Cotton being spun at a Parkdale Mills facility in Hillsville, Virginia. | Poh Si Teng/The New York Times
GAFFNEY, S.C. — The old textile mills here are mostly gone now. Gaffney Manufacturing, National Textiles, Cherokee — clangorous, dusty, productive engines of the Carolinas fabric trade — fell one by one to the forces of globalization.
Just as the Carolinas benefited when manufacturing migrated first from the Cottonopolises of England to the mill towns of New England and then to here, where labor was even cheaper, they suffered in the 1990s when the textile industry mostly left the United States.
It headed to China, India, Mexico — wherever people would spool, spin and sew for a few dollars or less a day. Which is why what is happening at the old Wellstone spinning plant is so remarkable.
Drive out to the interstate, with the big peach-shaped water tower just down the highway, and you’ll find the mill up and running again. Parkdale Mills, the country’s largest buyer of raw cotton, reopened it in 2010.
Bayard Winthrop, the founder of the sweatshirt and clothing company American Giant, was at the mill one morning earlier this year to meet with his Parkdale sales representative. Just last year, Mr. Winthrop was buying fabric from a factory in India. Now, he says, it is cheaper to shop in the United States. Mr. Winthrop uses Parkdale yarn from one of its 25 American factories, and has that yarn spun into fabric about four miles from Parkdale’s Gaffney plant, at Carolina Cotton Works.
Mr. Winthrop says American manufacturing has several advantages over outsourcing. Transportation costs are a fraction of what they are overseas. Turnaround time is quicker. Most striking, labor costs — the reason all these companies fled in the first place — aren’t that much higher than overseas because the factories that survived the outsourcing wave have largely turned to automation and are employing far fewer workers. |
Bayard Winthrop, right, founder and chief executive of American Giant, examines fabric with Hunter Ashby, plant manager for Carolina Cotton Works in Gaffney, S.C. | Mike Belleme for The New York Times
|
And while Mr. Winthrop did not run into such problems, monitoring worker safety in places like Bangladesh, where hundreds of textile workers have died in recent years in fires and other disasters, has become a huge challenge. “When I framed the business, I wasn’t saying, ‘From the cotton in the ground to the finished product, this is going to be all American-made,’ ” he said. “It wasn’t some patriotic quest.”
Instead, he said, the road to Gaffney was all about protecting his bottom line.
That simple, if counterintuitive, example is changing both Gaffney and the American textile and apparel industries.
In 2012, textile and apparel exports were $22.7 billion, up 37 percent from just three years earlier. While the size of operations remain behind those of overseas powers like China, the fact that these industries are thriving again after almost being left for dead is indicative of a broader reassessment by American companies about manufacturing in the United States.
In 2012, the M.I.T. Forum for Supply Chain Innovation and the publication Supply Chain Digest conducted a joint survey of 340 of their members. The survey found that one-third of American companies with manufacturing overseas said they were considering moving some production to the United States, and about 15 percent of the respondents said they had already decided to do so.
“This is a completely different manufacturing paradigm than what we saw 10 years ago,” said David Simchi-Levi, a professor at M.I.T. who conducted the survey.
Beyond the cost and time benefits, companies often get a boost with consumers by promoting American-made products, according to a survey conducted in January by The New York Times.
The survey found that 68 percent of respondents preferred products made in the United States, even if they cost more, and 63 percent believed they were of higher quality. Retailers from Walmart to Abercrombie & Fitch are starting to respond to those sentiments, creating sections for American-made items and sourcing goods domestically. |
Page Ashby, president of Carolina Cotton Works, inspects fabrics being made for American Giant at the Carolina Cotton Works plant in Gaffney, S.C. | Mike Belleme for The New York Times
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But as manufacturers find that American-made products are not only appealing but affordable, they are also finding the business landscape has changed. Two decades of overseas production has decimated factories here. Between 2000 and 2011, on average, 17 manufacturers closed up shop every day across the country, according to research from the Information Technology and Innovation Foundation.
Now, companies that want to make things here often have trouble finding qualified workers for specialized jobs and American-made components for their products. And politicians’ promises that American manufacturing means an abundance of new jobs is complicated — yes, it means jobs, but on nowhere near the scale there was before, because machines have replaced humans at almost every point in the production process.
Take Parkdale: The mill here produces 2.5 million pounds of yarn a week with about 140 workers. In 1980, that production level would have required more than 2,000 people.
Curse of Long Distance
When Bayard Winthrop founded American Giant, he knew precisely what he wanted to make: thick sweatshirts like the one from the Navy that his father used to wear.
They required a dry “hand feel,” so the fabric would not seem greasy to the touch, and a soft, heavily plucked underside. Mr. Winthrop had already produced sportswear overseas, so he looked there for the advanced techniques and affordable pricing he needed.
He wanted to sell his hooded sweatshirt for around $80, between the $10 Walmart version, made in China, and the $125 Polo Ralph Lauren version, made in Peru. He was insistent on cutting and sewing the sweatshirts in the United States — a company called American Giant couldn’t do that part overseas, he felt — but wasn’t picky about where the fabric came from.
With the help of a consultant, he settled on a mill in Haryana, India, that could make the desired fabric. After several months of back-and-forth, Mr. Winthrop was ready to ship his first sweatshirts in February 2012.
But he was frustrated with the quality, and the lengthy process. By October of last year, Mr. Winthrop had moved production to South Carolina. Now it takes just a month or so, start to finish, to get a sweatshirt to a customer.
“We just avoid so many big and small stumbles that invariably happen when you try to do things from far away,” he said. “We would never be where we are today if we were overseas. Nowhere close.”
The pro
blems in India were cultural, bureaucratic and practical. |
Bryan Ashby of Carolina Cotton Works tries on an American Giant sweatshirt in a meeting with executives from the apparel company. | Mike Belleme for The New York Times
|
Time was foremost among them. The Indian mill needed too much time — three to five months – to perfect its designs, send samples, schedule production, ship the fabric to the United States and get it through customs. Mr. Winthrop was hesitant to predict demand that far in advance.
There were also communication issues. Mr. Winthrop would send the Indian factory so-called tech packs that detailed exactly what kind of fabric he wanted and what variations he would allow. But even with photos and drawings, the roll-to-roll variance was big. And he couldn’t afford to fly to India regularly, or hire someone to monitor production there.
He also found that suppliers deferred to his wishes, rather than being frank about some of his choices, which weren’t, he conceded, always good ones.
“I’m a supporter of outsourcing when it makes sense,” he said. But it had stopped making sense.
Now that production has shifted to the United States, Mr. Winthrop says those problems have disappeared. Mr. Winthrop and his team visit Carolina Cotton Works and Parkdale whenever they want, check on quality and toss ideas around with the managers. And, he says, the cost is less than in India.
Outside air is filtered through cold water and cycled through the Parkdale textile plant in Gaffney, S.C., 30 times an hour, regulating temperature and humidity and removing contaminants. Mike Belleme for The New York Times
Seeing that other plants in the area were streamlining their businesses and ceasing to make their own yarn, Parkdale supplied yarn to nearby manufacturers like Hanesbrands. Business flourished, and Parkdale acquired competitors and soared until the 1990s.
That’s when its clients started fleeing the United States.
The North American Free Trade Agreement in 1994 was the first blow, erasing import duties on much of the apparel produced in Mexico. The Asian financial crisis in the late 1990s, when currencies collapsed, added a 30 to 40 percent discount to already cheaper overseas products, textile executives said. China joined the World Trade Organization in 2001 and quickly became an apparel powerhouse, and as of 2005, the W.T.O. eliminated textile quotas.
In 1991, American-made apparel accounted for 56.2 percent of all the clothing bought domestically, according to the American Apparel and Footwear Association. By 2012, it accounted for 2.5 percent. Over all, the American manufacturing sector lost 32 percent of its jobs, 5.8 million of them, between 1990 and 2012, according to Bureau of Labor Statistics data. The textile and apparel subsectors were hit even harder, losing 76.5 percent of their jobs, or 1.2 million.
“With all the challenges that we’ve had with cheap imports, we knew in order to survive we’d have to take technology as far as we could,” said Anderson Warlick, Parkdale’s chief executive.
The company began meeting with machine manufacturers, doing trial runs of equipment and offering feedback and debugging, so it got dibs on the newest technology. It looked for business opportunities in the countries where its customers were heading, those in Central America in particular, and now 75 percent of its business is in exports.
Over all, the company employs 4,000 people, its biggest work force ever, but it is technology that has made it competitive.
“We’ve been able to be effective here because we invested in our manufacturing to the point that labor is not as big of an issue as far as total cost as it once was,” Mr. Warlick said. “It’s allowed us to be able to compete more effectively with foreign countries that pay, you know, a fraction of what we pay in wages. We compete with them on technology and productivity.”
Back From the Dead
All that automation has made working in the mill — which once meant mostly dead-end jobs for people with no other options — desirable for many people.
Howard Taggert, 86, got his first mill job in 1948 after high school. “By being a color, yeah, you’ve got the worst jobs there was in textile,” said Mr. Taggert, who is African-American. “It was rough, but it was a living. We made a living.”
He started by opening cotton bales, which involved striking an ax onto a metal tie around the bales — a dangerous job, given that a spark from metal striking metal could ignite a room full of cotton. The dust was so thick that he couldn’t see to the next aisle, he said. He was paid 87 cents an hour.
“I had to. I didn’t have no other choice,” he said of working in the mills.
The work was so bad that Mr. Taggert refused to let his children go into mill work. He might be surprised to hear about Donna McKoy, who went back to work in a mill even after earning an associate degree in criminal justice.
Ms. McKoy, 47, lost her job at Continental Fabrics in North Carolina in the early 2000s, “when everything was downsizing and going over to China.” In 2001 alone, textile plants in the Carolinas eliminated 15,000 jobs. The sense of desperation was palpable, Ms. McKoy said.
“Now what?” she remembers asking herself before she decided to go to college.
After a headhunter contacted her in 2007, she became a supervisor at Parkdale, overseeing a night shift of 11 workers. The work — and the workplace — are barely recognizable compared with her job a decade ago. A couple of things struck her right away. First, the mill was clean. “Most open-end spinning plants that have the older model spinning frames in them are really dirty and dusty and not fun to be around,” she said. Thanks to the new technology, “my plant is always clean.”
Second, Ms. McKoy got training. For her first eight months, Parkdale paid for hotels, food, dry-cleaning and gas for trips home as she rotated around different factories and learned all of the jobs. And there were fewer people. Ms. McKoy now works at a plant in Walnut Cove, N.C., which she described as a smaller version of the Gaffney plant. On a typical 12-hour shift, Ms. McKoy said, two of the 11 people on her team fix the spinning machines about 4,000 times, with robots’ help.
She earns $47,000 a year and says the perks are good, like health care, an in-house nurse and monthly management classes for supervisors. She recently bought a three-bedroom house and owns a car.
“I have a comfortable life,” she said. “With this recession that we just had, I didn’t feel it.”
Back to “Made in America”After years of decline, one of the hardest hit industries in the United States might be making a comeback. But while textile manufacturing might return to the Carolinas, the jobs probably will not.Poh Si Teng/The New York Times
Still, some Parkdale employees worry about the future. They’ve seen too much hardship in the textile industry to be overly hopeful about a real turnaround.
Scott Symmonds, 40, of Galax, Va., works as a technician for two plants in the area. He never planned on manufacturing work, but after time in the National Guard in Iraq, his home went into foreclosure and he had trouble getting work because of his low credit score and lack of a college degree. As a teenager in rural Iowa, he knew people who worked in manufacturing and watched two plants go out of business.
“I saw how they would come home dirty, smelly and often injured,” he said. “I didn’t want that.”
But he needed a job, and Parkdale was hiring. Mr. Symmonds started as a spinner, then got a job on the packing line, and then snagged a technician’s job after a technical-aptitude test. He earns $15 an hour, which he says is better than what competitors pay. He fears, though, that his higher pay could become a liability.
“We are making far more money than our counterparts in China or other nations,” he said. “We can’t afford to take a big enough cut in pay to be on an even level with those places.”
Made in America Revival Gathers Pace
in Uncategorized/by MAM TeamBoston Consulting Group said its survey found most large U.S. companies now plan to move some production to America from China, or are “actively considering” the move.
The number of firms that have shifted manufacturing to the U.S. from China, or will do so in the next two years, has nearly doubled over the past 18 months.
The survey found the three main drivers of the trend are labor costs, product quality and a desire to be closer to customers.
As lower energy prices and declining labor costs make America a cheaper place to manufacture goods, China’s dynamics are also changing.
Once a source of cheap labor, the country is seeing its advantage squeezed by rising wage costs and an impending labor shortage.
More than 200 U.S.-based manufacturing companies with annual sales topping $1 billion took part in the Boston Consulting Group study.
A pick-up in manufacturing is a crucial plank in the American recovery story.
Already, several technology giants have shifted production back to the U.S. Google chief Eric Schmidt said it costs about the same to produce its Texas-made Moto X device locally as it would in Asia.
But a stronger push by technology firms to manufacture in the U.S. is unlikely. Most component suppliers for tech companies are based in Asia, while China has far more skilled engineers needed to meet swelling global demand for smartphones and devices than the United States.
US Manufacturers ‘Reshoring’ From China
in Uncategorized/by MAM TeamRecent examples of companies announcing plans to shift production from China to the US include K’Nex, the toy manufacturer, Trellis Earth Products, which makes bioplastic goods such as bags and utensils, and Handful, the bra manufacturer.
The Boston Consulting Group survey found 21 per cent of a sample of 200 executives of large manufacturers were either already relocating production to the US, or planning to do so within the next two years. A further 33 per cent said they were considering it, or would consider it in the near future.
Those figures are sharply increased from a similar BCG survey early last year, which found 10 per cent of respondents moving production to the US, and a further 27 per cent considering or close to considering it.
Labour costs were the factor most commonly cited by executives as determining location decisions, and China’s advantage has been slipping. Wage inflation has been running at about 15-20 per cent per year. Average hourly earnings in US manufacturing have risen just 1.6 per cent per year since 2011.
So far there has been little sign in the employment data of the improvement in the competitive position of US manufacturing. After bouncing back strongly from the trough of the recession, US manufacturing employment has stagnated for the past year at just under 12m.
However, Hal Sirkin of BCG said he expected the effect of reshoring would begin to show in the data over the next few years.
“These are leading indicators,” he said. “If you are going to have a plant up and running in 2015, you have to start planning in 2011, or 2012 at the latest.”
BCG is predicting that, by the end of the decade, reshoring and rising exports will have created 0.6m-1.2m new manufacturing jobs in the US.
The effect will vary across industries, BCG says. Prime candidates for reshoring are industries that have relatively lower labour costs, and relatively higher transport costs or other reasons to be close to their customers.
The US shale boom is also stimulating investment in industries that have high energy costs, particularly petrochemical production.
U.S. Textile Plants Return, With Floors Largely Empty of People
in Uncategorized/by MAM TeamIt headed to China, India, Mexico — wherever people would spool, spin and sew for a few dollars or less a day. Which is why what is happening at the old Wellstone spinning plant is so remarkable.
Drive out to the interstate, with the big peach-shaped water tower just down the highway, and you’ll find the mill up and running again. Parkdale Mills, the country’s largest buyer of raw cotton, reopened it in 2010.
Mr. Winthrop says American manufacturing has several advantages over outsourcing. Transportation costs are a fraction of what they are overseas. Turnaround time is quicker. Most striking, labor costs — the reason all these companies fled in the first place — aren’t that much higher than overseas because the factories that survived the outsourcing wave have largely turned to automation and are employing far fewer workers.
Instead, he said, the road to Gaffney was all about protecting his bottom line.
That simple, if counterintuitive, example is changing both Gaffney and the American textile and apparel industries.
In 2012, textile and apparel exports were $22.7 billion, up 37 percent from just three years earlier. While the size of operations remain behind those of overseas powers like China, the fact that these industries are thriving again after almost being left for dead is indicative of a broader reassessment by American companies about manufacturing in the United States.
In 2012, the M.I.T. Forum for Supply Chain Innovation and the publication Supply Chain Digest conducted a joint survey of 340 of their members. The survey found that one-third of American companies with manufacturing overseas said they were considering moving some production to the United States, and about 15 percent of the respondents said they had already decided to do so.
Beyond the cost and time benefits, companies often get a boost with consumers by promoting American-made products, according to a survey conducted in January by The New York Times.
The survey found that 68 percent of respondents preferred products made in the United States, even if they cost more, and 63 percent believed they were of higher quality. Retailers from Walmart to Abercrombie & Fitch are starting to respond to those sentiments, creating sections for American-made items and sourcing goods domestically.
Now, companies that want to make things here often have trouble finding qualified workers for specialized jobs and American-made components for their products. And politicians’ promises that American manufacturing means an abundance of new jobs is complicated — yes, it means jobs, but on nowhere near the scale there was before, because machines have replaced humans at almost every point in the production process.
Take Parkdale: The mill here produces 2.5 million pounds of yarn a week with about 140 workers. In 1980, that production level would have required more than 2,000 people.
Curse of Long Distance
When Bayard Winthrop founded American Giant, he knew precisely what he wanted to make: thick sweatshirts like the one from the Navy that his father used to wear.
They required a dry “hand feel,” so the fabric would not seem greasy to the touch, and a soft, heavily plucked underside. Mr. Winthrop had already produced sportswear overseas, so he looked there for the advanced techniques and affordable pricing he needed.
He wanted to sell his hooded sweatshirt for around $80, between the $10 Walmart version, made in China, and the $125 Polo Ralph Lauren version, made in Peru. He was insistent on cutting and sewing the sweatshirts in the United States — a company called American Giant couldn’t do that part overseas, he felt — but wasn’t picky about where the fabric came from.
With the help of a consultant, he settled on a mill in Haryana, India, that could make the desired fabric. After several months of back-and-forth, Mr. Winthrop was ready to ship his first sweatshirts in February 2012.
“We just avoid so many big and small stumbles that invariably happen when you try to do things from far away,” he said. “We would never be where we are today if we were overseas. Nowhere close.”
The pro
blems in India were cultural, bureaucratic and practical.
There were also communication issues. Mr. Winthrop would send the Indian factory so-called tech packs that detailed exactly what kind of fabric he wanted and what variations he would allow. But even with photos and drawings, the roll-to-roll variance was big. And he couldn’t afford to fly to India regularly, or hire someone to monitor production there.
He also found that suppliers deferred to his wishes, rather than being frank about some of his choices, which weren’t, he conceded, always good ones.
“I’m a supporter of outsourcing when it makes sense,” he said. But it had stopped making sense.
Now that production has shifted to the United States, Mr. Winthrop says those problems have disappeared. Mr. Winthrop and his team visit Carolina Cotton Works and Parkdale whenever they want, check on quality and toss ideas around with the managers. And, he says, the cost is less than in India.
That’s when its clients started fleeing the United States.
The North American Free Trade Agreement in 1994 was the first blow, erasing import duties on much of the apparel produced in Mexico. The Asian financial crisis in the late 1990s, when currencies collapsed, added a 30 to 40 percent discount to already cheaper overseas products, textile executives said. China joined the World Trade Organization in 2001 and quickly became an apparel powerhouse, and as of 2005, the W.T.O. eliminated textile quotas.
In 1991, American-made apparel accounted for 56.2 percent of all the clothing bought domestically, according to the American Apparel and Footwear Association. By 2012, it accounted for 2.5 percent. Over all, the American manufacturing sector lost 32 percent of its jobs, 5.8 million of them, between 1990 and 2012, according to Bureau of Labor Statistics data. The textile and apparel subsectors were hit even harder, losing 76.5 percent of their jobs, or 1.2 million.
“With all the challenges that we’ve had with cheap imports, we knew in order to survive we’d have to take technology as far as we could,” said Anderson Warlick, Parkdale’s chief executive.
The company began meeting with machine manufacturers, doing trial runs of equipment and offering feedback and debugging, so it got dibs on the newest technology. It looked for business opportunities in the countries where its customers were heading, those in Central America in particular, and now 75 percent of its business is in exports.
Over all, the company employs 4,000 people, its biggest work force ever, but it is technology that has made it competitive.
“We’ve been able to be effective here because we invested in our manufacturing to the point that labor is not as big of an issue as far as total cost as it once was,” Mr. Warlick said. “It’s allowed us to be able to compete more effectively with foreign countries that pay, you know, a fraction of what we pay in wages. We compete with them on technology and productivity.”
Back From the Dead
All that automation has made working in the mill — which once meant mostly dead-end jobs for people with no other options — desirable for many people.
Howard Taggert, 86, got his first mill job in 1948 after high school. “By being a color, yeah, you’ve got the worst jobs there was in textile,” said Mr. Taggert, who is African-American. “It was rough, but it was a living. We made a living.”
He started by opening cotton bales, which involved striking an ax onto a metal tie around the bales — a dangerous job, given that a spark from metal striking metal could ignite a room full of cotton. The dust was so thick that he couldn’t see to the next aisle, he said. He was paid 87 cents an hour.
“I had to. I didn’t have no other choice,” he said of working in the mills.
The work was so bad that Mr. Taggert refused to let his children go into mill work. He might be surprised to hear about Donna McKoy, who went back to work in a mill even after earning an associate degree in criminal justice.
Ms. McKoy, 47, lost her job at Continental Fabrics in North Carolina in the early 2000s, “when everything was downsizing and going over to China.” In 2001 alone, textile plants in the Carolinas eliminated 15,000 jobs. The sense of desperation was palpable, Ms. McKoy said.
“Now what?” she remembers asking herself before she decided to go to college.
After a headhunter contacted her in 2007, she became a supervisor at Parkdale, overseeing a night shift of 11 workers. The work — and the workplace — are barely recognizable compared with her job a decade ago. A couple of things struck her right away. First, the mill was clean. “Most open-end spinning plants that have the older model spinning frames in them are really dirty and dusty and not fun to be around,” she said. Thanks to the new technology, “my plant is always clean.”
Second, Ms. McKoy got training. For her first eight months, Parkdale paid for hotels, food, dry-cleaning and gas for trips home as she rotated around different factories and learned all of the jobs. And there were fewer people. Ms. McKoy now works at a plant in Walnut Cove, N.C., which she described as a smaller version of the Gaffney plant. On a typical 12-hour shift, Ms. McKoy said, two of the 11 people on her team fix the spinning machines about 4,000 times, with robots’ help.
She earns $47,000 a year and says the perks are good, like health care, an in-house nurse and monthly management classes for supervisors. She recently bought a three-bedroom house and owns a car.
“I have a comfortable life,” she said. “With this recession that we just had, I didn’t feel it.”
Scott Symmonds, 40, of Galax, Va., works as a technician for two plants in the area. He never planned on manufacturing work, but after time in the National Guard in Iraq, his home went into foreclosure and he had trouble getting work because of his low credit score and lack of a college degree. As a teenager in rural Iowa, he knew people who worked in manufacturing and watched two plants go out of business.
“I saw how they would come home dirty, smelly and often injured,” he said. “I didn’t want that.”
But he needed a job, and Parkdale was hiring. Mr. Symmonds started as a spinner, then got a job on the packing line, and then snagged a technician’s job after a technical-aptitude test. He earns $15 an hour, which he says is better than what competitors pay. He fears, though, that his higher pay could become a liability.
“We are making far more money than our counterparts in China or other nations,” he said. “We can’t afford to take a big enough cut in pay to be on an even level with those places.”
"Made in America" Is Back in Style
in Uncategorized/by MAM TeamThe story
Around 1990, China opened its doors to the global marketplace. By 2002, the U.S. Bureau of Labor Statistics estimated that China’s hourly manufacturing wage was only 1.68% of America’s hourly rate. In 2009, Chinese manufacturing labor costs were only 5.19% America’s costs.
Given this data, it is no wonder why my teacher’s family had such a difficult time finding inexpensive goods. American companies were quickly outsourcing work to China, saving boatloads of cash. But now the tide is turning.
With rising global fuel prices and labor prices rapidly increasing in China, American firms have been reassessing opportunities. We’re now beginning to see some of the results of their decisions.
Consider tech giants Google and Apple. They seem to have answered the nation’s plea to bring manufacturing jobs back to America. For example, Apple plans to invest $100 million to build Macs in America, while Google-owned Motorola Mobile is investing in U.S. manufacturing jobs. Regarding Motorola’s newest smartphone, Mark Randall, Motorola Mobile’s senior vice president of supply chain and operations, said:
We’re proud that Moto X is designed, engineered and assembled in the USA, but our decision to assemble here was also rooted in providing the best possible experience for consumers. … Assembling in the USA enables consumers in the USA to design their customized Moto X smartphones online and receive them in just a few days.
Other than running on Google’s newest Android operating system, the Moto X is customizable. As with building a custom vehicle, users can choose from nearly 2,000 combinations of features for the phone before it is assembled in Texas. As an added bonus, it is shipped free of charge within four business days of the order.
To be fair, many of the phone’s internal components are still made overseas. Regardless, Google is establishing a precedent, and consumers seem to like the results.
A recent Harris poll concluded that about 75% of consumers are willing to spend more money on American-made products while Gallup released a similar report in May that suggested only 60% of America’s population will pay more for U.S. products. Even with different results, we see a common thread: Americans will invest more if they think a product is made in America. Moreover, as the American economy improves, that increased production should boost stock prices for U.S. companies.
This phenomenon is even occurring within the automobile industry, where foreign automakers have dominated the market in recent history. For example, American car company Tesla Motors‘ stock has soared about 390% since April 2012. In the same time, Ford has jumped nearly 40%, while General Motors is up about 39%. But foreign manufacturer Honda has only increased about 1.9% in that time frame. Increasing consumer confidence, rising housing and auto markets, and improving economics — notably more comparable international manufacturing wages — all added to these firms’ stock price increases.
All things considered, though, the American automakers’ performance is exemplary. Ford now seems to have recovered from the 2008 crisis and has been profitable for 16 consecutive quarters. In fact, it is adding 1,400 manufacturing jobs in Detroit. Ford also plans to hire more than 6,000 employees to support its new products, growth, and long-term investments.
It is important to note, though, that like Google and Apple, most auto manufacturers are global firms. And given our globalized economy, it’s tough to draw clear comparisons between American carmakers and their foreign counterparts or to attribute the success of U.S. automakers to their U.S. operations.
That said, Tesla is making big waves. Tesla is stealing market share from foreign luxury auto-manufacturers like Mercedes and BMW. While it does not consider itself a luxury car manufacturer, Tesla is now the third-best-selling luxury car in California, America’s largest auto market. And although I question the firm’s ability to stabilize growth and anticipate a market correction, given its rapid market-share gains (in part because it has received government subsidies and because California residents receive subsidies if they purchase a Tesla made vehicle), Tesla is nonetheless further evidence that American-made goods are finding ample domestic interest.
In fact, American labor costs are comparable to, or lower than, some countries, especially after fuel and transportation costs are considered. As a result, foreign automakers are investing more capital in the U.S. Honda, for instance, operates nine manufacturing plants and 14 research and development facilities in America. Now, it is investing another $215 million in Ohio. Overall, it has $14 billion of capital tied up in the U.S.
Due to changing global conditions, U.S. labor costs are becoming more appealing, especially to companies headquartered in America. And many Americans seem to be interested in purchasing goods made domestically. Maybe my history teacher will be able to find American-made goods at comparable prices. I’ll be sure to ask the next time we correspond.
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Longaberger Effort to Buy U.S.-Made Pottery Hits a Snag
in Uncategorized/by MAM TeamLongaberger Co. is making alternative plans to obtain pottery after word came this week that the U.S. supplier it chose in the spring is shutting down.
The interim measures, however, mean that the Newark-based basket and decor company will source some of its goods from abroad, a departure from a recent buy-American initiative.
Niagara Ceramics, Longaberger’s Buffalo, N.Y., pottery supplier, filed notice on Monday with New York state’s Labor Department announcing that it will close, putting 110 employees out of work.
The move comes only a few months after a ribbon-cutting ceremony at the 300,000-square-foot facility that was to be known as Longaberger Pottery Works. The ceremony, on May 20, was to be one of the first steps toward Longaberger’s goal of selling only U.S.-made pottery.
The closing of the Buffalo facility comes as it was “just in the early stages” of manufacturing pottery, Longaberger spokesman Russell Mack said. The plant had yet to produce much.
Longaberger announced in 2012 that it would focus on returning to U.S.-made products in a strategy known as Project Eagle. The company’s pottery line — Longaberger Woven Traditions Pottery — was launched in 1992 and was made by suppliers in the United States until 2005, when pottery-making was moved abroad.
At the time that President and CEO Tami Longaberger announced the Buffalo partnership, company officials said it was possible that Longaberger would make pottery at its campus in Dresden in Muskingum County.
The availability of the Dresden facility means the Buffalo closing shouldn’t be hard for Longaberger to handle, said retail consultant Chris Boring, principal of Boulevard Strategies.
“I can’t imagine it would be that difficult to find another supplier,” Boring said. “Muskingum County has always been a hotbed of pottery. There’s really no reason they can’t set up pottery-making right here in Ohio.”
The closing could indeed mean more work for Ohio, Mack said, “because as we continue our ongoing search for the best ways to obtain the pottery our customers want, one of the options could be setting up our own facility here at our Ohio location at some point. We continue to look at that as an option.”
Mack said: “We always knew this transition to 100 percent American-made would take time. Tami said a year ago when she announced it that it would take three to five years and that there would be bumps along the way, but that it would be worth it, and we would get there as fast as we possibly can.”
Longaberger initially expected to make about 1 million pieces a year at the Buffalo plant.
Longaberger is switching to “alternative suppliers, both in the U.S. and internationally sourced,” to fill orders, Mack said. “We are also talking with the potential new owner of that Buffalo plant, so there are possibilities there as well.”
Finding the Finest Products Made in the USA Becomes Simpler
in News/by MAM TeamNow patriotic Americans looking to support the “Buy American” movement can shop a wide variety of products made in the USA from NoCargo, a new ecommerce business with the goal of supporting the American economy. NoCargo’s ecommerce web site, ShopNoCargo.com, is fast becoming the “go to” online marketplace for shoppers to buy cool, hip and high quality American made products all in one place.
Inspired by a World News segment about how the news team fulfilled a college freshman’s wish to decorate her dorm room with all American made products after her search for such products came up empty, Jamie Levine founded NoCargo as a one stop online destination for high quality products made in the USA. What she learned along the way, she found simply refreshing.
“The beauty of American made products is in the craftsmanship,” Jamie affirms. “While researching American brands, I learned a lot about manufacturing. It amazed me to see the artistry and brilliance in the details. From the meticulous selection of the components like wood for a piece of furniture to French seams (which hide the edges for a neat finish) on a garment, the fine points are actually what make the USA made products that we carry so special.”
When you buy products made in the USA, you know you are getting the highest quality because manufacturers adhere to the USA’s high-level environmental standards. The American government also doesn’t tolerate child labor or unsafe working conditions. Plus, avoiding overseas shipments reduces our global carbon footprint for a healthier environment. (The connotation behind NoCargo‘s brand name.)
Surprisingly, the World News report tracked the college freshman’s purchases compared with her roommates, whose side of the room was decorated with products from abroad and found there was actually $100 in total savings in buying the products made in the USA versus the products made abroad.
Jamie points out that “economists say that if every one of us just spent an extra $3.33 on American made products every year, it would create nearly 10,000 new jobs in America. Think what it would do if you were to spend that little every month. Not only would you be helping the commonwealth, you would also be enjoying the benefits of a superior made product.”
Just like NoCargo‘s tagline says, “American makes pretty neat stuff.”
For more information, contact Jamie Levine at jamie@shopnocargo.com.
Visit NoCargo:
Website: www.shopnocargo.com
Facebook: NoCargo
Pinterest: NoCargo
Twitter: @ShopNoCargo
U.S. Manufacturing is Back – But Can Americans Do The Job?
in Uncategorized/by MAM TeamOn the surface, evidence of the rebound is everywhere. Apple Inc., well known for its large number of factories in China, recently announced – with little fanfare – that it would soon start producing one of its Mac computer lines in the United States. In the past three years, 500,000 new manufacturing jobs have been created, and the deficit in manufacturing trade is finally starting to decline after years of sharp increases. The sector will never likely match the 17 million people it employed a couple of decades ago – employment is currently about 12 million – but at least manufacturers are finally taking on additional workers instead of posting layoff notices.
What has happened to a sector that many economists had written off? One key issue, according to Time magazine, is the shale oil and gas boom. Some U.S. manufacturers now have access to less expensive energy, while high world oil prices have made it more expensive to ship goods from low-cost plants in China and other countries in Asia.
It is not only cheap domestic energy that has encouraged some manufacturers to reconsider offshoring. For many years American manufacturers could not reduce the wage gap between the United States and developing countries. But as emerging countries such as China continue to grow, wages inevitably start to increase.
The gap between wages in China and the United States will never likely be entirely closed – currently American workers earn 7.4 times more than their Chinese counterparts – but other factors also come into play. The higher productivity of American workers compared with Chinese workers, the flexibility of the American work force, and the benefits garnered from locating production closer to customers imply that the outsourcing phenomenon may have peaked.
While the return of manufacturing to the U.S. is welcome news for American workers, the factory floor is taking on an entirely new look. The days when a teenager could drop out of school and pick up a well-paid factory job for life are gone – for good. Today’s factories have far fewer workers and many more complex machines. A lot of manufacturing jobs require at minimum a two-year tech degree, to complement skills such as welding. In the near future, the need for a four-year degree is not out of the question.
This dramatic change on the factory floor could prevent U.S. industry from taking advantage of improved domestic manufacturing conditions. Many American workers simply don’t have the skills to work in today’s modern factory. Even in an economy with an unemployment rate above 7 per cent, the Wall Street Journal has reported that manufacturers are encountering difficulties finding qualified workers to operate and repair sophisticated computerized machinery.
Education and skills training is widely considered the key element to addressing the worker shortage. But the U.S. education system has been falling behind the standards set in other developed countries; The Conference Board of Canada’s How Canada Performs: Education report card ranked the United States 11th out of 16 countries – Canada, by contrast, ranked second.
President Obama has identified education as a key to America’s future competitiveness. A failure on the part of U.S. policy makers to reform education could cause the manufacturing sector to fizzle, just when this long maligned sector is on the verge of a dramatic turnaround.
Vending Machine Dispenses 'FREE' T-shirts Made From Recycled Plastics
in Uncategorized/by MAM TeamFor three days during New York Fashion Week, anyone on midtown 8th Avenue can “buy” a limited edition designer T-shirt made with recycled plastic fabric from a new vending machine by Plastics Make it Possible®—using a plastic bottle as currency. Passersby can simply deposit a plastic bottle into the machine and—voila! Out pops a beautiful new garment made with recycled plastics, underscoring how everyday plastics can live on as “eco-chic” fashion.
The new vending machine is designed to celebrate the growing role of recycled plastics in fashion during New York Fashion Week. Visitors to the Plastics Make it Possible® website also will have a chance to win one of the limited edition T-shirts (see below).
Parris is one of a growing number of designers who have embraced recycled plastics as one of the new go-to materials for creating stylish clothing and accessories. To help create the T-shirt material, plastic bottles are cleaned, melted, and stretched into a fine thread, which then is woven into soft, comfortable fabrics. Thanks to the versatility of recycled plastics, these fabrics can be manufactured with a variety of weights and textures for a wide range of uses. Both high-end designers and mainstream brands today use recycled plastics to make everything from stylish party dresses to on-trend shoes to rugged outdoor jackets.
So the next time you recycle a plastic bottle, you just may be contributing to the next big thing in fashion.
ENTER FOR A CHANCE TO WIN
Each day during Fashion Week (September 5–12), five visitors to the Plastics Make it Possible® website will win a limited edition Allison Parris T-shirt made with recycled plastics. To enter for a chance to win, website visitors simply leave a comment on the Plastics Make it Possible® article about what plastics they recycle. Click here for the official rules.
To learn more about how recycled plastics are used in fashion, click here.
Abbott and Costello Explain Unemployment
in Uncategorized/by MAM TeamReposted from Coalition for a Prosperous America:
ABBOTT: Good Subject. Terrible Times. It’s 9%.
COSTELLO: That many people are out of work?
ABBOTT: No, that’s 16%.
COSTELLO: You just said 9%.
ABBOTT: 9% Unemployed.
COSTELLO: Right 9% out of work.
ABBOTT: No, that’s 16%.
COSTELLO: Okay, so it’s 16% unemployed.
ABBOTT: No, that’s 9% .
COSTELLO: WAIT A MINUTE. Is it 9% or 16%?
ABBOTT: 9% are unemployed. 16% are out of work.
COSTELLO: IF you are out of work you are unemployed.
ABBOTT: No, you can’t count the “Out of Work” as the unemployed. You have to look for work to be unemployed.
COSTELLO: BUT THEY ARE OUT OF WORK!!!
ABBOTT: No, you miss my point.
COSTELLO: What point?
ABBOTT: Someone who doesn’t look for work, can’t be counted with those who look for work. It wouldn’t be fair.
COSTELLO: To whom?
ABBOTT: The unemployed.
COSTELLO: But they are ALL out of work.
ABBOTT: No, the unemployed are actively looking for work. Those who are out of work stopped looking. They gave up. And, if you give up, you are no longer in the ranks of the unemployed.
COSTELLO: So if you’re off the unemployment roles, that would count as less unemployment?
ABBOTT: Unemployment would go down. Absolutely!
COSTELLO: The unemployment just goes down because you don’t look for work?
ABBOTT: Absolutely it goes down. That’s how you get to 9%. Otherwise it would be 16%. You don’t want to read about 16% unemployment, do ya?
COSTELLO: That would be frightening.
ABBOTT: Absolutely.
COSTELLO: Wait, I got a question for you. That means there are two ways to bring down the unemployment number?
ABBOTT: Two ways is correct.
COSTELLO: Unemployment can go down if someone gets a job?
ABBOTT: Correct.
COSTELLO: And unemployment can also go down if you stop looking for a job?
ABBOTT: Bingo.
COSTELLO: So there are two ways to bring unemployment down, and the easier of the two is to just stop looking for work.
ABBOTT: Now you’re thinking like an economist.
COSTELLO: I don’t even know what the hell I just said!
ABBOTT: Now you’re thinking like a politician
Thanks to Robert Johns, CPA Board member and founder of Romar Consulting.
Will Obama Trade American Jobs for His War on Syria?
in Uncategorized/by MAM TeamCan you say “quid pro quo”?
We need not rely on a single source. Before jetting to the summit, President Obama phoned Prime Minister Abe to invite him to his war party. The Wall Street Journal described their chat:
Presidents of both parties have long subordinated the interests of American workers and small businesses to the Great Game of Geopolitics. Former Senator Fritz Hollings of South Carolina summed it up: “the State Department continue to try winning friends by encouraging the export of American technology and productive capacity – that means loss of jobs here at home.”
Giving away entire industries – from apparel and textiles to consumer electronics – became a form of foreign aid to shore up allies during the Cold War.
Clyde Prestowitz discovered this when, as a trade enforcement official for the Reagan Administration, he targeted the European Union’s heavy subsidies for Airbus, a clear violation of international trade rules and a threat to our own aeronautics industry:
Coincidentally, negotiators from countries with a stake in the TransPacific Partnership meet in Washington this month.
The president says American ground troops will not be enlisted in the war on Syria.
But can he – will he – assure us that Americans who make automobiles, clothing, footwear and a thousand other things will not be sacrificed?
Don’t count on it.
I’ll let Clyde Prestowitz have the last word:
“America systematically subordinates its economic interests to achieve geopolitical objectives. What it should do is give back the military bases and go for the exports, and for greatly increased domestic production.”