Driven by rising wages in China and raw material price inflation — not to mention a presidential election year — there is a rebound in interest in domestic manufacturing that hasn’t been seen in a generation. It’s touching almost every industry, from cars to refrigerators to even apparel and textiles, where finding the lowest-cost producer has been a core part of the industry’s strategy for more than four decades.
So far, the anecdotal evidence in textiles and apparel outweighs statistical corroboration, but a slow awakening of a domestic industry once left for dead is under way. Interest in expanding or establishing more production in the U.S. has been growing for the past year or two in the wake of the Great Recession, as companies and consumers changed their buying habits, seeking to buy closer to the season and desiring higher quality.
At the same time, brands and retailers are looking to lower their risks, and a desire for Made in America goods as symbols of patriotism and job creation has crept back into the public and corporate mind-set. President Obama made proposals to spur job creation in his State of the Union address. On the other side of the political spectrum, GOP hopeful, former Pennsylvania Sen. Rick Santorum, has suggested ways to inspire U.S. firms to bring jobs back from overseas while his rival, former Massachusetts Gov. Mitt Romney, said he would punish China for unfair commercial competition.
Even Super Bowl ads got into the act on Sunday, with Clint Eastwood proclaiming in a TV ad for Chrysler and Jeep that it was “halftime, America, and our second half’s about to begin” and the country would come back even stronger. General Electric ran a commercial proclaiming that it was bringing refrigerator manufacturing back to the U.S. via a plant in Kentucky. RELATED STORY: U.S. Exports Climb on Sourcing Shift >>
A White House report released last month, “Investing in America: Building an Economy That Lasts,” in which analysts examined the viability of the U.S. as a location for manufacturing, said, “The U.S. will become an increasingly attractive option, especially for products consumed in North America,” as the “total cost of doing business, after taking into account the productivity of U.S. workers, as well as transportation, supply chain risks and other costs, are now making production in a range of industries as economical in the U.S. as in other parts of the world, including China.”
As for textiles and apparel, while statistics neither lie nor tell a whole story, they do offer concrete perspective. An August report from the U.S. International Trade Commission showed that the country is the world’s largest importer of textiles and apparel, accounting for about 25 percent of global imports by value in 2010, the most recent data available. The U.S. recession between 2007 and 2009 exacerbated the contraction in the U.S. textile and apparel sector that has been under way since the late Eighties, the report said. Output of textiles and apparel fell 35.3 percent from 2007 to 2009 to $62.7 billion before rebounding modestly by 5.9 percent to $66.4 billion in 2010. Output of apparel fell 47.9 percent, with a 1.3 percent recovery in 2010. Employment in the textiles and apparel sector also declined dramatically, falling 27 percent between 2007 and 2010 for a loss of 146,500 jobs.
The number of U.S. textile and apparel plants has declined, with a corresponding decrease in the number of textile and apparel workers, said the ITC report. In 2009, there were 11,273 textile mills, down from 11,958 in 2007, and 8,339 apparel factories, down from 9,492 in 2007. In the industry’s heyday, employment in apparel manufacturing declined by 61.5 percent between 1990 and 2002, from 929,100 workers to 357,600, according to the U.S. Commerce Department. Textile mills saw employment drop by 40.4 percent between 1990 and 2002, from 491,800 to 293,200. Despite this sharp contraction, industry representatives project that the rate of decline in the U.S. textile and apparel industry will slow through 2015 compared with the period from 2005 to 2010. On Friday, the U.S. Labor Department’s employment report showed some stability on sector jobs. It reported that mills making apparel fabric and yarns boosted payrolls by 700 to employ 120,300, up from 119,400 a year earlier, while apparel manufacturers added 100 jobs in the month to employ 149,800, down from 154,800 in January 2011.
This is where the statistics start to jive with the talk of executives in the industry that the desire for faster-turn production and more control of the supply chain balances higher labor costs and overhead expenses for certain better brands enough to make U.S. manufacturing a viable option again, even if it never will return to its heyday of a generation earlier.
Brian Meck, vice president of sales and marketing at knit apparel manufacturer Fessler USA, based in Orwigsburg, Pa., said, “It comes down to speed of production, speed-to-market. From the time we can take a creative concept and put product on the shelf is three months. When you compare that to doing business internationally, it gives us a very strong competitive advantage. Then the ability to react to what’s selling on the sales floor. We can work with our customers to continuously present new colors and new styles. We can replenish that quickly and have a large amount of product on the store shelves within four to six weeks, and that’s not something that can be done if you’re not doing business here because of the lead times. The time it takes just in shipping alone from overseas would prohibit it.”
Meck, whose company works with startup brands and about 75 small to medium-size brands, said many times some of its larger accounts will introduce styles with Fessler, import large quantities, and then fill in at the end of the season with his firm.
“The driver of our business is our design support business,” he said. “We have a staff of agreement enablers — patternmakers, cutters, sample makers. We make 500 samples a month and put 500 styles in production a year. We have a patternmaking and sample-making business as well, for which we don’t get any of that production.”
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