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Does It Matter Where Products Are Made?

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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.

Could Newark Be a Manufacturing Hub Again? 

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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)
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.

U.S. Isn't Respecting Meat Labeling Rules, Mexico says

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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

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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.

For the original version on PRWeb visit: 
http://www.prweb.com/releases/prwebUSA-made-jeans/made-in-America-jeans/prweb10764885.htm

Made in USA is Back in Style For Small Businesses

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Martin Rawls-Meehan, CEO of Reverie, poses at the company showroom next to a bed that reveals the manufacturing process, in Silver Creek, N.Y. The company is working to expand manufacturing in the United States. (AP Photo/David Duprey)

 

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By Joyce m. Rosenberg
AP Business Writer
NEW YORK (AP) — When Martin Rawls-Meehan started making adjustable beds in 2004, it was a foregone conclusion that key parts would be made overseas. It was cheaper to manufacture in Taiwan than in the U.S. And from Taiwan it was easier to ship to customers in Asia.
But this year, his company, Reverie, began making some of its beds entirely in a factory in New York. Shipping costs from Taiwan have soared between 50 percent and 60 percent since the company was founded.

“Shipping costs are tremendous,” he says. “I could put that money into the manufacturing side in the U.S.,” he says.

Reverie is one of a growing number of small businesses that are chipping away at the decades-old trend of manufacturing overseas. They’re doing what’s known as reshoring, moving production back to U.S. factories as labor costs grow in countries like China and India and shipping also becomes more expensive. Over the last 20 years, the price of a barrel of oil has risen to about $95 from $20.

There are other issues encouraging the shift. Owners are tired of having to wait weeks for shipments on slow-moving container ships, and they want to get products to customers faster. Some newer businesses aren’t even considering overseas manufacturing. It’s not just small businesses. Some of the largest companies in the U.S. are also joining the trend. Apple Inc. and Caterpillar Inc. are among the manufacturers planning to bring production back to the U.S.

Reverie has had the bases of its beds made in Taiwan since the company was founded. Rawls-Meehan and a business partner in Taiwan agreed that the cost savings and proximity to many customers were good reasons to manufacture there.

“The mentality was that products were going to be manufactured more cheaply in Asia than in the U.S.,” Rawls-Meehan says.

But shipping costs have risen to as much as 20 percent of the wholesale cost of a bed made in Asia. In 2004, it was just 10 percent on some of Reverie’s products. So the company is now making a new line of upscale beds in Silver Creek, N.Y., near Buffalo. Shipping on those beds accounts for no more than 5 percent of the wholesale price. That offsets the higher cost of labor in this country.

Rawls-Meehan is considering moving more of his manufacturing to the U.S., but because the company also sells beds to Asia and Australia, he says it likely will always have overseas production.

A good deal of U.S. manufacturing shifted to foreign shores in the 1990s and early 2000s. Workers in China, India and other countries earned far less than workers in U.S. factories. That lowered costs substantially for U.S. companies. Between 1997 and 2008, the U.S. lost nearly 4.5 million manufacturing jobs, according to the Census Bureau. And the amount of overseas manufacturing by U.S. companies grew 141 percent between 1997 and 2010, according to the government’s Bureau of Economic Analysis.

But the growing middle class in countries such as China and India have been demanding and getting higher wages. In Asia, labor costs are rising 20 percent a year, compared to 3 percent in the U.S., says David Simchi-Levi, a professor at the Massachusetts Institute of Technology whose specialties include supply chain management.

A weaker dollar has also made foreign-made goods more expensive. A study by the consulting firm AlixPartners predicts that the costs of manufacturing in the U.S. and China on average would be equal in 2015. For products including disposable packaging and some metal parts, costs are already equal or less when they’re made in the U.S., the study found.

Reshoring began picking up momentum in 2010 after the recession and as the dollar began to lose value, says Lisa Ellram, a professor at Miami University of Ohio who specializes in supply chain management. Businesses that were unsure how strong their sales would be in a weak economy didn’t want to make as many commitments to far-flung factories.

“They really just didn’t have as much certainty about their volume and their needs, so it was maybe a little bit easier to deal with somebody closer,” she says.

Innovations in manufacturing in the U.S. are encouraging the shift. Many U.S. companies use robots and highly specialized processes that allow them to make custom components for the automotive and aerospace industries.

“Instead of hiring people, we’re using robots,” Ellram says. Chinese companies are also using robots, but U.S. manufacturers are ahead of them, she says.

The government doesn’t have figures tracking how much manufacturing companies are bringing back the U.S., according to Jeannine Aversa, a spokeswoman with the Bureau of Economic Analysis. About 50,000 manufacturing jobs came back to the U.S. between 2010 and 2012, many of them in factories that turn out electrical equipment and components and metal parts, according to the Reshoring Initiative, a nonprofit group that advocates moving manufacturing back to the U.S.

The trend could gain momentum because demand for U.S. goods is growing. Ninety-five percent of manufacturers surveyed last year said they are increasing their purchases from domestic companies, or keeping them at the same level as 2011, according to ThomasNet, a company that operates an online marketplace where businesses can connect with manufacturers, distributors and service companies.

The amount of time it takes to get goods made overseas is another reason manufacturing is coming back to the U.S. It’s taking longer to ship finished products because cargo ships have lowered their speed by 20 percent to conserve fuel, Ellram says. That reduction adds four or five days to a container ship trip from China, she says. It takes two weeks or more for a ship to travel from China to the U.S., depending on which ports it departs from and where it makes its deliveries.

Shipping times matter for companies that need to get their goods to market quickly. Now that Cotton Babies, a manufacturer and retailer of baby merchandise, has moved manufacturing of its cotton diapers to Denver from Egypt, it has cut in half the time it takes to get them to market, says CEO Jennifer Labit.

Product development can be slowed by the distance between designers in the U.S. and manufacturers in other countries, Labit says. Communication takes longer and expensive overseas trips are often necessary to make sure that the products are being made to specifications.

Quality, and the ability to fix problems faster, gives small domestic manufacturers an advantage over foreign companies, Ellram says.

“Those are the things that (domestic) small businesses can use as a selling point,” she says.

A myriad of problems helped Reading Truck Body decide to bring manufacturing of truck parts back to the U.S. from China.

Shipments were disorganized. The compan
y didn’t know until it opened containers which parts had been shipped. That meant it couldn’t be sure ahead of time which of its truck bodies could be finished and sold, national sales director Craig Bonham says. Reading, based in Reading, Pa., also was concerned about the amount of time it took to get shipments.

“It spans about three months from purchase order to the time you get products to North American shores,” Bonham says. “That timeline did not allow us to become reactionary to market demands.”

Reading lost some sales because it didn’t have the parts to finish a truck a customer wanted. But the impact of unpredictable shipments went beyond lost revenue — it also led to chaos on the production line and frustration among the company’s managers.

“You feel a larger sense of dependency when you’re relying on someone that far away,” Bonham says. The company received its last shipment from Asia in December.

It also dealt with high expenses to send two employees to China each quarter, at a cost of $100,000 a year.

But with production now entirely in the U.S., the company is more confident.

“We have more control of our destiny,” he says.

SOURCE:  Associated Press
Follow Joyce Rosenberg on Twitter: @JoyceMRosenberg

Learn how you too can begin reshoring and creating jobs here in the U.S.A. Check out how Harry Moser and his team at the Reshoring Initiative can help.  Reshoring Initiative: http://www.reshorenow.org/

Do Americans Really Care How Their Clothes Are Made?

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Clothing with Joe Fresh labels lies in the debris on April 30

 

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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.”

It’s Not Easy To Be Sure Your Clothes Come From Safe Factories

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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

American Manufacturing Is Going (to New) Places: And What That Means About Jobs

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Mark Tomlinson
CEO, Society of Manufacturing Engineers

There’s been a lot of discussion lately about American manufacturing: why it’s important to a strong economy, what policies could strengthen it, and if the signs of resurgence will result in jobs for the many who remain unemployed in this country. (“Is U.S. manufacturing making a comeback, or is it just hype?” Washington Post, May 1, 2013; “Made in America” Time, April 22, 2013.)
To understand that last point, we must accept that we can no longer equate the number of manufacturing jobs with a successful manufacturing industry.

If America is to compete with low-waged countries, we must innovate ways to make things more cost effectively than the labor-heavy products that have been outsourced for the last two decades.

Manufacturing has long been the primary source of innovation, and the industry is using this creativity to remain competitive in a global market. And this is impacting the kinds of workers manufacturers need today.

For example, by automating processes, factories can now run “lights-out” operations that require no workers on site. Should we bemoan the loss of the repetitive-assembly jobs that used to be needed to support this type of activity or celebrate that this company can mark their products “Made in America,” and keep the higher-skilled jobs required to keep its lights out here in this country?

Manufacturing jobs are changing. We can no longer expect manufacturing to employ our nation’s low-skilled workers. Manufacturing jobs are now a part of the “knowledge economy.”

A healthy manufacturing industry of the future is one that keeps the research and development, design and production — and the highly paid manufacturing jobs that come with it — in America. Although these jobs won’t be as plentiful as they were in the last century, advanced manufacturing jobs average $77,000 compared with the workers in all other industries who average only $60,200 a year.

This illustrates why it is increasingly more critical to educate and train a workforce that can design parts and equipment, process how parts are made, manage, program and repair high-tech machines.

This education begins in the elementary schools where children are introduced to STEM subjects (science, technology, engineering and math). Participation in programs such as FIRST Robotics and SkillsUSA engage students and demonstrate real-word applications of science and math.

We also need to ensure our educational programs are creating workers ready for today’s jobs. SME is currently working within several communities to connect high schools, community colleges and local manufacturers in order to create a pipeline of future workers. With our knowledge of what manufacturers need, we work with more than 500 schools to offer industry-validated classes that prepare students for professions in today’s manufacturing environment. Online classes, for example, enable teachers to spend less time lecturing and more time applying this knowledge in the lab.

More than two thirds of manufacturers are having difficulty finding skilled employees. We cannot stand by hoping someone else will solve our skills gap crisis. Industry, government and educators need to work together to implement solutions that work.

Change is inevitable in manufacturing. Will we be ready to face the challenges ahead of us? Let’s stop talking and get on with making the future together.

SOURCE:  Huffington Post

Mark C. Tomlinson, CMfgE, EMCP, is executive director and CEO of the Society of Manufacturing Engineers (SME), a 501(c)3 organization that inspires, prepares and supports the advancement of manufacturing. SME works with government, educators and industry to resolve the skills gap that threatens manufacturing and the U.S. economy.  Follow Mark Tomlinson on Twitter:  www.Twitter.com/SocMfgEng 

Is Reshoring a Myth or Reality?

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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.

Legislation Seeks to Tweak Standards for Made in USA

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American Made products

Sally Schilling/Daily Journal Dylan Sievers, right, and Lisa Sievers, third from right, with the Bulldog Lighting company.

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Sally Schilling
Most Americans probably don’t think twice when they read a label that says, “Made in USA” They assume the product is made domestically. What they don’t realize is that the meaning of “Made in the USA” is up for debate.
In almost all states, an item can be labeled as “Made in the USA” and still be made with a portion of foreign labor or foreign material.In California, on the other hand, there is no leeway for products labeled “Made in the USA.” Manufacturers who want to label their goods as “Made in the USA” in California must use only American labor and American material. For 19-year-old Dylan Sievers, CEO of Bulldog Lighting based in San Carlos, this proved to be a problem. At age 17, Dylan started Bulldog Lighting — which makes LED lights for off-roading vehicles — in a business enterprise class at Junipero Serra High School in San Mateo. The young off-roading enthusiast discovered there was a lack of affordable lighting available for people wanting to race their trucks through dark terrain. He asked his mom if she could use her own background in manufacturing to help him figure out how to make the lights. “He asked if I could find a factory that could help make LED lights that were affordable,” said Dylan’s mother, Lisa Sievers, who previously worked for Cool Balls manufacturing antenna balls. “We found a factory in China.” Bulldog Lighting debuted its products last year, and Dylan decided to bring all production stateside. “He was sitting in class hearing about people losing their jobs,” said Sievers. “We decided we could make it here in the USA” The Sievers were hoping to label their product as “Made in the USA,” and were disappointed when they found out they could not make that claim. Despite their best efforts to produce the lights in the United States, there were some materials in the lights that Sievers said had to come from foreign countries. “There’s just some things in the United States we don’t make,” she said. “We don’t make LED here.” Bulldog’s lights are about 90 percent made in the United States, said Sievers.  “I don’t think it’s reasonable to say everything can be made in the USA,” she said.  The aluminum in the lights is from Texas, and the screws are made in Ohio, she said. “[The product] is substantially transformed using American workforce,” she said. “Dylan said, ‘if we do everything here, how come we can’t say ‘Made in the USA’?’” The Sievers are considering moving to Texas, where their products could be sold with a “Made in the USA” label. Proposed state legislation The Sievers contacted state Sen. Jerry Hill, D-San Mateo, who wrote legislation to address the issue.  “If you want to be competitive and keep jobs in California, we need to do everything we can,” said Hill. Hill has since introduced Senate Bill 661 to “update” California’s labeling standard to reflect the realities of today’s global economy. SB 661 would reduce the “Made in the USA” standard to allow for 90 percent of the product to be made in the United States. In this case, the manufacturer would have to prove that the remaining 10 percent of production was unavailable domestically. “This still gives us the integrity of the claim,” said Hill. According to Hill’s office, the original standard in California was established in 1961 to “prevent foreign firms from taking advantage of ‘buy American’ promotions.”  This standard is unrealistic in today’s global economy where not all materials are available locally, said Hill.  He gave the example of Star Milling Company in Perris, Calif., which produces feed that is 99 percent made in the United States. Just one vitamin in the feed is unavailable domestically, he said. He hopes bringing California standards closer more in line with federal standards will allow companies within the state to remain competitive.  “The final transformation has to be done domestically,” said Hill of his bill’s requirements. “We’re meeting every standard that can be made.” False advertising? Some consumer advocates are opposed to changing California’s labeling standard because they say it would be false advertising.  “This is a truth in labeling issue,” said Richard Holober, executive director of Consumer Federation of California. “We do not support changing the current standard. If something is 90 percent made in the U.S., it should say ‘90 percent made in the U.S.’” Aside from a few sectors such as the automobile industry, there is no legal requirement for companies to disclose the origins of its products. Labeling should not be such a big issue because it is a choice, said Holober. Changing California’s standard would hurt companies who are 100 percent American-made, he said.  “If there is a union company that pays better wages and is 100 percent [Made in USA.], they’ll say, ‘wait a second, why shouldn’t be able to gain a tiny edge here?’” he said. Some unions are also coming out against the bill “If you’re going to advertise your product as “Made in the U.S.,’ then it should be made in the U.S.,” said Shane Gusman, who represents the Teamsters Union and the Machinists Union. “Why would we want to loosen the standard so that ‘Company X’ can import 10 percent of its components from somewhere?” The whole idea behind the label is to get consumers who want to be patriotic to buy that product, said Gusman. Taking away California’s high standard would reduce the demand for domestic manufacturing jobs, he said. Lisa Sievers will be testifying in before the Senate Judiciary Committee on SB 661 on Tuesday.

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