that are collectively coming together to bring back American manufacturing.
Cotton Incorporated (cottoninc.com), funded by U.S. growers of upland cotton and importers of cotton and cotton textile products, is the research and marketing company representing upland cotton. The program is designed and operated to improve the demand for and profitability of cotton.
For more information on the Maker’s Row and Cotton Incorporated partnership, or more information on Maker’s Row, please contact Matthew Burnett, CEO, Maker’s Row.
Media Contact: Matthew Burnett, Maker’s Row, 347-860-9333, matthew@makersrow.com
10 States Where Manufacturing Still Matters
Factory manufacturing output increased for the second straight month. Overall industrial production has increased 0.8%. (Photo: Mike De Sisti, AP)
While some experts are predicting a revival, manufacturing has lagged the economy for years. The country has lost nearly 2.5 million manufacturing jobs in the past 10 years.
Last year, the manufacturing sector was responsible for 12% of the nation’s total economic output. In Indiana, the state where manufacturing contributes most, the figure was 28.2%. 24/7 Wall St. reviewed the 10 states where manufacturing represented the largest total share of the state economy.
The states with the biggest manufacturing economies specialize in different industries. In Oregon, nearly $38 billion of the state’s $50 billion manufacturing sector came from computer and electronic product manufacturing. In Louisiana, more than 10% of the state’s entire economic output in 2011 came from the manufacturing of petroleum and coal-based products. Michigan and Indiana both have sizable auto industries, with Michigan’s auto industry accounting for slightly less than a third of all its manufacturing output in 2011.
During the recession, and in many cases before the recession even started, many states’ manufacturing employment faced steep job losses. Between January 2007 and mid-2009, Indiana lost more than 100,000 manufacturing jobs. In Michigan, nearly 125,000 manufacturing jobs were lost between January 2008 and January 2009 alone.
Now, many of these states have seen employment rebound. Michigan had the fastest job growth in the nation from the end of 2009 to the end of 2011. According to Chad Moutray, chief economist at the National Association of Manufacturers, “the auto sector has been one of the driving sectors in the economy, pardon the pun, over the course of the last couple of years.”
In addition to Michigan, many parts of the Midwest benefited as well, he added. In Indiana, employment has risen more than 3.5% a year for each of the past three years, especially impressive in the context of the nation’s slow job growth overall.
While some believe that the benefits of a potential manufacturing renaissance are largely a myth, Moutray told 24/7 Wall St. that investments in the sector have a positive impact on the economy overall. He also noted that the prospect of added jobs may appeal to many Americans because it jobs pay well.
To identify the 10 states where manufacturing matters, 24/7 Wall St. used state gross domestic product (GDP) figures published by the Bureau of Economic Analysis. We determined from these data which states had the largest percentage of output attributable to manufacturing. Data on specific industries within the manufacturing sector from 2011 represent the most recent available figures. Employment figures for each state come from the Bureau of Labor Statistics and are seasonally adjusted.
Seasonally adjusted manufacturing job totals were not available for Alabama and Oklahoma.
These are the 10 states where manufacturing matters.
10. Alabama
- MFG share of output: 16.3%
- MFG output 2012: $30 billion (22nd highest)
- 2012 Unemployment rate: 7.3%
More than 16% of Alabama’s $183 billion worth of total output in 2012 came from manufacturing industries, about $30 billion. Last year, much of this output — $16.6 billion worth — came from the manufacturing of durable goods, which in 2012 accounted for 9.1% of total GDP, the ninth-highest percentage in the country. This includes the manufacturing of wood products, nonmetallic mineral products and so forth. News reports suggest a strong tradition of manufacturing in Alabama. Mobile County, for example, will now be the site of Airbus’s new A320 jetliner final assembly line, which will likely be the company’s first U.S.-based production facility. The project, which is scheduled to begin in 2015, is expected to create thousands of jobs, a welcome prospect in the wake of declining manufacturing industries this past decade.
9. Michigan
- MFG share of output: 16.5%
- MFG output 2012: $66.2 billion (8th highest)
- 2012 Unemployment rate: 9.1%
Each of the “Big Three” U.S. auto manufacturers — Chrysler, Ford and General Motors — is based in Michigan, and car sales are trending upward. This likely will be critical for the state: motor vehicle manufacturing accounted for nearly 5% of the state’s total GDP in 2011, far more than any other state. Michigan also led the nation with $18.8 billion in motor vehicle manufacturing output in 2011. The resurgence in the auto industry has not only boosted output but also led to job growth. Manufacturing employment in Michigan rose 7.9% between the ends of 2010 and 2011, leading all states, and then by an additional 3.9% between the ends of 2011 and 2012, also among the most in the nation. But this did little to help Detroit avoid a bankruptcy filing since extremely few auto manufacturing jobs exist within the city limits.
8. Iowa
- MFG share of output: 16.7%
- MFG output 2012: $25.4 billion (25th highest)
- 2012 Unemployment rate: 5.2%
Iowa had the 30th largest state economy in the nation last year. However, relative to its GDP, Iowa is still one of the nation’s largest manufacturers. This is especially the case for non-durable goods, which accounted for 8.4% of the state’s total output in 2012, the fifth-highest percentage in the nation. In 2011, when non-durable goods manufacturing accounted for 8.3% of Iowa’s output, nearly half of this contribution came from food, beverage and tobacco manufacturing. At 4% of state GDP, this was more than any other state except North Carolina. Despite low crop yields due to drought, Iowa was the leading producer of both corn and soybeans in 2012, according to the USDA.
7. Ohio
- MFG share of output: 17.1%
- MFG output 2012: $87.2 billion (5th highest)
- 2012 Unemployment rate: 7.2%
Ohio is a major manufacturer of a range of products. In 2011, it was one of the largest manufacturers of both primary and fabricated metals products, which together accounted for about 3% of the state’s output that year. The state was also the nation’s leader in producing plastics and rubber products, which accounted for more than $5.3 billion in output in 2011, or 1.1% of Ohio’s total output. Likely contributing to Ohio’s high output of manufactured rubber products, the state is home to Goodyear Tire & Rubber, a Fortune 500 company. At the end of 2012, Ohio was one of the top states for manufacturing employment, with roughly 658,000 jobs, trailing only far-larger California and Texas.
6. Kentucky
- MFG share of output: 17.1%
- MFG output 2012: $29.75 billion (23rd highest)
- 2012 Unemployment rate: 8.2%
In 2011, Kentucky manufactured nearly $4 billion worth of motor vehicles, bodies, trailers and parts, the fifth-largest output in the nation. As of 2011, this manufacturing industry was worth 2.4% of Kentucky’s GDP, the third-largest percentage in the country. In 2011, electrical equipment, appliance, and component manufacturing had an output of only about $1.3 billion the 15th highest, but this may be expected to improve. Louisville is home to the GE Appliance Park, where the company has recently built two new assembly lines. The assembly lines, which cost more than $100 million, will produce high-efficiency washing machines and will create about 200 jobs, in addition to the thousands of jobs GE has created in the region over the past few years with its opening of several other factories.
5. Wisconsin
- MFG share of output: 19.1%
- MFG output 2012: $49.98 billion (12th highest)
- 2012 Unemployment rate: 6.9%
Wisconsin led the nation in paper manufacturing in 2011, with nearly $4 billion in output, which was 1.5% of the state’s total GDP and the third-greatest portion of total output. In 2012, Wisconsin was a large producer of durable goods, which accounted for 11.3% of its GDP, up from 10.7% the previous year, holding on to its fourth place position. In spite of Wisconsin’s high output in the paper industry, the state’s Chamber of Commerce has expressed concerns regarding the implementation of government regulations that may hurt current and future job prospects. Officials in Wisconsin claim the new Boiler MACT regulations, for example, will have a negative economic impact on pulp and paper industry jobs in the state.
4. North Carolina
- MFG share of output: 19.4%
- MFG output 2012: $88.25 billion (4th highest)
- 2012 Unemployment rate: 9.5%
Last year, North Carolina was the fourth-largest manufacturing economy in the country, losing the third-place position to Illinois. In 2011, of the state’s $84 billion manufacturing output, nearly $24 billion alone came from chemical manufacturing.Roughly 5.5% of the state’s GDP arose from chemical manufacturing alone. Another close to $20 billion came from the food, beverage, and tobacco product industry, more than any state but California. North Carolina’s tobacco economy is one of the second-largest in the country, and R.J. Reynolds, the second-largest tobacco company by sales in the U.S., is based in the state.
3. Louisiana
- MFG share of output: 22.6%
- MFG output 2012: $55.10 billion (11th highest)
- 2012 Unemployment rate: 6.4%
None of the nation’s manufacturing leaders produced less output from durable goods manufacturing than Louisiana, at $7.7 billion. Similarly, in 2011, the state produced just $7.1 billion in manufactured durable goods. Louisiana was among the nation’s largest manufacturers of chemicals, as well as petroleum and coal products, that year, helping the state’s totals. As of 2011, more than 10% of the state’s GDP came from petroleum and coal manufacturing, by far the highest percentage in the nation. The state remains one of the nation’s leading oil refiners. According to the U.S. Energy Information Administration, “the Louisiana Offshore Oil Port (LOOP) is the only port in the U.S. capable of offloading deep draft tankers.”
2. Oregon
- MFG share of output: 27.8%
- MFG output 2012: $55.16 billion (10th highest)
- 2012 Unemployment rate: 8.7%
Oregon manufactured nearly $38 billion worth of computer and electronic products in 2011, up from the year before, and second in the nation. That output is behind California, but its percentage of total GDP was 20%, surpassing by far second place Idaho, where computer and electronic manufacturing accounts for only about 5.8% of total output as of 2011. Recent outside investments in the state reinforce the tech-heavy industries in Oregon. In the first half of this year, for example, AT&T invested nearly $80 million in its Oregon network to improve performance for Oregon residents, according to the Portland Business Journal.
1. Indiana
- MFG share of output: 28.2%
- MFG output 2012: $84.15 billion (6th highest)
- 2012 Unemployment rate: 8.4%
Indiana has added manufacturing jobs at one of the fastest rates in the nation over the past several years, with year-over-year growth in manufacturing at or above 3.7% at the end of each of the past three years. Some of this growth came from companies like Honda expanding their factories and adding thousands of jobs, which made headlines in 2011. Developments like these are critical for the economy of the state, which depends on manufacturing more than anywhere else in the nation. In 2012, Indiana had just the nation’s 16th largest economy, while its output from manufacturing exceeded all but a handful of states. In 2010 and 2011, Indiana was one of the leading states in total output from both motor vehicle-related and chemicals manufacturing. Manufacturing of chemical products accounted for 7% of the state’s GDP in 2011, at least partly due to the presence of pharmaceutical giant Eli Lilly, which has vendors throughout the state.
24/7 Wall St.com is a financial news and commentary website. Its content is produced independently of USA TODAY.
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Sell More Shoppers on Buying Made in USA Clothing
Photograph by David Paul Morris/Bloomberg
Karen E. Klein
Question: How can I successfully promote my made-in-the-USA children’s clothing line both domestically and overseas?
Answer: There is plenty of evidence that marketing your company under the Brand U.S.A. banner can boost sales, both domestically and overseas. And with a string of tragedies involving overseas garment workers in the news recently, more customers may be checking labels to see where their kids’ clothing is made.Just waving the flag, however, is no shortcut to success, particularly in the domestic market, says Tom Barnes, chief executive of Mediathink, an Atlanta marketing firm. “People are more loyal to their pocketbooks than their country when it comes to making that final purchase decision,” he says. “So stay away from jingoism and thinly veiled appeals to patriotism.”
Succeeding as a small business involves identifying your company’s unique value proposition and articulating it, he notes. Shama Kabani, chief executive of Marketing Zen Group, a Dallas marketing business, agrees. “You have to be careful in [the] marketing of anything [of] becoming a one-trick pony. There’s got to be more about your products that make them sell. For instance, if your customer service and shipping [are] not worked out, being made in the U.S.A. won’t help at all,” she says.
What you can do is reinforce customers’ interest in and loyalty to your clothing line by emphasizing that you are employing American workers to produce durable, well-made goods that meet the high standards of U.S. consumers.
“Tell your employees’ stories and have them tell the story of your brand,” Barnes suggests, making sure your message is honest and authentic, not “fabricated by some PR contractor.” You might come up with a video featuring your employees thanking customers for supporting them, their families, and their communities, for instance. “People are more likely to pay $10 extra for something if they see the impact their support makes,” Barnes says.
Something that showcases local craftsmanship could also tap into the artisanal buying trend that has consumers favoring small local businesses.
Transparency and integrity will be extremely important in such a marketing campaign, Kabani says: “You don’t want to say, ‘Buy from us because we’re made in the U.S.’ and then have someone find out you’re using illegal workers in a sweat shop. You have to have a true sense of why it matters to you, or eventually it looks like a gimmick.”
Once your message is perfected, send it out over social media and video-sharing sites and to bloggers who write about your industry and its products. “Make sure you’re telling the story, giving them a link, and making it easy for them to share it,” Kabani says.
That means putting “like” or “share” buttons on all your Web pages, including your shopping cart if you’re selling online. Making it easy for your customers to let their Facebook (FB) friends and Twitter contacts know they have just purchased clothing from you is a simple way to boost your visibility, but it’s a step often overlooked by smaller companies, she says.
SOURCE: Bloomberg Businessweek
Why Tech Manufacturing Jobs Are Coming Back To America
Ted Samson
Companies are moving manufacturing closer to high-tech hubs to better protect intellectual property, serve customers
For the first time in more than a decade, technology manufacturing jobs are on the rise in the United States, according to new research from Jones Lang LaSalle. The jobs aren’t surging back, per se; the research company predicts job growth at a rate of around 0.7 percent through 2018, up from around 1.1 million jobs at the end of 2012. Cities with a large concentration of highly educated tech workers — such as Silicon Valley and Austin, Texas — will see the greatest influx of manufacturing jobs.
JLL cited several reasons that American tech companies see greater value in creating tech jobs in the States, despite the relatively low real estate and labor costs in popular offshore locales.
To start, offshoring isn’t as cheap as it used to be. For example, wages of around 60 cents an hour during the height of the technological migration to Asia have risen to as high as $6 per hour in China’s eastern manufacturing centers, according to JLL. Increasing oil prices also play a role.
Second, as tech companies see increasing global competition, they need to protect their intellectual capital in new product manufacturing, and keeping production of new products within the United States makes it easier.
Third, keeping operations in close proximity to executives, designers, and engineers helps the product launch teams stay on task and during critical early-stage production.
Fourth, tech companies with U.S. locations are better equipped to quickly address end-user needs.
Finally, companies are more likely to find the workers with the technical skills necessary to operate complex systems in today’s highly automated manufacturing facilities.
“This regionalization of high-tech manufacturing is characterized by the creation of jobs requiring strong technological skills — think engineers on production lines — as opposed to reshoring where similar job functions are imported back to the United States from overseas,” said Greg Matter, vice president at Jones Lang LaSalle. “Having access to this talent is one of the reasons that manufacturing facilities for technology firms are often located in tier-one locations where labor and real estate are generally more expensive.”
Indeed, about 79 percent of moderately high-tech manufacturing jobs and 95 percent of very high-tech manufacturing jobs were located in the 100 largest American metropolitan areas in 2010, according to JLL. More than one-third of the most high-tech positions reside in companies on the West Coast. Lower-level technology jobs, meanwhile, are most concentrated in the southern states.
JLL expects that through 2018, high-tech manufacturing jobs will proliferate further in Silicon Valley. Austin, too, is becoming a magnet for high-tech manufacturing growth. Other cities poised to attract these jobs include Los Angeles; Binghamton, N.Y.; Portland, Ore.; Boulder, Colo.; Phoenix, Az.; Boston; and Boise, Idaho.
SOURCE: InfoWorld
This article, “Why tech manufacturing jobs are coming back to America,” was originally published at InfoWorld.com. Get the first word on what the important tech news really means with the InfoWorld Tech Watch blog. For the latest business technology news, follow InfoWorld.com on Twitter.
Lenovo Paves the Way for Made in America Computers
ABC News – Lenovo Paves the Way for Made-in-America Computers as North Carolina Facility Ramps Up Full Production (ABC News)
JOANNA STERN
Stephanie Nance places Microsoft stickers on new Lenovo ThinkPad computers. And not just any computers. They are computers that her mother Sharon Nance helped assemble.
The mother-daughter team doesn’t work in China or at one of the infamous factories like Foxconn. They work at Lenovo’s new North Carolina manufacturing facility, assembling popular ThinkPad laptops and desktops.Today Lenovo officially opened that manufacturing line in Whitsett, N.C after beginning production there in January. It signals a new trend among computer makers: Computer manufacturing is coming back to America, at least on a small scale. Motorola and Apple will join Lenovo soon in bringing production of some of its popular consumer electronics and computers back to the U.S.
“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.”
SOURCE: Yahoo News
Google-owned Motorola Builds World’s First Made in America Smartphone in Texas
By JENNA WORTHAM and BRIAN X. CHEN
Just like Apple, Google has caught the “Made in America” bug. Motorola Mobility, the handset maker acquired by Google, says its next phone, called Moto X, will be manufactured in the United States.
Speaking at the All Things D conference in Southern California on Wednesday, Dennis Woodside, the head of Motorola, said that the company would build its first new flagship phone under Google ownership at a factory outside Fort Worth. He said that the Texas location would allow Motorola to “iterate and innovate much faster.”
Google has tried making hardware in the United States before. Last year, it planned to assemble the Nexus Q, a home media player, in California. But the company postponed the device after it received poor reviews and then quietly killed it.
Mr. Woodside said Motorola and Google were taking over an old Nokia manufacturing plant that had employed 16,000 workers when it was last in use 15 years ago. He said around 2,000 employees would be hired to work at the 500,000-square-foot building. The plant will be up and running by August, he said.
The new workers will be employed by Flextronics, a manufacturing company Motorola hires for its work worldwide. They will be hired by August in jobs ranging from entry level roles to engineering, said Danielle McNally, a Motorola spokeswoman. The new jobs are “different and separate” from the more than 4,000 positions that Motorola eliminated last year, she said.
Mr. Woodside acknowledged that while the Moto X will be built in the United States, not all of its parts would necessarily come from American manufacturers.
“The components will come all over the world,” he said. Display parts will be built in South Korea, for example, and processors will be made in Taiwan, he said.
Google executives have given clues about what a Motorola phone would do. It would have batteries that last longer than a day, they have said, would not break when dropped and would include features like a better camera, artificial intelligence and sensors that recognize people’s voices in a room, for example.
“Think about your device — battery life is a problem, if a kid spills a drink on your tablet screen it shouldn’t die, if you drop your phone it shouldn’t shatter,” Larry Page, the chief executive of Google, told analysts last month. “There’s real potential to invent new and better experiences, ones that are much faster and more intuitive. So having just seen Motorola’s upcoming products myself, I’m really excited about the potential there.”
Mr. Woodside said Wednesday, though, that phones with unbreakable screens would not be included in this year’s Motorola phones.
Mr. Woodside said the Moto X phone was in his pocket — but coyly shook his head when asked to show it off.
Claire Cain Miller contributed reporting.
SOURCE: The New York Times
Made in America Company Lacks Support
Steve Atkinson
SAN DIEGO – Small businesses, it’s the backbone of America.
But what if you couldn’t find investors to help you grow your American-made business unless you took your product overseas. A local business is facing that dilemma and 10News spoke with the owner who says that the company is now turning to the general public for help.
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Every great business starts with a great idea or at least an unusual problem.
“I had an issue with my underarms sweating when I got nervous,” said Billy Thompson, owner of Thompson Tee.
Thompson turned his unusual problem into a thriving business — making garments that uses patent-pending technology to prevent embarrassing pit stains. The company is growing, profitable and made in America. But that seems to be a problem.
“You’re definitely fighting against the grain trying to produce garments here in America,” Thompson said.
Thompson and his partners are proud to be American-made. They want to keep Thompson Tee in the U.S. and they’re willing to pay twice as much in labor to do so.
But they can’t seem to find an investor who feels the same way. They had a big offer to take the product overseas, like a lot of other major clothing lines, where production costs would be cut dramatically. But Thompson and his partners turned down the lucrative offer.
“You know when you sit back and you think about it and you do a gut check and you think ‘OK, when we started this thing what were the core values to us?’ ” said Thompson. “And one of them was being made in the U.S.A.”
Now, the company is turning to crowdfunding. It started a grassroots, online campaign to raise the $25,000 needed to cover materials and labor. That would keep Thompson Tee in America and create American jobs.
“So we’ll see if the American public really does have an appetite for American made goods,” he said.
The crowdfunding campaign began June 1. Thompson said failure is not an option and that the company plans to stay in the U.S. no matter what.
Learn more about the company by watching the video below:
SOURCE: ABC 10 News
Does It Matter Where Products Are Made?
We now live in a globalized economy, and many people say it doesn’t matter where something is made. They say that the industrialization of third world countries is good because it has provided jobs for millions of people and raised their standard of living. American consumers have benefited from cheaper prices for the products they need and want. However, where products are made should matter to people who are concerned about the environment and the health and well-being of people around the world.
Manufacturing in America developed over a period of more than 200 years. It developed gradually, so there was the opportunity to learn about the hazards of industrialization on a smaller scale than has been possible with the rapid industrialization of developing countries. Pollution caused by specific industries affected small geographic areas, like West Virginia’s coal mining and Pennsylvania’s steel regions.The Bill of Rights provided freedom of speech, freedom of the press, and the right to assemble, enabling affected communities and workers to address unsafe working conditions and pollution. Residents spoke out against pollution’s health effects in their communities. Workers formed unions to fight for better working conditions and higher wages, especially in hazardous occupations. Newspapers, and later radio and TV, made the public aware of what was happening in factories and mines. After sufficient pressure was put on elected officials at the local, state, and federal levels, laws were passed that improved working conditions, protected worker safety, and reduced pollution.
As a result, great strides on these issues were made in the U.S. in the 20th century. These efforts culminated in the establishment of the Environmental Protection Agency in December 1970, consolidating 15 components from five agencies for the purpose of grouping all environmental regulatory activities in a single agency.
Since then, the U.S. has developed a comprehensive body of law to protect the environment and prevent pollution. The EPA enforces more than 15 statutes or laws, including the Clean Air Act; the Clean Water Act; the Federal Food, Drug, and Cosmetics Act; the Endangered Species Act; the Pollution Prevention Act; and the Insecticide, Fungicide, and Rodenticides Act. In turn, each of the 50 states has its own body of law to comply with federal laws and regulations.
Cleaning up the nation’s air, water, and land hasn’t come cheap. Since passing these laws, the U.S. government has spent trillions of dollars to clean up and prevent pollution. Individuals, small businesses, and corporations paid the taxes that funded these programs. But businesses were hit with a double whammy. They not only had to pay taxes for the government to carry out its end of these programs, they had to pay cleanup costs for their own sites and buy the equipment to prevent future pollution. In addition, they had to hire and train personnel to implement and maintain mandated pollution prevention systems and procedures.
According to a Census Bureau report “Pollution Abatement Costs and Expenditures,” as a result of a survey of 20,000 plants last conducted in 2005, U.S. manufacturers spent $5.9 billion on pollution equipment, and another $20.7 billion on pollution prevention.
The EPA has achieved some major successes:
• New cars are 98 percent cleaner than in 1970 in terms of smog-forming pollutants.
• Dangerous air pollutants that cause smog, acid rain, lead poisoning have been reduced by 60 percent.
• Levels of lead in children’s blood have declined 75 percent.
• 60 percent of the nation’s waterways are safe for fishing and swimming.
• 92 percent of Americans receive water that meets health standards.
• 67 percent of contaminated Superfund sites nationwide have been cleaned up.
As a result, we now have cleaner air in our cities and cleaner and safer water in our streams, rivers, lakes, bays, and harbors than at any time since the Industrial Revolution began. These vast environmental improvements made in the last 40 years have benefitted every single American.
In contrast, India and China have been getting more polluted in the last 30 years as they have industrialized. Since 2006, Blacksmith Institute’s yearly reports have been instrumental in increasing public understanding of the health impacts posed by toxic pollution, and in some cases, have compelled cleanup work at pollution hotspots. Blacksmith Institute reports have been issued jointly with Green Cross Switzerland since 2007.
Six cities in China and four cities in India were listed in the Blacksmith Institute’s “Dirty 30” of the 2007 report, “The World’s Worst Polluted Places.” This list was based on scoring criteria devised by an international panel including researchers from Johns Hopkins, Harvard, and Mt. Sinai Hospital, along with specialists from Green Cross Switzerland who participated in assessing more than 400 polluted sites.
It’s hard to describe the horrors of pollution in Chinese cities. Imagine living in Xiditou (pronounced shee-dee-tow), about 60 miles east of Beijing, where the Feng Chan River that runs through the town is now black as ink and clotted with debris. The local economy has doubled in just four years, but at a terrible cost. More than 100 factories occupy what were once fields of rice and cotton. These include dozens of local chemical plants, makers of toxins including sulfuric acid, and these factories disgorge wastewater directly into the river. Industrial poisons have leached into groundwater, contaminating drinking supplies. The air has a distinctively sour odor. The rate of cancer is now more than 18 times the national average.
According to the USA Today article, “Pollution Poisons China’s Progress,” of July 4, 2005, “People regard their drinking water as little better than liquid poison, but unable to afford bottled water for all their daily needs, most adults continue to drink it. They buy mineral water only for their children.”
Another horrible location is Tianying, in Anhui province, which is one of the largest lead production centers in China, with an output of half of the country’s total. Low-level technologies, illegal operations, and a lack of air-pollution control measures have caused severe lead poisoning. Lead concentrations in the air and soil are 8.5 to 10 times national standards. Local crops and wheat at farmers’ homes are also contaminated by lead dust, at 24 times the national standard.
The ironic note to these statistics is that China actually has more stringent restrictions on lead than the U.S. The difference is that neither the local nor the national government is enforcing the laws. Residents, particularly children, suffer from lead poisoning, which causes encephalopathy, lower IQs, short attention spans, learning disabilities, hyperactivity, hearing and vision problems, stomachaches, kidney malfunction, anemia, and premature births.
Perhaps you would like to live in Wanshan, China, termed the mercury capital of China because more than 60 percent of the country’s mercury deposits were discovered there. Mercury contamination extends throughout the city’s air, surface water, and soils. Concentrations in the soil range from 24 to 348 mg/kg, 16 to 232 times the national standard. To p
ut this into perspective, the mercury from one fluorescent bulb can pollute 6,000 gallons of water beyond safe levels for drinking, and it only takes one teaspoon of mercury to contaminate a 20-acre lake – forever. Health hazards include kidney and gastrointestinal damage, neurological damage, and birth defects. Chronic exposure is fatal.
China is now the largest source of CO2 and SO2 emissions in the world (SO2 causes acid rain). Japan, South Korea, and the northwest region of the U.S. suffer from acid rain produced by China’s coal-fired power plants and higher CO2 readings from easterly trade winds.
The horrific effects of pollution in China and its staggering cost in human life, are a graphic example of why Chinese companies can outcompete American companies – not only because of their disparity in wages, but also because their government does not enforce the same environmental and social standards. As Americans, who place a high value on human life and protecting our environment, we wouldn’t have it any other way. But American manufacturing industries do pay a penalty competing against China.
During China’s rapid industrialization of the last 30 years, the U.S. has spent billions on technologies and equipment to clean up and prevent pollution. China had a golden opportunity to benefit from all the hard lessons learned by developed countries during their own industrialization. If China had purchased the pollution abatement equipment developed in the U.S., their industrialization would not have caused such horrendous pollution. Millions of lives would have been saved!
In the U.S., our landfills wouldn’t be filling up with discarded products from China that are so cheap that it is easier to throw them away than repair them. Wouldn’t it be worth paying more for “Made in USA” products that are higher quality and last longer?
Thus, if you are concerned about global pollution and want to save lives in both China and the U. S., you should choose to buy “Made in USA” products that have been produced in the most non-polluting manner that is technically feasible at present. My next article will take a look at India’s environment.
SOURCE: Saving U.S. Manufacturing
Could Newark Be a Manufacturing Hub Again?
Maria Pereira of Parsippany is shown in this 2011 photo sewing draw-string backpacks with ‘Made In Newark’ printed on them at Unionware, a company in West Newark. A new report from the Brookings Institution examines Newark’s manufacturing assets. (Star-Ledger file photo)
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Newark has much of what it would take to undergo a new manufacturing boom, but it also has much to overcome before it can, according to a new report from the Brookings Institution. The Washington D.C.-based think tank yesterday issued a 60-page study on the manufacturing sector in New Jersey’s largest city, pointing out strengths and weaknesses its researchers found after a year-long survey of data and interviews with area manufacturers.
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The Manischewitz factory in Newark makes Schmura Matzoh, as seen here. (Star-Ledger file photo)
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In doing so, the group also turned its observations into something of a road map for local officials, enterprises and universities that are looking to revive an industry that once defined the city. As part of its multipoint plan, Brookings fellows urged the city to remake itself into a hub for small manufacturers and “next generation” suppliers; create networking opportunities for local businesses, and pathways for students and others to get the skills they need to enter the modern world of manufacturing. Some of these processes are already underway, according to Newark Mayor Cory Booker, who spoke yesterday at a New Jersey Institute of Technology event to discuss the findings of the Brookings report. “We have now elevated this as a primary goal,” he said. “‘Made in America’ can really become a rallying cry,” he said later. The Brookings study comes out at a time when public policy specialists are exploring ways to spark a new wave of American manufacturing and reinvigorate its export economy. Some say the U.S. is now poised to see more manufacturing return here as production costs climb in areas like China, instability strikes elsewhere and energy costs fall domestically. Though a shadow of its former self, Newark shows promise for such a renaissance, Brookings researchers wrote. The city, at the heart of the largest consumer market in the United States, is packed with resources and infrastructure that would support the manufacturing industry, and it is also situated on prime shipping and transportation lines. Within Newark, there is a wide availability of industrial property, and a high quotient of “intellectual capital” that could spur innovation: the number of scientists and engineers based in the city — 29.8 per square mile — is the densest in the world, researchers found.
SOURCE: The Star Ledger – NJ.com
U.S. Isn't Respecting Meat Labeling Rules, Mexico says
Adriana Barrera
MEXICO CITY — The United States is not respecting a World Trade Organization (WTO) ruling on meat labeling, Mexico’s Agriculture Minister Enrique Martinez said on Tuesday, saying it was hurting local industry.
The WTO ruled in late June last year that a U.S. program for labeling imported meat unfairly discriminated against Mexico and Canada, putting pressure on the United States to bring the scheme in line with global country-of-origin meat-labeling rules.
“We can’t understand why once the very WTO issues a ruling, the government of the United States does not respect it,” Martinez said.
“We have talked with beef producers in the United States and Canada, and totally agree this is an arbitrary decision and means discrimination against Mexican beef, which we will never agree with and as a government will defend against.”
Meat exporters in Canada and Mexico say the new rules would cut even deeper into cattle and hog shipments that have already slumped by as much as half in the last four years.
The Canadian government has threatened a possible retaliatory strike against U.S. imports, and is hoping Mexico will join it.
The WTO Appellate Body said last year that U.S. country-of-origin labeling rules, commonly known as COOL, were wrong because they gave less favorable treatment to beef and pork imported from Mexico and Canada than to U.S. meat.
Meat labels became mandatory in March 2009 after years of debate. U.S. consumer and some farm groups supported the requirement, saying consumers should have information to distinguish between U.S. and foreign products.
SOURCE: Reuters
Garments Can Be Made in USA Safely, with Profit
The recent Bangladesh collapse has raised an overall awareness on the safety being taken when manufacturers produce garments overseas. The All American Clothing Co, a USA made jean manufacturer is proving it can be done with safety and profit.
El Paso, Texas was once considered the blue jeans capital of the world. According to the San Antonio Express, it produced an estimated 2 million pairs of America’s favorite pants a week in the 1980s. Over the past few decades American jean giants have moved production to places such as Bangladesh, Mexico and China. Many Americans have lost jobs, buildings have become vacant, and the American garment industry is on the brink of extinction. It has lost 84% of its labor force since 1990, according to the U.S. Bureau of Labor Statistics.
Why did the garment industry leave El Paso?
In 2002 the World Trade Organization allowed foreign made products to be imported in the U.S. without tariffs. This allowed low dollar garments to be sold in the U.S. at lower prices than what most American manufacturers could compete with. Many American manufacturers left and when they went, so did the blue jean capitol of the world.
At around 2002, a man named Lawson Nickol had been working for a USA made jeans manufacturer who decided to leave the U.S. and manufacture its items in Mexico. Nickol could not bear the decision as he was a passionate USA made supporter who felt a strong responsibility to support American workers. He soon resigned and started a USA made jean manufacturer of his own with the help of his son BJ – the All American Clothing Co.
The All American Clothing Co. struggled at first, surviving on family savings, financial risks, and working long hours. Yet each year, the USA jean company continued to grow. After 11 years in the business, the All American Clothing Co. has gone from a small closet in warehouse space to 45,000 square feet of warehouse and main offices. The company is now operating a cut and sew factory in El Paso, Texas attempting to create jobs and bring back the once blue jean capitol of the world.
If their success continues, rebirthing the American denim industry will be the All American Clothing Company`s legacy. Together with it`s leadership, employees, patrons, and supporters they will continue to spread the word, help to fill empty buildings with employees, and create American jobs. It`s an All American thing.
To learn more about the growth and safety measures the All American Clothing Co. is pursuing, please visit http://www.allamericanclothing.com.
http://www.prweb.com/releases/prwebUSA-made-jeans/made-in-America-jeans/prweb10764885.htm
For the original version on PRWeb visit:
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Do Americans Really Care How Their Clothes Are Made?
Clothing with Joe Fresh labels lies in the debris on April 30
By Calum Macleod
DHAKA, Bangladesh — Just two more months, the daughter promised her mother by telephone, then she’d be home for good.
Making shirts in this packed metropolis of 12 million people, Sheuli Akhter, 20, made decent money — about $140 a month — by the impoverished standards of rural Bangladesh. But she missed the family benefiting from the wages of her hard work.
Her mother, Ranjana Akhter, was found sobbing near the rubble of the Rana Plaza factory where her daughter worked, days after the eight-story complex collapsed and killed more than 1,100 workers. Viewing dozens of corpses a day, the 35-year-old woman still hoped her daughter had somehow survived.
The victims retrieved from the debris were crushed and unrecognizable in the South Asian heat.
“I am looking for her body, but they are all decomposed now. It’s getting harder to identify,” said Ranjana Akhter, tears falling from her eyes.
The scale of the mismanagement and breadth of the human tragedies in Bangladesh powerfully illustrated what years of abuse, inhumane conditions and unthinkable danger could not: Garment workers in Third World countries take enormous risks to earn a living in Bangladeshi-owned companies that produce clothing for Western retailers.
At the end of this global production line stand millions of American shoppers whose favorite companies and brands — Benetton, The Children’s Place, Gap, J.C. Penney, Mango, Target and Sears — use Bangladesh as a launching pad for the goods Western consumers crave.
Clothing manufacturers in North America and Europe — operating with scant supervision of their operations — have made Bangladesh the second-largest exporter of clothes in the world. The enormity of this tragedy is already beginning to change the country’s free-for-all business climate.
Many international retailers rushed to embrace a labor-backed factory safety proposal after the April 24 collapse, the world’s deadliest industrial accident since India’s Bhopal chemical plant disaster took 2,260 lives in 1984.
4 million jobs at stake
More than 30 retail chains including H&M, the largest clothing producer in Bangladesh, agreed to sign onto the proposal, which requires public disclosure of factory inspections and company-paid renovations when problems are found.
But talks broke down between the labor coalition IndustriALL and trade groups representing U.S. retailers like Gap over language that might make stores liable for conditions in Bangladeshi factories while requiring union-style management restrictions. The retail groups said they could improve worker safety by conducting more rigorous inspections of their factories.
A major pillar of Bangladesh’s economy, the garment industry employs roughly 4 million people. Only China exports more clothing than Bangladesh, which has 5,000 factories of varying sizes producing for other major chains.
These global brands thrive in a place where the average worker earns the equivalent of 24 cents an hour, according to the Worker Rights Consortium, a worker advocacy group that criticized U.S. retailers for failing to sign onto the proposed changes. The wage for garment workers is much higher — sometimes four times that — which is why so many people are drawn to the industry.
Many of the garment operations have sprung up in the past decade in buildings sometimes refurbished in a hurry to capture customers. Western retailers contract with myriad unconnected workshops to get fabric and buttons and fasteners needed for their products. Though many importers require inspectors to check on working conditions, they do not oversee all aspects of building safety. Those laws are the authority of the government, which works hand-in-hand with the industry.
In fact, a consortium of Bangladesh factory owners is also a lobbying group that consults with the government on working conditions and safety matters. Government oversight is notoriously weak.
Rana Plaza was showing structural cracks before the collapse. They prompted some businesses to move out of the building, but that wasn’t enough for the factory to shut down. The owner was captured trying to flee across the Indian border and is under arrest on charges that he built illegal additional floors on a building not designed for manufacturing.
Since 2005, at least 1,800 garment workers have been killed in factory fires and building collapses in Bangladesh, according to the advocacy group International Labor Rights Forum. That includes the toll from Rana Plaza.
Despite this carnage, the retail industry has found a needy home in Bangladesh, a nation of 140 million mostly Muslim people that’s home to regular political strife and overwhelming poverty. Sixty million Bangladeshis are classified as “very poor,” and per capita income is $1,700 a year.
Its garment firms, which make up 80 percent of total exports, face pressure from foreign buyers to retain the nation’s chief selling point: the cheapest place to make clothes. The disaster highlights the perilous choice for Bangladeshis in the garment sector, 80 percent of them women who work as seamstresses and support entire families.
Some survivors say the jobs are no longer worth it.
“I will never work in a garment factory again, and never again in a multistory building,” said Asma Akhter, 22, who lay trapped in the rubble for three days before rescue.
‘This can’t be justified’
After a factory fire last November killed 117 people who were making T-shirts and jackets, “the government didn’t take any steps to prevent this type of incident. Another disaster like this can still happen,” she said.
“The garment factory owners sell the products abroad at a high price, but we get low wages. This can’t be justified,” said Asma Akhter, who hopes her secondary school education, unusual among her colleagues, will aid her job hunt.
Others see it differently.
Seamstress Asma Akhter, 25, who is no relation to the woman of the same name above, said she would be “helpless” without the garment sector.
“I don’t know what I could do,” she said. “If you want to survive you have to work.”
But nothing says world retailers have to stay in Bangladesh.
International companies must contend with a volatile political environment of frequent street agitation and confrontation. Regular strikes called by opposition parties wielding street power hamper production.
“We must stop the killing,” said Nazmar Akter, president of Sommilito Garments Sramik Federation and general-secretary of the Awaj Foundation of workers’ groups.
“It’s a global business. Everybody has the responsibility,” Akter said. “Workers in Bangladesh are unsafe, hungry, with bad living and working conditions. We are human. We want respect and dignity; that’s our demand.”
SOURCE: The Washington Post
It’s Not Easy To Be Sure Your Clothes Come From Safe Factories
NEW YORK — You can recycle your waste, grow your own food and drive a fuel-efficient car. But being socially responsible isn’t so easy when it comes to the clothes on your back.
Jason and Alexandra Lawrence of Lyons, Colo., eat locally grown food and fill up their diesel-powered Volkswagen and Dodge pickup with vegetable-based oil. They even take silverware to a nearby coffeehouse to avoid using the shop’s plastic utensils.
But when it comes to making sure that their clothes are made in factories that are safe for workers, they fall short.
“Clothing is one of our more challenging practices,” said Jason Lawrence, 35, who mostly buys secondhand. “I don’t want to travel around the world to see where my pants come from.”
Last month’s clothing factory building collapse in Bangladesh that killed more than a thousand people put a spotlight on the sobering fact that people in poor countries often risk their lives working in unsafe factories to make the clothes Westerners covet.
The disaster, which occurred after a fire in another Bangladesh factory killed 112 people in November, highlights something just as troubling for socially conscious shoppers: It’s nearly impossible to make sure that the clothes you buy come from factories with safe working conditions.
Very few companies sell clothing that’s “ethically made,” or marketed as being made in factories that maintain safe working conditions. Ethically made clothes make up a tiny fraction of 1 percent of the $1 trillion global fashion industry. And with a few exceptions, such as the 250-store clothing chain American Apparel Inc., most aren’t national brands.
Major chains typically use a complex web of suppliers that contract business to other factories. That means the retailers themselves don’t always know the origin of clothes when they’re made overseas.
Even a “Made in USA” label provides only a small amount of assurance: The tailors who assembled a skirt may have good working conditions, but the fabric may have been woven overseas in an unsafe environment.
“For U.S.-made labels, you have good assurance, but the farther you get away from the U.S., the less confidence you have,” said Craig Johnson, president of Customer Growth Partners, a retail consultancy.
Policing isn’t easy
Most global retailers have standards for workplace safety in the factories that make their clothes. And the companies typically require contractors and subcontractors to follow the guidelines. But policing factories around the world is a costly, time-consuming process that’s difficult to manage.
There were five factories in the building that collapsed April 24 in Bangladesh. They produced clothing for retailers including Children’s Place and the Canadian company Loblaw Inc., which markets the Joe Fresh clothing line.
“I have seen factories [in Bangladesh and other countries], and I know how difficult it is to monitor the factories to see they are safe,” said Walter Loeb, a New York-based retail consultant.
And some experts say that retailers have little incentive to do more because the public isn’t pushing them to.
America’s Research Group, which interviews 10,000 to 15,000 consumers a week, mostly on behalf of retailers, says shoppers seem more concerned about fit and price than worker safety or low wages.
C. Britt Beemer, chairman of the firm, said shoppers rarely mention “where something is made” or “abuses” in the factories in other countries.
“We have seen no consumer reaction to any charges about harmful working conditions,” he said.
Tom Burson, 49, said that if someone tells him a brand of jeans is made in “sweatshops by 8-year-olds,” he won’t buy it. But overall, there is no practical way for him to trace where his pants were made.
“I am looking for value,” said Burson, a management consultant who lives in Ashburn, Va. “I am not callous and not unconcerned about the conditions of the workers. It’s just that when I am standing in a clothing store and am comparing two pairs of pants, there’s nothing I can do about it.”
New awareness
Some experts and retailers say things are slowly changing.
Swati Argade, a clothing designer who promotes her Bhoomki boutique in the Brooklyn borough of New York as “ethically fashioned,” says people have been more conscious about where their clothes come from.
The store, which means “of the earth” in Hindi, sells everything from $18 organic cotton underwear to $1,000 coats that are primarily made in factories in India or Peru that are owned by their workers or that are designed by local designers in New York.
“After the November fire in Bangladesh, many customers say it made them more aware of the things they buy and who makes them,” Argade said.
Jennifer Galatioto, a 31-year-old fashion photographer from Brooklyn, has become thoughtful about where her clothes are made. “I am trying to learn the story behind the clothing and the people who are making it,” she said.
Some retailers are beginning to do more to ease shoppers’ consciences.
Wal-Mart Stores Inc., the world’s largest retailer, said in January that it would cut ties with any factory that failed an inspection, instead of giving warnings first as had been its practice. The Gap Inc., which owns the Gap, Old Navy and Banana Republic chains, hired a fire inspector to oversee factories that make its clothing in Bangladesh.
Still, Wal-Mart, Gap and many other global retailers continue to back off from a union-sponsored proposal to improve safety throughout Bangladesh’s $20 billion garment industry. As part of the legally binding agreement, retailers would be liable when there’s a factory fire and would have to pay factory owners more to make repairs.
Fair Trade U.S.A., a nonprofit founded in 1998 to audit products to make sure workers overseas are paid fair wages and work in safe conditions, is hoping to appeal to shoppers who care about where their clothing is made. In 2010, it expanded the list of products that it certifies beyond coffee, sugar and spices to include clothing.
The organization, known for its black, green and white label with an image of a person holding a bowl in front of a globe, said it’s working with small businesses such as PrAna, which sells yoga pants and other sportswear items to merchants like REI and Zappos.
To use the Fair Trade label on their products, companies have to follow a set of safety and wage standards.
5% more expensive
Still, less than 1 percent of clothing sold in the U.S. is stamped with a Fair Trade label. And shoppers will find that Fair Trade-certified clothing is typically about 5 percent more expensive than similar items that don’t have the label.
Fair Indigo is an online retailer that sells clothes and accessories that are certified by Fair Trade U.S.A., including $59.90 pima organic cotton dresses, $45.90 faux wrap skirts and $100 floral ballet flats. It generates annual
sales of just under $10 million.
The company’s catalog and website feature some of the garment workers in countries including Peru. “We are connecting consumers with the garment workers on a personal level,” said Rob Behnke, Fair Indigo’s co-founder and president. “We are showing that the garment workers are just like you and me.”
Los Angeles-based American Apparel, which says it knits, dyes, cuts and sews all of its products in-house in California, touts on its website that the working conditions are “sweatshop free.”
In an interview in November, the company’s founder and CEO, Dov Charney, said companies can control working conditions but they need to bring the production to the U.S.
“When the company knows the face of its worker, that’s important,” Charney said.
SOURCE: The Associated Press
Is Reshoring a Myth or Reality?
Michele Nash-Hoff
When I first started talking about saving America manufacturing and returning manufacturing to America four years ago after the first edition of my book, Can American Manufacturing be Saved? Why we should and how we can, came out, I was met with a great deal of skepticism. Some typical comments were: “I don’t think we can.” “It’s too late.” “I wish we could.” “We need to.” Very few thought we actually could return manufacturing to America.
A lot has changed in four years. At last week’s Del Mar Design and Electronics Show (DMEDS) in San Diego, CA, a very successful fellow manufacturers’ sales rep, stopped me in the parking lot and said, “I used to think you were nuts, but you were right. Manufacturing is returning to America.” While this manufacturers’ representative sales agency is headquartered in southern California, it has affiliate companies in Mexico, Malaysia, China (Beijing, Shanghai, and Shenzhen) and Taiwan (Taipei and Hsinchu) so I did not take this admission lightly.
The theme of this year’s DMEDS was “The Re-Birth of American Manufacturing, and it featured a full-day Reshoring track. This track began with my presentation on “Reshoring: Bringing Manufacturing Back to America Using Total Cost Analysis and ended with “Reshoring: What is a Fit and How Can it Save Your Company Money?” This track also featured “Lean Manufacturing is the Path to Operational Excellence,” “3D Printing: What it is, Isn’t, Will Be and Won’t Be,” and “Save Your Factory with Robotic Automation.”
While there were offshore companies exhibiting at DMEDS, it was dominated by U. S. manufacturers, regional contract manufacturers, and local sales reps and distributors. The buzz at the show was that manufacturing is returning to America, and every contract manufacturer I spoke to at the show had experienced a “reshoring” event.
In the past year, there have been numerous articles debating whether “reshoring” is a myth or really happening. For example, the cover article of the April 22, 2013 issue of Time magazine was “Made in USA – Manufacturing is Back ? But Where are the Jobs? The first page of the article is full of pictures of products that have returned from offshore, representing an unbelievable cross section of consumer goods, ranging from toys such as the Frisbee. Slinky and Crayola crayons to electric mixers, barbecues, saws, hammers, and many more.
The reason the article poses the questions about how many jobs are being created by the return of manufacturing to America is that the manufacturing plants of the present and future have more machines and fewer workers than in the past. Robotics, automation, and lean manufacturing are helping companies do more with fewer people, and the rapidly improving technology of additive manufacturing is changing the way parts are being made.
The article featured a glimpse of manufacturing’s future in the stories of two companies:
- ExOne, near Pittsburgh, PA, providing Digital Part Materialization (DPM) that transforms engineering design files directly into fully functional objects using 3D printing machines
- GE’s highly automated battery factory in Schenectady, NY.
ExOne needs only two workers and a design engineer per shift to support its 12 metal-printing machines. The GE plant produces Durathon sodium batteries that are large and powerful enough to power cell phone towers. Because of being highly automated, the plant only employs 370 high-tech workers in a 200,000 sq. ft. facility.
What was most encouraging to me was that the article reported that Ashley Furniture is building a new plant south of Winston-Salem, NC that will employ 500 people. This is an industry that even I doubted would ever come back to the U.S.
Key statistics pointed out in the article were that China’s average hourly wage was only $0.50 in 2000 but is projected to be $4.50 by 2015. This is probably a conservative estimate because China’s wages rose by 15-20% over the last five years but are expected to increase by another 60% in 2013 alone. Another factor noted is that the cost to ship a 40-ft. container from China to the West Coast rose from $1,184 in 2009 to $2,302 this year. These facts corroborate the Boston Consulting Group’s 2011 report that there will be a convergence in the total costs between China and the U. S. by 2015.
This quote from GE CEO Jeff Immelt concluded the article: “Will U.S. manufacturing go from 9% to 30% of all jobs? That’s unlikely. But could you see a steady increase in jobs over the next quarters and year? I think that will happen.” I agree and so does Harry Moser, founder of the Reshoring Initiative and developer of the Total Cost of Ownership TM spreadsheet.
Mr. Moser’s organization promotes and tracks cases of reshoring across the U.S. He estimates that between 2010 and 2012, about 50,000 jobs were created in the U.S. because of the trend—which equates to 10% of the 500,000 manufacturing jobs created in the past three years.
On the myth side of the debate, the 2012 Hackett Group’s report, “Reshoring Global Manufacturing: Myths and Realities” by Michel Janssen, Erik Dorr and David P. Sievers
states, “By next year, China’s cost advantage over manufacturers in industrialized nations and competing low-cost destinations will evaporate.” However, they conclude that “few of the low-skill Chinese manufacturing jobs will ever return to advanced economies; most will simply move to other low-cost countries.
Using hard data from their 2012 Supply Chain Optimization study, they analyzed the trend in “reshoring” of manufacturing capacity, and their findings debunk the myth that manufacturing capacity is returning in a big way to Western countries as a result of rising costs in China. The report states, “The reality is that the net amount of capacity coming back barely offsets the amount that continues to be sent offshore.”
The report also offers recommendations on how companies should plot their manufacturing sourcing strategies. Interestingly, their recommendations incorporate some of the factors that Mr. Moser and I include as part of a Total Cost of Ownership analysis, such as “integrate the views of manufacturing, procurement, finance and business-unit leadership,” “Establish a game plan to deal with risk: Geopolitical, supply base, environmental and commodity risks are a given,” “Establish a proactive approach to anticipate risks, creating mitigation plans with clear triggers for implementation,” and “Broaden the decision making approach beyond total landed cost.”
The Hackett Group’s definition of “Total landed cost” is not as broad and encompassing as the definition of Total Cost of Ownership I provide in the 2009 edition of my book and that Mr. Moser uses in the TCO spreadsheet he developed in 2010. Their definition is “Total landed cost is the set of end-to end supply chain costs to transform raw materials and components into a finished
good ready for sale. Key components include: raw material and component costs, manufacturing costs (fixed and variable), transportation and logistics, inventory carrying cost, and taxes and duties.
My definition of TCO includes the “hidden costs of doing business offshore,” such as Intellectual Property theft, danger of counterfeit parts, the risk factors of political instability, natural disasters, riots, strikes, technological depth and reserve capacity of suppliers, currency fluctuation. Mr. Moser’s TCO spreadsheet includes calculations for factors such as Intellectual Property risk, political instability risk, effect on innovation, product liability risk, annual wage inflation, and currency appreciation.
While the number of companies bringing products lines back to America is increasing, I have to admit that as manufacturers’ sales reps for all American companies; we are still losing business to China for individual parts our principals are quoting. Just recently, we lost several rubber parts that our rubber molder has made for a customer in our territory for 15 years. Our customer had been purchased by a multinational awhile back that has a subsidiary in China, so the new management decided to tool up these parts in China and discontinue ordering them from our molder. I am sure that the decision was made based on the lower piece price without doing a TCO analysis.
You can help your company get the most value for its dollars and help return manufacturing to America by doing the following:
- Use the TCO spreadsheet available for free at www.reshorenow.org
- Use the archived webinars to inform staff and customers
- Work with groups being trained on TCO – Manufacturing Extension Program (MEPs) sites around the country
- Prepare your workforce for reshoring
- Submit cases of reshoring for publication and posting using the Reshoring Initiative’s template
- Sponsor the Reshoring Initiative
I strongly believe that if more companies would learn to understand and utilize the TCO estimator spreadsheet of the “Reshoring Initiative,” they would realize that the best value for their company is to source their parts, assemblies, and products in America. Doing this would help return manufacturing to America to create a far higher percentage of jobs than the 10% that have been brought back to America thus far and help maintain more manufacturing in U. S.
SOURCE: Saving US Manufacturing
