Walking a Mile in American Made Shoes: Retailers Cry Wolf

What Could Happen if American Piggies Went to Market

The corporate baron robbers are pushing back on trade, but it’s not your Grandfather’s old manufacturing plant that America wants resurrected.

here’s a lot of little piggies currently being shod by foreign manufacturers and Americans want to change that. Along with much of manufacturing, U.S. shoe manufacturing has been in decline for decades, hitting its highest level in the 1940s and steadily declining to less than 1 percent as manufacturers fled overseas in search of cheap labor from China, India and Vietnam.

Enter third-generation shoemaker Sara Irvani, founder of Third Oak. Not only did this millennial want to make shoes right here in America, she is passionate about the environment. In a March 6, 2018 press release, Irvani says she believes that anyone can make an environmental difference simply by thoughtfully choosing the shoes they wear. Irvani’s team has created a sustainable brand made in her native Georgia using a bio-based material derived from soy.

“As a third-generation shoemaker and millennial CEO, I was shocked to discover the hidden, wasteful side of the footwear industry. I saw the need to develop Third Oak as an attractive, affordable and conscious brand that is responsibly made in the USA to empower our generation.”–Sara Irvani, Third Oak founder

Big name shoe manufactures such as Nike and Adidas had promised to bring manufacturing back to the United States, with Nike predicting it would hire up to 10,000 people if the Trans Pacific Partnership was passed. Eric Liedtke, Adidas’ executive board member responsible for global brands, also announced a manufacturing plan at a July 2, 2015 event in New York ostensibly held to unveil the company’s Ultra Boost shoes, which were made from plastics and netting dumped in the ocean.

True to their announcement, German-based Adidas has, in fact, opened what it dubs a “speedfactory” in Atlanta, Georgia that will employ about 140 people in 2018. And this isn’t your grandfather’s manufacturing facility. The majority of the roles staffing the speedfactory are highly technical, including planners, engineers, technicians and stitchers who received training in Germany in order to operate the highly specialized automated machinery.

Not your grandfather’s manufacturing facility. Adidas opens new robotics manufacturing facility in Atlanta, Georgia.

Oregon-based Nike, however, has not made good on opening manufacturing facilities in the United States. Rather than looking at the 99% opportunity to manufacture shoes in America by rolling back the unfair advantage that foreign manufacturers now enjoy, Nike appears more worried about their profit margins and continued access to cheap labor.

Even Nike’s promise to bring jobs to America wasn’t exactly honest. First, it was basing its promise on the passage of the TPP, which is now dead in the water, and it was never looking into manufacturing facilities in say, Pennsylvania, Ohio or Kentucky, but Nicaragua and Honduras.

Obama taking the stage to make his TPP pitch at Nike’s headquarters in Beaverton, Oregon. Photo credit: Pablo Martinez Monsivais, Associated Press.

Buttressed by big manufacturing and retail associations that have a stake in maintaining the current status quo, giant retail brands sent a letter to President Trump this week outlining their concerns about the “detrimental impact” broadly applied tariffs could have on American families.

The Retail Industry Leaders Association, American Apparel & Footwear Association and National Retail Federation say they are concerned that any benefits from tax reform for retailers and families will be wiped out by broadly applied tariffs on everyday consumer products.

“We support holding our trading partners accountable and using targeted trade remedies against intellectual property theft, illegal dumping or subsidies, and other proven trade violations,” the signers said. “At the same time, we are concerned about the negative impact as you consider remedial actions under Section 301 of the Trade Act could have on America’s working families…applying any additional broad-based tariff would worsen this inequity and punish American working families with higher prices on household basics like clothing, shoes, electronics and home goods.”

Sandy Kennedy, president of Retail Industry Leaders Association, stated that imposed tariffs could set the industry back. “This is not American industries crying wolf,” she said. But isn’t it? These groups have a vested interest in continuing to import cheap goods from China and India where corporate globalists exploit the poor and skirt environmental regulations. Without the muscle of their big donors such as Walmart, these big lobbying groups would have no influence over trade policies.

Clearly what is good for the goose is not good for the gander. In their own letter sent to Trump, they basically said that they are for remedies to correct intellectual property theft and illegal dumping or subsidies, just don’t mess with our industry—clothing or footwear. Chico’s, Kohl’s, Walmart and Costco, among other big brands, are worried about keeping their stores stocked with cheap imported goods, purportedly because they think it will hurt working class American families.

Workers pack shoes at a Nike factory in Tangerang in West Java province. Photo credit: Reuters.

Kennedy and others are, indeed, crying wolf. Their view is self-interested and doesn’t recognize the opportunity for retailers to ultimately directly benefit by the reform of unfair trade practices by receiving and selling goods manufactured, not on foreign soil, but right here in the United States. None of their statements addressed duty-free goods or the high costs of shipping from countries such as China.

The real issue with these lobbying groups is that they do not want to absorb the costs of a manufacturing shift that, in the long run, would benefit working Americans by providing jobs not just in manufacturing but in retail, sales, technology and distribution. It would also allow retailers, who have been severely hurt by online giant Amazon to become more responsive to the fickle and fast changing clothing and footwear industries.

And their position that tariffs will hurt working class Americans is simply not true. Just take a look at privately held athletic footwear manufacturer New Balance, the undisputed leader in manufacturing athletic shoes in the United States. New Balance makes 4 million pairs of athletic footwear in the United States and employs hundreds of workers, including 700 in Maine. New Balance also made Forbe’s largest private company list, with assets north of $2 billion.

Rick Helfenbein, President and CEO of American Apparel & Footwear Association said, “Tariffs are a hidden tax on Americans–plain and simple. More than 41 percent of clothing, 72 percent of footwear, and 84 percent of travel goods sold in the U.S. are made in China. A tariff on these products would be a tax on every American. In addition to increasing costs for American families, this action could result in retaliatory tariffs that target American businesses, resulting in job losses.”

Clearly, Helfenbein thinks we are dimwitted. When 41 percent of clothing and 72 percent of footwear is made somewhere else, he’s just naming the elephant in the room that Trump—and Americans—want to address, which is the huge trade imbalance that has undercut native manufacturing. And retaliatory tariffs are, simply, a boogey man Helfenbein wants to use to scare working class Americans. American exports of clothing and footwear represent such a small sector of the global industry, any retaliation would be negligible.

One of New Balance’s manufacturing facilities in Lawrence, Massachusetts. New Balance was promised a shot at a Pentagon contract under the Obama administration if it agreed to stop bashing the TPP. An agreement they say Obama reneged on. Photo credit: John Tlumacki/Boston Globe.

It is obvious that these large associations want to protect the status quo and make their member’s shareholders happy. I find it particularly odious that they based their objections under the guise that they actually care about working class American families. These retail leaders don’t represent consumers, but shareholders. And it is entrepreneurs such as Georgia-based Irvani, who may have their biggest chance yet under a Trump Administration to succeed in starting up the machines that were once the lifeblood of a strong American economy.

Technology and automation, including robots and 3-D printing, will make goods cheaper to produce and keep labor costs lower than decades before, and there is no good reason that Americans should not be producing the goods they consume. Although manufacturing isn’t the panacea for everything wrong with a stale economy, it will add jobs to the U.S. economy and create new opportunities for heavy industry, synthetic chemical industries, textile industries and computer and robotics companies to thrive right here on American soil.

It’s time for textile companies to come home. New Balance says that one of its greatest challenges in manufacturing in the United States is getting supplies. Brendan Melly, the director of U.S. operations for New Balance said, “When competitors in athletic footwear went overseas, their suppliers left as well.”

And Americans such as those trained and put to use in Atlanta’s Adidas speedfactory is a shining example of how you can train workers to learn new tricks and to run highly technological robotic systems and machines.

Finally, Trump wants to fix our crumbling infrastructure and outdated rail systems, which would create the modern transportation system our nation so desperately needs to distribute the goods Americans are just itching to make. I wrote about our crumbling infrastructure in my article, The Wailing Walls of the West. Infrastructure may not be as sexy as Russian collusion or Stormy Daniels, but it is surely the canary in the coal mind to the pulse and health of a nation.

Globalists have allowed the roads to Rome to crumble. In a February 2017 hearing in Washington, D.C., FedEx CEO Fred Smith told the House Transportation and Infrastructure Committee that his company is using twice as many tires than it did two decade ago due to the poor condition of our roads.

Unfair trade policies and our crumbling infrastructure systems are the fading tattoos given to us by the global masters who had no vested interest in whether America thrived as a nation. As the middle class disappeared and the nation’s idle workers turned to opiates and fantasy to escape, Trump’s policies offer a glimmer of hope to a generation who wants to turn off Netflix, put the drugs down and go to work. Reign well.

 

 

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