New Era, the company that holds the exclusive rights to manufacture and sell MLB hats, is closing down the union plant that sews hats for players to wear on the field of every game they play.
According to the Buffalo News, the plant is being closed so manufacturing can move to a non-union plant in Florida, while nearly 220 skilled workers at the Derby, New York, plant will be out of a job. The plant has been in Derby for over 40 years, and its closure has left people wondering what kind of company New Era has become.
New Era ‘pivot’ from manufacturing to marketing
New Era, which was founded in Buffalo, New York in 1920, has spent the last several years trying to get out of the hat manufacturing business. The Buffalo News reported that with the exception of the plant that makes MLB on-field hats, all of New Era’s hats will be produced overseas by third-party factories.
So why isn’t that particular plant moving overseas? As part of the massive branding contract between New Era and MLB, MLB stipulated that all of its on-field hats need to be made in the U.S. So New Era is choosing to close the Derby union factory and move the manufacturing of those hats to a non-union shop in Florida.
There are 219 workers at the Derby plant, and nearly all of them will be losing their jobs. The company will continue to be headquartered in Buffalo.
As New Era closes all but one of its U.S. factories, it’s not lowering the prices of its hats, but doing other things with that money. The Buffalo News reported that New Era has spent millions of dollars on celebrity marketing, such as hiring Will Smith’s son to DJ a party in the hope that Smith himself would show up (he didn’t).
New Era has freely spent money on marketing. That includes lavish parties at all-star and championship games. It also includes naming rights to the Buffalo Bills’ stadium, which became New Era Field in August 2016 for a reported $5 million to $7 million annually over seven years.
New Era executives who spoke to the Buffalo News said that the company is focusing on “social marketing, e-commerce and quick turnaround times for customer orders.” Having skilled workers at a longtime New Era factory make high-quality hats for MLB players to wear on the field is no longer part of their business plan, which is an interesting way for New Era to tell MLB that it cares about its business.
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