DHAKA, Bangladesh (AP) — Amid the ash, broken glass and melted sewing machines at what is left of the Tazreen Fashions Ltd. factory, there are piles of blue, red and off-white children’s shorts bearing Wal-Mart’s Faded Glory brand. Shorts from hip-hop star Sean Combs’ ENYCE label lay on the floor and are stacked in cartons.
An Associated Press reporter searching the factory Wednesday found these and other clothes, including sweaters from the French company Teddy Smith, among the equipment charred in the fire that killed 112 workers Saturday. He also found entries in account books indicating that the factory took orders to produce clothes for Disney, Sears , nd other Western brands.
Garments and documents left behind in the factory show it was used by a host of major American and European retailers, though at least one of them — Wal-Mart — had been aware of safety problems. Wal-Mart blames a supplier for using Tazreen Fashions without its knowledge.
The fire has elevated awareness of something labor groups, retailers and governments have known for years: Bangladesh’s fast-growing garment industry — second only to China’s in exports — is rife with dangerous workplaces. More than 300 workers there have died in fires since 2006.
Police on Wednesday arrested three factory officials suspected of locking in the workers who died in Saturday’s fire, the deadliest in the South Asian country’s less than 35-year history of exporting clothing.
Local police chief Habibur Rahman said the three will be questioned amid reports that many workers trying to escape the blaze had been locked inside. He said the owner of the factory was not among those arrested.
The three officials were arrested Wednesday at their homes in Savar, the Dhaka suburb where the factory is also located. Rahman did not identify the officials or give their job status.
Workers who survived the fire say exit doors were locked, and a fire official has said that far fewer people would have died if there had been just one emergency exit. Of the dead, 53 bodies were burned so badly they could not be identified; they were buried anonymously.
The fire started on the ground floor, where a factory worker named Nasima said stacks of yarn and clothes blocked part of the stairway.
Nasima, who uses only one name, said that when workers tried to flee, managers told them to go back to their work stations, but they were ignored.
Dense smoke filled the stairway, making it hard to see, and when the lights went out the workers were left in total darkness. Another surviving worker, Mohammad Rajiv, said some people used their cellphones to light their way.
“Everyone was screaming for help,” Nasima said. “Total chaos, panic and screaming. Everyone was trying to escape and come out. I was pulling the shirt of a man. I fainted and when I woke up I found myself lying on the road outside the factory.
“I don’t know how I survived.”
Rajiv said the factory conducted a fire drill just three days before the fire broke out, but no one used the fire extinguishers. “Only a selected group of workers are trained to use the extinguishers. Others have no idea how to use them,” he said.
Now windows at the eight-story factory are broken, sewing machines melted or burned to ash. Much of the clothing on the lower floors was incinerated. Nightgowns, children’s shorts, pants, jackets and sweat shirts were strewn about, piled up in some places, boxed in others.
Prime Minister Sheikh Hasina and Interior Minister Muhiuddin Khan Alamgir have said arson is suspected. Police say they have not ruled out sabotage.
Wal-Mart had received an audit deeming the factory “high risk” last year, said it had decided to stop doing business with Tazreen, but that a supplier subcontracted work to the factory anyway. Wal-Mart said it stopped working with that supplier on Monday.
Calls made to The Walt Disney Company and to Sears Holdings were not immediately returned.
Local TV reports said about 3,000 garment workers held protests over the fire Wednesday, blocking roads and throwing stones at some factories and vehicles. It was the third straight day of demonstrations, and as they did previously, factories in the area closed to avoid violence.
Police used batons to disperse the protesters, but no injuries were immediately reported.
According to local television, most factories in the area closed after opening briefly because of the protests — a common tactic to avoid violence.
—–
Associated Press writer Farid Hossain in Dhaka, Bangladesh, contributed to this report.
A Documentary Examines the ‘Made in China’ Label
in Uncategorized/by MAM TeamSince China joined the World Trade Organization in 2001 and gained full access to American markets, the AFL-CIO claims that over 50,000 factories in America have disappeared along with more than 6 million manufacturing jobs. For these reasons, AFL-CIO President Richard Trumka in the film urges people who pick up a product Made in China to “think about your relative that just got laid off or the factory that just got shut down. Think about the school that is doing with less because the manufacturing base has gone and the tax base has left. Think about the lower income that you’re receiving now because we’re not making products, and we’re not buying our own products.”
And here’s something else former Canadian Minister of Parliament David Kilgour wants you to think about as you consider your next Made in China purchase: That product may well have been made by prison labor. To emphasize his point, Kilgour in the film relates this darkly comic and well-documented tale about Charles Lee, an American citizen arrested in China and detained in one of China’s forced labor camps for three years: “When Lee was finally released thanks to pressure from the American people, he came back to New Jersey, and he was in a store, and he saw these big [Homer Simpson] slippers that he’d made in the work camp.”
Beyond the issues of jobs and human rights, there is also the prodigious air, soil, and water pollution generated annually by China’s factory floor. In fact, a study conducted by the World Health Organization found that China now has 16 of the 20 most polluted cities in the world.
Perhaps most unsettling is the well-documented tendency of at least some unscrupulous entrepreneurs in China to alter their products with toxic ingredient substitutes as a means of cutting costs and boosting profits. Well-publicized scandals to date have included the spiking of both pet food and baby formula with deadly melamine and the blood thinner heparin with lethal oversulfated condroitin sulfate. We’ve also seen lead paint in toys, antifreeze in toothpaste, baby cribs with choking hazards, tainted drywall, the list goes on and on.
The problem as Forbes columnist Gordon Chang describes it is “a political system that does not punish manufacturers for bad products. And it’s because it’s the nature of the political system. The Communist Party does not allow independent prosecutors, doesn’t allow a free press, doesn’t allow people to complain about bad products.”
Given the chronic failure of America’s politicians to confront China on these issues, in my opinion, if more consumers would pause at the Made in China label, that would be all to the good. As Judith Samuelson suggests at the end of the film: “I think that at every level, people could boycott to some extent, and there would be a shot heard around the world.”
Peter Navarro is a business professor at the University of California-Irvine. He wrote, produced, and directed the documentary “Death By China.” For for more information go here.
Bangladesh Factory in Fire: WalMart & Disney Among Clients
in News, Walmart/by MAM TeamAn Associated Press reporter searching the factory Wednesday found these and other clothes, including sweaters from the French company Teddy Smith, among the equipment charred in the fire that killed 112 workers Saturday. He also found entries in account books indicating that the factory took orders to produce clothes for Disney, Sears , nd other Western brands.
Garments and documents left behind in the factory show it was used by a host of major American and European retailers, though at least one of them — Wal-Mart — had been aware of safety problems. Wal-Mart blames a supplier for using Tazreen Fashions without its knowledge.
The fire has elevated awareness of something labor groups, retailers and governments have known for years: Bangladesh’s fast-growing garment industry — second only to China’s in exports — is rife with dangerous workplaces. More than 300 workers there have died in fires since 2006.
Police on Wednesday arrested three factory officials suspected of locking in the workers who died in Saturday’s fire, the deadliest in the South Asian country’s less than 35-year history of exporting clothing.
Local police chief Habibur Rahman said the three will be questioned amid reports that many workers trying to escape the blaze had been locked inside. He said the owner of the factory was not among those arrested.
The three officials were arrested Wednesday at their homes in Savar, the Dhaka suburb where the factory is also located. Rahman did not identify the officials or give their job status.
Workers who survived the fire say exit doors were locked, and a fire official has said that far fewer people would have died if there had been just one emergency exit. Of the dead, 53 bodies were burned so badly they could not be identified; they were buried anonymously.
The fire started on the ground floor, where a factory worker named Nasima said stacks of yarn and clothes blocked part of the stairway.
Nasima, who uses only one name, said that when workers tried to flee, managers told them to go back to their work stations, but they were ignored.
Dense smoke filled the stairway, making it hard to see, and when the lights went out the workers were left in total darkness. Another surviving worker, Mohammad Rajiv, said some people used their cellphones to light their way.
“Everyone was screaming for help,” Nasima said. “Total chaos, panic and screaming. Everyone was trying to escape and come out. I was pulling the shirt of a man. I fainted and when I woke up I found myself lying on the road outside the factory.
“I don’t know how I survived.”
Rajiv said the factory conducted a fire drill just three days before the fire broke out, but no one used the fire extinguishers. “Only a selected group of workers are trained to use the extinguishers. Others have no idea how to use them,” he said.
Now windows at the eight-story factory are broken, sewing machines melted or burned to ash. Much of the clothing on the lower floors was incinerated. Nightgowns, children’s shorts, pants, jackets and sweat shirts were strewn about, piled up in some places, boxed in others.
Prime Minister Sheikh Hasina and Interior Minister Muhiuddin Khan Alamgir have said arson is suspected. Police say they have not ruled out sabotage.
Wal-Mart had received an audit deeming the factory “high risk” last year, said it had decided to stop doing business with Tazreen, but that a supplier subcontracted work to the factory anyway. Wal-Mart said it stopped working with that supplier on Monday.
Calls made to The Walt Disney Company and to Sears Holdings were not immediately returned.
Local TV reports said about 3,000 garment workers held protests over the fire Wednesday, blocking roads and throwing stones at some factories and vehicles. It was the third straight day of demonstrations, and as they did previously, factories in the area closed to avoid violence.
Police used batons to disperse the protesters, but no injuries were immediately reported.
According to local television, most factories in the area closed after opening briefly because of the protests — a common tactic to avoid violence.
—–
Associated Press writer Farid Hossain in Dhaka, Bangladesh, contributed to this report.
Is Traditional America Dying?
in Uncategorized/by MAM Team11/18/2012
Actually, I was not surprised by O’Reilly’s irrational observations. The Republican party threw every weapon it had at President Obama during the recent election, including racism, birtherism, homophobia, xenophobia, socialism, communism, sexism, tax laws, abortion, birth control, legitimate rape, Kenya, NPR and Big Bird.
It didn’t start there, either. Those Chicken Little cries of “The Sky is Falling” started long before President Obama ever arrived on the scene.
When we declared our Independence from England, there were some who said it would be a disaster and was doomed to fail. When we ended slavery, others also declared that it was the end of America. Likewise, when we stopped segregation, gave women the right to vote, and allowed gays to openly serve in the military. They were wrong in all cases, and today we are a stronger nation because of the changes.Despite O’Reilly’s accusations about the president, which include everything from losing the big picture of God and country, to bowing and apologizing to corrupt leaders, to wreaking havoc on society with welfare, abortion and the public school system, to running us off a fiscal cliff with entitlements for the poor, the death of traditional America has little to do with Obama. It has more to do with the wealthy. Ask yourself this: why aren’t tax perks for the rich, agricultural subsidies for mega-farms, $700 billion dollar bank bailouts and lobbyists securing legislation favorable only to the rich labeled entitlements? I don’t know about you, but I call that welfare at the highest level.
The real truth about traditional America, though, is that this country is shifting, not sinking. Someone needs to tell O’Reilly that you can’t run a modern government based on ideals that are hundreds of years old (or thousands, if you believe the Bible). It was once legal to own people, to force employees to work in unsafe conditions, and to not allow women the right to vote. Face it, traditional America was never good for women, Native Americans, African-Americans, Asians, the disabled or the elderly.
It’s funny how quickly we forget the bigotry, homophobia and racism that was so common in our past. Remember the centuries of slavery, followed by segregation, religious intolerance, sweat factories, Salem witch hunts, McCarthy era communism, exploitation of immigrant labor, racism, anti-Semitism, economic oppression of the poor, and the breaking of treaties with Native Americans? If that’s tradition, who needs it?
Bill O’Reilly is cherry picking history. The idealized version of America he envisions is one where white men were the dominant social class, diversity was feared, a person’s worth was measured by the size of their bank balance, and the regulation of a woman’s body by church and state was good. Bill would like to go back to a time when the government, not you, decides who you can and can’t marry. Back to when the votes of minorities and women didn’t count, and where it was perfectly OK for individuals in power to force their beliefs and ideology on others.
I hate to burst O’Reilly’s bubble, but American history is no Norman Rockwell painting.
If you’re searching for traditional America, the best place to look is in the White House. President Obama and the first lady are strong supporters of traditional values of faith, and caring for one’s neighbors and family. They don’t think people should go bankrupt over health insurance or go hungry for lack of food. They want all religious institutions protected, but don’t want them (or the government) to dictate who should have access to contraceptives. The president and his wife believe that the education of our children is important, and that we need to do everything possible to keep them happy and healthy. That’s the kind of America I want to carry forward into the future.
Tim Martin resides in McKinleyville
Made In America Has A New Ring
in Uncategorized/by MAM Team11/19/2012
The data shows that Made in the USA resonates even stronger for U.S. consumers, of course.
Naturally, this presents a great opportunity for the many small businesses and manufacturers to tap into a new market like China with over a billion people. Many have tried to tap overseas markets only to fail because of the cultural differences, government red tape (on both sides), and shipping logistics, just to name a few of the challenges. The good news is there are many international trade resources for navigating this complex arena.
If you are looking to understand what your competitors are shipping, you can check out a company like Manifest Journals where a business connection of mine, Michael Heffernan, helps companies make sense of U.S. Customs Import Trade Data. Or head to the International Trade Administration to start your exporting journey. The USA.gov site on international trade is also a powerful resource.
The findings—part of BCG’s ongoing study of the changing global economics of manufacturing and its Made in America, Again research series—support previous BCG analysis showing that the U.S. is becoming increasingly attractive as a location for making certain products for the U.S. market and as a base for global exports.
The U.S. has improved its cost competitiveness compared with China and the advanced economies of Western Europe and Japan, leading BCG to estimate that higher U.S. exports—combined with production “reshored” from China—could create 2.5 million to 5 million new U.S. jobs in manufacturing and related services by the end of the decade (which I’ve reported on earlier this year).
In both the U.S. and China, respondents of all age groups and income levels expressed a concern for quality, a key driver of the consumer preference for U.S.-made products. Eighty-five percent of U.S. consumers and 82 percent of Chinese said they “agree” or “strongly agree” that they feel better about Made in USA quality. Patriotism is another strong consideration among U.S. consumers: 93 percent said that they would pay more for U.S.-made goods in order to keep jobs in the U.S., and 80 percent said that buying U.S. products demonstrates patriotism.
In contrast to U.S. and Chinese consumers, European consumers strongly prefer products made in their own countries. More than 65 percent of consumers in both Germany and France said that they would be willing to pay more for products made in their home country than for those made in the U.S.
Shopping for American-Made Holiday Gifts – Renewed Focus on Gifts Made in USA
in Christmas/by The Made in America Movement TeamRead more
The Revival of American Manufacturing: An Update
in Uncategorized/by MAM TeamChris Mayer
Nope. Made in the USA. The Solo Cup Co. makes them in Lake Forest, Ill.
Recently, another company started making an almost identical-looking reusable red cup. Trudeau USA makes millions of these cups, which they call simply the Red Party Cup. This was a job that in another year not so long ago might’ve headed to China. Not today.
American manufacturing is quietly enjoying a revival on some levels. Goods once made in China are now coming back to the USA — a process called re-shoring. In May, I wrote to my Capital & Crisis readers about “A New Trend ‘Sneaking up on People’”. I talked to Scott Huff, a principal at Innovate International, an engineering design and contract manufacturer for several industries. Scott was actively involved in re-shoring. Recently, I talked to Scott again to get an update.
“That red cup has been one of the most successful things we’ve re-shored,” he told me. I love this story precisely because it goes against what so many people think they know. They think US manufacturing is in inevitable decline. The red cup story is another strand in a growing thread of anecdotal evidence to the contrary.
As Scott says:
The end result is kind of like what we see in the mortgage market: superlow rates that not many borrowers can access. Ergo, manufacturers need to run lean these days.
“So,” Scott continues, “if you can make your manufacturing process leaner, you can free up cash. One way to do that is to make it local and turn over the dollars faster.” This way, you don’t have cash sitting in goods on a boat from China.
Driving the renaissance is more than just shipping costs, of course. Many of the factors we talked about back in May are still in play today. Namely: It is getting expensive to do business in China.
“The glory days of China’s export business are over,” Scott says. “Now it is down to hard work. The adjustment in the renminbi [China’s currency] took some of the pressure off the export companies, but the cost of living continues to just crawl upward — the cost of food and the cost of housing, especially. Those don’t come down. There is only so much you can do with currencies.”
Cheaper US energy prices also help along the re-shoring trend. Fertilizer and chemical firms want to put down roots in the US and plug into cheap sources of natural gas. In Asia, natural gas costs at least four times the price.
“Natural gas production has gotten to the point where we can’t store it all,” Scott says. “Natural gas prices should be even lower. And things that include natural gas as a raw material, such as olefin plastics, propylene and ethylene, should be cheaper to make here. We should have the cheapest propylene and ethylene in the world in the US.”
The same could happen with oil. US production is up 25% since 2008 as new technology cracks up new supplies. As I write, the price of West Texas Intermediate, the US benchmark oil price, is down nearly 16% on the year.
So China’s cost advantages have been ground away in several ways. Still, there are challenges bringing stuff back to the US — like a dearth of manufacturing know-how.
“You have a base of experience in Illinois and Michigan and places that have traditionally been the centers of excellence for some of these manufacturing processes,” Scott said. “A toolmaker who is capable and has kept up with the technology — well, let’s just say there aren’t very many unemployed toolmakers. There’s plenty of opportunity now as people are trying to re-shore stuff.”
I was fascinated by a role reversal Scott described.
“The vast majority of my design engineers are Chinese and work in my office in China,” Scott said. “And these are guys that have been with me for five years or more, in some cases as long as I’ve been in China. I’ve been there eight years. They’ve got a lot of experience.
“So,” he says with a chuckle, “one of the things we’re starting to do is bring some interns from the States to work with them. It’s kind of a role reversal. We have design engineers that actually put lines on paper in China for the products being made in Chicago. Eight years ago, I was taking a handful of older American guys to China with me to help work with these young Chinese designers. And now it’s going back the other way. Now I have young American graduates I’m shipping over there for six months to get experience with people that know what they’re doing.”
Incredible, isn’t it? All things change. As I like to say, if you stand around long enough in markets, you’ll see them come full circle.
US consumers also favor US-made products — to a point. “People love this story,” Scott said. “Having US-made products is an advantage in the marketplace. But on consumer products in particular, as much as people love US-made products, there is a limit to what they’ll pay for them. The economics of it all will still rule the day.”
There are a handful of publicly traded US manufacturers headquartered in places like Milwaukee, Wis., and Mansfield, Ohio, that are lean and world-class competitors. They are in good position to gain from this trend. But, as always, patience is key.
The stock market may be somewhat overzealous in its enthusiasms at this very moment. While keeping my eye on this still-nascent trend, I’ve determined to wait for better prices — and they will come, I have no doubt. In the meantime, though, the revival of American manufacturing is an important story to keep in mind…especially for contrarians who don’t mind getting paid to go against the crowd.
Made in USA Label Popular in China, Too: Study
in Uncategorized/by MAM TeamNovember 14, 2012
The report, by the Boston Consulting Group (BCG), found 61 percent of Chinese consumers would pay more for a product made in the United States. When products are of similar price or quality, about 47 percent prefer the U.S.-made alternative, more than double the number who would pick the Chinese-made item.
“The Chinese consumer is quietly concerned about what they’re getting,” said Hal Sirkin, a BCG senior partner and co-author of the BCG study.
Consumers are responding to recent cases of lead paint in toys, tainted milk and other scandals that, in some cases, led to severe penalties for those responsible. As more Chinese enter the middle class, they will increasingly look for value in the goods they buy rather than just the lowest price, which will pressure Chinese manufacturers to improve quality, Sirkin said.
Chinese consumers’ preference for U.S. goods, of course, is not as strong as U.S. consumers’, and its causes are different: Chinese shoppers more often cite durability and environmental impact than do shoppers in the United States.
But the survey still shows a potential advantage for manufacturers or retailers of consumer products, who may be able to charge higher prices for goods made in the United States.
BCG cited several examples of U.S.-based manufacturing: Dell Inc. makes computers; Google Inc. makes Motorola-branded phones; and General Electric Co manufactures home appliances in Kentucky.
PREMIUM FOR U.S. GOODS
The survey of more than 5,000 consumers helps support the argument that more manufacturers should base production in the United States, according to BCG.
As the cost of producing and shipping goods from China rises, more U.S. manufacturers are expected to expand U.S. capacity, BCG predicts. And as U.S. factories churn out more autos and auto parts, electrical equipment and furniture, they could spark an industrial renaissance with 5 million new jobs, it says.
BCG recommends retailers lock in U.S. suppliers to attract shoppers, and is advising consumer brands to make their U.S. sourcing as visible as possible. For now, relatively few do.
“If you’re going to have things that have a long life, like mechanics’ hand tools, there’s real premiums for ‘Made in USA’ over a foreign brand because the quality is better,” Sirkin said. He named Stanley <SWK.N> brand tools as an example.
In both the United States and China, more than 80 percent of those polled cite quality as a reason to pay more for U.S. goods. Baby food, household appliances, tires, car parts and furniture are items for which most people are willing to pay a premium, generally of 10 percent or less.
Some categories are outliers: shoppers in China would pay 77 percent more for U.S.-made athletic shoes, a status symbol.
Patriotism motivates U.S. consumers. More than nine in 10 cited domestic jobs as a reason for choosing “Made in USA” goods. Overall, 81 percent of Americans are likely to pay more for goods that carry the “Made in USA” label. More than a quarter of people are willing to pay at least 10 percent more for appliances, furniture, and baby food.
The BCG study, to be published Thursday, focused on consumer goods rather than pricy capital equipment geared toward business and government. It found only minor differences in attitudes based on age, income and whether respondents had children.
The appeal of U.S. goods is by no means universal, however. French consumers see U.S.-made mobile phones, shoes or baby toys as less valuable than local equivalents, and almost two-thirds of Germans would pay more for German products.
AMERICAN MOUNTAIN CO.: U.S.-MADE ALPINE GEAR WITH STYLE
in Uncategorized/by MAM TeamNovember 14, 2012
Driven by a desire to make products with fortitude and inspired by passion for the experiences unique to the magnificient peaks, the company makes mountain wear reminiscent of a time when climbing was in its purest form and excellence was found in all aspects of a product—when performance and quality were as important as style and design.
American Mountain Co. uses high-tech materials combined with classic style for its products, all manufactured in the United States. Every single stitch of their wears is sewn by a craftsman who takes personal pride in each pass of the needle. And every garment is arduously tested to ensure you can rely on it for a lifetime. When a product is finally deemed perfect, the crafter signs the garment before it’s sent to you with American Mountain Co.’s lifetime guarantee.
The company is launching on Kickstarter now with two products: the No. 907 High-Altitude Hardshell Jacket and the No. 307 Mid-Altitude Windproof Fleece Jacket.
The company took a ground-up approach to design these pieces. The made-in-the-USA fabrics are the best available, and the jackets have innovative features, like a system to keep the base of the jacket tight around your waist, which is far superior to the ubiquitous elastic waist drawcord used in most other jackets. And American Mountain Co.’s hightop collar offers increased wind protection and heat retention.
—Berne Broudy
@berneb
Available February 2013, $325 for the #307 and $625 for the #907 at americanmountainco.com.
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American Manufacturing Loses Another Member
in Uncategorized/by MAM TeamNovember 13, 2012
Third-generation owner Walter Meck and other family members bought the company back from the Fessler family after Meck’s father had sold it in 1960. After the advent of “free trade” and NAFTA had claimed its three biggest customers, the company shifted from high-volume mass-market apparel to higher-end products made with more expensive fabrics produced quickly in small quantities. The company adopted a policy of offering organic cotton, and fabrics made from bamboo.
FesslerUSA thrived. So much so that five years ago the company doubled its capacity and moved into a new factory. But it finally fell victim to the Great Recession with its tighter credit standards, Asian competition, and weak consumer spending.
The Detroit News, itself a part of a dying industry (the printed newspaper), quoted Meck as observing, “We knew that it was change or die. We had to reinvent ourselves.”
So reinvent they did. Meck laid off half his workforce and maintained a leaner, more profitable company until 2010, when sales again plummeted. New markets and new product proposals were promising, but not in time to avoid the bank calling the company’s loan.
Meck noted that his company could have survived had he been able to find a lender, but that tightened credit is a common problem for small manufacturers. Chad Moutray, chief economist for the National Association of Manufacturers, told The Detroit News,“Many of [the member companies] have complained to me that the standards for borrowing have become a lot more strict since the recession. It’s much tougher to get a loan today than it was in the past.”
In particular, new lending standards, a casualty of the country’s bailout policy, are what have made it much more difficult for struggling companies to get a loan. That, along with a national program of increased taxation and regulations on producers, has resulted in jobs and production going overseas. Meck also blamed part of his company’s problem on lack of investor interest — not surprising to analysts, given that the economy is scaring investors into hanging onto their money.
Fessler was one of the few remaining vertically integrated companies, meaning that all aspects of production remained under one roof. The company wove its own fabric, and did its own cutting and sewing.
Los Angeles-based American Apparel is an example of a highly successful clothing manufacturer using the vertical integration model, having carved itself a good chunk of a niche market. It has bucked the system. According to The Detroit News report,
“’It’s going to be tough for me to get a job because of my age,” said Bambrick, who became the sole breadwinner for her stepdaughter and elderly mother after the recent death of her husband. “I am very strapped. I will need a good job.”’
Americans still do have choices, although they are shrinking. Though die-hard label-readers are finding fewer and fewer items made anywhere but China, analysts note that perseverance can pay off. In addition to American Apparel, “Made in the USA” labels can still be found at Munro Shoes, Finley Shirts, Unis, and Patricia Wolf, among others.
For Fessler, however, the run is over. Production will shut down in November after nearly 113 years, leaving 130 employees out of work. Meck commented,
New U.S. Address in Foxconn's Future? Don't Bet On It
in Uncategorized/by MAM TeamNovember 9, 2012
I was skeptical about this story — which talks about production of LCD TVs, not iPhones — and that might have been the end of it.
But maybe it’s not quite as crazy as it seems. A spokeswoman for Foxconn told me in an e-mail that the company “already has multiple facilities based in the U.S.” but she also went on to say that “there are no current plans to expand our operations there at this time.”
Suppose, however, you want to make the case that once the camel gets its nose under the tent, why should it stop there? I’d imagine Exhibit A could include the comments offered up the other day by Foxconn’s Chairman Terry Gou, who revealed just how badly the company was straining just to keep pace with current iPhone production demands. Any extra manufacturing capacity coming online would go a long way to help relieve that crunch. Then there’s the political benefit of turning out products with “Made in the U.S.A.” labels stamped on the back, no small benefit given the touchy state of U.S.-Sino trade relations these days. And it is entirely possible that Foxconn is getting prodded by one of its major customers because of those same political considerations.
And more jobs equals good politics. The two cities mentioned by Digitimes are Detroit and Los Angeles where both Mayors Dave Bing and Antonio Villaraigosa would be eager to put out the welcome mat: Los Angeles, with an 11.2 percent unemployment rate and Detroit, where 18.1 percent of the labor force is out of work, are doing far worse than the national average of just under 8 percent.
“If you want to make things in America, we know how to make things,” said Ned Staebler, formerly of the Michigan Economic Development Corporation and now Wayne State’s vice president for economic development.
Michigan business circles have indeed been buzzing about “a big announcement” related to technology, according to Staebler, though it’s still unclear whether we’re talking about Foxconn or some other company. Word has it that the site in question might ultimately wind up in one of Detroit’s suburbs. The announcement also may have more to do with software than hardware. We’ll know more in a few weeks.
Now to the question whether Foxconn would ever employ Americans to put together iPhones or iPads in the U.S. The skeptics will note that while Foxconn has already crossed the Pacific to Brazil — last year it began operating an assembly plant not far from Sao Paulo in a the bedroom community of Jundai — average wages in Brazil remain lower than in the U.S. This becomes a case where math really matters. Foxconn — and by extension its bigger clients, like Apple — rake in fat profits from Chinese sites where hourly wages and production costs are much lower than those in the United States. (Foxconn pays its assembly workers a monthly wage of 2,500 RMB ($400).) It’s hard to imagine that tax breaks from Detroit, L.A. or Oshkosh would be enough to compensate for taking lower margins just for the “benefit” of being on U.S. soil. Economists have estimated that paying a U.S. labor force to make the devices” would add between $65 to $100 to the cost of an iPhone.
“It would be a positive if Apple made at least some percentage of their products (here) and I would like to see them do that,” notes Scott Nova, the executive director of the Worker Rights Consortium, a Washington D.C.-based labor rights monitoring organization. “But it would be a huge leap from their current manufacturing policy… and would be a radical change You cannot replicate Chinese working conditions in LA.”
Foxconn would also have a tough selling job to win hearts and minds given its spotty labor history, which is rife with complaints about worker conditions in factories making iPhones and other high-volume tech products. As much as Foxconn would want to keep the unions out, a new U.S. factory would still have to conform to local labor standards. Would it be worth the hassle?
Nothing is out of the realm of possibilities, but those aren’t the sorts of jobs that the political class says America ought to invest in for the future. As President Obama noted during his third debate with Mitt Romney, echoing what the late Steve Jobs told him during a dinner in Silicon Valley in 2011, “There are some jobs that are not going to come back, because they’re low-wage, low-skill jobs.”
And in this case, it may be a good enough reason not to invite them back. To be continued.