Wednesday, July 3, 2013

Made For America...

The "Made in America" segment of last night's CNBC's Kudlow and Company featured the CEO (Mitch Cahn) of Unionwear and New Balance's Director of Public Affairs (Matt LeBretton). Both companies proudly promote their U.S.-based manufacturing operations.

In the case of Unionwear (launched in 1992), its 115 employees produce 100% of its sportswear out of its Newark, NJ factory. More power to em!!

As for New Balance, well, it does manufacture 25% of its shoes here in the U.S., however, back in the '90s, that number was 70%. Larry (Kudlow), after citing the decline, asked "what's been the problem?" Mr. LeBretton replied with the obvious; "If we made all our shoes here in the U.S. we simply couldn't compete." However, interestingly, he added:
But I think a more important number than the percentage of shoes we make here is the amount of people we're employing in the U.S. We have over 1,300 people making shoes, which is today more than we've ever had making shoes in the United States. Our overall growth as a brand has grown as has our domestic capacity and our domestic production.

Hmm... So, over the past 20 years New Balance has off-shored the majority of its manufacturing and, yet, employs more Americans than ever. Amazing what can happen when smart-run companies are free to exploit every opportunity to compete on the global stage.

Of course there are those stories where entire manufacturing operations have emigrated to other shores. To them---on behalf of the U.S. consumer and business owner---I say "thank you!" Read on to see why...

Larry segued to Unionwear's Mr. Cahn: "Mitch Cahn, you're one hundred percent, tell me about that? That is the golden ring, one hundred percent made in America!" After confirming that they are indeed all U.S., Cahn explained:
For the last twenty years we've really been focusing on markets that would be willing to pay a premium for made in USA. That includes the U.S. military, the federal government, political campaigns, labor unions, and for the last two years we've seen a surge in business from corporations, from nonprofits, and from the garment industry.

Larry chimed in with "Are you unionized? You mentioned the garment industry. Garment workers really destroyed that industry at one point in time. Are you unionized?" After declaring "We are a union shop", Cahn explained how, through what he called "lean manufacturing", they can indeed compete with non-union shops in right-to-work states. Larry finished up by asking how they can beat the manufacturing operations out of China and Bangladesh? He answered "Well, we don't have to beat them because there are a lot of people who will pay twenty to twenty-five percent more for a domestic product."

Of course there's nothing wrong with exploiting those markets so enamored by your brand that they don't mind paying up---while thus limiting their patronage to the local companies that vie for their discretionary income, as well as limiting the capital they provide (through their savings and investment) for other growing enterprises to expand and create jobs right here at home (hence my "thank you" to the off-shorers who, while competing on price, indirectly support local enterprises). Although I have to admit, the fact that Unionwear owes a great deal of its success to "markets" that house society's most egregiously inefficient/irresponsible characters---those who spend other people's (taxpayers') money on other people---irks me to no end!

Thank goodness---on behalf of those 1,300 New Balance U.S. workers, and who knows how many New Balance U.S. customers, and who knows how many U.S. employees of who knows how many other U.S. businesses who vie for the discretionary income of those New Balance U.S. (and non-U.S.) customers---New Balance didn't go the all U.S. route! In other words, New Balance's lack of some captive market to exploit resulted in an utter flowering of economic activity, for America...

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