The Survivors: Still American-made When Others Left Long Ago
|Author: Bloomberg -- Sho Chandra: 8-16-17|
Date: Tuesday, August 29th, 2017
|Return to Archive|
These stories show the challenge of producing at home … and also that it’s not impossible.
(Bloomberg -- Sho Chandra: 8-16-17) Entire industries, from textiles to toys, have become almost extinct in the U.S. as manufacturers moved abroad in search of lower costs or got swept away by a wave of imports.
Some products aren’t Made in America at all anymore. Others still are—but by just a handful of small businesses, or maybe only one. They’re mostly surviving by the skin of their teeth in a world where shoppers care more about price than country of origin. Their stories show the challenge of producing at home … but also that it’s not impossible.
Dubuque Clamp Works
Dubuque, Iowa, had a thriving industrial economy until the 1980s. Now, not so much. Keith Clark, 72, is still there making woodworking clamps as he’s done for four decades.
The company he co-owns with his wife, Edna, has annual sales of $500,000, with customers from Germany to South Korea. Clark turns away new orders, partly because so much of the supply chain he relies on has moved abroad. Rivets and springs can take weeks to arrive. He often ends up making his own parts.
“That’s the reason it’s going to be hard for manufacturing to come back,” Clark says. “You need all these sundry businesses to be here.”
So Dubuque Clamp stays small by design, employing three people plus part-timers. It does some custom molding, but 90 percent of its output is specialized clamps for holding wood in place. They’re manufactured on about 50 dedicated machines and used to make everything from cabinets to countertops and guitars.
“If a clamp isn’t perfect, it doesn’t go out. We just throw it away,” Clark says. “If anybody breaks a part, we just replace it, no questions asked.”
That means higher price tags than mass-produced imports. On Amazon.com, his 6-inch handscrew clamp costs $24—not the cheapest option, though not the most expensive either. Clark doesn’t see the need for his own website or any marketing; customer testimonials bring in plenty of sales.
But “nobody in their right minds probably wants to do this anymore,” he says about the industry. “It’s too demanding.” One of his last U.S.-based rivals, which made Pony and Jorgensen clamps, was sold to a China-based buyer after shutting its business operations last year. Clark likens himself to “The last Mohican. Boy, that’s probably how they felt.”
American Mug & Stein Co.
“Everything is made the old way,” says owner Clyde McClellan, 68. “It’s not high-volume or mechanized.”
Fifteen employees—down from 35 in the company’s heyday—cast ceramic mugs by hand into molds, then glaze and fire them in kilns. There’s rich clay to be found locally near American Mug’s base in East Liverpool, Ohio—known as the nation’s pottery capital in the 19th century. Foreign competition led to a steady erosion, and the last recession dealt another blow. American Mug and another firm are the only holdouts in town. McClellan, a 44-year veteran of the industry, bought the company in 2009.
Then, in 2011, along came Starbucks Corp. The coffee chain was running a campaign to encourage American products, which led it to McClellan. “Starbucks came out of nowhere,” and suddenly there was hope, and more orders than ever, he recalls.
The publicity around that deal has brought in almost all his new clients in recent years, McClellan says. “We’ve had to reinvent ourselves. Instead of having customers adapt to us, there are deadlines now,” and he’s more selective about accepting orders.
Oktoberfest is the busiest time for beer steins, while coffee mugs are cranked out at maximum capacity all year. Starbucks still buys about 35 percent of them. The pottery’s special commemorative mugs have, through contractors, made their way to patrons such as the Smithsonian’s Hirshhorn Museum and the U.S. Navy.
McClellan says he needs two more workers, but the region’s drug-abuse problem has made the search harder. “You need good hand-eye coordination” to avoid breaking things or wasting materials. His staff can earn as much as $13 an hour, though in high temperatures, and “people don’t like to get their hands dirty” with clay these days.
For every mug McClellan produces at a wholesale cost of $3.50, chain-store suppliers can get one from China at 85 cents to $1, decorate it and still sell it cheaper than his, for a profit.
“That’s what we’re competing against,” says McClellan. He’s focusing instead on customers willing to pay for Made in America. Otherwise, “it would be impossible to survive.”
Exxel Outdoors LLC
Sleeping bag maker Exxel had about a half-dozen rivals in the mid-1990s, according to Chief Executive Officer Harry Kazazian. Most had moved overseas by 2000 when he and co-founder Armen Kouleyan bought the Haleyville, Alabama, factory. The company is now the largest sleeping bag manufacturer in the nation. “We’re proud that we’re the last man standing,” Kazazian says. “We stuck with it, and it paid off.”
Since 2000, the factory’s employees have more than doubled to 95; they produce about 2 million sleeping bags a year. Import competition remains cutthroat in the below-$30 range for the high-volume, mass-retail business. Exxel makes its own brands, Disney- and Marvel-licensed ones, and retailers’ private labels. Wal-Mart Stores Inc. is its biggest buyer.
Exxel added outdoor-gear brands such as Wenzel and Kelty with an acquisition in 2015, diversifying its offerings to include $689.95 Sierra Designs tents and $299.95 Slumberjack hunting backpacks.
While many of Exxel’s products are produced in China, it makes more sleeping bags in America than overseas. They account for over a third of annual sales, which exceed $100 million.
In 2008, when the weakening dollar and rising foreign wages tilted the advantage toward U.S. manufacturing, Kazazian, 55, brought some production back from China. The factory has maximized automation, though workers do quality control and other tasks such as operating quilting machines. Ten-hour, four-day workweeks limit energy costs. The fiberfill, threads and packaging cartons are all bought from U.S. suppliers.
Still, some things just can’t get done at home. When retailer demand for “Star Wars” sleeping bags surged late in the holiday season last year, Exxel tapped contract factories overseas to supplement its American production. Shells and carry-cases for the bags are imported as the necessary low-cost, polyester taffeta isn’t available here.
As Kazazian says, “a percentage of something here is better than 100 percent of zero.”
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