WASHINGTON — Shinola, the brand that has built its image on manufacturing in Detroit, is eyeing expansion plans and potentially opening a leather manufacturing facility on the south side of Chicago, its founder revealed at the Commerce Department’s Select USA summer conference here on Monday.
Tom Kartsotis, founder of Bedrock Manufacturing Co., the parent company of Shinola and Filson, told Commerce Secretary Penny Pritzker, who led a panel discussion on investment strategy in the U.S., that his company is focused on job creation in the U.S.
Pritzker, who said she visited the Shinola factory in Detroit a couple of weeks ago, touted the company’s creativity, growth and investment in U.S. workers. She asked Kartsotis to talk about the company’s rise, challenges and future growth strategy.
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Bedrock employs about 530 people, 397 of whom work in Detroit, according to a spokeswoman. The company assembles watches and bikes in Detroit and makes watch straps and small leather goods.
At the summit on Monday, Kartsotis said the company is looking to expand and build on the success it has had with making watch straps and a training program. He said Shinola has started moving workers from making watch straps to small leather goods.
“We are in the process of trying to figure out if we can build a leather manufacturing facility perhaps on the south side of Chicago where there is a strong need for jobs,” Kartsotis said. “If we can continue to think one step further, if we can figure out how to make shoes, that would be the mother load of job creation. We are looking at things we can potentially make long-term and things that would create jobs. That’s basically our strategy — what can we do to create jobs.”
As the company looks to expand manufacturing and different product categories, it also has plans on tap to open more stores.
“The business model calls for 75 to 100 in the next three or four years,” Kartsotis said.
Pritzker asked if all of the stores were based in the U.S.
“We have one in London,” he said. “It’s a lot easier for us to sell here in the United States because the Detroit thing resonates here in the U.S., so we are focusing on America.”
Shinola and Bedrock came under a review by the Federal Trade Commission for its “Made in USA” marketing claims. The FTC, while concerned about the scope of what the company makes here, declined to pursue enforcement action, but the review prompted Bedrock to implement a “remedial action plan” that included corrective hang tags and information cards to watches, bicycles and other products to alert consumers that those products contained “significant imported content,” among other steps.
Kartsotis defended his company’s practices in a statement Friday and said the government’s standards are “subjective,” making it hard for companies to communicate to consumers about the scope of the products made in the U.S.
The issue did not come up at the summit, which brought together an estimated 2,400 participants from 70 markets around the world and from economic development offices across the U.S.
“We have had a resurgence in manufacturing since 2009,” Pritkzer said. “Job creation is up, manufacturing productivity is up and manufacturers drive innovation. Seventy-five percent of research and development spent in the U.S. comes from private sector manufacturing. Our foreign investors play a huge part in that. In 2014, it was the first time the stock of foreign direct investment in manufacturing exceeded $1 trillion.”
Pritzker said the amount of foreign investment has grown significantly since Select USA was launched in 2013.
“To date, Select USA has facilitated over $22.5 billion in investment,” she said. “In the first two quarters of fiscal-year 2016 alone, Select USA clients announced 67 projects totaling $2.6 billion that are expected to create more than 5,400 jobs in the United States.”
Against the backdrop of the summit and the administration’s push for more foreign investment and U.S. manufacturing, President Obama announced the winner of a new “Smart Manufacturing Innovation Institute,” marking the ninth such manufacturing hub out of a total goal of 15.
The institute will be headquartered in Los Angeles and funded with more than $140 million in public-private investment from leading universities and manufacturers with a focus on developing smart sensors for use in advanced manufacturing.
Obama also announced the launch of five manufacturing hub competitions slated to invest nearly $800 million in combined federal and non-federal resources to support “transformative manufacturing technologies from collaborative robotics to bio-fabrication of cells and tissues, to revolutionizing the ways materials can be reused or recycled.”
“Since 2014, we’ve opened eight cutting-edge manufacturing hubs — public-private partnerships that specialize in game-changing technologies like 3-D printing, photonics, the next-generation textiles,” Obama said.