While the markets fluctuate with the changing trade policy of the United States, the CEOs of American manufacturing companies are optimistic about the manufacture of more products in the United States.
Ric Cabot, founder and CEO of Darn Quartf, a manufacturer of socks based in Vermont, told Business Insider that it welcomes the prospect of manufacturing companies in America making a return, Even if there are certain things to be desired with regard to the speed and unpredictability of the current approach of the White House.
“For the first time, and I hope that for the last time, domestic manufacturing is in a good place,” he said. “But you have to commit yourself. You have to commit to doing it here. It’s not easy. No one subcontracts anything for quality.”
Darn Dur is undoubtedly one of the best positioned companies that could benefit from a higher pricing environment. With a large part of its merino wool from the United States, and all its manufacture carried out here, Darn Tough does not almost look at the type of cost increased that the brands of competing clothes that depend on the overseas production sail.
Its products guaranteed for life reduce a premium price – a typical pair of difficult socks costs $ 25 compared to wool socks at a lower cost on Amazon listed for $ 3 – but this higher cost may not seem so intimidating if imported alternatives are starting to become more expensive. This is essentially what the Trump administration officials said they wanted to see.
“Prices are a way to reach an end, and I think the end brings the manufacturing base back to the United States,” said Treasury Secretary Scott Bessent in a February interview with Fox News. In other interviews, Bessent said that this could involve the drop in American consumption as rebalancing international trade.
“There are a lot of misunderstandings on what is possible here, and it comes mainly from large companies,” said Bayard Winthrop, founder and CEO of the clothing manufacturer based in California, American Giant.
“You can absolutely-especially in knitwear-make very high quality and very large knitting in the United States, they just forgot how to do it,” he added.
Winthrop told BI that he welcomes attention to domestic manufacturing after he described as four decades of negligence, but he is less comfortable with a heavy approach to trade.
“I don’t like instability, I don’t like the threat of the speed and extent of this kind of thing, and I certainly don’t think we have to treat our sympathetic allies, like Canada and Vietnam, in the same way as we treat China,” he said.
Strengthening the production capacity of these American manufacturing companies has taken years to cultivate supply chains, facilities and talents – in other words, this is not the kind of thing that can be done overnight or in 90 days.
Idaho Preaded has been in business for a decade and now manufactures its truck storage system products in Ohio and Utah factories.
CEO Bill Banta told BI the first stage of the company involved a careful discovery process to find American suppliers who could make finishing parts or components for predge products.
The suppliers being relatively close, a few minutes or a few hours by car instead of a long flight or by boat across the Pacific, offer its own advantages.
“There are certainly pockets of expertise across the country for different types of processes,” he said. “Having this nearby expertise really shortens our product development cycles.”
The company then reached a scale around 2022 which, according to Banta, could justify the investment of tens of millions of dollars to extend its American production capacity with its own injection molding machines and robotic welders.
“It is not as if we could simply return a switch, write a check and activate all these capacities the next day,” he said.
Banta also said that the company had managed to go to bed against fluctuations linked to the prices of American steel prices, which are still subject to international markets of basic products, and that less than 5% of its cost of destroles is imported.
Even so, for companies that seek to build or extend their own manufacturing lines, the newly imposed prices could make any imported machine more expensive. Darn difficult, for example, obtains his Italian machines, while payed machines come from Germany and Japan.
“If we were trying to try to build the installation we have in an environment at a high price, I do not know what it would be very like, but it would certainly not be as favorable,” said Banta.
“It is really difficult to make capital investments of several million dollars if you do not know if there is an important price when the equipment is lands in an American port,” he added.
Darn Tough was even longer in business, and CEO Cabot said that the company had invested massively in its facilities, its workforce and its larger community.
“If we really want to bring domestic manufacturing here, yes, we need a longer track,” he said. “We need time to develop interior supply chains. We need time to train the labor market.”
With enough time, Cabot insists that American manufacturing can work, especially since the industry used a massive number of workers whose jobs have gone abroad.
“We have sort of abandoned a whole demography of people who have worked in manufacturing, and I do not see the reason why we cannot bring this back, but that will take time,” he said.
businessinsider
