Made in USA

Mitch Cahn, CEO of Unionwear, Talks About his Lean Journey

| Posted by unionwear

Mitch:  Hi, I am the Chief Executive of Unionwear.  We’re a small company, about 120 people, and I didn’t necessarily support the Lean program, I was the Lean program.  I lived and breathed the Lean program.  I was the point of contact for our consultant, and I still am.  I would say the number one thing that I do at our company is to enforce the principles of Lean and make sure that they work.

Gerry talked a little about unions. One connection between unions and Lean is that without Lean manufacturing, we would not be able to afford union labor.  Union labor is expensive, but it’s expensive because union people earn a living wage, and they have great benefits. They’re happy employees, and happy employees make productive employees. Productive and happy employees who want to do well for the company to follow the principles of Lean manufacturing.

I was introduced to your organization when I spoke here about five years ago at the request of Dave Hollinger from the New Jersey Manufacturing Extension Program (NJMEP).  We went through a Lean transformation between 2004 and 2006, and then we bought a bag factory, which was the complete opposite of Lean. It took Dave’s help and all of our experience, but at the end of that process, we took a factory that was in 60,000 square feet with about 80 workers, and we fit them into an 8,000 square foot space with 60 workers, and we doubled our production in our first year.

That’s the kind of experience that we had with Lean.  So, let me tell you a little about our company. We manufacture bags, such as backpacks, handbags, and tote bags, and we do a lot of military business. Homeland Security is one of our biggest clients. We manufacture ammunition pouches for the army and garment bags for the air force. We also have a very big hat business, and it’s the reason we’re called Unionwear—unions are a very big part of our clientele.  We are the only union shop in the country that produces baseball hats, and one of four that produces bags. Just imagine every Teamster who steps out of a truck wearing a Teamster logo hat—that’s us! That’s still a big part of our hat business.

CREATING VALUE

We are ten miles from NYC in Newark. We have union labor, which means that for all of our product categories, we probably have the highest labor costs in the world. A lot of people ask me how we compete with China. We can’t compete with China on wages, so we compete by creating value. That’s our focus, and it’s one of the key aspects of Lean. A lot of people have misconceptions about creating value, and I just want to say a few things here to clear up some of those misconceptions.

Manufacturers can’t create value by building up work in process, because parts have no value until clients are going to pay for them. Manufacturers can’t create value by cutting labor costs. You can cut your unit cost on a product by using Lean tools, but unless you redeploy that labor into creating more value, you’re not creating value.  Manufacturers can’t create value by focusing on profits—using productivity as a tool to increase profits is just the other side of the labor cost equation, and a manufacturer in New Jersey cannot compete on labor.  As a manufacturer, you only create value when your finished product sells for more than it costs you. Otherwise, you’re not creating value; you’re just moving it around.

I say this because a lot of people think creating value is just making work, without necessarily making finished products, but you’re better off keeping people home.  Manufacturers can’t create value by getting workers to work faster, because if they’re working fast but not adding value to our product, they’re actually destroying value.

We’ve survived by developing a single-minded focus on creating value, and this Lean transformation that we went through, nine years ago now, was just the beginning. Staying Lean, however, is a constant, never-ending struggle against human nature that consultants like to call continuous improvement.  Continuous improvement means that our Lean team—the team of supervisors that reviews all of our Lean procedures—tries every day to create more value with the same people.  When we measure productivity, we measure only finished products, and after nine years of continuous improvement across the board, we have tripled our productivity.

At the same time, the cost of imported textile products has more than doubled, so our products went from being five and often ten times higher in price than imported products to being in the same ball-park. Our bags maybe 20-25% more expensive on average, which is in the range of a premium that people are willing to pay for Made in USA products. That’s part of the reason we’ve been able to grow from 40 employees in 2004 to about 130 right now.

WHAT TRIGGERED THE LEAN TRANSFORMATION?

I started Unionwear in ‘92 when I saw a niche that was not being served— sewing to markets that value the country of origin enough to pay a significant premium for those products with, for example, a “Made in USA” label.  There are a lot of markets, such as political campaigns, that will only buy products made in USA. I started the business in ’92. From ‘94 until about 2004, we were competitive with the rest of the country, and we were really just focusing on the Made in USA and Union-made markets. In 2004, New Jersey passed a law to raise its minimum wage, and then we were no longer ahead of the rest of the country.

We were not paying people minimum wage, but we weren’t paying people right off the street with no experience eight or nine dollars an hour, either, and that’s where we would have to be pretty quick, so we were looking for a way to stay competitive with places like Georgia. In 2004, we calculated that an entry-level worker in a non-union shop in Georgia could make about five dollars an hour, whereas an entry-level worker in the union shop in New Jersey was being paid about  $11 an hour with the benefits.  We were unable to compete nationally, and we were looking for a kind of a magic bullet to solve this problem. That’s when I stumbled upon one of NJMEP’s Lean 101 simulations.

The Lean 101 simulation is a simulated clock factory—an eight-hour program run by NJMEP. In the beginning, a lot of senior professionals who think they know everything, myself included, sit down, and work in teams.  Everyone’s very competitive, and they try to make the highest number of clocks in the way that they know.  Lean principles are introduced throughout the day. In the first hour, your team might make 15 clocks, but after a day of Lean training, you might make 300 per hour. It’s a really great program! I highly recommend it to anybody, and when I came back from that program, I looked around at my factory.  All of a sudden, I was angry. I couldn’t believe all this stuff that I hadn’t noticed for the past twelve years.  All I could see when I came back was non-value-added work. I saw people spending fifteen minutes looking for a pair of scissors, people waiting for their boss to get off the phone, people sitting there while their machine was down, people desperately looking for a thread, people building work-in-process inventory, people manually measuring every single garment to make sure they did the job right. They were working very hard, very diligently—but they weren’t adding value to the product.

Those are all things that I can’t put on a client’s invoice, so if I get rid of them, that’s bottom-line profit right there.  We figured out pretty quickly how to calculate where we stood—we just did time studies of how people would work at 100% efficiency and compared that to how much time they were actually working. We found that people were adding value to a product about 20 percent of the time, for about two of their working hours. During the other six hours, they were working just as hard, they just weren’t adding value.

Our floor supervisors had been focusing on problems like people talking, sneaking calls on their cell phones, or going to the bathroom. Those things added up to maybe ten minutes of unproductive time, and here we are—not adding value for six hours! The supervisors’ focus was completely off-base.  We’d brought in consultants and their focus was to measure our labor in minutes: a tennis shirt might take 23 minutes of labor to produce when we first add it, and by introducing all these attachments and methods, they could get that down to 20 minutes at best. That would be a home run for the consultants, but they weren’t even considering the other 40 minutes in each hour that people weren’t sewing at all.

So, we never really touched on a non-value-added work. We pretty quickly hired Dave Hollinger through NJMEP to come in. He had absolutely no garment industry experience; in our first meeting with him, I brought our plant manager, who’d been in the textile industry for about 40 years. When we sat together, and Dave said he had no garment industry experience, Mike, the plant manager, said “I don’t see how you can help us to sew faster.”

Dave replied, “I have no intention of helping you sew faster. My experience is eliminating all the work that you do when you are not sewing.  It’s always the same, whether you’re in food processing or you’re manufacturing auto parts.”  So we gave him a small job (to kind of prove himself ) before we invested a lot of money in it. We asked him to improve our setup time in embroidery.

Our embroidery manager estimated that we were spending about 20 minutes between orders, taking some threads out of the embroidery machine, and putting new threads in. As Dave sat there on the first day, he said, “No, it’s actually taking you more like three hours between orders—20 minutes was what it said on the spreadsheet when you bought the machine.”  So we took a look at why it was taking three hours, and the first problem was our embroidery manager from China. Her floor people were mostly from Ecuador, some of whom spoke English pretty well. She would take our orders and write on them gray, forest green, navy blue to indicate thread colors they were to use. She gave these papers to the workers, who would then walk out to the shelves, where they saw boxes that said cement and canary and pewter and lilac. They had no idea what was gray and what was green; they had to open every box, and then when they found a gray, it was never the right one, so they got into a habit of bringing back six grays at a time and asking the manager which one to use. She would look at the boxes and if they were lucky, she’d choose one of them. The workers then went back to the shelves. Each box held 12 spools, but the machines embroidered 20 spools at a time, so they’d have to find another box of the same color. They’d bring the two boxes to the machine and then move on to the next color.

There are usually three or four colors in a design, so three hours later, we are finally ready to start the embroidery. That was one example of non-value-added work, so the first thing we did was take all of our 1500 colors of embroidery thread out of the boxes. We got rid of the names and replaced them with color numbers. We put them in clear zip-lock bags, and then we just created color-coded bins, kind of like a rainbow. Now when the manager gives a worker an order, they walk over, pick out three colors in ten minutes, and put them right on the machine.

That was the first thing that we did; we hired Dave Hollinger and his Lean team right away. We actually got a grant from the Department of Labor to keep them on for about two years, and during that time we made about a hundred improvements in only the baseball hat factory and our embroidery department.  Of those hundred improvements, probably 95 of them are still there, and we’re committed to keeping them there for a while.

Baseball caps are very much cookie-cutter products. Every day we make 15 totally different hats, and they’re all custom, but they all have the same elements, and they all go through the same raveling process, so it’s very easy to put Lean principles in place there.  That same principle that we applied to the embroidery threads works as well for plastic wraps or fabric.  Some of the biggest gains cost us no money and were very easy to figure out and put in place.  For example, workers wasted most time just looking for things because the place was such a mess. We went through our 5 Sigma exercise, and we ended up getting rid of every table and every drawer in the factory. We put everything up on walls where it was all visible.

When we put things on walls, we did shadow boards, so if someone took a certain dye or a pair of scissors off the wall, there was a shadow exactly where it had been. They would know exactly where to put it back and didn’t put it in the wrong place. We then made a small investment in tools for every single worker and drilled holes in their sewing machine tables for things like scissors, tweezers, screwdrivers, and things that they previously spent a lot of time looking for.  On average, they spent 20 to 30 minutes a day looking for tools, and workers hoarded them because our supply manager charged them if they lost something. As a result of the hoarding (and people having to look for tools), we spent way more in labor than we would have lost in theft.

We got rid of all the marginal junk in the factory. At that time we had 45,000 square feet of space, and when I walked out on the factory floor, there were shelves everywhere. When we got rid of the shelves and clutter, I could see clear across the floor and could see products flow through the factory. That uncovered a lot of other production problems that we didn’t realize we had. It’s amazing how people become blind to things they see every day! I remember when we were doing the 5 Sigma exercise, one operator had a bulky lamp on her sewing table. I was sitting in front of her, watching. Her sewing built up in a pile on one side, and then she’d pick it up, move it around the lamp and drop it in a bin in front of her.  Every ten minutes, she had to stop what she was doing to perform this routine. I asked her, do you ever actually use that lamp?  And she looked at me and asked:  “what lamp?” True story.

We moved sewing machines closer together so the work wouldn’t have to be carried between the machines. Managers in garment industries have traditionally practiced batching—one worker fills a bin with work before pushing it on to the next operation.  Eliminating batching definitely gave us the biggest productivity gains. It’s a bit difficult to explain why, but single-unit processing will get you the most bang for the buck in the Lean transformation.

After we’d eliminated batching, we were able to get orders out in three days instead of three weeks, when the order was at the end of the production line.  If there was a problem with the order, we could see and correct it early in the process, before the rest of the order was completed. Getting rid of the batching, however, was not without its difficulties. We said, okay we’re getting rid of all the bins now, so instead of a big pile of work behind you, you are just going to get one piece from the person behind you. Isn’t that great? The workers weren’t too sure about that.

The first week without batching, production really slowed down, and it took us some time to realize why. Everyone was afraid we didn’t have any work because they were used to having a huge pile of work behind them. In their previous jobs, they knew that if the plant manager didn’t have enough work, you got laid off.  So we started with a written policy telling everyone that we will not lay anybody off due to lack of work, which addressed that concern. Then we started broadcasting our production schedule. We made a huge sign saying we have 32,000 hats in-process right now, and that got the point across. The workers were way more productive than they had been before.

The bigger obstacle was that our plant manager’s management style was based on batching. It’s easy to manage by batching: I give you a big box of something, you do this, and come and get me when you’re done, which could be a day and a half from now.  So he gave everybody a bin and sat in his office. He was busy— he was also doing the purchasing— and at any given time there were three people sitting in his office, waiting for him to get off the phone. (There would probably  have been more, but he had only three chairs.)  He hated the fact that we got rid of batching because then he had to do the planning and had to move around. He gave me an ultimatum: either Lean went, or he would. We decided to stay with Lean, and he made good on his threat and left. He just didn’t want to do this job—he wanted to batch somewhere else, which is what he ended up doing, but as soon as he left, it was like we gained four free full-time employees. The people who had been sitting in his office were suddenly working, and productivity jumped up just from that.

We’re continuing to improve all of our processes. You have to because when you improve one process, something else becomes the bottleneck. Once you improve your productivity, then all of a sudden you’re not sewing fast enough, and then when you start sewing faster, your office and administration become a bottleneck. When you get all that figured out, you can’t make the stuff fast enough again, so we’re just constantly going through and improving productivity in every department.

We learned a lot of lessons that made the transformation easier. One is that the top management has to be involved—maybe not to the extent that I have been, but if top management is not involved, people are afraid to make decisions.  For example, I can say it’s okay to throw machinery away, but no one is ever going to throw away a machine unless I’m sitting there. No one is going to restructure a department, and no one is going to change the floor layout. There are obsolete parts that people are afraid to let go of; they just put them in a box somewhere, and it goes under a table. It needs to be thrown out.

Management has to be involved to make sure that that stuff happens in real-time. You also have to share the productivity gains, in order for people to really buy into it—we had bonuses, those bonuses became raises, and the raises became performance incentives, but we’ve always been keen on sharing those productivity gains. That’s how you get your best ideas from other people on the factory floor.  Once a critical mass of workers really buys into Lean, it really takes off. The workers inevitably love it—it’s a cleaner work environment, and they’re less fatigued. After about four years, we did Lean training in very small groups. We weren’t sure how much the factory workers would understand it. We found a training video from a consultant up in Massachusetts; it was in Spanish (most of our workers speak Spanish). It showed our employees how most people naturally use the principles of Lean manufacturing in their kitchens, but when they go to work, they throw it all out the window. It’s called Leaning Toast, and I highly recommend it.

So in 2008, we bought this bag factory. It had gone out of business; it was in foreclosure. We basically bought the assets and took most of the employees from East Newark over to Newark. Then we had the challenge of figuring out how to apply Lean in a custom product situation. It was very easy with hats because it’s the same line, but one day we are making backpacks, and the next day we are making safety vests, and there are days when we’re making backpacks, safety vests, tote bags and yarmulkes, and all these different things. We had to figure out how to make that work, so we have a Lean production team that meets twice a week and discusses production planning and production problems. We ended up hiring an engineer from the New Jersey Institute of Technology who does our value stream maps for every single product, and then we determine whether we can fit it into a basic team of sewing machines, or whether we should restructure them into a production line. We almost always determine that it’s faster to just move the machines around. It might take 90 minutes to move the machines, but an order that would have taken five days now takes three and a half.  We’ve also found that it’s worthwhile to have dedicated production lines for products that we make only intermittently. When we make safety vests, we get a pretty big order, but then we won’t make them again for six months, and there was always a very long learning curve when we set these production lines up again. We finally said, you know what? Let’s just leave a line in place—the rent is going to be cheaper than paying for that learning curve and spending that non-value added time for every new safety vest order. We’ve done that with a bunch of different products.

Since then we’ve figured out that the better and less expensive way is to map every production line that we set up. Because we didn’t want to keep taking more space, we now keep track of the production line at the end of the order—we take snapshots of everything, make a grid on it, and then when we get that order again, we put it all back into place.

Now that we have a companywide policy of adding value, we aim for five hours a day of adding value. That’s our minimum; we’re usually getting about six hours a day of adding value, and we use the term hours per day because that’s something that our workers all understand. They didn’t necessarily understand percentages. We got a math trainer from MEP to come in, and we found that most of our workers were at a second-grade math level, and they spoke very little English, but they understood the hours per day, and they also understood that adding value for five or six hours per day and getting paid for eight was a great deal.

We’re a small business, and we’ve had an engineer working with us until last year. We found that by focusing on the value stream maps, we were then able to reengineer products that we didn’t think that we could do before. We would make a messenger bag, and that’s the way that messenger bag was made. In an ironic twist, customers were taking their overseas products and sending them to us, asking us to knock them off, because they wanted the products made in America. In many cases, it’s actually less expensive to make the products domestically. One example is a product that requires very expensive fabric, like a leather handbag. A lot of those are made in the USA or in places that have even more expensive labor, like Italy. The leather is going to cost the same or a little more here than in China—it might be $40 in leather here and $6 in labor versus $40 in leather in China and $2 dollars in labor, but at the end of the day, its $46 versus $42, and you end up paying more in shipping and duties for the Chinese product. We’re seeing a lot of big bulky products coming back, like laptop bags with a lot of foam in them, and when we get these products, we’re noticing much unnecessary labor in the products that are made overseas. A lot of it is a vestige from six or eight years ago when labor in China was basically free. It’s not like there was unemployment insurance there—they had to make work for all the factory workers, and so they would have people trimming between the lining and the outside of a bag, something that no one would ever see, or just doing a lot of unnecessary stitching. A lot of bags had seams at the bottom, where makes it absolutely no sense. Why would you put a seam at the bottom of a bag? It’s only going to rip. It would only make sense if you want to throw some extra labor on there.

The first thing that we do when we get one of these restoring jobs is to take the product and re-engineer it so that it will be a better product and look exactly the same. The difference is, if we make it the way that you want us to make it, it’s going to be $85. If we make it the way that we want to make it, it will be $15. It’s really that much of a difference.  Then we’re able to be a lot more competitive without having to exploit workers, without trying to compete on labor costs. We’re basically competing on engineering.

Interviewer 1:  Since the Lean transformation, how’s your turnover been?

Mitch:  Our turnover is virtually nil. One of the advantages of being a union shop is that health insurance is very inexpensive for union shops. It’s something that we offer all of our workers.  Few of the other sewing factories— actually none of them in our area—offer health insurance, so workers will come to work for us because they know we offer it, and once they get it, they don’t want to leave. In fact, during that whole Lean time, the only turnover we had was the plant manager. You would think that implementing Lean would result in fewer workers, but in reality, it lowered our costs and made us more competitive. It enabled us to ship products faster, and as a result, we ended up with more business. With more business, we had more scale, which enabled us to lower our costs even more. Lean really drove the growth of the business and the growth in the number of employees, so turnover has not been an issue.

Interviewer 2:  Can you give me an idea of what the competitive landscape is like?  For making hats or something like that, who are your competitors?

Mitch:  Well, with hats, we don’t compete so much with overseas. A baseball cap has a ton of labor in it and very low material costs. Because it’s almost all labor, we’re still probably twice as much as an overseas hat—we used to be about ten times as much—but still, there are very few clients who will spend that for a product because it’s made in the United States.  We’re able to be competitive with bags. There are four other union shops out there, and so we compete with them for union work. We just did an order of 6,000 backpacks for the Federal Government Employees Union and 4,000 backpacks for the Firefighters Union Convention. There’s a larger number of domestic, military, and homeland security and government contractors that we bid against and really, there’s enough business to go around.

Now, however, the garment industry is really starting to come back, for bags in particular, and because of our location close to Newark, we’re seeing a big increase in business. We met with The Limited who came out and did a factory tour yesterday. We actually did work for Victoria’s Secret two years ago, and it was a very interesting experience. They decided then that they wanted to make five to ten percent of their products in the United States. We were doing their pink tote bags, and they did not have a plan to deal with a domestic factory. We took the order—we were really excited about the business—and we had to ship everything to Hong Kong first because that’s where all their testing facilities were.  They did not have any facilities domestically that could test for the kinds of toxins that were coming out of China. We couldn’t prove that this stuff didn’t have of these toxins in it, so we just sent everything to Hong Kong. Now they’ve gotten their infrastructure in place and they’re going to start sourcing some things domestically.

There are also a lot of organizations that really focus on labor content. An example is the college bookstore market. The Federal Labor Association began as a monitoring agency for bookstores to make sure that colleges weren’t licensing their logos to companies that produced goods in sweatshops. That fair labor organization is the same one that Apple hired to monitor the iPhone factories, and now Nike has hired it to monitor their factories overseas, but the college market has a very strong commitment to labor content. When you go to a college bookstore, you will see a lot of products that are made domestically, but they don’t advertise it anywhere. You don’t see a lot of college students rushing out to buy something because it’s union-made, but in reality, a lot of the products in the bookstores are actually union-made in the United States, because the bookstores’ standards for labor are so strict.

Because of the premium for domestic products is shrinking, different types of organizations buy domestically now because it’s not as expensive for them to be consistent. Manufacturers would be the first one—GM and Ford, food processing companies like Budweiser—because they’re using Made in the USA in their advertising, they don’t want stuff out in the marketplace that has Made in China labels, but then you also have organizations like NPR and Greenpeace that are buying products Made in USA to avoid any potential conflict concerning sweatshops, pollution and huge carbon footprint associated with shipping. It’s becoming a lot easier for us to compete, because there are a lot more clients who are willing to pay our price, and I feel that trend is only going in one direction.

Interviewer 3:  What percentage of your goods is for resale, and what percentage is just for organizations just to distribute as gifts, bonuses, etc.?

Mitch:  Right now, it’s probably about 40% of government work, mostly uniforms, and bags. We do a lot of hats for Homeland Security, coast guard, FEMA organizations, etc., and then, of the balance, it’s probably about 20%  garment industry, which is for resale. That’s really the only resale stuff that we do. As for licensed goods, even a company like Harley Davidson, which has a strong commitment to domestic manufacturing, made licensing deals several years ago, and they have lost control over the sourcing content of those things, so if you buy a Harley hat, it will still say Made in China. GM is not really licensing their logo except through NASCAR, and that stuff is made in China, so we’re not doing a lot of licensing business. It’s mostly the garment industry, and the balance is mostly promotional work for those kinds of companies and unions.

Interviewer 4:  Where are you located?

Mitch:  We’re in Newark, we’re right off of Greenfield Avenue in North Newark.

Interviewer 5:  You mentioned that now you’re at about six hours of value-added work a day, and originally you had a little about two hours of value-added work a day. What was the reaction of both the union employees and the union as a whole when you started turning up the level a little bit?

Mitch:  They wanted to make sure they were included in the gains, but in the backdrop of all this, there used to be maybe two dozen union shops in the area. Now we’re the only hat factory left out of four, and during that time our union was going through a lot of changes.  They finally told us to do whatever we needed to do to stay in business; they saw that the workers were really happy that we were increasing and not decreasing employment. It was a non-issue with the union.  In fact, I was even surprised to find out that unions, in general, had problems with Lean manufacturing. I found that out after attending a labor conference—apparently, it’s a big issue in China, where labor activists were fighting against Lean manufacturing. I learned, though, that’s because they weren’t sharing the gains with the workers; they were just trying to come up with ways to get more product out of the same number of people. Lean does not work in a top-down environment. It only works when people cooperate—you can’t force somebody to work smart, you can only force somebody to work harder.

Interviewer 6:  You said you had achieved gains when you got rid of the batching and moved to a continuous flow environment. I’m kind of curious, did you run into problems where some people on the line worked faster than others, and if so, how did you deal with it?

Mitch:  All the time! We balance our teams by doing a value stream map, and we determine that maybe this is a 30-second job, this is a 60-second job and this is a 90-second job. We look forward, and the job that takes the longest is the limiting factor.  With a baseball hat, it takes about a minute and a half to sew the visor on perfectly straight; that’s the limiting factor in baseball hats. It takes a minute and a half, so then we say okay, we want to give everybody else here a minute and a half worth of work, which might mean combining smaller jobs. With experience, you figure out what kind of buffer can go between jobs.  Maybe you put it in another machine. You’ve got to have people cross-trained to move to that second machine when there’s a problem, but we tend to put the slowest and most unpredictable people at the beginning and the end of the line because that’s how you can make up for your biggest mistakes.  If someone is slow or new, you can put an extra person at the beginning of the line a lot more easily than you can put him in the middle. You can always take people from the beginning of the production line and move them to the end if you see things are backing up there.

Here’s what you don’t want to happen, and it’s part of human nature:  When there is a backup in production, you notice that everybody behind that person starts to slow down. When I want to determine what is imbalanced in a factory, I walk around. If I see two people standing up and moving around, I know there’s a problem. I’m not paying people to walk around. We took the time to put these machines in the right place, so we did something wrong—the workers didn’t do anything wrong.  If I see a big pile of work in process, a machine is down, somebody didn’t show up for work, or we planned or estimated this wrong. People got used to be looking for piles, so they learned how to stay out of trouble by slowing down, not creating the piles.  That’s why I say that continuous improvement is just a constant struggle against human nature.

From Baseball Hats to Face Shields & Isolation Gowns

| Posted by unionwear

As one of the few remaining manufacturers in the US, Mitch Cahn & Unionwear is trying to fill the void left by all of the cost-cutting, outsourcing companies that have contributed to our crippled supply chain for lifesaving healthcare products, including personal protection equipment. They have turned a factory that was gearing up to make baseball hats for the Olympics, the US Census, and presidential campaigns into a facility making face shields & isolation gowns for frontline healthcare workers.

source: The Righteous Capitalists

NJBIZ: Manufacturers grateful for federal help, worried about the future

| Posted by unionwear

A group of business owners and executives told state legislators June 10 that federal loans provided crucial assistance in the early days of the COVID-19 lockdown, but said they are worried about the state’s business climate and what will happen when the funds run out if the economy does not recover quickly.

“I pushed the button to upload my documents one second after the loans were available,” said Gary Fails, the president of Carlstadt-based City Theatrical Inc. “We were among the first companies to get funding.”

The loans enabled the company to retain all of its employees, but, he noted “as one of the first companies to get funding, we’re also one of the first companies to have the funds run out.” City Theatrical produces lighting products and accessories for live events, a business that is unlikely to return this year. “Broadway shut down and our business disappeared and our sales dropped by 90 percent, Fails said.

Fails’ comments, along with those of other owners and executives, came during an online hearing convened by the bipartisan state Legislative Manufacturing Caucus and the New Jersey Manufacturing Extension program.

While some executives described problems getting loans from the federal Paycheck Protection Program they were eventually resolved and allowed them to keep employees on staff.

Newark-based UnionWear usually makes promotional hats and other apparel, but pivoted to producing personal protection equipment when the COVID-19 outbreak hit. “In early March, we were about to have our greatest year ever,” said company President Mitch Cahn. UnionWear had orders to make products for presidential election campaigns and for Olympic athletes.

The PPP loans, Cahn said, allowed him to offer hazard pay to workers. He was able to offer a “significant bonus to convince people to come back to work.”

When a worker at Newark-based ZaGo Manufacturing Co. contracted COVID-19, the company was able to allow him and everyone he had contact with to be away from work for a month, thanks to PPP funds. “Our employees knew that that if they were exposed, they wouldn’t be hurt economically,” explained Gail Friedberg Rottenstrich, ZaGo’s CEO. The company makes self-sealing screws, nuts and bolts.

Cahn also raised an issue that many of his peers echoed: the regulatory environment in New Jersey. He said UnionWear did not get any orders from New Jersey for its PPE because the state did not override the need for approval from the Food and Drug Administration, an action other jurisdictions have taken. “We work with Detroit and Los Angeles, but nothing locally,” Cahn said.

Several lawmakers on the call, including Manufacturing Caucus co-chair Sen. Linda Greenstein, D-14th District, vowed that the Legislature would examine the issue.

Social distancing rules could also pose problems in a state where expanding structures can often be expensive and time-consuming. Marotta Controls CEO Patrick Marotta, told the lawmakers that in preparing his most recent budget, he planned to squeeze more employees into the company’s existing space. “That’s completely out the window,” he said.

The Montville-based maker of electronic components for the military owns 25 acres of land, but cannot add another building because of Highlands Council rules. So Marotta is trying to find a second location and is “looking at New Jersey restrictions as opposed to restrictions in other states.”

While the participants in the call generally praised the government response to the pandemic, many are concerned about what the recovery might look like. As Dax Strohmeyer, president of Triangle Manufacturing Co. Inc., put it: “If the demand isn’t there, it doesn’t matter if you can stay open.” The Upper Saddle River-based company is a contract manufacturer of medical devices and its business was hurt by the prohibition on elective surgical procedures imposed in March. Gov. Phil Murphy ended the ban effective May 26, though some limitations remain in place.

Strohmeyer is concerned that when his PPP funds are exhausted, he may be “in the tough position of furloughing and laying off people to realign our costs and revenue.” He added that when demand does return, he won’t easily be able to bring qualified workers back.

All of the owners and executives heaped praise on the NJMEP and CEO John Kennedy for providing essential guidance on reopening and interpretation of government mandates.

Source:  NJBIZ.com

Unionwear is the merchandise provider of choice for Trump, Biden and others

| Posted by unionwear

Unionwear in Newark, NJ made hats for the Warren, Bloomberg and Trump campaigns. Mitch Cahn, CEO of Unionwear, has been overflowing with orders of merch. Before the Coronavirus pandemic, the factory had been making election swag for both parties since 1992.

“I want to make sure that people have a way to speak freely and use our products to get their messages across,” said Cahn. “Some will appeal to young people, some will appeal to women, some will appeal to old white men.”

Before the Coronavirus hit, Unionwear was making between 2000-3000 hats in a single day. The factory orders usually come from agencies working with campaigns or candidate-supporting groups. That’s because political campaigns often want to hire US-based businesses for their merch.

The 2016 election was also a busy season.

Cahn continues: “The one time we saw a very surprising spike was with the original ‘Make America Great Again’ hat. The demand overwhelmed the supply. There are only a handful of factories [that could produce these] in the United States working on that hat for Trump.”

This sort of swag often doubles as campaign contributions, and it adds up. The Trump campaign sold more than $20m worth of merchandise between 2016 and 2018. 

But not all campaigns make money on merch. Mike Bloomberg did not make money on his hats. He funded his run out of his own pocket.

Political swag is as old as the Presidency itself. Buttons bearing George Washington’s initials were sold at his first inauguration in 1789. But the business really took off in the mid-90s, when Mitch was just getting started.

“When the Internet came around and e-commerce became more viable, we got into the political market in a big way,” Cahn commented. But it wasn’t always easy. “All of our clients had moved overseas. And then we were left with a baseball hat factory and a lot of employees, and not a lot of places to get business from.”

Mitch had to transform the company, but he didn’t have to look far. He began selling to unions, who were looking to buy from Unionized businesses like his. He also began selling to military agencies, some of which are required to buy US-made goods.

Then came the political campaigns.

“The first order we got was a small order for the Bill Clinton campaign and was maybe 150 hats. Our first big break was with the Al Gore campaign [in 2000.] We sold probably more hats than we ever sold for any one particular client before. It was probably 200,000 hats overall.”

But having lots of swag may not translate into lots of votes, especially in 2020.

“The candidate that ordered the largest amount dropped out of the race early, Andrew Yang. That was definitely the most hats we’ve sold in this election cycle.” 

Yang’s campaign sold more than 30,000 “Make Americans Think Harder” hats, which made up about $1.2 million of campaign revenue and are still for sale on his website.

And, what does Unionwear do with its merchandise once a candidate drops out?

“We have this down to a science. We are producing in small batches. Someone would have to drop out unexpectedly for us to get stuck with anything.”

Business Insider: Presidential candidates buy hats from Unionwear for three primary reasons

| Posted by unionwear

Before the Covid-19 crisis, Unionwear CEO Mitch Cahn spent the past 28 years supplying hats to a wide variety of clients. Being one of the only unionized, domestic manufacturers of hats and other items, Mitch has found a significant advantage in providing swag to organizations that purchase products that are made in the USA. These groups include labor unions, some military organizations, and especially Presidential campaigns. 

Presidential candidates buy hats from Unionwear for three primary reasons:

1- Candidates are eager to show off their commitment to American job creation

2- Some candidates, such as Donald Trump and Andrew Yang, earn a profit off of selling their hats, providing much-needed financing to their campaigns

3- Unionwear’s prices are not significantly higher than those made overseas, thanks to their commitment to lean manufacturing and just-in-time ordering. This also means there are almost never leftover hats, even if a candidate drops out of the race suddenly

How did Unionwear get started selling merchandise to candidates as diverse as Al Gore, Donald Trump, Mike Bloomberg, and Andrew Yang?

After making a whopping 150 hats to Bill Clinton’s re-election campaign, their big break came from Al Gore’s 2000 presidential run, where he sold an estimated 200,000 hats. He has made hats for nearly every presidential candidate since.

“The candidate that ordered the largest amount dropped out of the [2020] race early, Andrew Yang. That was definitely the most hats we’ve sold in this election cycle,” said Cahn. 

Yang’s campaign sold more than 30,000 “Make Americans Think Harder” hats, which made up about $1.2 million of campaign revenue and are still for sale on his website.

“I want to make sure that people have a way to speak freely and use our products to get their messages across. Some will appeal to young people, some will appeal to women, some will appeal to old white men,” Cahn said.

Although currently manufacturing face shields and washable gowns for first responders, Unionwear is still taking orders for hats and other apparel. This crisis won’t last forever, but Unionwear plans on being around for a long time afterward.

Mitch Cahn, President of Unionwear, on Lean and Pivoting to Shields & Gowns

| Posted by unionwear

Mitch tells us how, a month ago, orders for political campaign hats and items evaporated as the Democratic presidential field consolidated. So, Unionwear needed to pivot and they started calling hospitals to find out how they might be able to help by making personal protective equipment (PPE) to help in the Covid-19 crisis.

Read more here

Rootstock: Unionwear Switches to Manufacturing PPE in the Fight against COVID-19

| Posted by unionwear

Under normal circumstances, Unionwear is the leading manufacturer of union, made-in-USA headwear, bags, accessories, work wear and safety gear. 2020 was shaping up to be a great year for the New Jersey-based company – between the presidential campaign, the Olympics, the US Census and other events, Unionwear’s employees would be busy all year.

But when the Democratic presidential campaign abruptly ended and the coronavirus pandemic arrived, circumstances became anything but normal.

“A lot of our jobs were canceled,” says Mitch Cahn, Unionwear President. “We do a lot of event merchandise, and a lot of events were canceled and some of our military projects were scaled back to make funds available for emergency relief.”

Like many companies coping with the challenge of operating with mandated social distancing amid sharply reduced economic activity, Unionwear quickly went from trying to keep up with orders while working at full capacity to not having much to do at all. The company cut their staff, sent workers home and tried to figure out how to succeed in a world changed by COVID-19.

Then they decided that they needed to come up with a new business model to carry them through the crisis.

The pandemic created a huge demand for personal protection equipment (PPE) to keep front-line health care workers, law enforcement and essential employees safe. Unionwear not only wanted to shift production to keep operating but also to make a difference.

Read more here

ACG Global: Mitch Cahn discusses winning ACG New Jersey’s Corporate Growth Award

| Posted by unionwear

In the latest installment of ACG Global’s At Home with the Middle Market, Unionwear’s President, Mitch Cahn, discusses why Unionwear won ACG New Jersey’s Corporate Growth Award (1:15) and their experience being a union shop (2:55).

Mitch explains how Unionwear was able to participate in the PPP due to some assistance from the Newark Mayor and Invest Newark (9:48), how they’re able to grow by purchasing the assets of bankrupt textile businesses (11:32), and more.

NJ.com: Unionwear, Workers United team up to produce PPE for coronavirus first responders

| Posted by unionwear

A healthy relationship between company and union has been the driving force in getting health care providers more and more personal protective equipment when it is needed most.

Unionwear, a Newark-based company that is known for its production of hats, backpacks and binders, has quickly shifted its focus to creating face shields and surgical gowns.

Workers United has been reaching out to companies who could provide needs for those on the front lines in combatting the coronavirus, ensuring their employees are still working.

In uncertain times, it was a perfect match.

Please read more here

njpac: The New Home Front: Newark Manufacturers Innovate to Fight Covid-19

| Posted by unionwear

Mitch Cahn of Unionwear was featured in a new series called NJPAC Business Partners @ Home.  These interviews will offer virtual conversations with executives leading their businesses in creative, effective and useful ways in the fight against the pandemic.

The first video conversation features three Newark business leaders who’ve rapidly pivoted from producing their traditional wares to manufacturing the vital materials—masks, sanitizer, medical face shields, isolation gowns—needed by front-line medical workers.

To learn more, please visit here

The Athletic: How a Newark factory that was going to make U.S. Olympic hats is now making PPE

| Posted by unionwear

Mitch Cahn saw his entire summer’s worth of production laid out. His shop was going to produce hats for the U.S. Olympic team, manufacturing the line that organization would wear and sell. It was already manufacturing hats for all of the Democratic presidential nominees. Then his company would make more hats for the fall. Presidential merchandise was a lifeblood for Unionwear and the Newark, N.J., factory where they are produced.

As one of the few textile manufacturing factories in the United States, Cahn said, its “Made in USA” emblem was a premium companies want to be associated with. When a presidential candidate or the team representing the U.S. abroad wants a hat, they also want it, well, made in the U.S. — and that’s Cahn’s business.

But everything went awry quickly in early March. All but two of the Democratic candidates dropped out. Then the novel coronavirus pandemic started to hit the United States in full force, dramatically slowing down business along with the rest of the country. A few weeks later, Unionwear cut their staff, too, sending workers home and trying to figure out how they would operate in this new world.

Read more here

Business Insider: The Same Factory Makes Hats for Trump, Biden, and Bernie

| Posted by unionwear

Donald Trump and Bernie Sanders aren’t exactly close on the political spectrum.

But at the Unionwear hat factory in Newark, New Jersey, they’re side by side.

Unionwear has been making campaign merchandise for US presidential candidates for nearly three decades.

The company caters to both Republican and Democratic candidates of all political stripes. This election cycle, the company has made campaign hats for Trump, Sanders, Joe Biden, Michael Bloomberg, and Elizabeth Warren, among other candidates.

Garment worker Maria Gallardo expressed a common sentiment: “We have to make money for our families, whether we agree or disagree with their message,” she said.

This year’s crowded field of candidates has been good for business. Cahn said Unionwear makes between 2,000 and 3,000 hats in a single day, with most orders coming from campaign-affiliated agencies or groups of supporters.

The 2016 election cycle was a particularly busy time for the company — Cahn said the company was surprised by demand for Trump’s famous “Make America Great Again” hats.

“Demand overwhelmed the supply,” he said. “And there are only a handful of factories in the United States. Everyone was working on that hat for Trump.”

Political campaigns often prefer merchandise companies that are based in the US, making Unionwear a go-to option.

Yet the candidate it’s provided the most merch for isn’t Trump, or Sanders, or even Bloomberg and his seemingly endless campaign budget.

That honor would go to Andrew Yang, the Democratic entrepreneur who dropped out of the race in February. Unionwear made many of the 30,000 “MATH” hats — that’s “Make America Think Harder — that Yang sold during his longshot presidential bid.

Its first political hats were for Bill Clinton’s 1992 campaign.

Political swag is at least as old as the presidency itself — buttons bearing George Washington’s initials were sold at his first inauguration in 1789.

But the merch business really took off in the mid-1990s, when Cahn was just getting started with Unionwear.

Cahn started the business in 1992. His initial attempts to sell to high-end clients like Neiman Marcus and Ralph Lauren were successful but short lived when the garment industry started to migrate to China en masse in 1994.

“We were left with a baseball hat factory and a lot of employees,” he said. “And not a lot of places to get business from.”

 

He didn’t have to look far for new clients, though. He began selling to American unions, which were looking for products made by unionized businesses like his. He also began selling to military agencies, some of which are required to buy US-made products.

Then came the political campaigns, starting with a small order of 150 hats for Bill Clinton’s first presidential campaign in 1992. But Cahn said business didn’t really take off until Al Gore, then vice president, ran for president in 2000.

“We sold probably more hats than we had ever sold for any one particular client,” Cahn said. “It was probably 200,000 hats overall.”

All of Unionwear’s production takes place at its New Jersey plant. That makes the company an attractive option for political campaigns, who often want to hire US-based companies to make their merchandise.

Unionwear contributes to a multibillion-dollar political marketing industry. Campaign managers and political strategists are increasingly looking to merchandise like hats and other apparel as powerful branding tools, according to New York magazine. Trump’s campaign alone has made $45 million off his “MAGA” merchandise.

So what happens to Unionwear’s supply of hats once a candidate drops out, like Democrats Klobuchar and Pete Buttigieg did recently?

“We have this down to a science. We are producing in small batches,” Cahn said. “Someone would have to drop out really unexpectedly for us to get stuck with anything.”

Fox: Merch Madness-Trump and Dems Use Same NJ Hat Factory

| Posted by unionwear

Fox News’ Alex Hogan reports from Unionwear where nearly every candidate for the 2020 presidential election has chosen to manufacture hats and bags. Candidates choose made in USA products for their campaigns to demonstrate their support for the American worker and domestic economy.

ABC: What do Trump, Bernie, Biden Share?

| Posted by unionwear

Despite all of the political differences between republicans and democrats, both parties have turned to Unionwear in Newark, New Jersey to manufacture their campaign hats during election season, since 1992.

“We’ve worked with virtually every campaign since we started the business. One of our first orders was for the Bill Clinton campaign in 1992,” said Mitch Cahn, President of Unionwear.

For the 2020 campaign season, Unionwear has manufactured hats for most of the democratic candidates as well as various support groups of President Trump.

According to Cahn, it is during presidential campaign years when many businesses turn to American manufacturers to produce their promotional goods to ensure their products are “Made in USA”.

“We have all sorts of businesses who order promotional products for their business thinking “This is made in China, maybe I should get this made in the USA, I don’t want us to look bad,” said Cahn.

For Cahn, whose company has manufactured products for entities like the U.S. Coast Guard and the U.S. Census, manufacturing “Made in USA” items with the highest standards of production is an obligation that has set Unionwear apart from the rest.

“When consumers buy products “Made in USA” they know that the workers who produce those products are supported by the same labor laws and environmental laws that the consumer benefits from,” said Cahn.

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Righteous Capitalists Podcast Features Unionwear

| Posted by unionwear

Who says that the only way for a manufacturer to make money is to send production outside of the USA? Not Mitch Cahn. After graduating from Wharton and working on Wall Street, Mitch decided he wanted to create something. So, in the early 1990’s he bought the distressed assets of a hat manufacturer and very purposely brought back the unionized workers that had been employed there. Twenty-eight years later, Mitch’s company, Unionwear, is the only manufacturer of American made baseball hats produced by unionized employees. In fact, he is the go-to source for every presidential campaign and anyone who wants the world to know that they care about where their merchandise is made and who makes it.

Listen here:

https://www.therighteouscapitalists.com/podcastepisodes/ep012mitchcahnunionwear

Fox Business Visits Unionwear’s USA Made Booth

| Posted by unionwear

Fox News’ Opened the First-ever Made in America conference with live broadcase from Unionwear’s booth at the Indianapolis Convention Center.  Carly Shimkus was suprised by the depth and quality of Unionwear’s product line and discussed how USA made products demonstrate their manufacturers’ commitment to the American economy.

Unionwear Wins Inaugural Reshoring Award

| Posted by unionwear

The Reshoring Initiative and SEAMS, the domestic textile manufacturing association, presented their inaugural Manufacturing Reshoring Award to Unionwear for bringing cut and sew jobs back to the USA. Unionwear’s 180 workers in Newark, NJ make baseball hats, backpacks, and other bags for the promotional products, fashion, and uniform industries.

Unionwear’s technological innovations have leveled the playing field with imports by highlighting small batch, quick turn manufacturing. Unionwear’s predictive configuration tool at http://www.trillionhats.com allows it to sell custom made products using a traditional webstore experience rather than a cumbersome online configurator, while its mobile ERP platform automates purchasing, production scheduling, manufacturing, and shipping. The result is “made to order” as seamless as ordering from Amazon.

The baseball cap industry’s mass relocation to China since the 1990’s, and Unionwear’s success in keeping manufacturing stateside throughout, was thoroughly explored earlier this month in the three part serial podcast documentary “American Icon” on iHeartRadio’s Red Pilled America podcast.

The Reshoring Award was presented at SEAMS’ annual conference in Savannah,GA on May 9, 2019. At the event, Contempora Fabrics won the Textile Reshoring Award and Mara Hoffman Designs won the Brand Reshoring Award. SEAMS members had reasons to celebrate, with domestic textile manufacturing showing strong, sustainable growth to $70 billion and over 100,000 jobs, numbers that will continue to climb due to the recent tariffs and the upcoming presidential election, when interest in “USA Made” traditionally peaks.

Podcast: The Fall and Rise of USA Cap Manufacturing

| Posted by unionwear

Red Pilled America took a deep dive into the history of the baseball cap, and used the story of offshoring ballcap production to tell the story of American apparel manufacturing.

Episode 24 focuses on Unionwear’s history. Founded as a fashion industry contractor, Unionwear was nearly shuttered when unintended consequences of trade deals resulted in most of the textile business moving to China in the mid 90’s.

Unionwear took a systematic approach to seek markets that would only buy American: starting with unions, moving to political campaigns, the US government and military, then other manufacturers and nonprofits, and now back as a fashion contractor.

Hosts Patrick Courrielche and Adryana Cortez intersperse Unionwear’s story with a fascinating analysis of the economic, regulatory, and systemic changes that resulted in American manufacturing losing its edge, and what it would take to regain it.

The podcast has started a kickstarter campaign to sell a Red-Pilled America cap, pictured above.

The podcast is broadcast by iHeartAmerica and is available on Apple Podcasts

Leader Bag’s Domestic Manufacturing Challenges

| Posted by unionwear

How did Leader Bag Co come to be?

Leader Bag Co was born from a love of beautiful design, and the desire to create a family-centered product that is truly missing from the marketplace.

When Meghan Nesher was pregnant with her son, Julien, she went shopping for a diaper bag that would work for both she and her husband. Coming up empty-handed, she opted for a Brooklyn Industries messenger bag; great for function, not so much for fashion. After a few months of use, she switched to the Fjällräven backpack; stylish and more comfortable, but not super functional. It was around this time that Meghan and her sister-in-law Liz Elliott, also a new mom, had their lightbulb moment: Why isn’t there a diaper bag that is beautifully crafted, simply designed and practical for both mom and dad?

Leader Bag Co :: Baby Business

Meghan, Liz and third sister-in-law Jess Nesher formed and funded Leader Bag Co as a family business in 2013. Since inception, we’ve enlisted the help of technical designer and manufacturing guru Jay O’Neill to bring our idea to life, and the uber-talented Lotta Nieminen to create our brand aesthetic.

Your brand is still only a year old, but what’s been the biggest challenge you’ve faced so far?

As a team of four, we all bring different strengths to the table, but at the same time, we all have strong opinions about pretty much every aspect of the business. We value playing to each other’s unique talents, but it’s not always easy with lots of cooks in the kitchen. We are constantly perfecting our team’s balance.

Manufacturing in the US – we were totally warned over and over that this was going to be difficult. All of us are perfectionists, and we’re all demanding, and I don’t think Unionwear knew we’d be so high-maintenance. Lucky for us, they have tons of pride in their work and are always striving to exceed expectations – which they did and continue to do.

Best thing you’ve learned?

Mistakes are opportunities, either to learn from or to create something new.

Your signature diaper backpack, the Julien, is a slick answer to a universal need; what kind of R&D did you pursue in the early stages?

Since we were all new moms, we did a lot of research for ourselves in the diaper bag market. We spent time looking at bags we didn’t like – even bought a few to compare. At the same time, we collected non-diaper bags we liked too, mostly based on modern aesthetics and strong craftsmanship.

We made lists of all the gear we stuffed into our baby bags and measured everything to make sure we designed the right size storage. We talked through where we would take the bag and what features we might need; for example, a hook to hang it in a bathroom stall while you change baby at a restaurant.

We collected tons of images on shared Pinterest boards – including inspiration for the brand, the bag and the lifestyle we wanted to promote.

Jay led us through multiple rounds of bag sketches – all different flavors and styles – until we settled on one we liked. He took the sketches to technical drawings, collected materials and had samples made. We went through at least three rounds of samples with Unionwear before we got our pack just right.

We put our samples on everyone’s backs, asked for feedback and took photos. We were careful to remove any design elements that seemed “girlie”, and made sure the shoulder straps were long enough to fit a really tall dad.

What features make the Julien awesome for carrying baby essentials?

The fact that it’s a backpack is key. We are all about leaving both hands free for tending to baby and being fully involved in family activities. Style-wise, the backpack is better for dad too – he’ll feel much more comfortable than if he were asked to carry a one-shoulder bag.

Ultimately, the Julien is awesome because of its storage and organization. We loved the idea of doing a drop-in “pouch” that can house some basics like a change mat, a few diapers, diaper cream and wipes. This way, you can just reach in and grab it for a quick change while you’re out.

We also made sure there were tons of compartments for all the essential gear. Outside, there are four decent-sized pockets for easy access, plus a clasp for hanging your keys. We also added stroller straps and hooks so you can easily hang it on your stroller when you don’t want to carry. Inside, there are four baby bottle (or water bottle) pockets, a sleeve for the change kit (or even a computer or iPad), a zipper pocket, and a few other larger pocket compartments. It’s wipe-clean and very utilitarian, but you wouldn’t necessarily know it from the outside.

When you’re running on no sleep and wearing the parental uniform of tracksuit pants and an old t-shirt, why is a luxe bag like the Julien important?

Being a parent isn’t always an elegant, effortless job. Especially when you’re a new parent running on empty and feeling overwhelmed.

The Julien immediately elevates your look: leather and canvas with rose gold details, all mixed with fine Made in the USA craftsmanship. And it’s effortless – it looks great with everything, is comfortable and keeps you organized so you can focus on what’s important: being present for your kid. There is absolutely nothing more chic.

Who else is making rad baby-related carry? Who inspires you to be better?

No one, in our opinion, is making a great diaper bag we’d want to carry! We do like Fawn and Cub’s change mat, and Ida Ising’s change mat/bag design.

Accessory and clothing companies outside of the diaper bag industry inspire us to be better, and companies that are producing their goods in the USA: Clare Vivier, Emerson Fry, Mansur Gavriel, Marine Layer, imogene + willie, etc.

What’s next for Leader?

There is a ton of room for us in the baby market right now. We see a lack of simple but beautiful and useful design, especially in kid accessories – which creates a whole lot of space for Leader to play.

What do you personally carry daily? And why?

Our Leader bags, of course!

Slate: What Do Bush and Clinton Have in Common? Unionwear

| Posted by unionwear

TRANSCRIPT: Bill Clinton, Al Gore, John Kerry, John McCain, Barak Obama, Hillary Clinton, Bernie Sanders, and Jeb Bush all have something in common: the White House, yes, but also, this baseball cap factory in Newark, NJ, and more specifically, this guy:

“What they do is incredibly dexterous, I can’t do once what they do all day, which is take that thread and just throw it through a little hole.”

In 1992 at the age of 25 Mitch Cahn quit his job on Wall Street and bought a bankrupt hat factory in Jersey City at an auction sale. The idea was to make baseball hats for the fashion market including brands like the Gap. It was a trend at the time, but there was a hiccup. By 1994, American manufacturing was fleeing to cheaper manufacturing overseas and undercutting Mitch’s prices.

Mitch needed a new plan, so he turned to groups with vested interests in manufacturing goods in the US, and at the top of that list was political campaigns which is where this story gets interesting.

Cue James Carville: “Bush is buying up to $10 million in printing in Brazil. The president don’t buy American for his campaign.”

Making campaign gear offshore created the potential for a political scandal.

Cahn: “We are making hats for almost all the candidates, we are doing work for Hillary Clinton, Bernie Sanders, Jeb Bush, If someone is having a hat made here, then they are making a decision to use American Labor.”

Campaigns aren’t the only clients who rely on Mitch’s US based factory.

There are socially complaint companies and non-profits who want to avoid any possible connotation that their products could be made in a sweat shop. The US Military. Promotional gear for labor unions and other companies looking to cobrand with the USA Made label. And the fashion industry.

But political campaigns are where Mitch has really dominated the market. Now located in Newark, his factory has been pumping out millions of hats from behind these doors, manufacturing for every Democratic primary candidate since 2000, as well as John McCain, George W. Bush, and Jeb Bush.

The bad optics of a made in China label aren’t the only thing driving political business to Mitch.

“The market is moving to small batch customization”, said Cahn. “Consumers are expecting to get products that they order in 2 or 3 weeks and you can’t wait 60 or 90 days for goods to come in on a ship. Your generally have to order a much larger quantity of goods when you bring things in from China, than you can domestically, and there is no way you can get things turned around a week or two.”

Which is key in the ever changing landscape of politics. Campaigns rarely have the luxury of folks ordering a set amount of products months in advance. They rely on quick turnarounds and flexible order sizes while replenishing their online stores. A bonus for the campaigns, especially those seeking much needed endorsement from a big union: Mitch also uses organized labor.

Once mostly the norm amongst textile manufacturers, Mitch’s pro union stance is a rarity these days, which is something he is proud of.

“Any difference in wages is made up of any increased productivity by our workers who are generally more content in their job. This was a union shop since the day we opened.
I believe over half of our people have been here for at least over 15 years.”

As manufacturing costs remain relatively flat in the US while rising dramatically in places like China, Mitch’s pro labor stance could become more prevalent. It is possible other manufacturers will follow Mitch’s lead and we’ll see more textile work come back to the USA. For now Mitch’s made in Newark factory is still producing the vast majority of the hats you see in the presidential campaign trail. But the most popular hat he has ever produced, you might have a guess if you have been tuned into the 2016 campaign season.

“Probably the hat we make the most here is the hat that says Make American Great Again which was made popular by Donald Trump and we are making that for the company selling the Made in USA version of that hat.”

Trump unsurprisingly uses a non union factory in California to produce the authentic version, but with all the polarization these days. It’s nice to know so many other politicians on both sides of the aisle can agree on thing. Newark is a great place to make hats.

Wanted in Global Markets: The “Made in USA” Label

| Posted by unionwear

When they came face to face with an angry broker whose business was threatened by their new website, Maker’s Row, Matthew Burnett and Tanya Menendez knew they were on to something.

“He came to our office and threatened to shut down the site because that was his livelihood,” Burnett said in the Brooklyn, New York, office of Maker’s Row, the site they believe is making it easier and cheaper for entrepreneurs get their products made in the U.S.

“It was a telling sign of the disruption that was going on in the industry,” Menendez said. She recalled the incident had left her looking both ways when leaving the office. “This is like a big guy, who comes in … huge presence. We felt really uncomfortable, but it was also really enlightening for us.”

Despite the decline in U.S. manufacturing, a “Made in the USA” label is still desirable in global markets.

It brings a certain assurance that products are made according to high production standards, using safe materials. Over the years, that label has also become synonymous with high labor costs. But the cost of foreign labor is on the rise, and it’s beginning to level the playing field for U.S. manufacturers.

Finding a domestic manufacturer, however, can be time consuming. Most brands don’t like to share manufacturing information because they don’t want to help their competition. “It was almost taboo to ask,” Burnett said.

Plus, many older manufacturers don’t have their own websites, which only compounds the domestic sourcing challenge.

One way to find a manufacturer is to get help from a broker, if you can find one. They aren’t always easy to track down. If you can afford the broker costs, you buy a list of manufacturers that might be able to make your product. It’s a system Burnett found troublesome.

“Some of these consultants were basically hoarding the information and charging $5,000. It’s impossible. Five to $10,000 for any small business?” Burnett said. “I would never pay that. I couldn’t pay it. I’m paying $10,000 for maybe my first run of products.”

Before starting Maker’s Row, Burnett founded two small businesses. He studied design in school and was lucky enough to design watches for Marc Jacobs and DKNY. It was a dream since his childhood in Detroit, where he saw his grandfather make watches.

In 2007, he began to market his own brand, Steel Cake. Using connections he’d developed through big designers, he had product made in China, which presented hurdles. Larger orders get priority, and it can take months for shipments to arrive in the U.S. So Burnett had to build inventory without knowing whether it would sell.

He also couldn’t afford to have staff on site to monitor the process for quality control. One costly mistake was enough to put him out of business, “There’s this manufacturing error that occurred in about $35,000 worth of lost merchandise. I couldn’t take it,” Burnett recalled. “It ended up being just too much of a gamble being so far away from my manufacturing facilities.”

So he got out of watches and began crafting leather goods, sourcing materials and manufacturing locally in New York City. His new brand, Brooklyn Bakery, began to take off, but the search for manufacturing help took months, diverting his attention from designing, marketing and selling goods.

Enter Menendez. She’s a marketer with experience at Google and Goldman Sachs. She not only helped Burnett find manufacturers, but also helped build a direct-to-consumer business, bringing Brooklyn Bakery to shopping sites and eventually building a consumer site of its own.

Together, Burnett and Menendez saw the power that local production brought to small business owners.

“We’d get the shipment back within a few days, and it was amazing. It was a very low-risk, very profitable type of business,” Menendez said.

Burnett said that managing the size of orders was the key to their success. “When I was producing domestically, I wasn’t producing a thousand of each product. I was producing a dozen of each product. That means that I’m able to test the market. See what works and press the pedal to the metal, when I see that something is moving.”

As they met with manufacturers and other entrepreneurs, especially the start-ups selling their wares on websites like Etsy and Shopify, Menendez and Burnett began to realize that the search for manufacturing help was a constant issue. So they decided to do something about it.

Maker’s Row went live in November of 2012. Within months, they learned it wasn’t just small businesses that needed help finding U.S. manufacturers. The problem was much bigger than that.

“Big brands are having this problem, too. We see that Wal-Mart is signing up. We see that Burberry is signing up. These are the kings of industry that we’re looking at here,” Burnett said. Big brands using Maker’s Row was a big surprise “because if anyone was to have this information, we thought that it would be the big brands.”

Supporting local manufacturers

The timing is certainly good for Maker’s Row.

There’s a lot of confidence among U.S. manufacturers these days. A recent survey by the Boston Consulting Group revealed that 16 percent of the 252 U.S. manufacturers who responded are reshoring jobs from China, a 20 percent jump from a year ago, and more than double the number from February 2012.

Back then, Burnett and Menendez were just beginning to wonder how they could find enough manufacturers to make Maker’s Row a success. It was a tough sell at first, but they began to list manufacturers on the site for free, which turned out to be a smart move because some of them saw almost immediate results.

“People started to see leads before Maker’s Row asked them to sign up for their service,” according to Mitch Cahn, who runs Unionwear, a maker of baseball caps and bags in Newark, New Jersey. With leads in hand, it became much easier for Burnett and Menendez to sign up other manufacturers.

“We get several inquiries a day from Maker’s Row,” said Cahn, who bought a former baseball cap factory in nearby Jersey City in 1992, when, he said, there were about 400 baseball cap manufacturers in the United States. These days, he said, there are only about four but he believes the playing field for domestic manufacturers has leveled because the cost of labor overseas is climbing dramatically, making “Made in USA” more of a reality, than a lofty ambition. “There had been interest before but it was really a lot of talk,” he said. “Now that the price differential is so much smaller, people are saying, ‘Hmmm, I may spend another 20 percent to get a product ‘Made in the USA.’ Five years ago, it might have been another 100 percent.”

Local governments have gotten on board to help Maker’s Row, hoping to help their local manufacturers at the same time. They’ve had a large number of sign-ups in Los Angeles and Chicago, too. In about two years they’ve signed up approximately 5,000 manufacturers. A good thing, because there are also about 50,000 brands using the site to look for help. Subscriptions to Maker’s Row begin at $25 a month.

Shifting manufacturing

It’s a similar story at Genil Accessories in Brooklyn, where Gina Bihm and her staff make bow ties and neckties for the likes of Vineyard Vines and Marc Jacobs. Despite her big-name clients, Bihm says she also tries to help the little guy create a sample, if they can find her. “I don’t turn away no one. No one,” she said.

Bihm said the recession that began in 2007 nearly put her out of business. At the time she was shipping out about 20,000 pieces per year. In 2008 and 2009 work was hard to come by. Her entire staff, once numbering about 20 full-timers, was cut to zero. She needed a loan to pay the rent on her work space. She still has only 11 full-time employees, but she says business is better than ever. With bow ties back in vogue, they’re making about 4,000 units per week now, and that was before she found Maker’s Row. They’re practically around the corner from each other, but Bihm only signed onto Maker’s Row during the summer. “The phone calls doubled. I picked up about seven new customers and they all came from Maker’s Row,” Bihm said.

The 2-year-old website also works for entrepreneurs, including Andrew Kessler, Ari Klaristenfeld and Alexa Nigro, who began making their scarf product, called the “Scough,” with built-in carbon breathing filters, by hand in Brooklyn last winter. Within months they were having trouble keeping up with demand. They looked two months for a manufacturer before trying Maker’s Row. Two weeks later, they’d found MCM Enterprises, nearby in Brooklyn.

“We found that it was cheaper for us to manufacture here in the U.S. than it would be for us to produce in China or India,” Klaristenfeld said.

“We’re starting to send thousands and thousands of Scoughs to China which is this really interesting anomaly, where we’re making something in Brooklyn and, uh, it’s going to China because there’s brand, quality assurance that a lot of Chinese manufacturers can’t get,” Kessler said.

Those are the same reasons that Burnett believes Maker’s Row has seen some foreign businesses come online looking for U.S. manufacturing. “We’re looking to change the rule of thumb,” Burnett said. “We’re changing that mindset by showing people where they can produce and manufacture locally because this is a global shift right now.”

—By Andy Rothman.

Making Made in USA Easier: New Tools for Designers To Find Contractors

| Posted by unionwear

When they came face-to-face with an angry broker, whose business was threatened by their new website Maker’s Row, Matthew Burnett and Tanya Menendez knew they were on to something.

“He came to our office and threatened to shut down the site because that was his livelihood,” said Burnett in the Brooklyn, New York office of Maker’s Row, the site they believe is making easier and cheaper for entrepreneurs get their products made in the U.S.A

“It was a telling sign of the disruption that was going on in the industry,” adds Menendez. She recalled the incident had left her looking both ways, when leaving the office. “This is like a big guy, who comes in … huge presence. We felt really uncomfortable, but it was also really enlightening for us.”

Despite the decline in U.S. manufacturing, a “Made in the USA” label is still desirable in global markets.

It brings a certain assurance that products are made according to high production standards, using safe materials. Over the years, that label has also become synonymous with high labor costs. But the cost of foreign labor is on the rise, and it’s beginning to level the playing field for U.S. manufacturers.

Finding a domestic manufacturer, however, can be time consuming. Most brands don’t like to share manufacturing information because they don’t want to help their competition. “It was almost taboo to ask,” Burnett said.

Supporting local manufacturers

The timing is certainly good for Maker’s Row.

There’s a lot of confidence among U.S. manufacturers these days. A recent survey by the Boston Consulting Group revealed that 16 percent of the 252 U.S. manufacturers who responded are re-shoring jobs from China, a 20 percent jump from a year ago, and more than double the number that were doing so back in February 2012.

Back then, Burnett and Menendez were just beginning to wonder how they could find enough manufacturers to make Maker’s Row a success. It was a tough sell at first, but they began to list manufacturers on the site for free, which turned out to be a smart move because some of them saw almost immediate results.

“People started to see leads before Maker’s Row asked them to sign up for their service,” according to Mitch Cahn, who runs Unionwear, a maker of baseball caps and bags in Newark, New Jersey. With leads in hand, it became much easier for Burnett and Menendez to sign up other manufacturers.

“We get several inquiries a day from Maker’s Row,” says Cahn, who bought a former baseball cap factory in nearby Jersey City back in 1992, when he says there were about 400 baseball cap manufacturers in the United States. These days, he says there are only about four but he believes the playing field for domestic manufacturers has leveled because the cost of labor overseas is climbing dramatically, making “Made in USA” more of a reality, than a lofty ambition. “There had been interest before but it was really a lot of talk,” he says, “Now that the price differential is so much smaller people are saying, ‘Hmmm, I may spend another 20 percent to get a product ‘Made in the USA.’ Five years ago, it might have been another 100 percent.”

Local governments have gotten on board to help Maker’s Row, hoping to help their local manufacturers at the same time. They’ve had a large number of signups in Los Angeles and Chicago too. In about two years they’ve signed up approximately 5,000 manufacturers. A good thing, because there are also about 50,000 brands using the site to look for help. Subscriptions to Maker’s Row begin at $25 a month.

Shifting manufacturing

It’s a similar story at Genil Accessories in Brooklyn, where Gina Bihm and her staff make bow ties and neckties for the likes of Vineyard Vines and Marc Jacobs. Despite her big name clients, Bihm says she’ll also tries to help the little guy create samples, if they can find her, “I don’t turn away no one. No one,” she says.

Bihm said the recession which began in 2007 nearly put her out of business. At the time she was shipping out about 20,000 pieces per year. In 2008 and 2009 work was hard to come by. Her entire staff, once numbering about 20 full-timers, was cut to zero. She needed a loan to pay the rent on her work space. She still has only 11 full-time employees but she says business is better than ever. With bow ties back in vogue, they’re making about 4,000 units per week now.. and that was before she found Maker’s Row. They’re practically around the corner from each other but Bihm only signed onto Maker’s Row during the summer. “The phone calls doubled. I picked up about seven new customers and they all came from Maker’s Row,” Bihm said.

Those are the same reasons that Burnett believes Maker’s Row has seen some foreign businesses come on line looking for U.S. manufacturing. “we’re looking to change the rule of thumb,” Burnett said, “we’re changing that mindset by showing people where they can produce and manufacture locally because this is a global shift right now.”

MSNBC Gives Bag Designer “USA Made” Makeover at Unionwear

| Posted by unionwear

The MSNBC show Your Business helps Yadabags find domestic manufacturer Unionwear to produce their bags more cost effectively than China.

TRANSCRIPT

JJ Ramberg, Host: We first met Janet a year ago, at a conference for entrepreneurs in Nashville.

Janet Goodman: My business is YadaBags. YadaBags is a purse that’s designed to carry medical equipment for people with chronic disease, so people with diabetes can put all the paraphernalia in it and actually find it.

Host: She came to us to ask a question on camera about getting funding for her business. Once she felt she got the design right she hired someone to do a small but costly production run to see if people would actually buy the bag. After getting some sales, she was optimistic and ready to produce more. But when she looked into manufacturing in China which she thought would be cheap she found that she would have to make a thousand bags to get the right price. That put her in a chicken or egg situation.

Janet Goodman: I am not willing to risk retirement, if I didn’t get orders and I have to put money in to get product that I know is going to sell I would do that in a minute.

Host: With an order for a thousand bags unlikely at this point, we set out to find a solution for her chicken or egg problem by doing what she thought was impossible, finding a domestic small batch manufacturer that was cost effective. And we found just the people to help us out. Janet, I want to introduce to you Matthew and Tonya.

In front of Unionwear’s Newark Factory

Janet Goodman: Hi Matthew, hi Tonya.

Host: They are the founders of Maker’s Row.

Matthew: So Maker’s Row is an online market place and we connect businesses, small businesses and big businesses with American manufacturers to produce products here in the United States.

Host: Maker’s Row did a little homework for us, within introduction to Mitch Cahn the President of Unionwear. They helped us surprise Janet and Fred with the tour of the Newark, New Jersey based factory where the order minimum is 300 pieces. A much easier pill to swallow than a thousand units being made overseas. Mitch.

Mitch Cahn: Hi nice to meet you.

Janet Goodman: Hi nice to meet you also Mitch, this is quite a place you know.

Host: Let’s see your bag. Tell us how much it cost to make this one.

Janet Goodman: For putting it together was $60 and not including material. It was labor only.

Host: Okay.

Janet Goodman: Right, okay.

Host: That’s your bag.

Mitch Cahn: Okay here is our bag. (Produces redesigned bag)

Janet Goodman: Oh very nice.

Host: And the total cost to put it together?

Mitch Cahn: Around $47 and the material should cost no more than about $7 or $8.

Janet Goodman: Total?

Mitch Cahn: Yes.

Janet Goodman: Everything?

Mitch Cahn: Yes.

Janet Goodman: Oh I could love him.

Host: Would you like to give him a hug?

Janet Goodman: Totally.

Host: Mitch explained that the approach to manufacturing in China were labor inexpensive is less efficient than the way they tackle a bag like Janet’s here in America.

Mitch Cahn: We took almost about 60 steps in manufacturing the bag and that’s how we are able to lower the cost.

Host: With all of these resources at hand we gave Janet a challenge. Pull this all together to re-launch YadaBags by November. Just in time for American diabetes month.

Host: So this was a big day.

Janet Goodman: Oh wow, really big. I think it’s really moving in the direction that I envisioned.

Host: What did you learn?

Janet Goodman: Oh wow, I think the biggest piece for me if feeling like I have some support in developing that and somebody to think with as opposed to trying to figure all this up, all of this stuff out myself which I can’t do because I don’t know a lot of it.

Host: But by the way you have done an amazing job. With no manufacturing experience, no design experience and you created a bag.

Janet Goodman: I did, right I got there.

Host: You didn’t yet create a business.

Janet Goodman: Well, I should have got there, but didn’t get there.

Host: Right you got a bag business.

Janet Goodman: I got a bag.

 

USA Made Promotional Products: 3 Cheers for the Red, White and Blue

| Posted by unionwear

How to make the most of selling products made in the U.S.

By Brendan Menapace for Promo Marketing Magazine

There are plenty of products that were made in America that we should all be proud of—Bruce Springsteen, baseball, movies where Nicolas Cage navigates an elaborate scavenger hunt made up of national monuments to find a historic treasure. The list goes on, but what stands out the most are the many promotional products manufactured in the U.S., and the business opportunities they present. By providing products made domestically, distributors can create business with new clients. Here’s how.

OPEN NEW DOORS

Aside from providing jobs in the U.S., domestically-made products can give distributors the chance to work with clients that otherwise may not have been available. David Bronson, national accounts manager for Unionwear, Newark, N.J., said that many companies only will purchase products that are made in the U.S. He named nonprofit, government and military organizations as potential clients that [usually] purchase domestically. “More and more, large domestic manufacturers, food processors, tech companies, and other corporations that promote themselves as ‘Made in USA’ are requiring their logo gear to also be consistent with their domestic mission,” he advised. “Unions and political campaigns generally have domestic sourcing requirements, which will boom in the upcoming presidential primaries and general elections.”

Bronson, who has been a distributor for a decade, added that using items made in the U.S. makes sense from an economic standpoint. “Domestic manufacturing is beginning to make sense economically in a number of areas,” he noted. “In particular, small-batch customization allows buyers to save on overhead, such as sampling, tech packs, sourcing, prepayments and lead times, that can dwarf the unit costs of importing fewer than a thousand units.”

Tim Boyle, president of JournalBooks/Timeplanner Calendars, Charlotte, N.C., explained that buying domestic ensures the protection of U.S. labor and manufacturing laws. “The U.S. has much stricter laws and regulations regarding safety and compliance,” he said. “When distributors sell U.S.-made products, they do not have to worry as much about factories using child labor or unsafe materials.” He added that distributors should still evaluate a company’s code of conduct and compliance safety standards. “Compliance and safety are top concerns for end-users,” he said. “Although the standards for compliance are improving globally, it becomes much trickier for distributors once they go offshore.”

HANDLE INTERNATIONAL COMPETITION

Some distributors may be hesitant to choose domestic products over imports, as they say they can often get products from overseas at a cheaper price point. However, importing products can come with a high price tag that some distributors might not take into account. Factors such as duties, fees, shipping and port delays can throw a monkey wrench into the process and end up costing more than it than saves.

Bronson also explained that some clients would even be willing to pay more for domestic products. “Even when import pricing can still result in significant savings, there are many end-users who will still pay a premium to co-brand with the most powerful brand in the world—Made in USA,” he said.

Boyle he believes the global competition is a good thing for U.S. companies. “It’s hard to compete with importers on price, but not impossible,” he said. “We are constantly exploring new ways to increase manufacturing efficiency and decrease material costs, and we can often be competitive with import items, especially custom projects. Price is only one aspect of the equation.”

The best way to compete is to produce a better product. Bronson said that many imported items are made with cheaper materials and unnecessary labor, which creates an inferior product. “A common example is tote bags coming out of China that have a seam along the bottom,” he detailed. “This adds labor cost to the bag and also weakens the bag at its biggest stress point.” He explained that the sum is there because cutting large panels into smaller pieces provides a greater yield for the manufacturer.

“If a bag has $40 in materials in either China or the U.S., but it costs $4 to sew it in China vs. $8 in the U.S., the end difference will be $44 versus $48,” he continued. “And that $4 difference will be more than eaten up by shipping, fees and duties.” Bronson added that the gap between the price of imports and domestic products has decreased every year for the last six years, and he believes the trend will continue.

GIVE THEM WHAT THEY WANT

According to Consumer Reports, when given a choice between a U.S.-made product and an identical item sourced overseas, 78 percent of Americans prefer the American product. Boyle and Bronson are optimistic about the demand for domestic products.
Boyle said that he sees the demand for U.S.-made items himself. “My opinion is that the demand for U.S.-made products has never been stronger,” he said. JournalBooks, which has manufactured in Charlotte, N.C. since 1971, has taken steps to keep up with the increased demand. “We do whatever it takes to keep up with demand, whether it is adding the necessary equipment or adding members to our team. JournalBooks has a modern, 90,000-square-foot facility with plenty of extra capacity for additional growth.”
In Newark, N.J., Unionwear is having its best year to date. “The demand is higher than ever,” Bronson said. “It has been a challenge to continually increase capacity.”

He attributed much of the success to Unionwear’s ability to offer detailed customization. “Small batch customization is one area where improvements in order processing and set up times can have big payoffs,” he expressed. “We can make any of our bags in any color combination customers want at low quantities. This is what China does not offer the industry.”

Three Cheers for the Red, White and Blue

7 Reasons Why People Really Buy American Made Goods

| Posted by unionwear

Manufacturing is booming in Newark and other American cities after decades of decline. Newark has over 400 active factories that employ over 10,000 people. Cities like Newark are reaping the benefits because there is already an infrastructure in place from the 70s. With concentrated labor, the center of transit hubs, and proximity to ⅓ of the population, the City is a great place to manufacture goods.

American Manufacturing Is More Competitive

After 20 years, Maker’s Row preferred manufacturing partner Unionwear is finally competitive with imports again. Unionwear sold primarily to entities like the government and military because they required that products be “Made in the USA” and, at the time, there were really no other markets willing to pay a huge premium for goods.

The price of imported textiles has been growing at 25% per year for the last four years while the prices for domestic goods have remained flat. As the premium paid for Made in USA shrinks, more markets implement and enforce labor and sourcing standards, and the benefits of Made in USA increase in value. A lot more people will buy Made in USA when it is 25% more expensive than when it was 200% more expensive.

The 7 Reasons Why People Buy Made in USA:

Support American economy
Fair Labor & Product Quality Standards
Economics—small batch manufacturing
Buy Union
Buy Eco Friendly— consumers don’t want to be part of the problem
Locality
Convenience

Manufacturers have learned to localize supply chains from the food movement. The underlying motivations are different and more related to worker rights. The closer production is to consumption, the less acceptable worker exploitation becomes and the more likely goods are produced using labor and environmental standards that the consumer benefits from.

The international worker rights movement is an issue in manufacturing; Bangladeshi factory collapses, inadequate minimum wages, and deep-seated inequalities. Consumers want to know that they are not contributing to the problem–that the products they buy are made at factories that comply with America’s core labor standards. This is important for domestic manufacturing because what actually causes buyers to connect with “USA Made” are deep convictions about issues that support of domestic manufacturing can cure.

Along with localism and worker rights, environmentalism and the maker movement are also affecting the American manufacturing landscape. All four of these factors are much deeper convictions than patriotism. That sentiment is rooted in business-to-business markets since companies are sensitive to being judged on their commitment to everything, from helping rebuild our economy to the working conditions at their vendors’ factories. Putting a Made in USA label on your product enables a small business to co-brand with the most powerful ‘brand’ in the world—America!

The most exciting aspect of American manufacturing right now is the confluence of pricing being competitive, deep seated convictions driving sales, and cloud computing and ERP (Enterprise Resource Planning) making small batch manufacturing a reality.

A special thanks to Unionwear’s Mitch Cahn. This post was inspired by Cahn’s TED talk and various other discussions on American manufacturing trends.

Source: https://makersrow.com/blog/2015/04/7-reasons-why-people-really-buy-american-made-goods/

Unionwear’s Featured TedX Talk: Made Right Here

| Posted by unionwear

Unionwear President Mitch Cahn’s 15 Minute Ted Talk–Made Right Here: How the international worker rights and buy local movements are creating a surge in U.S. urban manufacturing opportunities.  The talk discusses why the premium for domestic goods are shrinking, and the five types of business to business to market segments with strong convictions about buying USA Made.

TRANSCRIPT

Manufacturing is booming in Newark and other American cities after decades of decline.

Newark, NJ has over 400 active factories within the city limits that employ over 10,000 people.  Four years ago nobody knew this, now a growing number of people know this.  How did this happen in the middle of a recession?  Well, as a manufacturer, I can’t say it was anything that our industry did.  I am pretty sure it wasn’t anything that our government did.  And I don’t think it was a wave of made in USA consumerism that pushed us over the edge.

What happened was over the last 20 years, goods have been made overseas in the third world very, very cheaply on the backs of exploitation of labor and exploitation of the environment.  The growth in manufacturing now is because both “overseas” and “exploitation” have become a lot more expensive and a lot less attractive.

Activists did this–labor activists did this, unions, worker rights coalitions and environmental and buy local activists made this happen.  They raised awareness, they localized supply chains and they helped to impose regulations creatively.  And as a result we’ve seen what’s going on in Newark right now.  “Made in USA” has relatively become a bargain.  Cities like Newark are reaping the benefits because we have an infrastructure in place still from the 70’s and before that, we have a lot of concentrated labor and we are in the center of a transit hub.  We have the ability to move people and goods around very quickly.  We are within a day’s drive for something like a third of the population.

What I want to do now is talk about my experiences running Unionwear, which is a manufacturer of baseball hats, bags like backpacks and garment bags, safety vessel scrubs.  We manufacture everything from scratch right here in North Newark.  We have about a 110 union workers, we are 11 miles from Midtown Manhattan.  We have been in business for 21 years.  In almost every product category of ours, we might be the most expensive place to make that product in the entire world.  So how is that over the last four or five years we’ve grown by about 25% per year after about a decade of being flat.

Well we’ve narrowed it down to five areas.  One is market forces, specifically understanding the market forces that are going on and being able to educate our clients about it.  How is Obama care going to affect domestic manufacturing?  How is immigration policy going to affect in manufacturing.  What if China decides to float their currency against the United States?  Is that going to make United States manufactured goods less expensive?  And more appealing to the rest of the world?  Yes.

We stay on top of these things and we make sure clients know about them because changes in the economy happen right under people’s noses and they don’t even see it.

Market selection is a big one.  There are markets that want to buy local.  There are markets that want to buy made in USA.  It’s more expensive to buy those things but they are willing to pay a premium.  Who are those people and how do we reach them?

Product selection is an area that goes along with market selection.  Now someone might not be in a market that wants to buy made in USA but they might want to be a product that might be less expensive to manufacture in United States, so what are those products?

Re-engineering is important because it’s very different to manufacture a product where there is no regulation and people are paid ten cents an hour versus where it is manufactured in an area where there is a lot of regulation and people make 10 to 15 dollars an hour.  You can bridge that gap through smart re-engineering.

Finally we take advantage of our geographic advantages.  We play up how close we are to New York City and Newark airport and port Newark and millions of skilled laborers.

So I am declaring right now the era of cheap imports is over. It’s dead.

So what’s happened as the price of imports increases is the premium paid for made in USA product shrinks.  As that premium shrinks it becomes less expensive for people to have sourcing standards or enforce standards that they already had.  So what happens and why the market is grown is there are a lot more people who are willing to pay 25% more for a product that’s made green, made in USA, made union, then they were in 2008 when it might have been 200% or 300% more expensive for that same thing.  And it is that a big of a difference.

So one reason for this is labor supply and demand.  China has had decades of a one child policy, and as a result there are a lot fewer people entering their workforce now and the people who are entering the workforce, they don’t want to make the iPhone, they want to work for Apple.  So there are not enough people working in these factories–when that happens you have to pay people more to get them to work in manufacturing.

As a result of people being paid more there is now a consumer class in China and in India and in Pakistan.  That’s driving up the costs of goods, its driving up the costs of gasoline, petroleum which is making goods more expensive to ship to United States.

I put a slide up of the iPhone factory because that’s an example of what has happened because of worker rights activists.  When all of the working violations at the Foxconn factory where over a million people are employed were discovered, labor activists came in and negotiated a 40% wage increase and they lowered the amount of hours they can work from a 100 hours a week to 60 hours a week.  They came in a year later and negotiated another 40% increase.  You imagine what it does when a million people make that much more money.  And have to work that fewer hours.  They have to scramble the find workers.  That’s why prices have been of imports have been going up so much.

And as a result of social media, the rest of the world’s workers are finding out what’s going on and realizing they don’t have to work this way.  So you are seeing the same sort of riots, protests, strikes in Bangladesh and Pakistan.  This has led to wage inflation of 25% to 30% a year.  The response overseas has been to cut corners– poison in pet food, poison in dog food, exploding tires, broken plane parts, that’s led to more regulation which has put more expense on products that come in from overseas.

Companies have moved their manufacturing to places that they thought were cheaper than China like Bangladesh.  But they didn’t have the infrastructure and ended up being more expensive.  You ended up with month after month, factory fires and factory collapses which led to more regulation and more expense.

So who is buying made in USA, now that their premium has shrunk?

There are five different ways that people can say “buy local” and these are the markets that we try to appeal to.  Buy American, people buy American for economic reasons, or if they have standards like the US government.  Or if they want consistent messaging, like General Motors who makes goods domestically and they want to buy American-made goods because they are selling made American.

People want to buy union and support their fellow union workers.

People want to buy fair labor, they don’t want to buy goods that were made in a sweatshop.

People want to buy eco-friendly and people want to buy local.

So one of the of the areas that wants to buy American is the US government which makes up about a quarter of our GDP.  This is something that is relatively new, this enforcement of the government buying American made goods.

Another area is trade justice and if you say the labels fair trade and sweat free and living wage on goods, those are all ways of saying that these goods were made by workers who are not exploited.

An example of someone who used to not buy products with these labels in is now is NPR.  They would give away tote bags for memberships at the same time they were doing stories about sweatshops in China but the tote bags were made in those sweatshops because they get them for 25 cents a piece.  Now it’s costing them $2.50 a piece to import.  They are going to spring for $3 a piece and buy something that is made in USA and it basically cost less for them to put their money where their mouth is.

The link between fair labor and local and eco-friendly is this:  The closer production is to consumption the less acceptable worker exploitation becomes.  You don’t want to buy a shirt from someone around the corner who you know as working for below minimum wage and maybe working a 100 hours a week, but its okay if it is around the world.

Also the more likely that goods are produced using your labor and environmental standards.  The factories are operating under the same laws that you benefit from.

Another area is product selection.  So two examples of products that are less expensive to make domestically would be products that are big and bulky to ship and don’t have a lot of labor like this gigantic case right here that we make.  That didn’t need to be made in USA but it is.

Or bags using expensive materials– this bag has $40 in leather in it but only maybe $8 in labor.  In China maybe you can get it made for $4, so at the end of the day its $48 verses $44.  By the time you ship it here and have the duties on it, its less expensive to make it in the United States.  That’s why you see a lot of goods with expensive materials made in countries that are more expensive than United States like Italy.

So another area is small batch customization.  There is a big overhead to making products overseas, you have to translate, you have to make tech packs.  It is expensive to ship sampling back and forth, there are time zone considerations, so as result nobody wants to make 500 or a 1000 of something in China or Bangladesh.  It’s a lot less expensive to make it here.

And finally re-engineering is the area where we are able to close the gap through product design.  When we get goods a lot of times now people are reshoring goods–they send goods to us and it was a bag that they had made in China, they want to get it made in United States and I’ll say if you want it made exactly this way, its going to cost you $80 because there is no thought given to engineering the products because labor was practically free over there.  We can redesign it so your clients won’t notice the difference that will be just as nice and we can do it for $15.

The other area is Lean Manufacturing and that is the concept where you can take people in a high wage environment and train them to use all of their time to just add value to the product and not waste time doing things that are not that the client doesn’t pay for, like looking for a pair of scissors or waiting for manager or walking from machine to machine.

So finally, Newark is a place that is perfect for manufacturing for a number of different reasons.  We’ve got a high concentration of skilled labor, we’ve got a well developed infrastructure of manufacturing.  There are lot of other manufactures here which means that there is a market for mechanics and trucks and things where that might not exist in an economy where there is not a lot of manufacturers.  We are close to the port, we got Newark airport here and we’ve got access to everything.  We have access to New York City we have access to capital, marketing, and technological expertise right here in the city of Newark through our academic communities.

There are other cities where this is happening.  There are not a lot of rural areas where this is happening.  So this is the time to take advantage of this once in a generation opportunity where people are coming to Newark to get things manufactured.  Thank you very much.

 

Kudlow: Unionwear Gets “USA Made” Gold Ring

| Posted by unionwear

Unionwear and New Balance were featured on the Kudlow Report’s Made in USA July 4th Special. Unionwear President Mitch Cahn talks about how lean manufacturing principles helps union shops compete with factories overseas and in Right to Work States.

 

CNBC: Made in USA on the Rise

| Posted by unionwear

Mitch Cahn is the owner and founder of Unionwear, an apparel and accessories maker—all exclusively made in the U.S. Despite years of panicked manufacturing headlines—Japan is making everything! No, It’s China!—Cahn has kept his business open for 21 years and counting, all on American soil.

The company’s first core customers were unions that wanted to support union wages and “Made in USA” goods. Then more recently, a new crop of customers began ringing Unionwear headquarters in Newark, N.J.

East Coast fashion designers—including those in NYC’s garment district—were shopping for U.S.-based contract manufacturers. With labor costs in China rising and that country’s own economy accelerating, small U.S. shop owners couldn’t get the attention of overseas manufacturers. In an ironic twist, they couldn’t afford a “Made in China” strategy.

“Now we have five to 10 callers a day about doing that kind of contract work. It’s a groundswell,” Cahn said. “And it’s not patriotism. It’s economics that’s prompting them to call us,” he said.

Cahn’s changing business points to the shifting global economy. With labor costs in China forecast to climb further, more small-business owners are benefiting from, or actively pursuing, domestic manufacturing rather than overseas options, sometimes called reshoring.

And small shop manufacturers aren’t just dusting off shuttered businesses, locked up after jobs moved to countries such as Japan in the 1970s. Young entrepreneurs are innovating from scratch, creating new online communities such as Maker’s Row—and even turning to emerging platforms such as crowdfunding—to bankroll U.S. manufacturing operations.

(Read MoreMade in the USA: More Consumers Buying American)

STRDEL | AFP | Getty Images
Bangladesh factory collapse

After Bangladesh

After the deadly collapse of a garment factory building in Bangladesh, more people have been asking questions about overseas-made apparel, often linked to sweatshops and unsafe working conditions. (Read MoreHow to Bring Ethics to Your Closet)

Some top European apparel labels includingH&M have signed a safety-standards pact. But other major U.S. companies including the Gap and Walmart are pursuing independent solutions. They haven’t signed the group safety accord, which binds retailers to improve safety at Bangladesh factories.

But searching for ethically-sourced goods in a global economy is tricky. And what percentage of a good’s raw materials and labor must originate from the U.S. to merit a “Made in the USA” label?

“Right now there’s no common, national definition for ‘Made in the USA,’ ” said Harold Sirkin, a senior partner at Boston Consulting Group.

Even if you wanted to make American-made products, sourcing domestic raw materials is challenging in part because most online manufacturing resources are Asia-focused. But one Brooklyn, N.Y.-based start-up is changing that trend.

(Read moreThe ‘Opportunity’ Entrepreneur Returns)

Source: Maker’s Row
The Maker’s Row team of Tanya Menendez, Matthew Burnett and Scott Weiner have created a website that connects designers with U.S. factories and suppliers.

Maker’s Row

Maker’s Row is an online matchmaker that connects designers with industry-specific factories and suppliers—all based in the U.S. Product designers and small businesses can join the website for free, while manufacturers pay $200 a month.

Maker’s Row founder Matthew Burnett is a designer and Detroit native. He relocated to New York City to work for major apparel labels, before launching his own watch line. His grandfather was a watchmaker so he’s been around small shop manufacturing all his life.

But manufacturing his designs overseas was a costly headache. Orders and tweaks, shipped abroad, took weeks to resolve. “You add import taxes and it becomes such a gamble manufacturing overseas as a small business,” Burnett said.

Maker’s Row was launched in 2012 and breaks down the manufacturing process for small- to medium-sized ventures. The site allows entrepreneurs, many first-timers, to plug into a U.S. supply chain including factories in all 50 states.

Participating businesses straddle apparel and accessories. “It’s harder to find a manufacturer in the U.S. than in China,” Burnett said. Maker’s Row plans to add other industries, and is wrapping up their seed round of funding.

The site includes about 10,000 small-business owners and roughly 1,800 manufacturers, including Cahn of Unionwear.

And a vibrant U.S. manufacturing sector means more domestic jobs. For a $1 million backpack order, for example, Cahn estimates he’s able to hire 35 to 40 New Jersey workers. Less than 10 percent of American jobs come from manufacturing.

(Read MoreUS Manufacturing Shrinks for First Time in Six Months)

Can Americans Afford ‘Made in the USA?’

Of course not everyone can afford American-made goods. U.S. consumer spending fell in April for the first time in almost a year, as personal income growth was flat. But attitudes are changing.

Earlier this year, Walmart announced it will boost sourcing of U.S. products. And more American and Chinese consumers are willing to pay a 10 percent to 60 percent premium for “Made in USA” goods, according to BCG research released last fall.

Meanwhile, a shift in manufacturing away from China will begin to take hold around 2015, according to BCG forecasts. Rising labor prices there will create a ripple effect.

Certain industries—in which labor is a lower percentage of total product costs—are more likely to pack up overseas for North America, including Mexico, where labor costs are stable. Product categories likely to reshore first include appliances and electronics, transportation, machinery, plastics, furniture and chemicals, BCG’s Sirkin said.

But as the global economy evolves and shakes out new winners and losers, consumers are connecting the dots between inexpensive, overseas goods and evaporating U.S. jobs.

The recession has been especially brutal on chronically out-of-work or underemployed Americans. Unemployment that counts the discouraged and underemployed, sometimes called the “real” jobless rate, is still above 10 percent in many states.

“People used to thumb their nose at manufacturing jobs,” said Unionwear’s Cahn. But when the recession gripped the U.S. and the manufacturing sector was among the first to stand up and create jobs, many gave the sector a another look.

“As a country we can’t all be servicing each other,” Cahn said. “You have to have manufacturing.”

BCNBC’s Heesun Wee; Follow her on Twitter @heesunwee

 

Unionwear in Wearables Fashion Sense Channel “USA Made” segment

| Posted by unionwear

The resurgence of domestic apparel manufacturing (including Unionwear) featured on the Wearables Fashion Sense Channel this month. All of these brands are available from your local promotional products professional, screen printer, or embroiderer.

4 USA Made Items That Cost Less Than Imports

| Posted by unionwear

With labor costs continuing to skyrocket in China, transportation costs trending upward, and importers piling on currency hedge premiums, a number of promotional items have become less expensive to produce domestically. Four places to look:

1. Products made out of expensive materials. Pricey leathers and performance fabrics make the difference in labor costs insignificant. This bag uses $40 worth of leather whether it’s made in China or New Jersey. If labor costs are $9 domestically and $3 overseas, the FOB price will be $49 vs. $43–and the shipping, duties, taxes, cost of capital and other import headaches will more than eat up the cost savings. That’s why so many leather bags are made in the USA or in places even more expensive, like Italy.

2. Bulky products that are expensive to ship. Look for hard cases, coolers, laptop bags, products that don’t ship flat or nest. We recently made a hard case that was three feet wide by two feet high–it was more cost effective for the client to buy domestically than to pay to ship mostly air around the world.

3. Products with unnecessary bells and whistles. When labor was almost free, the Chinese often engineered products to “make work”, and little has changed. Evolved US factories re-engineer, eliminating unnecessary labor from imported products and build dedicated, lean production lines to keep labor costs low in a high wage environment.

4. Small batch customization. Import unit pricing may still be cheaper on most items, but there is a large overhead with every transaction. Language differences require tech packs. Sample approval and product development cost a fortune. As a result, customization in small quantities is cost prohibitive. Not domestically: you can do all over prints, custom dye lots, custom patterns, and panel embroideries by the hundreds–not tens of thousands.

Corporate USA-Made Buying Sees Uptick

| Posted by unionwear

Another day, another study that 75% of Americans are willing to pay more for USA Made merchandise.

Corporate logo apparel magnifies this phenomenon since companies are sensitive to being judged on their commitment to everything from helping rebuild our economy to the working conditions at their vendors’ factories. Here are six situations where a company will pay a small premium to see Made in USA on a promotional product that features its logo:

Company Store Catalogs/Fulfillment Programs

Companies that charge employees for corporate logo gear at far more likely to offer Made in USA options because it’s a risk free way to test their employees’ willingness to shell out a couple bucks extra for USA Made, while showing their support for domestic manufacturing. These companies may continue to buy their giveaways overseas unless they are…

Domestic Manufacturers

USA manufacturers such as GM, GE, John Deere, and Harley Davidson are already aware of the rapidly shrinking premium paid for USA Made. Most push “Made in USA” in their marketing and want to avoid appearing hypocritical saving money by putting their logo on an overseas product.

Other Industries Identifying with USA Made

Companies that promote their commitment to adding value with US labor in industries such as food processing, bottling, construction, energy and even technology, graphic design, and web development buy USA promos for the same reasons as domestic manufacturers.

Regulated Utilities/Telecom with strong Unions

Public Utilities and cable and phone giants such as AT&T and Verizon have been at the forefront of buying USA made wearables for their workers, as a nod to both the gigantic unions who represent their field workers and the politicians who must approve the usage of public bandwidth, easements, and other resources.

Trade Justice, Green, and other Social Ventures

Corporations with Social Ventures departments and/or a strong stated commitment to the environment or workers rights will buy USA Made–or at least avoid associating with countries known for sweatshops and lax environmental regulation.

Companies with Clients Highly Sensitive to “USA Made”

Unions, federal and state governments, the military, and political campaigns take issue with anything not USA Made, so companies giving away merch at events that cater to these industries take pains to endorse “USA Made”. Examples are financial services companies that cater to unions, military contractors, and DOT vendors.

Sources:

http://www.crainsnewyork.com/article/20130203/RETAIL_APPAREL/302039979

Inside, Outside U.S.A.

| Posted by unionwear

Inside, Outside U.S.A.: Presidents of American Apparel, Unionwear, Jensen discuss the economics behind the surge in domestic apparel production.