For decades, shoes were for the US market from the USA. Then the Chinese came. An American industry that has tried everything and the far East fails. In Spite Of Donald Trump.
Douglas Clark has long lived in the world of shoes: More than 30 years of his life, he has worked for the biggest Shoe brands in the world, he has come up the Trends and go, and workers in factories around the world to learn. The Shoe that was for him always a classic, American product. The more it bothered him that the production migrated more and more to the far East. The must be another way, he thought to himself and made himself a little later with his own brand of “New England Footwear” independently. His goal: shoes that are “Made in USA”.
For eight years he was in the development of: He automated the production, simplified the models and down screwed the cost. But the competition from the far East was ahead of him anyway. Finally, he had to give up disillusioned, as he told recently, the American Radio broadcaster NPR. How to produce shoes in the United States, don’t know, the Shoe Veteran today.
There were times, many US Shoe manufacturers
40 years ago all of this was still different. The country produced dozens of Shoe manufacturers for the domestic market, more than 90 percent of in the US sold shoes was fabricated in Germany. Since then, the demand has grown strongly, the U.S. Shoe production, however, shrunk. So have rotated in the meantime, the conditions complete: 99 percent of all shoes coming from the far East – 2,4 billion representatives each year. In the United States are produced only 25 million. It is a gradual, but radical decline of a once great American industry.
Great choice of accommodation: a Young woman in a Shoe store in Santa Cruz, California
“Shoes were a very large Business in the United States,” says Matt Priest, Executive Director of the Footwear Distributors and Retailers of America (FDRA), the largest American Association of the footwear industry. However, with the growing American economy, even the wages are – and the life increased maintenance costs. This development has ensured that the production was relocated to other countries. “Today, the Shoe production is only a niche market in the United States. And that will probably remain for a while,” says Priest.
The laughing winners
The winners sitting in the far East. Even if China is no longer the workbench of the world, is produced there is still a majority for the American market. Three dollars per hour to earn the workers on-site, in the United States, there are often 13 dollars more. It is estimated wholesale and retail margins to quadruple the cost for a Pair of shoes compared to those that are produced in China. At the end of a price difference of 50 dollars per Pair results. You don’t need math to be a genius to know who’s winning the race.
A fight against the cost
Clark wanted to turn these ratios. His Credo: produce where the market is and not where the lowest wage costs. The production costs to be kept as low as possible, reduced the parts required per Shoe in a Minimum of twelve parts instead of 50. And also the amount of work involved should be reduced through automated production to a Minimum.
But this is precisely the Crux of the matter was. Unlike human workers, robots’t see any production error. Again and again it came to production stops, because the machines are not doing what they should. New models were added, it took to re-program forever. It was a show of strength, the cost of Clark’s entire life savings.
Made in Asia: sports shoes in a Nike Store in Gilroy, California
Shoe imports for work in the United States
While Clark struggled with globalisation, arranged for the American Shoe industry and the Asian competition. In the meantime, you can even take Advantage of the favorable conditions in China. For FDRA in-chief of a Win-Win Priest-Situation: “On the one hand, can produce American companies very cheaply Overseas,” he says, “on the other hand, the Import business hundreds allows thousands of jobs in the United States”.
Seven Pairs of shoes per US citizen to be imported every year from the far East. In the last few years are only due to the Import of footwear to 350,000 jobs will be created – much more than there was in the High times of the U.S. Shoe production. According to the U.S. Bureau of labour statistics, the industry had “only” 76,000 jobs.
Trade war could affect Shoe store
But also the Import business has its price. Now the industry will pay every year “exorbitant three billion dollars in state taxes,” says Priest. Costs could rise as a result of the President, Trump announced tariffs significantly. Tariff rates of 60, 70 or even 80 percent of the expected Priest who is certain that the costs will be circulated to the consumers.
The price for a Pair of running shoes from China could increase from 150 to 190 dollars or more. This will, in turn, have an impact on the demand, and could bring the industry to its knees, afraid of the FDRA. “We may see rates in the retail sector, will soon have negative growth,” warns the Priest.
A few weeks ago, he turned with a petition to US President Trump. Because shortly before Christmas, the tariffs will be increased once again: a further 15 per cent from the 15. December. Together with the 203 firms in the world, he asked Trump to stop the sanctions immediately. “Of course the Chinese should be considered for the theft of intellectual property accountable,” says Priest. But to create conditions, which could damage the American growth, was wrong. “We need an agreement so that we can produce to focus again on what is really Important: shoes for our customers.”
During the FDRA is struggling with the consequences of the trade dispute, there are a few of the Shoe producers, the shoes of globalization and duties unperturbed more in the United States produce: the manufacturer of the Military. A majority of 200 in America’s still-intact factories is used for the Shoe production, the government, Capps Shoe co. in Virginia is one of them. Several Hundred workers to recap here are the feet of US soldiers.