The United States today has fewer people working in manufacturing than it had in 1941 before the Japanese attack on Pearl Harbor and the rush to produce weapons. But not all U.S. manufacturers are shadows of their former selves. Case in point: New Balance, the Boston-based athletic shoe producer.
The company has 1300 manufacturing employees working in the U.S.--the highest headcount in its 108-year history, says President and CEO Robert DeMartini. And it's exporting twice as much product as it was two years ago.
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"Rising labor costs in foreign markets and consumers' demand for customization have given companies like ours new incentives to make things closer to consumption," DeMartini told The Daily Ticker. "We have an opportunity right now to reinvent how things are made, and make them here, in the U.S."
About one-quarter of the athletic shoes New Balance manufactures are produced in the U.S. The company has invested heavily in manufacturing processes, focusing on efficiency and moving into advance manufacturing techniques such as 3D printing, says DeMartini.
"Investment and innovation is key...[and] the government could encourage that...through tax breaks or investment breaks for developing technologies on our shores."
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Helping New Balance is its profile as a private company rather than one whose shares are publicly traded, and therefore naturally is under pressure to boost earnings every quarter. Being a private company has "allowed us to take a long view, be patient and invest in technology that takes time to develop," says DeMartini.
And the benefits ascribe to the broader economy as well. "Making things matters," he says. "As we give up making things we lose leverage in the global economy."
But U.S. manufacturing is expanding. The latest data shows factory orders rose 1.6% in February, which was the biggest upward move since September. And the Institute for Supply Management's index of factory activity has topped the pivotal 50 level -- indicating expanding activity -- for the first time since last June.
Still, DeMartini argues, "The growth is not broad enough and not in enough industries." But he's hopeful. "People who are putting their minds into making things here are figuring out how to do it."
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- New Balance