by Elizabeth Segran
It’s a sunny morning in Boyle Heights, a working-class neighborhood in East Los Angeles. Marty Bailey, 55, is about to start his day as the head of manufacturing at the eco-chic label Reformation. The brand’s 33,500-square-foot headquarters houses the first fully sustainable sewing factory in the United States. When visitors stop by, they tend to notice the Curtis Kuling graffiti scrawled on the walls, the hip vintage furniture that populates the design studio, and employees tending to their plots in the community garden outside. But for Bailey, the most exciting thing about the factory is its totally reimagined manufacturing process.
Reformation is a fast fashion brand, constantly changing its product mix to keep up with the latest trends. But founder Yael Aflalo has upended each step of her supply chain to make it leaner, more nimble, and more environmentally friendly. A team of data scientists keeps track of best-selling outfits and conveys this information to Bailey, who is tasked with producing garments based on real-time demand. This ensures that the brand is delivering products that customers love, while eliminating wasted inventory. “Today, we’re making 300 maxi dresses,” Bailey says. “Yesterday, we were making T-shirts. From a logistical and supply-chain perspective, that’s a very complicated thing to do. It’s a challenge, in the best possible way.”
This approach to manufacturing bears little resemblance to the Fruit of the Loom factory where Bailey first launched his career three decades ago. In 1984, Bailey had just graduated from Campbellsville University in Kentucky, got married, and had a baby girl on the way. He needed a job quick, so he took a position at “the Factory” (as the locals called it) on the western edge of Campbellsville. At the time, it was among the largest apparel-making operations in the world, with 700,000 square feet devoted to bleaching and dying fabric, cutting and sewing, and quality control.
During each shift, Bailey remembers tens of thousands of professional sewers being shuttled in by school bus from seven counties, churning out more than 4 million identical plain white T-shirts and tightie-whities a week, filling the cavernous floor with the rhythmic buzzing and whirring of sewing machines. One sewer, June Judd, who spent 18 years at the factory, remembers sewing the fly onto 15,000 men’s briefs every single day. Sewers earned double the minimum wage—between $10 and $12 an hour—often making around $50,000 a year with overtime, or $75,888 a year with overtime, adjusted for inflation.
The twists and turns of Bailey’s 33-year-long career tell a story about how factories in the United States hollowed out in the ’90s, then unexpectedly began to show signs of life again a decade ago. Bailey, it seems, is kind of like the Forrest Gump of American manufacturing: always at the right place at the right time when the industry is on the brink of transformation. He’s gone from Fruit of the Loom’s Kentucky sewing plant to setting up manufacturing facilities for American companies in El Salvador and Honduras, to developing high-tech operations for American Apparel, and now, Reformation’s factory in L.A.
The shift is clear: These days, instead of massive conglomerates making generic products, a wave of tech-savvy startups are choosing to manufacture in America. Their reasons for going local often have little to do with patriotism. They’re primarily searching for better ways to create high-quality, state-of-the-art products and deliver them to customers faster than competitors making merchandise overseas.
Reformation is a great example of this, but there are hundreds of others. Take American Giant, which is trying to engineer the best hoodie of all time; or Mizzen+Main, which incorporates performance fabrics into dress shirts; or Winkbeds, which develops mattresses that allow couples to adjust the temperature on their side of the bed; or Bench Modern, which builds customized sofas in as little as 24 hours. These new companies are contributing to small gains in the U.S. manufacturing sector, including the 35% increase in output and the 650,000 new jobs added since the recession ended in 2009.
THE HOLLOWING OUT OF AMERICAN FACTORIES
This uptick in Made in America startups could well signal a new era of manufacturing in the United States. But it’s important to remember that these are just a small fraction of the 4.5 million jobs that disappeared since NAFTA went into effect in 1994.
Bailey first noticed jobs leaving the country in the mid-’90s. All around him, he watched as factories began to downsize. There were many reasons for this shift—American consumers demanding cheaper products, American employers resisting rising labor costs and unions, free trade agreements making it easier to manufacture abroad—but the end result was always the same: American workers were out of work. Week by week, hundreds of Bailey’s coworkers at Fruit of the Loom were handed pink slips. Then, in 1998, after running for 50 years, the factory shut down operations altogether. “These were folks I knew,” Bailey says. “These jobs had paid for people’s houses, cars, and kids’ college. Workers took pride in being skilled sewing operators.”
As a rising star at Fruit of the Loom, Bailey was posted to Central America to set up new facilities that would make the very same T-shirts and underwear his friends in Campbellsville once made. “I went from managing factories in the southern United States and Texas to opening facilities in Honduras, El Salvador, and Mexico,” he recalls. “I went from working with highly skilled American sewers to training people in Central America who had never seen an industrial sewing machine before.”
Manufacturing jobs have been leaving the country for decades now, but recently, offshoring has been creeping back into the headlines. It came up repeatedly during the 2016 election, with candidates on both sides of the political divide decrying the hollowing out of American factories. Donald Trump and Bernie Sanders devoted a significant part of their platforms to promising to bring these jobs back, tossing around plans to pull out of free trade agreements and impose import taxes. Yet few politicians, if any, have talked about what it would actually look like to usher in a new era of manufacturing in the United States.
As president, it’s unclear whether Donald Trump will follow through on his protectionist rhetoric. He has already abandoned the Trans-Pacific Partnership and is talking about imposing an adjustable border tax that could hurt companies that produce overseas. His goal is essentially to go back in time to the golden age of American manufacturing, putting the working class back to work in the vacant steel, automotive, aerospace, and textile factories that are dotted around the country. But there are holes in this plan: What products can still be produced here, given the current infrastructure and workforce? How would companies manufacturing locally compete with those making products with cheaper overseas labor? How would recent advances in robotics and automation fit into the picture? “It’s not so easy just going back in time,” Bailey points out. “The world has changed.”
The startups that have committed to U.S.-based manufacturing understand this. They were laying the groundwork for a new phase in American manufacturing long before Trump started campaigning on his America First platform—and they didn’t model their factories on those of the past. They’ve been coming up with new, innovative approaches to production that address current demands and challenges.
American Apparel is one of them. After years of setting up factories overseas, Bailey returned to the U.S. in 2002 to run the company’s brand new factory in Los Angeles. Fifteen years ago, the notion of making T-shirts in America was so novel that journalists and cable news crews were constantly buzzing about American Apparel, trying to make sense of how founder and CEO Dov Charney was able to wholesale a T-shirt for $3 while still paying American workers a fair wage. But by setting up a vertically integrated supply chain—controlling everything from the factory to the distribution—Charney had found a business model that worked, paving the way for a whole flock of fashion startups to consider making products locally, rather than instinctively looking to Asia and Central and South America.
Earlier this year, American Apparel filed for bankruptcy and was sold, but by then, Los Angeles had been transformed into a thriving hub of garment manufacturing, employing nearly 50,000 workers to cut and sew apparel. And Southern California isn’t the only place that’s created new jobs in this sector. American Giant has built a robust cotton manufacturing supply chain in the Carolinas, Mizzen+Main is bringing dress-shirt making to Texas, State Optical is training eyeglass craftspeople in Chicago, Winkbeds is working with traditional mattress makers in Wisconsin to make the most high-tech beds on the market, and Maiden Home is able to deliver customized furniture in three weeks by manufacturing in North Carolina.
The question is whether this new generation of startups will remain niche, forever appealing to a small subset of wealthy consumers, or whether they can scale and stay in it for the long haul. To have an impact on the economy, these brands will need to produce at greater volumes, drive down prices, and employ more workers. They will also have to reckon with the shifting technology landscape, including Amazon’s dominance of the e-commerce market, the shifting rules of engagement with consumers on social media, and advances in automation that are upending manufacturing as we know it. Can they do it?
Some of the most well-known American companies today—Microsoft, Apple, Facebook, Amazon—have relatively small workforces. When Facebook reached a market capitalization of $200 billion in 2014, it only had 9,199 employees; when General Electric hit the same mark in 1997, it had 239,000. Technology companies are able to create wealth but not necessarily jobs. This isn’t the case when it comes to making furniture, clothes, watches, and eyeglasses. As a new breed of entrepreneurs is discovering, to make products in America, you need skilled workers—and a lot of them.
In 2014, Scott Shapiro launched State Optical, one of a handful of eyewear brands operating entirely in the U.S. He opened a 10,000-square-foot factory in Vernon Hills, a northern suburb of Chicago, and invested thousands of dollars in building a team of craftspeople. Before launching, the company had a six-month-long apprenticeship program. Shapiro’s cofounders, Marc Franchi and Jason Stanley, who previously handmade small batches of eyeglasses for their brand Frieze Frames, taught 50 new employees the fundamentals of the craft. These new workers had previously been mechanics, jewelers, retail associates, and electricians. “There just weren’t people left in the U.S. who knew how to make eyeglasses anymore,” Shapiro explains. “Starting this business meant reintroducing these skills into the workforce.”
State Optical’s factory is well-lit and the white walls are stark, except for the enormous American flags that add bright pops of red and blue. Making eyewear is precise work: Employees sit quietly at tables, buffing the frames with tiny tools for a high-gloss finish, tightening tiny screws to just the right level of tension, or inspecting each pair’s rounded edge.
Vitaly Vaysberg, who was born and raised in Chicago, can be found behind one of the 50 new state-of-the-art machines Shapiro imported from Japan and China. He began his career at his family’s metalworking factory, but after his father retired, he began looking for other manufacturing work and spotted an ad for a job at State Optical. He became employee No. 4. These days, he works at a computer that helps him insert hinges into glasses with fine precision. “I fell in love with manufacturing because you’re basically taking a big, unformed slab of material and turning it into something that someone can use,” he says. “But metal is totally different from plastic. When you make a mistake working with metal, you can always fix it by welding a small piece of metal back into the structure. With plastic, you only have one shot, so you have to get it right the first time.”
Shapiro, whose family has been in the eyewear wholesale business since 1977, had noticed that the quality of eyewear had been steadily getting worse. He watched Luxottica, an Italian conglomerate, dominate 80% of the market, buying up brands like Ray-Ban and Oakley, licensing glasses for designers ranging from Michael Kors to Tory Burch to DKNY, and setting up retail chains like Pearle Vision and Lenscrafters. To streamline production, Luxottica invested heavily in a factory in Dongguan, China, where it makes the vast majority of frames and lenses sold in the United States. Warby Parker, a eyewear company popular with the millennial set, manufactures in a similar facility in China. “The workforce in the Chinese eyewear factories is not particularly specialized,” says Shapiro, who has visited these facilities many times because of his parents’ company. “The entire staff goes home for two weeks during Chinese New Year, and often, only half comes back. The factory is continually putting untrained workers on tasks and expecting them to learn on the job.”
All of this, Shapiro says, affects quality. But as he studied the market, he realized that some Americans were looking for better craftsmanship and attention to detail in their eyewear. “We’re seeing a lot of cynicism in the marketplace today from young people who are asking why eyeglasses cost what they do and where are they made,” Shapiro says. “I had heard consumers asking for glasses that were made in the U.S., so I knew there was a market.”
At State Optical, each pair of glasses requires more than two weeks to make, and requires 75 separate steps, such as drilling 21 tiny holes that make up State Optical’s logo onto the end pieces. He believes that attention to detail sets his company apart. Perfectly cut and buffed plastic sits more comfortably on the nose, well-made screws will stay tight, and together, all these little touches make a product that will last a long time.
Of course, quality comes at a price. Given State Optical’s initial investment in the factory infrastructure and worker training—plus paying employees an average of $15 an hour, with benefits and paid vacation—it made sense for Shapiro to price products at the higher end of the market. The glasses cost between $310 and $410, on par with brands like Chanel or Prada, and are currently sold in more than 500 high-end optical stores around the country. But over time, Shapiro hopes that it will be possible to produce in greater volume and more competitive prices.
As the company grows, Shapiro continues to bring on new workers, and he believes that eventually, he’ll help create a new workforce of skilled artisans who will be able to kickstart an American-made eyewear industry.
Cameron Weiss, one of a handful of people in the U.S. who can make a mechanical watch from scratch, is hoping to bring about a similar change in the timepiece industry. In 2013, he launched Weiss Watch Company out of his Los Angeles apartment, painstakingly placing each one of the 150 tiny components that go into a single watch (a process that takes 35 hours). Weiss, 29, has loved watches since he was a toddler and remembers trying to fix his brother’s dinosaur watch when he was 4. Before launching his business, he took a two-year training program at a watchmaking academy in Miami. “People who attend watchmaking schools in the U.S. generally train to fix watches,” he explains. “My ambitions were slightly different, in that I wanted to build an entire watch from scratch.”
Weiss apprenticed at two Swiss companies, Audemars Piguet and Vacheron Constantin, but rather than spending his career in Europe, he set a goal of returning the prestige of watchmaking to the United States. In the mid-1800s, the United States had been a leader in mechanical watchmaking, with brands like Waltham and Elgin developing engineering methods that were adopted by the Swiss and the British. But when the quartz battery-powered watch was invented in 1969, handcrafted mechanical watches were replaced by mass-produced watches, and production was shipped off to Asia. “I really believed there was a market for luxury watches that were made here,” Weiss says.
He was right. Over the last four years, the Weiss Watch Company has grown steadily and sells 2,500 timepieces a year. They cost between $950 and $6,950, a similar price point to Movado and Tag Heuer. Most Americans can’t afford that steep an investment, but Weiss has tapped into a market of luxury consumers who are particularly intrigued by the watches’ American provenance. As he’s ramped up production, he’s moved into a proper studio in L.A. and begun the work of training others. He has already taught former pastry chef Lisa Odland to become a watch technician (she now works alongside him), and he will continue to hire more people as his business expands. Improbably, Weiss has a helped resuscitate a dead industry in the United States.
MADE TO MEASURE
While U.S. eyewear and watch manufacturing have been almost entirely offshored for the past several decades, the furniture sector has fared slightly better. Across the country, clusters of woodworkers and craftspeople have doggedly continued to make tables and armchairs, selling them at local main street stores or trade shows.
Woodworking has deep roots in this country. In the late 1800s, the United States was a global hub of furniture manufacturing: Companies in North Carolina, Michigan, and Wisconsin developed new ways to streamline the mass production of wooden dressers and sofa sets. The industry thrived for more than 150 years, until production largely moved to China in the 1990s, partly because the Chinese government subsidized manufacturing to ensure that Chinese-made furniture was the cheapest in the world. This policy defied WTO anti-competitive agreements. In the last decade alone, America has lost 300,000 furniture jobs.
But in the last two years, tech entrepreneurs have been searching out independent furniture workshops around the country and partnering with them to sell their products online. They’ve discovered that manufacturing furniture locally comes with unique advantages: You can create customized products, then ship them to the customer in a matter of days. This holds significant weight in an era when consumers are more eager for customized products than ever before.
Maiden Home, a newly launched furniture startup, makes all of its products in three small family-owned factories in North Carolina, historically the epicenter of furniture making in the South. Nidhi Kapur, a Stanford graduate who previously worked at McKinsey, Google, and Birchbox, founded the company because she believed there was space in the market for a furniture brand that offered total customization. On the Maiden Home website, you can design an armchair or sofa from scratch, playing around with materials and colors like you would in a video game. With a few clicks, you can buy a personalized piece and have it shipped to your home in less than three weeks.
Selling products directly to customers online allows Kapur to cut out retail markups (which are particularly hefty in the furniture industry) and price her sofas at between $1,000 and $2,000, in line with brands like Pottery Barn and West Elm that mass manufacture the majority of their projects in China. “Making products in the U.S. happened to be the right decision based on my business model,” Kapur says. “My goal is to deliver high quality, customization, and most importantly, very quick turnaround times.”
Kapur, who grew up in Saratoga, California, right in the heart of Silicon Valley, has brought the mind-set of a tech entrepreneur to her business. When she began partnering with the small North Carolina factories, she noticed that their supply chains were fragmented and inefficient: They each sourced cushions and fabrics from a range of suppliers, paying far too much in the process. Kapur now buys raw materials in bulk on behalf of all three of the factories she works with, aggregating their buying power so that the factory owners can tap into lower prices whenever they need to purchase materials.
Creating jobs was not a driving factor for Kapur. But now that she spends her days with woodworkers in small workshops, her thinking has changed. “I have developed relationships with these craftspeople,” she says. “These are skills that have been passed on through generations and can’t just be outsourced overseas. It’s incredibly personal for me now.”
Kapur built her supply chain to ensure her sofas and armchairs would be reasonably priced. For Edgar Blazona, perfecting the process of creating high-quality American-made furniture at good prices took a few years. In 2011, Blazona borrowed $5,000 from his father-in-law to set up a small store in Berkeley called True Modern. Back then, there weren’t many options for buying locally made sofas in California; there was a far more robust furniture-making industry on the East Coast. But in the Bay Area—where granola-eating hippies buy their vegetables from nearby farms and slather artisanal jam on homemade bread—Blazona thought there could be a market for American-made sofas. He was right—but as he discovered, even people obsessed with locally made goods are still price-conscious. “We’ve become addicted to these low price points,” Blazona says. “For us, we were trying to figure out how to create a great product at a reasonable price point. Not the cheapest—not competing with China—just reasonable.”
He’s been tinkering with his business model for several years, but his newest business—a company called Benchmade Modern—has allowed him to scale. These days, he sells sofas online, allowing customers to pick the color, fabric, and size and have it delivered to their door in as few as seven days. Prices are similar to Crate and Barrel (as is the company’s aesthetic), costing between $1,000 and $4,000, depending on the model.
To make this possible, Blazona set up a factory in Los Angeles where sections of furniture are assembled to create a customer’s desired shape and size, then upholstered in the fabric of choice. Everything has been streamlined so that when an order comes in, workers are able to put all the pieces together almost immediately. There’s even a tracking device on the finished product so that the customer can watch it travel across the country to their living room. “I don’t want to get all Donald Trump about it,” Blazona says. “For us, it’s simply about asking: How do we use our people to build the things that we love? We’re betting we can do this at enough scale to bring the cost [of our merchandise] down.”
Both Benchmade and Maiden Home rely on technology to make the manufacturing and selling process as efficient as possible. But at Winkbeds, technology is essential to the mattresses themselves. Two years ago, founder Dan Alder left a career in corporate law because he wanted to create a tangible product that people would use every day. He’d had unpleasant experiences with buying beds. “It’s such an opaque industry,” he says. “No bed salesman can tell you why one bed is double the price of another. When I learned more about the industry, I learned that the very same bed is often marketed under different brands at different prices.”
Adler believed the industry could do better. To him, this meant not only creating a high-quality product, but also innovating to give the customer a better sleeping experience. And one thing that continues to wake people up at night is suddenly feeling too hot or to cold. He began to imagine: What if a bed could be temperature-regulated to the sleeper’s ideal level of coolness? Better yet, what if you could adjust the temperature on both sides of the mattress, so that couples with different preferences sleep comfortably?
As he set out to create his futuristic bed, it was critical that he work with a bedmaker based in the U.S. He found a family-owned factory in Wisconsin whose founder was excited about about developing this new bed. It’s easy for Adler to travel to the Midwest from his New York headquarters, so he makes regular trips to the facility to build prototypes and discuss how to incorporate new technologies. Moreover, communication is not a barrier, as it might be if he was working with a factory in China or Japan.
Earlier this year, Winkbeds launched coolControl, a patented system that conducts fresh air from the bedroom to create the desired temperature on each side of the bed using a remote control or an app. All beds are made to order and are delivered for free within seven to 14 days. A mattress costs $1,299 for a queen size bed, which is similar to the cost of Sealy or Serta. “It’s very clear to me that my entire business hinges on local manufacturing,” Adler says.
NEW VALUE PROPOSITIONS
Since 1988, Todd Whitley has come into work at everyday at 7 a.m. on the dot at the Eagle Sportswear factory in Middlesex, North Carolina. As the cutting manager, he supervises a team of five people who cut clothing patterns on fabric, which are then sent up to another floor in the building where 200 sewers turn the pieces into completed garments.
His work hadn’t changed much over the course of his three-decade-long career, but four years ago, the San Francisco-based apparel startup American Giant took over the facility, adding small but important improvements to the workflow. The company outfitted Whitley’s department with a high-tech digital pattern maker, which spits out designs in a matter of minutes, allowing the team to focus on the cutting process. “In the past, it would take hours, sometimes an entire day, for one person to draw out patterns,” Whitley says. “Now, it all happens by machine.”
Up on the sewing floor, American Giant has introduced a technique called “group sew.” Previously, each sewer on a team would be responsible for finishing off a particular part of the garment: the hem, the sleeve, the collar, etc. With the new method, a group of five or six sewers learn how to do all of these tasks. They pick garments from a pile and sew whatever part is required. “It ends up being much faster, and there are fewer defects when they work as a team this way,” American Giant’s founder, Bayard Winthrop, explains. “We offer incentives for teams that are able to go through garments faster, and the sewers have been pretty excited about it.”
The fact that the Eagle factory is still here at all is a miracle, given how many textile plants in North Carolina have shuttered since the 1990s. “I kept hearing that factories in this area were closing down,” he says. “It was really scary. But I really credit the Morrells [the factory’s owners] for keeping this place going and not letting employees go during the hard times.”
Winthrop founded American Giant in 2011 as a brand for high-quality basics. Slate called one sweatshirt “the greatest hoodie ever made,” which earned the company a loyal following among the Silicon Valley set. Winthrop launched American Giant because he was nostalgic for the American brands of his youth—Levi’s, Wrangler, and Fruit of the Loom—that were proudly made in the U.S. and were crafted to last a lifetime. He was committed to making all his products locally, and equally committed to making them at prices that middle-class consumers could afford.
The problem is, Americans are addicted to cheap products—especially when it comes to their wardrobe. The price of garments has gone down over the last few decades. In 1998, a pair of Levi’s 501 jeans cost $50 and a Ralph Lauren Polo shirt went for $62.50 (or $74.72 and $93.41 adjusted for inflation). Twenty years later, the suggested retail prices for the jeans is $59.50 and $85 for the shirt.
Last year, an Associated Press-GfK poll of 1,076 Americans found that the vast majority would choose lower prices over paying a premium for items that are made in the U.S. When presented with the option of buying a $50 pair of jeans made in another country or an $85 pair made in the U.S.—both made with the same fabric and design—67% said they would buy the less expensive version. This was true across the socioeconomic spectrum: People in households earning more than $100,000 annually were just as likely to go for the cheaper pants.
Consumers’ expectation that they should be able to buy clothes, sofas, and eyewear at rock-bottom prices is one of the biggest hurdles to the scaling of the American-made movement. The brands in this story are playing in the premium or luxury space: Only a small, wealthy subsection of the market will ever be able to afford $2,000 sofas, $1,000 watches, and $350 eyeglasses.
American Giant is trying to change the perception that goods made in the U.S. are out of reach to the average consumer. Offering hoodies that start at $69 and T-shirts at $24.50, Winthrop believes he’s on his way. He stays up at night thinking about how he can make his supply chain as cost-effective as possible. For him, it comes down to streamlining operations, making them as efficient as possible to drive down costs while still paying American workers healthy salaries. Part of this involves acquiring factories such as the Eagle plant, so that the company can update the machinery and use smarter techniques. But Winthrop is also working on larger scale efficiencies, such as bringing the factories, mills, and cotton suppliers closer together to further streamline operations.
All of this has an impact on the bottom line, enabling Winthrop to bring prices closer to mid-range brands like Gap or Banana Republic. But American Giant is trying to make the case that its products are good value for money because they are made with better materials and craftsmanship than brands making products in China (like Gap and Banana Republic). The company also prides itself on a rigorous R&D process, where each product goes through many rounds of prototyping to make sure that it is an improvement on what already exists on the market. While a $89 sweatshirt is three or four times what you might pay at Walmart, Winthrop argues that it will last longer.
“We’re in the business of trying to change consumer behavior,” he says. “We’re not trying to bring prices down to Made in China prices, but when you consider the quality we’re offering, we think we have a very strong value proposition for the consumer. I think consumers are getting tired of buying low-end, poorly-made fast fashion: They’re disillusioned from seeing one thing after another fall apart on them.”
NOT TRUMP’S WAY
Young entrepreneurs making products in America tend to focus on how innovative their products are, but every so often, you’ll meet one that is overtly patriotic.
In 2012, Kevin Lavelle launched Mizzen+Main, a menswear brand that incorporates high-tech fabrics into shirts so that they wick moisture and don’t wrinkle. The technology, it turns out, was the easy part. It was the manufacturing that proved much more challenging than he imagined.
Lavelle, 31, was dead-set on producing the shirts not just in America, but in his home state of Texas. He dug through phone books and web databases, calling thousands of factories. Some had been closed for a long time, while others specialized in a single product like firemen’s jackets or chef’s aprons. (Meanwhile, he passed over pages of websites that allow you to fax over a simple form with prototype and fabric information to China, and receive a shipment of shirts in six to 12 months.) Eventually, the legwork paid off: Lavelle found a facility outside Houston that has been making his shirts since day one and has expanded as his business has exploded.
“I care an enormous amount about my town, my city, and this country,” Lavelle says. “As a business leader, given that I had the choice, I thought it was important to offer people in my community jobs. If we don’t employ our own people, I won’t have a market to sell my shirts to.”
But even for entrepreneurs who proudly support job creation, Trump’s protectionist rhetoric does not sit well. For months, there has been talk of a proposed border adjustment tax, which the New York Times describes as the “centerpiece of the Republican tax overhaul.” The 20% tax would be levied on products imported to the United States in an effort to boost domestic manufacturing and make American products more competitive with those made overseas.
To Lavelle, who built his business entirely on his own terms, these new regulations feel a little like coercion. “Despite the fact that as an American-made business we would have a comparative advantage, I do not think the Border Adjustment Tax would benefit our economy or consumers over the long term or short term,” he says via email. “Plenty of things just cannot be made in the U.S. anymore and require an international supply chain; we cannot find some fabrics in the U.S., not because of cost but rather technical capabilities from both a machine and human capital side of the equation. We strongly support keeping every job in the United States [where] possible, but that should be a choice and not a mandated policy or punishment.”
In the weeks after the election, Erik Schnakenberg and Sasha Koehn, cofounders of menswear brand Buck Mason, spent hours discussing the future of their industry with other business owners in Los Angeles. Even though they manufacture their products in New York City’s Garment District and would not be immediately affected by Trump’s proposed border taxes, it still worries them. “It seems shortsighted to me,” Schnakenberg says. “I would much rather that the government support companies manufacturing locally with incentives, rather than punish overseas production. It means that if we ever decide that we want to scale, manufacturing in another country would not be an option for us. It would limit our options.”
Theirs is a common sentiment. American Giant’s Winthrop believes that these regulations might increase local production, but it won’t ensure that the products made here are innovative or well-made. “An inexpensive way for the federal government to maintain and increase American manufacturing is by introducing tax breaks, benefits, and incentives to companies that manufacture in the U.S.,” he says. “But the focus needs to be on fostering competitiveness.”
State Optical’s Scott Shapiro agrees. “Coercing business to manufacture in the U.S. won’t necessarily do anything to ensure that they make good products,” he says. “It won’t help make factories high-tech or ensure that we’re making well-crafted products.”
When Marty Bailey ponders his three decades in the apparel industry, it’s clear to him that we can’t simply go back to the time when Campbellsville, Kentucky, was a thriving factory town, churning out millions of T-shirts a week. But those days are long gone. “Many of the people I used to work with have retooled and learned new skills,” he says.
Because the Fruit of the Loom factory was closed to send jobs overseas, workers qualified for a year to 18 months of unemployment, rather than the typical six months. Many staffers who hadn’t completed high school used this time to get their GED. Most had never touched a keyboard before, but a number of them took courses in the basics of computing. Others became nurses or admissions clerks in hospitals. More than 1,000 workers took advantage of state benefits to get associate’s degrees at Campbellsville University. “If Fruit of the Loom moved back into the factory, I doubt they would be lining up for their old jobs.”
And it’s extremely unlikely the company ever would move back. In 1999, Amazon moved into the old Fruit of the Loom textile plant and turned the space into a distribution center. The retail giant has been there ever since, transforming Campbellsville from a hub of the industrial economy into a hub of the information economy. Bailey believes that manufacturing can come back to the U.S., but it must happen organically, with entrepreneurs who choose to build out new supply chains and smart new products of their own volition. This is the only way to create truly innovative businesses in the United States.
“There’s no going back,” Bailey says, sitting in his Reformation office in Los Angeles. He nods, then resumes thumbing through swatches of the most advanced sustainable fabrics on the market. Later, he’ll look over samples of material the world has never seen before: recycled fibers woven with tercel and viscose that are dramatically less polluting than most synthetics. Eventually, workers in a downtown Los Angeles factory will transform those fabrics into body-conscious mini-dresses for the trendiest twentysomethings. And maybe, someday, the Reformation business model—local, ethical, green—won’t be so exceptional in the landscape of modern American manufacturing.