Can America Make Stuff Anymore?

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Mid Adult worker with yellow helmet against factory interior
Dominik Pabis/Getty Images
Do you want to buy clothes that are made in America? And are you willing to pay what it costs to help bring manufacturing jobs back to America -- and be once again able to buy quality goods that will last, in return for your money?

Words and Actions

Most Americans answer yes to the first question -- initially, at least. A New York Times poll last year found 46 percent of shoppers saying they would happily pay the same price -- or even a bit of a premium -- to own clothing made in America, as opposed to clothing made in China, Vietnam or another foreign country.

Yet according to American-made apparel manufacturer Buck Mason, less than 3 percent of clothing is made in America.

Why is this? Many products made in America sell for prices far higher than what similar products made elsewhere cost. What's more, even if you are willing to pay the premium for quality (the Times poll noted that 56 percent of Americans say American-made clothing is of higher quality than imports), Buck Mason laments: "it is virtually impossible to go to a mall anywhere, and find a high-quality, American-made garment" today.

So there are really two problems for shoppers looking to "buy American" today. First, you can't find such goods to buy. Second, if you do find them, they cost too much.

American Apparel

One company trying to fix the first problem is Los Angeles-based American Apparel (APP). A vertically integrated clothing company (meaning it owns and operates its own retail stores, selling its own clothing), American Apparel makes its clothing in the U.S. and sells it here and abroad. Despite charging prices that can be twice the cost of imports, however, American Apparel has struggled to earn a profit.

The company ran into difficulties with its financial auditor in 2010 and suffered through a Securities and Exchange Commission investigation as a result. Sales growth has been anemic; American Apparel is losing money; and at last report, the company was $235 million in debt. Adding existential crisis to injury, American Apparel just ousted CEO Dov Charney, setting the stage for a nasty lawsuit with him.

Giant retailer Walmart (WMT) is having different difficulties with the made-in-America business model. You've probably heard that Walmart plans to spend an additional "$50 billion" over the next 10 years, buying American-made goods to sell in its stores. However, after contributing to the dearth of supply in the first place -- by pushing suppliers to cut prices, forcing many of them to close up shop in the U.S. and move manufacturing abroad -- Walmart is scrambling to find businesses that still make stuff in America, to stock its shelves and help it fulfill its promise.

American Prices

And what about the second part of the problem: price? With the falling cost of energy in the U.S. resulting from the shale oil boom, advances in manufacturing technology such as 3-D printing and rising cost of labor elsewhere, you'd think U.S.-made goods would be getting more cost-competitive. So why do they still cost so much?

Buck Mason co-founder Sasha Koehn points the finger at the multiple links in the supply chain that clothing passes through today en route from manufacturer to retailer. If a T-shirt from Thailand sells for $10 wholesale, for example, then delivery to industry showrooms, sales to wholesalers, resales to retailers and final sales to consumers can push the price tag on that tee up past $50. Koehn notes that the garment industry standard is for prices to get marked up as much as 800 percent between manufacture and retail.

A Modest Solution

Buck Mason is challenging industry norms with a two-pronged approach. First, the company limits price mark-ups with a "direct-to-consumer" model, manufacturing clothing in-house, then selling over the Internet to customers. By cutting out the middleman, Koehn says he's able to hold its retail prices to just twice the cost of manufacturing -- rather than 800 percent.

Still, as long as American workers are paid better wages than their counterparts overseas, made-in-USA prices will remain higher than American shoppers are used to paying. (Buck Mason sells jeans for $135, belts for $72, and T-shirts for $24.) With its cost structure as low as it can go, therefore, Buck Mason focuses its efforts on ensuring customers "get what they pay for."

Paying up for high-quality raw materials, Buck Mason sources leather for its belts from a century-old tannery in Chicago, for example. Koehn says that Buck Mason gets its denim from a North Carolina plant that charges $16 a yard just for the fabric. On one hand, this helps preserve American jobs and the same manufacturing base Walmart says it wants to promote. On the other hand, the higher-quality materials, Koehn says, enable it to stand behind the promise that its "30 Year Belts" and "20 Year Boots" names imply.

Will this business model work? If shoppers really do mean what they say about wanting to "buy American," it just might.

Motley Fool contributor Rich Smith has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned, either.

Looking for stories about the kinds of goods Americans still make? Check out the new AOL series, This Built America.


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393 Comments

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Doc

It's really easy to blame the EPA, OSHA, taxes, licencing, union labor, what ever excuse you want to name, but the profit margins tell a different story. They say the money is there, but it's not trickling down. Down to the employee's wages so they have money to buy their own products, down to new equiptment for more efficient and cleaner production, down to the stockholders in the form of dividends, down to the consummers in the form of lower prices. All that money, our money, is being collected and horded by a hand full of people at the top, at the expense of our nation, our independence, and our future. The profits show that there is plenty of money to do the right thing, but they just don't.

June 29 2014 at 3:19 PM Report abuse rate up rate down Reply
lregan066

I will pay the premium.

June 29 2014 at 10:47 AM Report abuse rate up rate down Reply
abourge458

Some years back, I decided to "GO USA " and bought A Pontiac.
Too bad It wasn't till I had already signed the contract before I saw the little metal tag on the door that said: "Made in Canada."

June 29 2014 at 2:59 AM Report abuse rate up rate down Reply
sapofam

While it is true that American-made clothing IS hard to find, does cost more than foreign-made clothes but IS of better quality. My father was a sewing- machine operator in Brooklyn, finally ending his career 1949-1983. My aunt and her husband oprated a retail clothing store on Orchard Street from 1951 -2005, I worked at Ripley Clothing, a large haberdashery chain through High School. My family was involved in the garment business. Now my son-in-law operates a clothing factory in Los Angeles. He employes about 100 people and is distributed by about 60 major retailers and many boutique outlets across the country. His main-line is "Kamarov", higher-end ladies apparel. He tried importing from China for a few years but problems like control, timed delivery and contractual design kept out-weighing the lower cost benefits and the need to visit Shang Hai at least once a year to settle misunderstandings...I am sure many other American manufacterers have undergone similar problems and some of the over-seas trade will come back to our shores. Between the 1890's and the 1960's the New York City area dominated the world in the clothing trade. Even today, most designers and makers (labels) maintain an office/showroom in NYC. where sales and design contacts predominate in the old "garment district" in Manhattan along with Chicago, Atlanta, Houston and LA are on the American trade-show circuit. We NEED American-made clothing to make a come-back for all the right reasons. Making it happen will be up to the next generation...the last one allowed it to slip away.

June 29 2014 at 2:42 AM Report abuse +1 rate up rate down Reply
crobertski

First off all you need to do is "google" usa made jeans and you'll find numerous American made jeans for a lot less than this article implies, like $49.00. As a matter of fact one company actually labels its stuff so you can actually trace the cotton back to the farm it was grown on. Doug and cwebuilder really have their finger on the economic pulse. Yea, we all should buy the cheapest possible crap we can find, that way we have more cash available to pay higher taxes to help out the losers on unemployment who can't find a living wage job. GOOD THINKING !!!! At least GM is trying to make good on their "junk". I don't recall the last time China wanted to make good on the lead based toys, or any of the other high quality goods they ship over here. You boys sure got it right why shouldn't we take all those "illegals" and "high school drop outs" and start exploiting them right here in our country, why should all those Foreigners have all the fun, nothing like a good old sweat shop. Screw them damn Unions for wrecking all that and building a stupid middle class. It's about time we're back on the right track, two classes the rich and the poor and "We Know" those poor deserve what they get !! Lazy Bastards wanting a living wage, who the hell do they think they are. Once again, better our tax dollars go to those great Fed programs that so efficiently deal with that rabble. They would only waste it locally on better food, clothing ,housing. Next thing you know all those local businesses would be making more and then they to would be wasting it on growing the economy. What a bunch of dumb asses, how the hell do they expect China to continue to expand and take over the world economy. Lucky for "us" they can't afford to invest in gold, that just leaves more for "us". You know if it wasn't for the fact that "we" do so well in this country we should just move out to some third world country and really live like the Kings we are !!!! There's a s**t load more low life out there to keep in their place. By the way I'm old enough to remember the old Bugs Bunny cartoons. I believe he would look at you folk and say " What a bunch of marrons!!"

June 29 2014 at 2:28 AM Report abuse +2 rate up rate down Reply
cwebuilder

since the time televisions were first invented they were known to be a major hazard, so people never kept them on while unattended and no one was trying to do anything about it. un till Japan started making them and solved the problem, this forced American companies to do the same. the government had to force auto makers to put seat belts in cars, it is said Volkswagen spends the most money in the auto industry on safety. as a matter of fact I hold a patent on a safety device that will save thousands of lives a year around the world, the patent examiner said "it is the greatest invention that has ever crossed my desk in the 31 years of my being an examiner and I have an advanced degree in engineering." I have sent a copy to GM and Ford about three years ago and haven't heard a word back. the one nice thing about it is it can fit in existing cars without modification to the structure or the layout of the vehicles. so they don't care they are forced to care. but they still want you to buy American!

June 29 2014 at 1:56 AM Report abuse rate up rate down Reply
dab

funny thing about their question asking IF THE CONSUMER IS WILLING TO PAY THE HIGHER COST FOR GOODS IF THE MANUFACTURING RETURNED TO THE USA??? wellllll now, lets put it this way....when the manufacturing started going south of the border or to asia after bill clinton signed nafta into law, DID ANYONE ACTUALLY NOTICE A REDUCTION IN COST FOR THESE GOODS FORMERLY MANUFACTURED HERE ONCE THEY GOT TO THEIR NEW HOMES OUTSIDE THE BORDERS OF THE USA??? I for one noticed NO reduction in cost prior to 1997/98.....I will tell you how it is....these companies packed up and relocated for one reason.....MONEY....thats right....for example, werner ladder whose hq is in pa relocated atleast one of their plants to mexico, laid off all the workers in the usa, hired workers in mexico and provided FREE TRANSPORTATION TO AND FROM WORK, 2 FREE MEALS, AND I THINK I WAS TOLD EMPLOYEE ONLY HEALTHCARE ON SITE....the savings??? in one week they still paid LESS than the salary of the workers in the usa in a single day...NO retirement benefits, health insurance, unemployment benefits....and this is for just one company.....all the rest that went south have similar deals....but check this now....all the raw goods for those products being produced south of the border are shipped via truck to brownsville, mccallen, laredo, el paso tx, nogales az, and one or 2 other crossings further west...then the products are manufactured and sent back...so the big manufacturing business's are the only ones that have been saving any money since all this started in 97/98 time period...I know because I have hauled enough to the border crossings and brought back enough finished goods

June 29 2014 at 1:52 AM Report abuse +1 rate up rate down Reply
brennemanbelkin

The only reason the world isn't goose stepping and speaking German is that in the fourties America could make things. (Tanks, planes, etc.)
If WW-3 breaks out, we're toast.

June 29 2014 at 1:45 AM Report abuse rate up rate down Reply
jimmyv033

Thank Bill Clinton and the Democrats for NAFTA ....

June 29 2014 at 1:45 AM Report abuse +1 rate up rate down Reply
1 reply to jimmyv033's comment
Doc

You do know that Clinton just signed NAFTA right? It was the brain child of GHWB and Rockefeller, Two republicans. Bush the senior really wanted for NAFTA to be finalized on his watch but he couldn't get Mexico on board before the end of his term.

June 29 2014 at 10:00 AM Report abuse +1 rate up rate down Reply
time1865

I bought a John Deere D170 tractor that has a sticker proudly saying it was "assembled in America." Since I bought it 3 years ago it has had major mechanical problems every year. At the moment it is sitting in at the dealer once again. So far I have spent several hundred dollars trying to keep this green piece of crap cutting grass.

Before this tractor I had a John Deere LX188 that ran 19 years without one problem. So much for buying American. I am not going to pay more just because it's made in America. First try making a product that doesn't fall apart.

My cousin bought a Kenmore washer less than 2 months ago. It fell apart. They are taking it back and refunding her money.

June 29 2014 at 1:39 AM Report abuse rate up rate down Reply
1 reply to time1865's comment
abourge458

Hey... I told you awhile back.... Do not throw your Craftsman tools in the washer.
A lot of Craftsman are now made in China, and they don't stand up to a Kenmore washers like the USA ones did. All those broken parts of Chinese tools block things up!

June 29 2014 at 2:55 AM Report abuse rate up rate down Reply