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Outsourcing Outfits Incites Olympic Ire

The dustup over the Chinese-made uniforms on Capitol Hill Thursday exposed the two-sided debate that accompanies globalization and U.S. trade policy.

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This just in…it appears the world is indeed flat.

After decades of globalization and free-trade agreements, outsourcing many areas of industry has become the norm around the world, with apparel at the top of the list.

But when Olympic committees across the globe contracted companies to make their team uniforms and those companies turned to their established supply chains to produce them, national pride was stirred.

Ralph Lauren, who pledged Friday to make the uniforms for the 2014 Games in the U.S., is not alone. Spain, Russia, the U.K. and Ireland are among the countries, like the U.S., that had all or part of their Olympic apparel produced in countries other than their own.

The fallout seems to have been avoidable. Global sourcing strategies in the last quarter-century have seen China and other Asian nations rise to the top of the supplier pyramid, but most experts agree there is enough capacity left in most countries — including the U.S. — to have made the national uniforms in the country they represent.

RELATED STORY: Bridget Foley’s Diary on Olympic Posturing >>

The dustup over the Chinese-made apparel and uniforms on Capitol Hill Thursday — which saw Democratic and Republican leaders of both the Senate and House express emotion, ranging from concern to outrage, over the U.S. Olympic Committee’s decision — exposed the two-sided debate that accompanies globalization and U.S. trade policy. Some of the lawmakers who decried the USOC’s decision have voted in favor of free-trade deals, some of which led to the erosion of the apparel and textile manufacturing base over the past two decades. On the other hand, many argue that free-trade agreements open markets to vast consumer bases and help create and support more import-and-export-related jobs in the U.S.

In the wake of the controversy, six senators announced late Friday they plan to introduce legislation this week that would require the USOC to outfit the U.S. team in uniforms and clothing made in America for all future Olympic games.

Sens. Robert Menendez (D., N.J.), Frank R. Lautenberg (D., N.J.), Bob Casey (D., Pa.), Charles Schumer (D., N.Y.), Kirsten Gillibrand (D., N.Y.) and Sherrod Brown (D., Ohio) said they will introduce the Team USA Made in America Act of 2012 this week.

The legislation would require the USOC, “a federally chartered nonprofit entity, to adopt a procurement policy that requires ceremonial uniforms the Committee purchases or commissions to be sewn or assembled in the United States.” It also calls for the use of fabrics formed and cut in the U.S. or knit-to-shape components from yarns wholly formed in the U.S.

“While American textiles manufacturers are struggling, the Olympic Committee should be leaders in supporting American jobs and manufacturing,” Lautenberg said.

Many in the industry were emotional about the matter.

Bud Konheim, president and chief executive officer of Nicole Miller, said, “Wake up. Everything is made in China. This is not new and it’s not unpatriotic. But manufacturing in China allows everyone in the world to buy these things versus making them here, which would require higher pricing. Eighty percent of our collection is made in New York City and nobody cares. For us, it doesn’t move one single thing but we still do it.”

Doug Williams, ceo of HMX Group, which manufactures the Hickey Freeman line in U.S. manufacturing plants, joined forces with Sen. Schumer on Friday in a letter to Lawrence Probst 3rd, chairman of the USOC, saying the company “stands ready” to make all of the U.S. Olympic team’s uniforms.

Their letter followed a day on Capitol Hill Thursday in which many lawmakers on both sides of the aisle lambasted the USOC’s decision.

Schumer called on the USOC to “start over,” and urged it “to quickly make this right to support America’s economy and workers.”

“I think it is political posturing,” said Erik Autor, vice president and international trade counsel at the National Retail Federation. “They are trying to make political hay out of it and suggest that there are jobs in the U.S. at stake in this. We know that is nonsense. Garments for the most part are not made in the U.S. anymore.

“They are all trying to make an anti-China political statement,” Autor said, adding that it plays well in an election year and in a weak economy where both parties are jockeying to gain the upper hand in showing the American public they can create jobs.

Autor also noted that the uproar shows the “consensus on free trade has completely broken down” on Capitol Hill.

“Everyone is trying to show how tough they can be on trade,” he said. “Demonizing imports is part of that messaging. It just goes to show how much of what used to be a fairly broad consensus on the benefits of trade, on imports and exports, has withered away.”

A prominent executive from the manufacturing industry, who requested anonymity, also took issue with the politicians’ outrage. “They should check their cars, their refrigerator parts. Every piece of sporting equipment, every bat, everything is made in China. This is the dumbest thing I ever heard. No one in America could figure out how they make things in China, for any price. It’s ridiculous. They [the politicians] are morons. It’s all political. Who makes anything in the U.S. anymore? The Chinese are the smartest manufacturers in the world. I would be curious where all the [sporting] equipment comes from.”

Nanette Lepore had a different take. “You would think in this environment where we’re screaming, ‘Jobs, jobs, jobs,’ that more people would have been onto this,” she said. “At some point, you have to think ethically and ‘What’s the responsible thing to do?’ as opposed to ‘What’s cheapest?’ or ‘That’s how we’ve always done it.’

“It’s sad that people don’t take American manufacturing seriously,” Lepore added. “I feel like the American Olympic committee is at fault and the idea that no one in the production team at Ralph Lauren thought, ‘Just make it here, why not?’ And I feel bad that the athletes have to go into the Olympic competition with this black cloud over their heads. They could have represented America from head-to-toe not only athletically but they could have shown the skills of American workers and beautiful clothes that they make. Diane Sawyer said on ABC News that if all of Team USA’s uniforms and Olympic memorabilia had been made [in the U.S.] that would have brought $1 billion into our economy.”

Kevin Burke, president and ceo of the American Apparel & Footwear Association, represents apparel importers and manufactures in the U.S. and attributed the outcry on Capitol Hill partly to “political posturing on [trade] and imports in a bad economy.”

“The thing that amazes me is that these are members of Congress condemning imports at the same time they support free-trade agreements,” Burke said. “It brings into question that this is more of a political reaction to the situation.”

He added that he doesn’t expect a big shift in sourcing as a result of the heightened attention to made in America, but he said, in some cases, U.S. apparel manufacturers could get a boost if the made in America concept gains more traction, which he applauded.

The National Council of Textile Organizations said U.S. textile and apparel companies have ample capacity to supply uniforms for the U.S. Olympic team.

NCTO president Cass Johnson said, “Our industry and our colleagues could have easily supplied this product. In the last three years, we have invested over $3 billion in our industry, including building new plants in the United States that produce some of the most innovative yarns and fabrics found anywhere. We have added more than 2,000 new jobs during a time that the U.S. economy is struggling.”

The U.S. textile industry shipped $53 billion worth of textile products last year, including large quantities of uniform fabric and other materials of the type used by Team USA. NCTO urged Ralph Lauren and the USOC to consider sourcing options in the U.S., which are plentiful and increasingly cost-competitive.

“Once they take a look, importers will find innovative products, fast turnaround times and competitive prices for goods made in the United States,” Johnson added.

Marc Gobé, ceo of Emotional Branding Alliance, said Team USA’s Chinese-made uniforms have become an emotional issue. While China is the top supplier of U.S. clothing, “in this particular case, it has bigger resonance and implication of what the Olympics brand stands for,” he said.

“We’re in a very strong political time with the presidential elections,” and people are focused on the economy and jobs, Gobé added. “I think for someone as iconic as he is, [Ralph Lauren] should have been more sensitive to that decision at a time when the economy is struggling and people are concerned about their jobs.”

The U.S. apparel and textile industry, from fibers and yarns to fabric and apparel, employed 506,000 workers in 2011. The U.S. textile industry is the third-largest exporter of textile products in the world, growing 13.4 percent to $17 billion in 2011. Total textile and apparel exports were a record $22.4 billion.

An August 2011 report from the U.S. International Trade Commission showed 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. In 2009, there were 11,273 textile mills, down from 11,958 in 2007, and 8,339 apparel factories, down from 9,492 two years earlier. Employment in apparel manufacturing declined by 61.5 percent between 1990 and 2002, from 929,100 workers to 357,600.

Allen B. Schwartz, principal and creative director of A.B.S. by Allen Schwartz, a domestic manufacturer, believes it was a huge oversight.

“In my personal opinion, when you’re promoting the USA, 100 percent of it should have been made in the USA,” Schwartz said. “That’s what it’s all about today and it was a very careless oversight. I understand your business is predominantly offshore, but if you’re manufacturing the uniforms for the Olympics, it should be made in the U.S.”

Hickey Freeman is outfitting the male sportscasters for the Games and their on-air wardrobes will be manufactured at the company’s factory in Rochester, N.Y. They will provide everyone from Bob Costas, Matt Lauer and Pat O’Brien to Jimmy Fallon with personalized outfits that they’ll wear during NBC’s prime-time broadcasts, as well as on its cable networks’ coverage.

Designer Rene Ruiz, who produces his signature collection solely in the U.S., said, “I think it’s shameful. I just came back from New York and half the factories are working at half their capacity. It’s a sad day for our country. All of those factories want to work. They would be so pleased to have more work and proud to make the clothes Americans will wear in the Olympics….What happens if we don’t have entry-level jobs anymore for people who don’t want to wait tables or know how to use a computer? This was an industry where you could learn a trade and better yourself. It’s not like that anymore.”

Thea Lee, deputy chief of staff at the AFL-CIO, said: “There has been a lot more tension on this issue recently. That is a healthy thing. We are starting to see some resurgence in the manufacturing sector. People feel like it is not outlandish to talk about bringing some of these jobs home. Why don’t we start with the U.S. Olympic Committee being more aware of where they source their products and giving good jobs to American workers and business to American-based manufacturers?”

Lee said the USOC has a responsibility to be “respectful” of the fact that “there is a lot of national pride involved in every decision it makes.”

Representing a more internationalist view, Gary Hufbauer, senior fellow at the Peterson Institute for International Economics, called the highly charged rhetoric “ridiculous” and said the underlying trends would “ultimately be very harmful for the United States.”

“What it’s doing is building up kind of a frenzy, that buying foreign goods is unpatriotic, that it’s un-American,” Hufbauer said. “Here it is quite symbolic. It’s harmful to the U.S. in terms of our own economy, in terms of our leadership in the world trading system and so on and it’s not going to go away quickly.”

The uniform issue isn’t isolated to the U.S.

On Spain’s uniforms being outscourced to Russia, Modesto Lomba, president of ACME, Spain’s Madrid-based Fashion Designers’ Association, said: “Spain has lost a great opportunity. In a country with (almost) six million unemployed, an important textile industry that includes the world’s most internationally distributed apparel brand [Zara] and dozens of fashion designers, to give the Olympic project to a Russian company is so against our economic interests and our culture.”

Various parts of the uniforms and outfits produced by Adidas, the official sportswear partner of the London 2012 Olympic Games and the London 2012 Paralympic Games, were sourced from factories in countries such as Cambodia, China, Indonesia, Pakistan, the Philippines, Thailand, Turkey, Sri Lanka, Vietnam and the U.K. Adidas claims to be the only London Olympic sponsor to have publicly disclosed a full list of authorized suppliers making products for the London 2012 Olympics. The list, which is available on the brand’s corporate Web site, includes names and addresses of the factories per country. The list also shows the status of worker or trade union representation and whether there is a collective bargaining agreement in place at the individual facility.

Adidas will also outfit all volunteers, technical staff and officials during the events, and is the official partner of Team GB, providing all British athletes in all Olympic sports with performance products.

Adidas will be the official partner of 10 other national Olympic committees, including Australia, France and Germany, and created the Paralympic kits for France, Germany, Cuba and Belgium.

“It is important to note that we only conduct business with overseas manufacturers who work in a fair, honest and responsible manner,” said an Adidas spokeswoman.

A spokesman for Stella McCartney, who designed for the U.K., said uniforms are manufactured in Europe, with some pieces made in the U.K., and in China and Southeast Asia. Different pieces are made in different locations, he said, depending on the materials used and the discipline.

A spokeswoman for Giorgio Armani, who designed the opening ceremony looks for the Italian team, as well as the “off-field” outfits, which basically means any clothes not used for sports, were made in Italy, except for sneakers and polo shirts. As for the athleticwear, the Italian athletes wear whatever their sponsors supply, or whatever they want.

Japanese sporting-goods maker Asics designed the ceremony wear for the Irish Olympic Team. The tracksuits, which were produced in Italy, are mostly green, with touches of white and orange and blue.

Olympic organizing committees in Australia and New Zealand have had to defend the decisions to use uniforms that were manufactured offshore. The Australian uniform was designed in Australia, but manufactured in China. The New Zealand uniform was designed in Australia, where Rodd & Gunn’s head designer, Irena Prikryl, is based, with fabrics sourced in Italy and then manufactured in Turkey, China and Italy. Its opening ceremony uniform, which is under wraps until July 27, was designed by Chinese sports apparel brand Peak in collaboration with Maori artist Rangi Kipa.

A spokesman for Russian sportswear brand Bosco, which has provided apparel for opening and medal ceremonies, casual and reception wear and competition uniforms for the Russian Olympic team, as well as outfits for the opening and medal ceremonies for the Ukrainian Olympic Team, said: “Bosco makes clothing around the world. As with any brand, the most important factors in choosing where to manufacture goods are speed and accuracy. More delicate items are made in Europe, but due to time restraints and the sheer volume of the order, neither European nor domestic production was appropriate. Therefore, the less complicated items were produced in Asia…which is the leader in production volume and quality sportswear.”

Athletic kits for South Africa were made in China, but its opening ceremony kits were all made in South Africa. The Philippines opening ceremony kits were made in the Philippines.

Canada and Japan stayed within their borders.

A spokesman for Hudson’s Bay Co. said, “All of the clothing that will be worn by our Canadian athletes respect and meet the ‘made in Canada’ standards set by the Government of Canada. We worked with both the athletes themselves and Canadian manufacturers to deliver high-performance, high-design uniforms for all of the athlete opening, closing and podium uniforms, and athlete village wear. Hudson’s Bay Co. has ensured to respect all ‘made in Canada’ guidelines.”

At the opening ceremony, the Japan Olympic team will be decked out in crisp white shirts and trousers and red blazers by Takashimaya. The suitlike outfits are made entirely in Japan and employ some of the country’s latest textile technologies and the highest-quality materials.

Ralph Lauren Corp. has clearly heard the clamoring, saying, “For more than 45 years, Ralph Lauren has built a brand that embodies the best of American quality and design rooted in the rich heritage of our country. Ralph Lauren promises to lead the conversation within our industry and our government to address the issue to increase manufacturing in the United States. We have committed to producing the opening and closing ceremony Team USA uniforms in the United States that will be worn for the 2014 Olympic Games.”

As for other parts of the U.S. team gear, executives at Speedo, which will provide the on-deck and podium attire for American Olympic swimmers and in some cases swimwear, did not respond to requests for comment. Unlike other Olympic sports, swimmers can compete in the swimsuits of their own choice.

Tyr’s five sponsored swimmers will be wearing American-made swimsuits at the Summer Games, according to Callie Breen, associate marketing manager. “They will be the only Americans wearing suits made in the U.S.,” she said.

Representatives from USA Swimming, the sport’s governing body, also did not respond to requests for comment, nor did the USOC.

Nike, too, had little to say about the uniform controversy. Last month, however, the company had an all-out publicity blitz in New York for the unveiling of its new Olympic gear for the U.S. track and field team. A company spokesman said, “The products we create for U.S. athletes at the Olympics are made in multiple countries, including the USA.”

He declined to comment when asked what percentage of the American team’s uniforms and footwear will be American made, or to identify any specific items. The Nike spokesman also declined comment when asked to name the other countries that are being used for the production of Olympic goods.

Phillip Swagel, professor of international economic policy at the University of Maryland, put some perspective on the matter, saying, “We all use goods and services made around the world and these uniforms are a manifestation of that global economy. Sort of like the Olympics is a global sporting event.”

 

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