Farr West Lingerie

Thanks to the folks over at Style Bistro for a post about 10 lingerie brands that are made in the U.S.A. Great to see Made in USA can be sexy!

Bob Lutz, former vice chairman of General Motors has a new book out-Car Guys vs Bean Counters: The Battle for the Soul of American Business. Lutz believes there is a great opportunity for the United States to regain is leadership as the world’s top manufacturer and exporter. The formula is easy, according to Lutz- America needs to get back to the basics of creating things of value

There is a dawning awakening on the part of most Americans that we cannot maintain the wealth of the nation by being bond traders and lawyers. At some point the country has to get back to work and create wealth through mining, agriculture or manufacturing. There’s a renewed emphasis on being more than competitive with the Japanese and the Germans, especially when it comes to the auto industry. Right now with the dollar where it is and American wage rates where they are, there is no excuse not to manufacture in the United States.

Of course, this needs to be taken with a grain of salt. Lutz was responsible for much of the problems that faced GM and other American carmakers, namely absurd labor costs, pensions, and obsolete manufacturing processes.

According to a recent Reuters report a number of factors are driving more companies away from Asia,  including rising wages, surging fuel prices, and the complexity of transporting goods across the Pacific.

According to Daniel Meckstroth, chief economist at the Manufacturers Alliance/MAPI- “What you’re starting to see is the economics shifting more into the United States’ favor regarding sourcing from the United States versus sourcing from a low-cost country.”

One of the biggest reasons why is the subpar economic growth in the United States versus in Asia is helping its manufacturers to close the cost gap on their foreign rivals. China’s inflation rate hit 5.5 percent in May, well ahead of the United States’ 3.6 percent headline rate. With Chinese wages rising at 15 to 20 percent per year, the labor costs of manufacturing in the two countries could pull even by 2015, as we reported a few months ago. Rising oil prices, which drive up the cost of shipping goods by boat or plane, are also eating in to China’s edge.

Automation also helps tilt the balance toward the United States. For example, at Master Lock in Milwaukee, Wisconsin, they can produce 24,000 locks a day with about one-sixth the number of workers needed by the company’s Chinese suppliers and rivals because of better machines and efficiency.

Mark Andol outside of his store

A big shout out to Mark Andol in Elma, New York. If you haven’t heard of Mark, he is the owner of the “Made in America Store,” in upstate New York that has attracted quite a bit of buzz recently.

Mark’s story goes back a few years. You see, his welding company nearly went out of business after losing a major contract to sell steel posts. His company was selling them for $17. China was selling them for $14. From 2007 to 2010, he had to lay off nearly half of his 70-person work force.

His retail store has over 30,000 items for sale.  His team spends about 25 hours on each item making sure that every component, down to the glue in the packaging, is 100 percent American. Keep up the good work Mark and team!

In addition, a recent American Express study found that consumers like products made in America, up 5 percentage points from 2008, and 65% say they try to buy U.S. brands whenever possible, a 3 percentage point gain over 2008.

A great read in Bloomberg/Businessweek yesterday about luxury brands that are swaying customers with Made in USA products. All of us know the majority of companies that they feature- Brooks Brothers, Tiffany, Joseph Abboud, etc. One brand that may surprise everyone, The Row, the high end fashion line from The Olson twins, makes their clothes in New York City and Los Angeles. In fact, most Americans don’t realize that most fashion brands make clothes in the fashion districts in NYC and Los Angeles. Do you think a Hollywood star wants their hand sewn gown for the Academy Awards made in Vietnam? The Olson Twins’ brand has found favor with the likes of Michelle Obama and actress Julianne Moore. The brand also got a nomination this year for a new talent award by the Council of Fashion Designers of America.

According to the company:

This grant is intended to help EVI modernize and transform the medium and heavy-duty electric vehicle manufacturing industry, making clean, electric vehicles more accessible and affordable, and facilitating a widespread transition from diesel engines to zero-emission vehicles to meet California’s progressive economic and environmental goals.”

Click here for a full list to see how your state faired.

An example of products that don't need to be made here

We were linked to a Consumerist post yesterday that highlighted a company called A.S. Sutton & Sons selling bibs that say “Made in America.” They got worked up because the bibs are actually Made in China. We do not see the big deal. Although this story may be ironic, we continue to stress that this is the wrong way to frame the discussion. It makes no difference where cheap goods are made. Let the Chinese make inexpensive items, while we focus on items that create high paying jobs here in America.

Of course, you didn’t need a million dollar study from BCG to know this. If America were to make the tax structure more advantageous and eliminate healthcare and other costs, we would be far and away the first choice amongst executives. If you added a true valuation for the Yuan, versus the artificial valuation that their policy makers have been trying to maintain for years, the results would be even more dramatic.