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American-Made: Insiders Dissect ‘Newshoring’ and US Manufacturing Revival

Once upon a time, “Made in America” was a patriotic mantra, a salute to the blue-collar worker, a reason to spend a little more for a product of the same quality.

Nowadays, however, with globalization fully blossomed and fast fashion driving prices ever-downward, sentiment alone won’t increase the demand for domestic apparel production.

Advantages in the supply chain, desire for American goods abroad and an ever-growing call for onshoring, nearshoring, reshoring and sustainability, however, may.

Deliveryman crossing Eighth Avenue with a sack truck loaded with rolls of fabric in the Garment District of New York City, New York, 29th August 1959. (Photo by UPI/Bettmann Archive/Getty Images)

Gateway to rebirth

John Erruchio grew up in the Garment District of New York City back when that meant something; before skyrocketing real estate values drove factories out of the city and the lure of cheap labor drove manufacturing out of the country altogether. He was keenly aware that the second-biggest hub for apparel manufacturing in those days was St. Louis, so when he sought to open his own knitting factory after more than 35 years in the apparel business, the Gateway Arch was calling his name.

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“Our vision was to have a central location,” said Erruchio, who along with business partner Jon Lewis, opened Evolution St. Louis in February of 2020 with 30 Stoll knitting machines, along with 3D printers that allow it to produce everything from sweaters and socks to shoes, housewares and automobile parts. “The whole country is within two or three hours of here.”

Opening when the pandemic hit proved to be a blessing in disguise of sorts for Evolution, as it gave the manufacturer a chance to hire and train up staff on new machinery, all the while filling a nearly bottomless need for facemasks.

A look inside the factory at Evolution St. Louis.

“We have the latest Stoll ADFs and we’re sort of proud we got serial number 0001,” Erruchio said. “We have more to bring into this facility. We’re negotiating for a second building at 130,000 square feet, so we’re hoping to bring in another 220-plus machines over the next few years.”

Erruchio said a trend that began taking shape just prior to the pandemics hasn’t slowed since.

“Brands were starting to reimagine supply chains,” he said. “It’s amazing, the USA really starts to take on more resonance because there’s a desire for a lot of brands to maneuver around problems in the supply chains. I think also a big driving factor is sustainability. To have true sustainability, you have to have a brand in the U.S.”

His point is taken that when goods are being shipped from the center of the continental U.S., they’re not traveling over oceans or rocketing through the atmosphere just to get on trains, then trucks.

And as American Apparel and Footwear Associated president and CEO Steve Lamar chimed in, “A lot of Made in the USA stuff is very popular overseas. We run into an interesting situation where what we Make in the USA we sell abroad; what we buy in the USA, we import. The U.S. customer does not value [Made in the USA] as much as a customer in Japan or Britain or the Middle East.”

Lamar has coined his own term for the type of industry coming out of manufacturers like Evolution St. Louis.

“There is definitely a lot of interest and lot of that is converting into actual activities, both for nearshoring as well as onshoring, or what I often call ‘newshoring,’” Lamar said. “The term I don’t like is re-shoring, which is what’s left is coming back and that’s just not the case. But we’re seeing people do new things with technology, with new production methods.”

Savings realized in logistics and automation can somewhat recoup a labor cost three or four times what it would be in Asia, but for the foreseeable future these ‘newshoring’ factories will have to target brands with a clientele that can handle a higher price point.

“We’re not interested in manufacturing for Walmart; that’s not economically feasible,” said Erruchio, whose company gets about 25 percent of its revenue from apparel. “For us, it’s kind of like driving a Ferrari to the grocery store—not the best use of our equipment.”

Andari Fashion, Inc. in El Monte, Calif.

Family legacy

Some American factories are family legacies that have been around for decades. Andari Fashion Inc. is owned by the brother-sister tandem of Wei and Ilona Wang, whose mother opened the factory in El Monte, Calif. in 1991 where it’s still rolling today, now with one of the largest sweater manufacturing locations in the country, and 70 percent of its energy consumption provided by solar.

“My mom knew somebody in El Monte that was doing sweater production and when she decided to emigrate to the U.S. [from Taiwan] she started a small company, basically subcontracting work for that other factory,” Illona Wang said. “She started growing her own clientele and kind of became what we’re doing right now.”

Andari, too, winds up making higher-priced garments with Ralph Lauren as one of its top clients, but the Wangs have realized some material efficiencies by producing in the USA.

“If the program is right, depending on the sourcing of materials, you can save on lead time,” Ilona Wang said. “We also have smaller minimum orders than overseas factories so we’re able to accommodate smaller units. Some clients starting new lines may have quantities that are hard to communicate with overseas factories, so we provide that kind of convenience for them—product development, communication, facilitate production, process support.”

That’s still not enough to make up for the difference in labor costs, but Wei Wang said there’s still more sweetening factors.

“There’s no inventory, so the brands are willing to take a higher cost knowing everything they sell is going to margin,” he said. “A lot of our clients use Italian yarn and it’s easier to sell Italian yarn through the U.S., instead of China, then shipping the finished good back to the states, so there’s some savings there and also less [carbon] footprint. On some projects we work with clients who want it 100 percent made in the USA, including fiber-forward.”

For brands on a budget, Andari offers clients the chance to print a test sample at their California plant and send the larger order on to their factory in China, a service they’ve been offering since the late 1990s.

Chinese Vice Premier Liu He presents U.S. President Donald Trump with a letter from Chinese President Xi Jinping after Trump announced a “phase one” trade agreement with China in the Oval Office at the White House October 11, 2019 in Washington, DC. China and the United States have slapped each other with hundreds of billions of dollars in tariffs since the current trade war began between the world’s two largest national economies in 2018. (Photo by Win McNamee/Getty Images)

Of tariffs and trade wars

Tariffs levied against China by the Trump Administration and continued by President Biden have incentivized some American brands to produce at home, but have also had a discouraging effect, Lamar says.

“It’s also become anti-Made in the USA, because if you want to make it in the U.S. and import it to China, there will be a tariff, but if you make it in Canada or Mexico, you don’t have to pay the tariff,” he pointed out, adding that stringent guidelines for claiming Made in the USA have been a turnoff for some brands. “Companies that use the Made in the USA label have to know their entire supply chain is in the U.S., then get it made in the USA, but then if it has imported parts they can’t get it, so it’s a disincentive for companies because they’ve made getting the label so strict.”

Lamar believes it might behoove the cause of domestic production to lighten the requirements to be Made in the USA.

“We want Made in the USA labeling to make sense, to support and encourage U.S. manufacturing. But the more restrictive the requirement, the less likely we’ll see support,” he said. “It doesn’t help if labeling ‘Made in the USA’ is actively discouraging it. It seems like it’s sort of taking us in the wrong direction. I certainly want to be accurate, but at what level accurate?”

Sucharita Kodali, VP analyst with the technology research firm Forrester, said an uptick in American manufacturing has been on her radar for a while.

“We’re hearing about it because there’s just been more of a push toward domestic production, or nearshoring, which I think dates back to the last presidential administration, so I do expect there to be more of it, but I don’t know that anybody has resolved the pricing and the costs,” she said. “It seems like there should be more nearshoring in Central America, but I don’t know the factories there are able to deliver high-quality goods.”

In the meantime, trade wars will continue to be a factor.

“What’s interesting is that both political parties are supporting it,” Kodali said. “What’s going to happen to all the business, all the free market people when both political parties are protectionist? Is that part of the reason we wind up having a third political party?”

American-made pride

Though globalization has made the bumper-sticker appeal for ‘Made in the USA’ seem like an antiquated, at times even xenophobic taunt from a bygone era, there is a still-vital urge for many brands to manufacture domestically for reasons at least in part patriotic.

“I truly wanted to keep the work in the United States and get supply from the U.S.,” said Scott MacKenzie, a 62-year-old from New Hampshire, whose first foray into fashion yielded Delaine & Co., a knit-wool ski sweater brand. “Making [my sweaters] in America has been great—it’s just taken me a little while to find the mill.”

After some struggles trying to find a factory that could meet his demanding specifics, MacKenzie finally came upon Andari, which appears to be the right fit for both.

“Some companies do [care about being American-made],” Ilona Wang said. “I think the higher price point, more luxury brands definitely want that. But compared to the ’90s, I think companies are going in two different directions—some don’t care and will produce anywhere in the world and some will produce exclusively in the U.S. Rarely are there brands in the middle.”

Lamar points out that for all the talk of buying American made and protecting jobs at home, U.S. consumers have never really put their money where their mouths are.

“Lots and lots of data over the years has shown that the ‘Made in the USA’ label doesn’t necessarily translate into more purchasing. Consumers go for the product that has more features, whether that’s price or quality or something else,” Lamar said. “There are people with loud voices who say ‘only Made in the USA!’ and there’s nothing wrong with that, but the vast majority of consumers make buying decisions on a variety of factors.”

The stats bore out that truth in 2021, as even with supply chain issues and the trade war with China, U.S. apparel and footwear production accounted for just 2.8 percent and 1.9 percent of the U.S. market, respectively, according to the Coalition for American Partnerships in the Americas (CEPA).

Fast fashion for the troops?

For brands, finding the right fit for their specific needs can present a challenge. Robert Yturri was among the founding members of The North Face in the late 1980s and when he decided to take on head of product development duties for Forloh CEO Andy Techmanski in 2019, he decided ‘Made in America’ was the only way to go.

“With Forloh (For the Love Of Hunting) and Andy’s desire to make something different, you know, I pitched him the idea of Made in the USA,” Yturri said. “I said, you’re going to need a decent amount of money and you’re gonna need some patience because this would be a project like no one’s ever done because we’re talking about the highest end product in a country that doesn’t even know how to make it.”

Last week, Yturri and Forloh announced the latest fruits of that dream, an 800-plus fill 90/10 power down, developed in partnership between Forloh and Downlite Outdoor, that the company said is the first of its kind that’s Made in the U.S. In 2021, Forloh was first to market with its cooling technology collection SolAir.

“The real secret sauce in making stuff in the USA is down to the partnerships with your sourcing vendors—and your cutting,” Yturri said. “If you don’t have that, you’re going nowhere. And so that’s what we worked on for the first two years was getting all of these relationships dialed in.”

Somewhat surprisingly, the first roadblock Yturri ran into was put there by the U.S. military.

“If there was a government order my stuff wouldn’t get made,” Yturri said of the challenge of working with a federally contracted factory. “So we had to shift gears a little bit and start thinking of joint venture partnerships with these factories instead, where we’d invest in, say, the machinery.”

The JV move proved to be Forloh’s “secret sauce.”

“There was minimal risk on the factory side because we were doing the investment in materials. We did the investment in everything other than cutting,” Yturri said. “All they needed to do is guarantee the output by a certain date. We started talking like that and that became our secret sauce. No one else. No other brand, from a competition standpoint, could come in and use our stuff.”

Yturri quickly discovered that many U.S. apparel factories were all at once completely dependent on government uniform contracts, for which they were paid so little that there was no room for profitable margins.

“The factories are on edge because they don’t want to lose their military contracts,” Yturri said. “You just kind of sit there and wait on them, and I’ll be honest, the stuff [the military] is wearing is crap. This is what we’re giving to the people that defend us? It’s just a joke; zero thought and design, so, you know, I’d be lying if I wasn’t telling you the military’s not on our radar.”

Yturri hopes the success of Forloh’s waterproof down jacket will inspire other companies to take a chance on Made in the USA.

“Hopefully, they will learn to take that needle out of their arm of Asian manufacturing,” Yturri said. “If we can offer the same price 100 percent made in the USA, I’m pretty sure people are going to start leaning to Made in the USA. It was kind of why we launched it first, to sort of show everybody that USA manufacturing has made strides.”

Red, white and green?

If manufacturing in the United States is more expensive, transportation within its borders leaves less of a carbon footprint and its factories subject to greater labor and environmental oversight, is it unreasonable to come to the conclusion that anything Made in the USA is necessarily sustainable?

Yes, says Chelsea Murtha, sustainability director for the American Apparel and Footwear Association.

“Made in the USA basically confers you might have higher environmental or labor standards, but it doesn’t mean you’re meeting full sustainable criteria. Made in USA only claims cradle to gate, not cradle to cradle—it doesn’t reach the full life cycle,” she said. “I have seen folks use [Made in the USA] as a proxy for sustainability claims… but I think consumers have really high expectations and I don’t think Made in the USA gets you all the way there.”

Just how close Made in the USA credentials get a brand to sustainability status, the positive association is important to the clients at Andari and Evolution St. Louis.

“We do not have any customer in fast fashion, large quantity,” Ilona Wang said. “H&M, Gap, Zara are definitely not our clients. We’re in a more niche area where customers care about sustainability, care about the country of origin, all those things for their brands. Most of our customers are in the sustainable route at this point, but they may not be able to advertise that they’re sustainable as their message.”

Erruchio sees his clients trying to close a generational gap, as well.

“The younger generation, especially, is very mindful that fast fashion is really disposable and the fashion industry is the largest polluter of landfills,” he said. “There’s a trend away from that for younger consumers.”

Is there a trained labor force in the USA?

Not only are wage expectations higher in the U.S., there’s a gap in experience working in clothing factories and in knowledge of how to use newer machinery.

Illona and Wei Wang see that first-hand as they head into their fourth decade at Andari.

Inside Andari Fashion Inc. in El Monte, Calif.

“Fortunately, we’re in the Los Angeles area and sometimes we’re able to find maybe new immigrants with previous work experience, so they can basically start immediately, but it’s been a challenge,” Ilona Wang said. “Wei and I had a conversation recently how a lot of our employees have been with us 20 and some almost 30 years, but they’re getting older and we have to think about how to train newer, younger people.”

Evolution’s Erruchio has been able to lean on consulting help from Stoll and a strong immigrant contingent from countries like Turkey, but the biggest problem he encounters is finding workers suited for the more white-collar work of product design and programming state-of-the-art machinery.

“What we’re trying to do is challenge and teach designers what these machines are capable of. Their design mindset is still set to the old methodologies,” he said. “We’re slowly teaching them to do it this way and not that way… The knitting machines we have are really able to step up to the next generation. We should be producing three, four, five different structures within the same garments. In the past you had to layer each separate piece of fabric whereas now, you can knit it all in one piece.”

Despite these advances, Wei Wang said, human labor is still needed at the end of the line.

“We are pretty much as automated as we can be. Everything is on a program and fully fashioned so when you’re on a knitting machine, there is no cutting. All that’s really left to do is assemble the pieces together,” he said. “Basically, we can 3D print an entire knit sweater without assembly. I think we are at the forefront of trying to minimize finishing and labor work, but there are certain styles, certain settings where we’re still in need of a labor force to do the work.”