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All American Clothing Growing with Demand for USA-Made Goods

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Feb. 24, 2013
ARCANUM — All American Clothing Co. is expanding production with the purchase of an El Paso, Texas, factory and the launch of a new line of women’s jeans.
The company, with headquarters, warehouse, shipping and now a showroom housed at a 45,000-square-foot factory complex here, is making strategic moves as a growing “Buy American” movement pushes demand for jeans, t-shirts, polos, sweatshirts, and khaki wear to new highs.

The company rose to national prominence with the U.S. Olympic team uniform uproar and revelations that designer Ralph Lauren, who built an image on an all-American look, had the garments made in China. Subsequently, Lauren said he would lead a discussion about bringing clothing manufacturing back to the U.S.

The purchase of the El Paso facility, a deal sealed in the past few weeks, gives the company greater leverage. Even with the purchase, the company’s three-year-plan remains in place to build production in Arcanum, said owner Lawson Nickol.

Buying the manufacturer could mean employment for 70 people at the Texas location, and more jobs in Arcanum. “We can get more competitive,” Nickol said.

There’s room for expansion. The complex once employed 200. Nickol, who runs the online retailer with his family including son B.J. and wife Mary Ann, puts annual growth at double digits.

The future looks bright. Nickol said he has fielded inquiries from 300 companies large and small that would like to work All American products into their lineups. Because his business sells direct to the online purchaser, All American can match or beat the higher-end clothing catalogs on price.

All American is the latest success in the direct-to-consumer, made in USA, clothing segment. There’s San Francisco’s American Giant Clothing, a sweatshirt/hoodie hit that sold out over the holiday season. There’s also American Apparel, which advertises as “sweatshop free.” And old standbys like Stormy Kromer or Ironwood, Mich., have expanded from a line of wool hats to outerwear. The industry lost 80 percent of its jobs since 1990 and the companies are trying to build employment back.

At All American, about $50 gets a pair of jeans. For a couple dollars more, there’s a traditional blue jean jacket. For those who insist on clothing that’s cheaper and foreign made, Nickol responds that his competitive edge is item quality and durability. Now, it’s style, too.

His new ladies jean line has fancy retro pocket stitching and offers three different shaped jeans to match body types. The show room is intended for large order buyers and includes fitting booths. But local customers can stop by, too.

“We’ve never turned anyone away,” Nickol said. Customers still have to order online, but they can pick the product up in Arcanum to save on shipping.

Nickol sources every thread that goes into his wear from the U.S., all the way from those growing the cotton to the cut-and-sew operation. The company offers an online “traceability” system. Buyers can track the origin of the products all the way back to the U.S. cotton field and farmer.

A survey this month of 1,845 adults by www.CouponCodes4u.com, one of the leading coupon websites in the U.S., found that even among the bargain-hunting coupon crowd, a large contingent want U.S. products. When asked if they paid attention to whether goods they purchased were made and produced in the U.S., the majority, 39 percent, said that they did, while 25 percent said it depended on the product and 36 percent said they did not care where their goods were made.

When asked which items they looked for, 77 percent said American meat, 51 percent said clothes, and 39 percent said U.S.-made gadgets. Asked why they preferred to purchase U.S. products, the majority, 42 percent, said they wanted to help boost the economy any way they could.

“There is a huge market for USA made,” Nickol said.

Intel’s First Factory Customer Touts Made-in-USA Chips

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Don Clark
A chip company called Achronix on Wednesday announced that the first fruits of Intel’s new build-to-order service are emerging from the factory. That’s a milestone for both companies, and a surprising sidelight could play into the story–worries about dependence on non-U.S. manufacturers.
The Silicon Valley startup in 2010 turned to Intel, which opted to break from long-standing practice and use its sophisticated factories and manufacturing processes to serve customers beyond Intel’s own chip-design groups. Achronix became one of two publicly announced users of the new Intel foundry business, as such services are called.

Intel believes it can make smaller and more sophisticated transistors than other foundries. Achronix, which makes a variety of programmable chips that use lots of transistors, says its bet on Intel has paid off as advertised.

The chips, which include models with a whopping six billion transistors, consume half the power of competing chips and cost about half as much, Achronix says. It is shipping sample quantities to customers now and, when extended testing is completed, will be shipping them in volume in the third quarter, says Robert Blake, the company’s president and chief executive officer.

Most foundry factories are in Taiwan or other parts of Asia. Achronix is quick to point out that the entire process of making its chips is handled in the United States.

An Intel factory in Oregon fabricates the Achronix chips on silicon wafers. They are then shipped to facilities Arizona for packaging.

Though U.S. makers of computers and other devices have long relied on foreign suppliers, government agencies and companies that sell to them often express a preference for hardware produced domestically. Achronix expects many of chips will be used to companies that make gear used in applications like high-performance computing, networking, security and encryption.

In those kinds of products, government officials want to make sure where key components are made–and that they don’t include secret “back doors” or other features that could be exploited by foreign intelligence agencies. Such concerns may be fueled further by a growing number of reports about cyber attacks on U.S. institutions that some experts link to Asia and Europe.

Asked if the idea of domestic manufacturing is resonating with hardware makers, Achronix Chairman John Lofton Holt “absolutely.”

Blake added: “It comes up quite often with customers. They would like to source devices that are manufactured in the U.S. and they’ve never had that choice before.”

Not that Achronix, or Intel, are likely to exclusively use that selling point. Rival Globalfoundries has new manufacturing facilities near Albany, N.Y., that it has cited as a key selling point.

Besides Achronix, Intel has identified another programmable-chip startup, Tabula, as a customer of its foundry services. It also says it has other customers who choose not to be identified yet.

The chip giant is frequently asked–and declines to talk about–about rumors that it might one day serve larger customers, such as Apple. It has only made clear that it won’t serve companies that include its direct customers.

If Intel ever does want to serve high-volume customers, Achronix believes that it could. “They’ve become a real foundry,” says Holt.

National Farmers Union (NFU) Releases Analysis on COOL Compliance

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February, 2013
WASHINGTON (Feb. 12, 2013) – National Farmers Union (NFU) and the United States Cattlemen’s Association (USCA), released a legal analysis today that details the available options for successful U.S. compliance of a recent World Trade Organization (WTO) ruling on County-of-Origin labeling (COOL).
“The comprehensive legal analysis demonstrates that the USDA can come into compliance with the WTO appellate body ruling by amending the COOL regulations,” NFU President Roger Johnson said. “Changes to the COOL legislation are not necessary to achieve compliance. U.S. producers are rightfully proud of their products and consumers want to know where their food comes from. Additionally, these remedies should not result in any increase in consumers’ retail prices. Achieving compliance is a win-win situation for all interested parties.”
 
The analysis essentially concluded that an effective way of complying with the WTO decision is to simply provide more information and more accurate details to consumers. It would not require producers or processors to collect additional information; it would merely require strengthening the regulations so that the information is provided to the consumer.
 
The WTO recently required the U.S Department of Agriculture (USDA) to adjust its rules requiring American retailers to label certain foods with the country (or countries) in which the animals are born, raised, or slaughtered. The WTO said that while the United States can require meat labeling, current U.S. COOL rules do not meet WTO standards. The WTO has given the United States until May 23, 2013 to bring its COOL rules into compliance.
 
“Based on the analysis, we stand in support of tightening U.S. COOL regulations,” said USCA President Jon Wooster. “USCA is proud of our U.S. raised products and remain committed to this issue, while continuing to vigorously advocate for U.S. cattle producers as well as every consumer’s right to information regarding where their meat products originate and are raised.”
 
COOL was passed as a part of the Farm Security and Rural Investment Act of 2002 and amended in the 2008 Farm Bill, going into effect in 2008, with regulations being put forward in 2009. 
 
Click here to view the report.
 
National Farmers Union has been working since 1902 to protect and enhance the economic well-being and quality of life for family farmers, ranchers and rural communities through advocating grassroots-driven policy positions adopted by its membership.

SOURCE: National Farmers Union

Contact:
Melisa Augusto 
202-314-3191 
maugusto@nfudc.org


Dan McEvily
202-314-3104 
dmcevily@nfudc.org

In Ohio and Beyond, President Obama Sees Model for an American Manufacturing Revival

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U.S. President Barack Obama delivers remarks on the economy after touring Linamar Corporation that manufactures parts for the truck industry in Arden, North Carolina, February 13, 2013. Credit: Reuters/Jason Reed

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Andy Sullivan
February 14, 2013
(Reuters) – A former furniture warehouse in a struggling Rust Belt city has emerged as a national model for innovation after President Barack Obama highlighted it in his State of the Union speech on Tuesday.
Obama now aims to convince Congress to spend $1 billion to replicate the model nationwide. But it will be a tough sell to Republicans, who oppose government spending on industry and argue private capital will respond if there is real demand.

Yet even before the facility is fully up and running, local business leaders say Youngstown, Ohio’s National Additive Manufacturing Innovation Institute (NAMII) is already spurring interest in a promising new technology known as “3D printing” that could bring new manufacturing jobs to the region.

They say the federal government is bringing together researchers and businesses that could make the region a hotbed of cutting-edge manufacturing.

“This is absolutely a net positive for the Youngstown area,” said Eric Planey, a vice president with the Youngstown Chamber of Commerce.

Also known as additive manufacturing, 3D printing creates solid objects from a digital model by laying down successive thin layers of material, rather than the traditional “subtractive” approach, in which objects are created by cutting them out of a solid chunk of metal or plastic.

The process has been used to build prototypes for 25 years, but now is making its way into regular production. Companies such as General Electric Co plan to use 3D printing to build lightweight aircraft parts, while dentists use it to create crowns in the space of an hour rather than two weeks.

The Obama administration has been promoting the idea of a manufacturing revival as labor-saving technology, rising costs overseas and cheap energy at home have prompted some manufacturers to bring factory jobs back from overseas.

Economists say the United States is long past the days when steel mills, auto plants and machine jobs boosted millions of unskilled Americans into the middle class. Manufacturing now represents 12 percent of the U.S. work force, down from 20 percent in 1979.

Youngstown has seen some manufacturing jobs return since its giant steel mills shut down in the 1970s, but increased automation means that they employ fewer people than they would have several decades ago.

A new pipe factory that would have needed 1,000 workers 25 years ago now employs 350, Planey said, while a General Motors assembly plant that employs 5,000 produces as many cars as it did when it employed 14,000 people.

Obama administration officials say manufacturing might not ever employ as many people as it once did, but the sector has broader benefits to the economy because it spurs research and development and boosts exports.

Taking a page from similar efforts in Germany, the administration last year picked Youngstown as the site of an “innovation institute” that would spread new manufacturing ideas among a wide range of businesses.

“You are using a facility as essentially like a teaching hospital,” Gene Sperling, the director of the White House National Economic Council, said on a conference call on Wednesday. “When there are developments in technology and research, you have the capacity to share them with smaller businesses.”

GOVERNMENT, BUSINESS, UNIVERSITIES

Government agencies such as the Department of Defense, the Department of Energy, NASA and the National Science Foundation put up $30 million for the effort, matched by $40 million from businesses such as Northrop Grumman Corp and universities including Carnegie Mellon.

In his State of the Union speech, Obama asked Congress to spend $1 billion to set up 14 more innovation centers across the nation. He said he would set up three facilities on his own, using existing funds, if lawmakers do not act.

Republicans, who have fought Obama’s stimulus for green technology, are unlikely to soften their stance on spending.

“Washington has a spending problem that threatens the prosperity of every child, every family, and every small business in America,” House of Representatives Speaker John Boehner, who ran an Ohio manufacturing firm before entering politics.

When the Youngstown center is fully up and running in the next several weeks, the 11,000 manufacturers in the region will get a chance to learn how 3D printing works and determine whether they want to invest in it themselves, said NAMII president Ralph Resnick.

Local workers also could learn how to operate the new equipment, and experts could ensure that the final product will meet existing quality standards.

The idea is to create enough of a body of expertise around the technology to turn the region into a hotbed of additive manufacturing, Resnick said.

“What we’re looking to work on is pervasive issues,” ones that affect many manufacturers, he said. “If we solve it, it’s all good for the community in general.”

Like other forms of “high tech” manufacturing, additive manufacturing doesn’t have much use for low-skilled workers doing repetitive tasks on an assembly line.

But if it catches on, it could create more demand for industrial designers, inventory managers and other skilled workers, said Todd Grimm, an industry consultant based in Kentucky. It also could spur a new wave of business startups as the barriers to entry are much lower than they are in traditional manufacturing, he said.

“The economy will benefit. To what extent? Will it even be measurable? Who knows – that’s for somebody with a crystal ball,” he said.

SOURCE:  Reuters

This Might Be The Year For A Pro-Domestic Manufacturing Policy Agenda In Congress

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Richard A. McCormack 
February, 2013
The U.S. Senate might be more open this year to legislation aimed at improving U.S. manufacturing and reducing the U.S. trade deficit. A number of new senators and those reelected to the chamber ran campaigns that focused on bringing manufacturing back to the United States.
One of the chamber’s new members, Chris Murphy (D-Conn.), says supporting American manufacturing in his campaign had “political potency,” and helped him win against former CEO of World Wrestling Entertainment Inc., Republican Linda McMahon. During the campaign, Murphy described her as having made millions of dollars by offshoring work to China and Pakistan. “It dovetailed with the similar conversation that was happening in the presidential election,” says Murphy.

Murphy, the youngest member of the Senate at age 39, says he intends to be a leader on issues related to “Buy American” acquisition laws, currency manipulation, tax policies that promote investment in plants and equipment in the United States, and government investment in infrastructure that improves industrial competitiveness. “I have already reached out to other senators like Debbie Stabenow [D-Mich.] to join the pro-manufacturing efforts underway here in the Senate,” he says. “If we get together as a party and movement to push this new strategy there will be a lot more people than just me in the Senate and the House ready to follow.”

Murphy says the Republican Party could come around, too, on issues that favor domestic manufacturing. “There is an examination happening in the Republican Party as to why they hemorrhaged votes and seats in 2012,” says Murphy. “They would be smart to realize that one of the reasons they lost votes is they continue to be on the wrong end of the outsourcing debate. They are coming around on immigration because they recognize that they can’t win elections unless they change their tune on immigration. I think the same thing is true when it comes to manufacturing and outsourcing. If the Republicans continue to be identified as the supporters of outsourcing, they cannot win national elections. They certainly can’t win presidential elections in places like Ohio and Pennsylvania. And so I think that our hopes — to the extent that we have any hope of moving this agenda through the House — is that the Republican consultant class, who tend to dictate what the Republicans stand for in the House, will realize that they have to get on the other side of this debate, and fast.”

Other senators ran successful campaigns on similar pro U.S. manufacturing issues, notes Scott Paul, President of the Alliance for American Manufacturing. Among them were Democrats Tammy Baldwin of Wisconsin, Joe Donnelly of Indiana, Bob Casey of Pennsylvania, Sherrod Brown of Ohio and Kirsten Gillibrand of New York. Other Senate allies include Democratic Sens. Amy Klobuchar and Al Franken from Minnesota and Charles Schumer of New York, “and that’s just touching the tip of the iceberg,” says Paul. “In the Senate, there is an extraordinary amount of interest in pursuing” a domestic manufacturing agenda. “I am cautiously optimistic that in the Senate we can make some significant progress this year. Will the House listen? I don’t know, but we were able to extract some modest improvements in the Buy American laws in the infrastructure bill that passed the Republican-led House in the last Congress because it would have been too painful for some of their members to vote against it.”

Who is working against the pro-domestic manufacturing agenda? The organizations that represent multinational companies that have outsourced production, replies Paul. Identifying those outside groups “will shed some light on who on the inside [in Congress] is working against us,” he notes. On the issues of “Buy American” and cracking down on Chinese currency manipulation and unfair trade practices, it is the U.S. Chamber of Commerce and the Club for Growth. “You think of the senators and those in the House of Representatives who take their guidance from the Club for Growth and the Chamber and you have your answer.”

Even with those forces lined up against, the China currency bill was able to pass in the Senate during the last session with bipartisan support, despite the threat of a filibuster from Senate Minority Leader Mitch McConnell (R-Ky.). “There were enough Republicans including Lindsey Graham [R-S.C.], other southern senators and even [Sen.] Rob Portman [R-Ohio] who bucked him on this to support the bill,” says Paul. “It was the only bill to overcome a Mitch McConnell filibuster. We are making some progress, but they are baby steps, not giant steps. I am hoping in the Senate this year, we can make giant steps and broader shame some of the Republicans in the House to go along with this. There are rank and file House Republicans who support this agenda — not a lot of them, but enough to provide a majority.”

Sen. Murphy says backing a strong domestic manufacturing agenda is a good political strategy for Democrats. As the former member of the House of Representatives who created the Buy American Caucus, Murphy says that most voters realize that the U.S. economy cannot fully recover unless there is a healthy manufacturing sector. “This necessitates a new agenda,” he says. “I have always seen this issue as one of a few that allows Democrats to reach constituency groups that they might not traditionally reach. First and foremost, you are out there talking to small manufacturers and businesses which aren’t used to having Democrats coming into their factories and talk to them about what they need. Second, you are talking to a demographic of families associated with manufacturing trades that also aren’t traditionally Democratic constituencies.”

Murphy said he held a seat in the House of Representatives from a conservative district — one that had been Republican for the previous 24 years prior to his winning in 2006 — “in part to my speaking to them on the issue of making things here in America.”

The pro-domestic manufacturing issue was a big part of last year’s election campaign, notes Paul. “One of the most popular images in American political advertising in 2012 was the American factory,” he notes. “We have data to back that up.” There were almost one million political ads last year addressing issues related to jobs, companies that ship jobs overseas and the auto rescue. “There were over $45 million in ads in the presidential contest alone just on the China trade issue,” says Paul. “And in virtually every close race — Indiana, Ohio, Wisconsin, Pennsylvania and in Sen. Murphy’s race in Connecticut — one of the primary focus points for the victors was support for an American manufacturing policy.”

Even Obama pledged during the campaign to create one million manufacturing jobs over the next four years. “So now we have a metric to hold the Obama administration accountable,” says Paul. “It’s something that is easy to measure. So every month we will lay out how much or how little progress the President is making on his goal.”

Murphy says he will start a Buy American caucus in the Senate “because the U.S. government, year after year after year, is outsourcing taxpayer funded procurement to foreign countries,” he says.

Murphy would like to raise the requirement under the current law for agencies to buy 50 percent U.S. content to at least 60 percent and, better, 75 percent. He would get rid of
loopho
les that allow the U.S. government to buy foreign-made products if those products are being consumed outside the United States. And he would beef up the enforcement mechanism in the law by making it difficult for government agencies to approve waivers to the act.

As for free trade issue on Capitol Hill, Robert Borosage of the Campaign for America’s Future says the financial sector collapse in 2008 and subsequent recession may have broken the stronghold that multinational corporations and Wall Street have had on policymakers. “Corporate-defined free trade that does more to guarantee investment abroad than it does to guarantee jobs at home has been the centerpiece of the bipartisan consensus in this country for many decades,” says Borosage. The Democratic Party — directed by Wall Street and Clinton White House titan Robert Rubin — was fully on board with this strategy “even though it was widely opposed by broad majorities of Americans across both parties,” he notes. “One of the moments we are in given the collapse of that economic model is whether that broad public sentiment against that policy can start to gain traction in the Congress despite these very powerful forces lined up against it. What is interesting about the array of allies and the progress on the [last session’s] China currency bill that went further than many would have thought, is that we do have a moment here were popular opinion can finally start to be reflected in the halls of Congress in a way that it hasn’t in the past.”

Made in USA: We Are The 3%

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This past week I’ve been in a bit of a funk. My funky mood began on the day Wal-Mart made its big announcement – they plan to invest $50 Billion over the next 10 years in products made in the USA. Why, you ask would such seemingly good news put me in such a funk? Because I think Wal-Mart’s big announcement is another case of red, white, and blue washing.

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What Do American Manufacturers Owe Their Country?

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Michele Nash-Hoff
February 5th, 2013
Last week The Economist conducted an on-line debate on the question:  Do multinational corporations have a duty to maintain a strong presence in their home countries? After a very intense written debate between Harry Moser, former president of GF AgieCharmilles  and founder of the Reshoring Initiative, and Jagdish Bhagwati, Professor of Economics and Law, Columbia University, the vote was 54% “yes,” and 46% “no.”

The moderator of the debate was Tamzin Booth, European business correspondent for The Economist, who introduced the topic by stating, “after the Great Recession, with high levels of unemployment persisting in rich countries, politicians are putting enormous pressure on firms to either keep operations at home or bring them back. The offshoring and outsourcing of work overseas have never been more unpopular. So strong is the backlash against firms which shift jobs abroad that many companies are choosing not to do it for fear of igniting a public outcry. And a “reshoring” trend, bringing factories home to America from China and elsewhere, is gathering pace and support from several American multinationals, including General Electric and Ford Motor Company.”

While Mr. Moser acknowledges that multinational corporations (MNCs) “have a responsibility to enhance shareholder return and obey relevant laws and regulations,” he believes that “MNCs also have a duty to maintain a strong presence in their country of origin,” which he defines “as investing, employing, manufacturing and sourcing at least in proportion to their sales in the origin country.”

He states, “This duty has two sources. The first is a quid pro quo for the special benefits that their charter provides. The second is based on understanding that a strong presence is almost always in the interest of their shareholders.”

In his pro argument for the first duty, Mr. Moser quotes Clyde Prestowitz: “Corporations are not created by the shareholders or the management. Rather they are created by the state. They are granted important privileges by the state (limited liability, eternal life, etc). They are granted these privileges because the state expects them to do something beneficial for the society that makes the grant. They may well provide benefits to other societies, but their main purpose is to provide benefits to the societies (not to the shareholders, not to management, but to the societies) that create them.”

This view is corroborated by a recent essay, “The American Corporation,” by Ralph Gomory and Richard Sylla, in which they provide a brief history of corporation formation in America. From 1790 to 1860, over 22,000 corporations were chartered under special legislative acts by states, and

several thousand more were chartered under general incorporation laws introduced in the 1840s and 1850s. These state granted charters were not perpetual and had to be renewed periodically, “with its “powers, responsibilities?including to the community?and basic governance provisions carefully specified.”

The essayists comment that general incorporation laws were the answer to the problem of corruption in legislative chartering, but created their own problems in the late 19th Century with the rise of “Robber Barons, both the business leaders who amassed great power and wealth in the rise of mass-production and mass-distribution industries, and the great financiers of Wall Street who collaborated with them.” The concentration of wealth and power in the hands of so few led to the passage of antitrust laws and corporate regulations at both the federal and state levels regulations in the 20th Century to prevent or rein in monopolies.

The stock market crash of 1929 and the Great Depression resulted in a multitude of “New Deal” reforms and regulations on the corporate and financial sectors to protect and inform stockholders and the general public.

Gomory and Sylla write that for decades after WWII, “the problem of corporate goals seemed under control,” and “the interests of managers, stockholders workers, consumers and society seemed well aligned” while the U. S. and the Soviet Union were fighting a Cold War.

As late as 1981, the U. S. Business Roundtable issued a statement recognizing the stewardship obligations of corporations to society:  “Corporations have a responsibility, first of all, to make available to the public quality goods and services at fair prices, thereby earning a profit that attracts investment to continue and enhance the enterprise, provide jobs, and build the economy.” In addition, “The long-term viability of the corporation depends upon its responsibility to the society of which it is a part. And the well being of society depends upon profitable and responsible business enterprises.”

Establishing plants in another country in order to do business in that country and be closer to your customers is a reasonable business decision for many companies whose products are sold globally, such as Coca Cola and other food and beverage manufacturers. I concur with Mr. Moser’s statement. “We do not question multinational companies’ right to invest offshore.” However, it is another thing to transfer all or most of the manufacturing of your products to be sold mainly in the U. S. market to another country, at the cost of hundreds, if not thousands, of American jobs.

This brings us to Mr. Moser’s second pro argument to the question; namely, “a strong presence is almost always in the interest of their shareholders.” He states that his experience with the Reshoring Initiative’s free Total Cost of Ownership Estimator™ (TCO) has shown that “in their excessive focus on offshoring of manufacturing, many MNCs make suboptimal decisions, actually reducing the long-term return to their shareholders. Thus many MNCs will more fully maximise returns for shareholders if they maintain a stronger presence.”

This is because most MNCs do not accurately measure the “Total Cost of Ownership” or “landed costs” in making decisions regarding where to manufacture their products. They ignore the “hidden costs” of doing business offshore about which I have written extensively in my book , such as:  quality problems, legal liabilities, currency fluctuations, travel expenses, difficulty in making design changes, time and effort to manage offshore contract, and cost of inventory.

In addition, Mr. Moser states that the behaviors of MNCs include:

  • “Ignoring a whole range of medium-term risks: IP loss; impact on innovation; and loss of competence and control due to increasing reliance on offshore outsourcing firms. The further a firm is removed from the manufacturing of its products, the harder it is to evolve and make future related products.
  • Ignoring longer-term catastrophic risks associated with shifting their presence offshore, including the decline
    in Am
    erican economic, technological and military strength: risk of losing sales and assets in developing countries, especially when competing with local state-owned enterprises (SOEs); loss of the government-funded R&D that gives them a head start in many technologies; loss of strong origin-country defence and legal systems that protect the corporate charter; loss of “Pax Americana” that protects their trade around the world; and populist calls for anti-MNC political actions resulting from income inequality driven by a shriveling middle class.”

One important risk that Mr. Moser did not mention is the risk of theft of Intellectual Property by offshore manufacturers, especially in China. For many years, China has been doing this by reverse engineering, counterfeiting, and cyber espionage, but it has been made easier in the past two years by the mandatory technology transfer required by the Chinese government for corporations who set up plants in China.

In his con argument, Professor Bhagwati asserts that global sourcing and locating plants around the world has happened already, and “there is little point in tilting at reality.” He states, “Multinationals’ products, after all, can now hardly even be defined as American, French or any other nationality when their parts come from every corner of the world. All that matters, he argues, is that worldwide operations bring profits to the multinational, thereby benefiting the country in which it is headquartered. , “MNC investment abroad is good, not bad, for America unless it is a result of distorting tax policies that lead to overinvestment abroad. Asking MNCs to have a presence at home, and subsidising or forcing them under threat of penalties to do so, makes little sense unless you claim that this presence produces some externalities…the benefits to the MNC, and hence to America most likely, will accrue regardless of where the MNC does R&D, in Bangalore or Boston.”

In is rebuttal, Professor Bhagwati states, “Compelling an American MNC to retain a strong presence in America would be the wrong prescription no matter which of the two rationales you accept…Forcing them to produce at home when that makes them uncompetitive in world markets is surely the wrong prescription: it makes them uncompetitive in markets which today are fiercely competitive.

While I realize and have written about the fact that American manufacturers are under a disadvantage in dealing with countries like China that practice “predatory mercantilism,” it is my opinion that American multinational and national manufacturing corporations have more than a “duty to maintain a strong presence in their home countries.” As American citizens, we “pledge allegiance to the Flag of the United States of America, and to the Republic for which it stands, one Nation under God, indivisible, with liberty and justice for all.” Thus, we owe “allegiance” to our country, which is defined as “the loyalty of a citizen to his or her government.” Other synonyms are:  fidelity, faithfulness, adherence, and devotion.

Obviously, if you are a loyal, faithful, devoted citizen of the United States this means that you take actions in your personal and business life to support your country and do not purposely take actions that may cause harm to your country. Moving a majority of manufacturing to other countries, especially China is doing harm to your country since China has a written plan to replace the United States as the world’s super power. Therefore, American multinational corporations and other American manufacturers owe allegiance to the United States of America by maintaining a strong presence in our country.

SOURCE:  Saving US Manufacturing

Michelle Nash-Hoff is the author of “Can American Manufacturing Be Saved? “

SKILLS GAP PUTS MANUFACTURING IN THE U.S.A. AT A COMPETITIVE DISADVANTAGE

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Matthew Lavoie
February, 2013
NAM President & CEO Jay Timmons testified before the House Committee on Education and the Workforce hearing on the “Challenges Facing America’s Workplaces and Classrooms”.   NAM Chief Calls for Comprehensive Immigration Reform as Key Building Block for America’s Workforce
WASHINGTON, D.C., 02/05/13 –  National Association of Manufacturers (NAM) President and CEO Jay Timmons testified before the House Committee on Education and the Workforce at today’s hearing on the “Challenges Facing America’s Workplaces and Classrooms.” His testimony highlighted the need for comprehensive immigration reform both to strengthen the workforce by providing access to skilled workers and allow the United States to live up to its full potential. Timmons has previously met with key members of Congress to discuss comprehensive reform, and manufacturers will continue congressional outreach to work with policymakers to offer input as the debate moves forward.

Manufacturers are committed to a reformed immigration system that accounts for all aspects of legal immigration. As part of comprehensive reforms, manufacturers are asking Congress and the Administration to focus on addressing the lack of high-skilled workers, settling the issues regarding the undocumented population and establishing a commitment to strong legal enforcement.

“Talent and skill have no borders, and it is time that American immigration policy reflected that truth,” said Timmons. “Manufacturers need to be able to hire the right person with the right skills at the right time. Congress and the Administration must move forward with comprehensive immigration reform that allows manufacturers to meet their current and future workforce needs. The current system, unworthy of our ideals, is broken and holding the United States back. Without major reforms, we’ll be ceding talent to our competitors and turning away a future generation of entrepreneurs. Comprehensive reform will ensure that manufacturers have access to innovative workers who will help lead and grow our economy.

In addition to border security, structural reforms and verification issues, immigration reform must also address the millions of undocumented individuals who currently live in the United States. It is essential that we find a solution for these men, women and children living outside the system, and in doing so, we will build a stronger country. Members of Congress and President Obama must not waste this critical opportunity. Manufacturers look forward to working with policymakers toward a more vibrant economy that leads to more investment and jobs in America.”

A study released by the Partnership for a New American Economy found that more than 40 percent of Fortune 500 companies were either started by an immigrant or the child of an immigrant. American manufacturing enterprises founded by immigrants span all sectors, from technology, to steel, to chemicals, to medical devices, to many others. All told, major companies founded by immigrants or children of immigrants have an economic impact larger than all but two U.S. competitors—Japan and China—according to the report.

Approximately 600,000 manufacturing jobs remain unfilled due to an ongoing skills gap that has left employers unable to find appropriately skilled workers. As part of its efforts in support of comprehensive immigration reform, the NAM has partnered with businesses and education groups to form a coalition to address the need to fix America’s skilled worker crisis. As the debate moves forward, inSPIRE STEM USA will call on Congress to act on immigration reform to strengthen America’s workforce and education system both for today and tomorrow.

Made in USA Sees An Uptick

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LOCAL TIES: Paulette Garafalo of Brooks Brothers, which manufactures neckwear at a factory in Long Island City. | Photo: Buck Ennis

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Adrianne Pasquarelli
February, 2013
Apparel-making picks up (slightly) in NYC as trends favor city manufacturers.
Manufacturing clothes in the garment center might seem like a step back in time—but it’s actually forward growth for Ricky Schiffer. In December, the third-generation sweater maker, with his business partner, Leonard Keff, opened a 7,500-square-foot knitting factory on West 36th Street.

“We are just the first of many to come,” said Mr. Schiffer, who has committed $2.6 million to the project. “We’ll keep growing.”

The Made in USA movement is gaining steam, as retailers from Brooks Brothers to Walmart push to manufacture their wares in the United States to appeal to patriotic consumers and avoid costly overproduction as overseas labor and shipping costs rise. Surprisingly, the trend is playing out on a smaller scale in the city.

For an area that has seen apparel-making plummet—last year, on average, there were 14,900 apparel manufacturing workers in New York City, and two decades ago, there were more than 80,000, according to the New York State Department of Labor—new factories are welcome additions.

Mr. Schiffer’s factory, Keff NYC, has eight knitting machines (each costs $100,000), and he has ordered a dozen more. Though the company is currently making samples, Mr. Schiffer expects to engage in production of up to thousands of units. The company has already signed Abercrombie, Opening Ceremony and Burt’s Bees Baby as clients. It’s also producing uniform accessories, including hats, gloves and scarves, for the 2014 Winter Olympic Games.

Orders up by 30%Meanwhile, Stoll America, a 140-year-old knitting-machine seller that also makes apparel, opened an outpost on West 39th Street in 2009 and has been growing ever since. The company employs 21 workers, up from 12 four years ago, and has seen orders increase by 30% since 2010.

“Up until now, no one was around where designers could get samples done,” said Marcus Kirwald, product development manager. “They had to send them out, and there was lot of time and frustration involved.”

Brooks Brothers has made a name for itself in local production—it has manufactured its ties at a Long Island City, Queens-based factory for decades, for example, and operates two additional East Coast facilities—and is working to strengthen its capabilities. In its neckwear factory, which last year produced 1.5 million cravats, Brooks Brothers employs 300 workers, up 10% since early 2011. Three years ago, the brand overhauled its operations from assembly line to “module,” or manufacturing by team, to become more efficient, and it began producing apparel for other brands, such as Club Monaco and Jack Spade.

The clothier now promotes its American-made wares through a special section on its website and specific catalogs—recognizing that consumers are paying attention to the origin of their clothing. (Ralph Lauren was criticized last summer for making the U.S. Olympic team’s uniforms in China.)

“It’s really critical as part of our heritage and our culture that we maintain and actually increase American manufacturing,” said Paulette Garafalo, president of international and manufacturing at Brooks Brothers.

Asia’s rising middle class also has altered the landscape. Asian shoppers are beginning to covet U.S.-made brands, according to some designers. New York-based designer Patrik Ervell, who launched his eponymous menswear business seven years ago and manufactures 95% of his goods in the U.S., has noticed that buyers from Japan, China and South Korea are looking to stock only apparel manufactured in the U.S. If it doesn’t carry that label, they’re not interested, he noted. Currently, Asia represents 25% of his wholesale business.

Shifting pattern”People have started to fetishize this ‘Made in USA’ thing; it has an aura around it,” said Mr. Ervell, who sells to upscale stores such as Barneys New York and Opening Ceremony. “That period of churning stuff out of China and shipping it here is shifting.”

Domestic production is pricier—by as much as 40%—but the gap has been narrowing in recent years. In addition, manufacturing here means that retailers can get smaller batches of products into stores more quickly, reducing the need for end-of-season markdowns.

“It’s the unsold portion which becomes the albatross around their necks,” said Andy Jassin, head of retail consultancy Jassin Consulting Group. “It’s a matter of what’s efficient, and we’re beginning to see the efficiency of ‘Made in USA.’ “

And Americans appear increasingly willing to pay for it. About 75% of consumers said they would shell out more for American-made goods, up from 50% in 2010, according to America’s Research Group. Typically, U.S.-made products have been limited to small high-end designers, but now larger mainstream retailers, like Ohio-based Abercrombie, are investing in U.S. manufacturing.

“A lot of these stores are strategizing how they can do a ‘Made in USA’ product now because they think the country is ready for it,” said Mr. Schiffer.

Even so, manufacturing locally, whether in New York’s garment district or Garland, N.C.—where Brooks Brothers operates a factory—continues to present challenges. Most apparel sellers buy fabrics overseas, because Environmental Protection Agency rules for printing with dyes make local sourcing difficult. Meanwhile, when brands began outsourcing manufacturing and shuttering their local factories decades ago, younger workers, especially in the garment district, started abandoning the field for more lucrative industries.

So far, the return of some factories has not been enough to reverse the loss of manufacturing jobs in the city, where fashion jobs have steadily declined from 200,000 in the heyday of the 1960s.

“You don’t see the kids of the kids in the factories anymore,” said Alex Garfield, who has been in the apparel industry for more than two decades, currently as a founder of women’s pants brand Peace of Cloth. “A whole generation is missing.”

Still, the dynamic is shifting.

“Ten years ago, it was six times cheaper to manufacture in China,” said Ms. Garafalo. “Today, it is about three times less expensive, so the opportunity for better margins [there] is reducing.”

U.S. Congressman Cicilline (D-RI) Unveils The Make It In America Manufacturing Act

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January 31, 2013
“Make It In America Manufacturing Act” would provide targeted investments to support small business expansion.
PAWTUCKET – As part of his ongoing work to get Rhode Island’s economy back on the right track, U.S. Congressman David N. Cicilline (D-RI) today unveiled the Make It In America Manufacturing Act to target federal investment in manufacturing, helping create jobs, generate public-private partnerships, and support small business growth.

“When they’re competing on a level playing field, American workers outperform competitors across the world,” said Cicilline.  “Rhode Island’s economy was built on the strength of our manufacturing industry and that’s why I am pleased to introduce the Make It In America Manufacturing Act in order to help give manufacturers the resources they need to compete successfully, grow jobs, and get our state and national economy moving again.”

Senator Kirsten Gillibrand (D-NY), who has introduced the Senate version of the Make It In America Manufacturing Act, collaborated with Cicilline in recent months to build upon legislation they introduced in the 112th Congress. Cicilline also received feedback from Rhode Island constituents and the Brookings Institution on ways to enhance the manufacturing proposal.

If signed into law, the Make It In America Manufacturing Act would create a competitive incentive grant program, jointly administered through the Departments of Labor and Commerce. States or regional partnerships may apply for the program, and successful applicants will receive grant funds to help implement innovative Manufacturing Enhancement Strategies.  Funds can be used to create a revolving loan fund, to issue low interest loans to manufacturers, or to provide grants to non-profits, including community colleges, helping manufacturers to:

  • Address the skills gap that hinders growth in the manufacturing sector
  • Increase exports and domestic supply chain opportunities
  • Improve energy efficiency
  • Retool and expand existing manufacturing facilities to compete in the 21st century economy

“There is tremendous potential for job creation in the advanced manufacturing sector here in Rhode Island and throughout New England, and this innovative proposal would provide the kind of investment needed to support growth,” said James T. Brett, President & CEO of The New England Council.  “The Council is proud to support Congressman Cicilline’s Make it in America Manufacturing Act and we look forward to working with him as he continues to fight for our region’s ongoing economic recovery.”

Cicilline, who was a leading advocate for the House Democratic Make It In America agenda during his first term in Congress, has pledged to continue working with colleagues to find commonsense solutions for the obstacles facing small business owners and manufacturers – especially those in Rhode Island.

Congressman Tim Ryan (D-OH), an original co-sponsor of the Make it in America Manufacturing Act and the Co-Chair of the House Manufacturing Caucus, added, “I am proud to support the Make it in America Manufacturing Act of 2013. This bill should receive the support of my colleagues from both parties as it seeks to maintain the revitalization of manufacturing that continues around the country. This competitive grant program will provide low-interest loans to small business and job training assistance to employees and community colleges, just the things we need in my District to keep our traditional manufacturers thriving and continue building our advanced manufacturing sector. This bill will also allow U.S. manufacturers to refine their processes, train both new and existing employees on the most updated machinery, and innovate their product line to stay ahead of the competition. This is what we need right now.”

The Make It In America Manufacturing Act has already received endorsements from several national groups, including the American Small Manufacturers Coalition, National Association of Counties, National Skills Coalition, United Steel Workers, AFL-CIO, and National Association of Development Organizations.

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