Friday, January 6, 2017

Made in .... at home

Winter in Washington is really dull, especially from mid-January till mid-March. This year, the new administration will try to generate some energy into Washington's dreary winter with its inauguration spectacle, but who can get really excited about the Mormon Tabernacle Choir? Or any of the million-dollar balls? Except for being more glitzy, these crowded "galas" are about as stimulating as rehearsed American weddings. However, at least some goings-on stand out from the ordinary as the winter sets in.

Ford Motor Company created some sizzle this week when it announced it is scrapping the plan to build a new plant in Mexico and is expanding business at home. Although the move is carefully calculated and Ford is doing nothing to hurt its profits (its Mexico production continues as usual in an older Mexico plant ) the management gave some credit to the President-elect Donald Trump, for pressuring companies to keep jobs in the United States. Trump has since targeted more carmakers, but other U.S. companies making their goods in China, Mexico and elsewhere, are weighing the pros and cons of following Ford's suit. Even Apple is said to be looking into how much it would cost to move the production of its cell phones from China to the United States.

Attempts to promote local businesses are not new. In the past decades, the United States has seen a nationwide boom of farmers' markets selling locally grown produce. I found my first decent American tomato in one of those. And then there was American Apparel, formed in 1989, that branded its clothes as made in the U.S.A. But small farmers produce little and don't make significant profits and American Apparel went bankrupt in 2015, in part due to its relatively high labor costs. In my opinion, the bigger reason is that its garments are so unappealing there is no incentive to buy them when you can get more attractive and cheaper stuff at H&M or Zara. Whatever the reason, that company is not a role model to follow. 

Slogan "Made in the USA" could not save American Apparel
Regardless, the latest reports say Amazon now wants to buy the failing U.S. clothier. The question is why. The online retailer already is expected to surpass Macy's as the top U.S. garment seller in 2017. One reason may be to gain Trump's support (Amazon's founder Jeff Bezos has locked horns with Trump in the past) and another could be to appeal to the currently fashionable patriotic sentiment. American Apparel employs about 4,000 people and boasts of producing sweatshop free garments.  Buying an American Apparel T-shirt is akin to choosing a steak that is labeled as coming from a humanely raised cow.

But perhaps more importantly, Amazon is expanding from e-commerce into brick-and-mortar stores, with food and other goods, even books. (Ironically, the company that forced bookstores around the country to close is now opening its own). Most people like to try clothes before buying them and American Apparel already has retail stores throughout the country. If Amazon can rebuild the brand's image, it may be worth taking on its losses.

The United States is not alone in seeking ways to produce things close to home, although the trend is far from widespread. I was surprised recently by an article about Italian designer Brunello Cucinelli whose garments I remembered for their luxurious fabrics, sleek design and unaffordable prices. And they were unaffordable even in now-defunct discount stores such as Loehmann's and Filene's Basement, where I became familiar with the brand. 

Cucinelli vest on sale for $1,500, 40% off the original price
The article describes Italy's "king of cashmere" as someone who strives for quality not just in his products, but in the working lives of his employees. His business empire is based in the medieval village of Solomeo in the idyllic hills of central Italy. Cucinelli imports cashmere from China and Mongolia, but all his manufacturing is done in Italy. His factories are no sweatshops either. They are fitted with floor-to-ceiling windows so workers can enjoy the view.

“I don’t think it’s time wasted watching a bird in the sky when you are in the middle of sewing a button. On the contrary, nothing could be more beautiful,” he said in an interview. His workers get a 90-minute lunch break, go home at 5:30 PM and are not expected to check their office mail once they get home.

“Today in the world, we work too much. We are too connected and I don’t think that’s fair. I find that if I make you work too much, it’s like I’m stealing part of your soul,” said Cucinelli. Hmmm... Is something like that possible in the United States?  I am not sure any of my bosses care for the health of my soul.

Cucinelli Factory, Solomeo, Italy
Like American Apparel's employees, Cucinelli's are paid more than the industry's norm. But his business is thriving.  He has spent much of his profits in his village, helping renovate a 13th century castle and build a theatre, a library and an art school. According to the report, his brand has quadrupled in size in the past decade and his investors are not complaining either.

Cucinelli said 
it is important to return dignity to workers in western countries who feel they have been forgotten. The rise of Donald Trump and Brexit testify to the widespread dissatisfaction among Western workforces. But just giving them a job is not enough. 

"We cannot have companies that earn incredible amounts and our workers earning tiny sums to work 12 hours a day staring at a wall under an electric lamp. We have to put dignity back at the heart of our economic activity."

One of the main reasons for promoting local businesses is to improve the quality of life of local populations. As Cucinelli demonstrates, if you live where you work, you have a vested interest in making improvements in your community.  The luxury clothes designer is able to secure better living for his staff and contribute to his hometown by selling his high quality garments at extremely high prices. Not everyone can do that, but much can be learned from Cucinelli.

Trump won his way to the White House in large part by promising to keep manufacturing jobs in the United States. Companies such as Ford in Michigan and Carrier in Indiana have made small moves in that direction to see how it goes.
But small moves are better than none. Michael Gilligan, a Ford employee in Dearborn said, "at least we get 500 to 700 jobs extra and we need that in our state, terribly."

By acquiring American Apparel, Amazon could save about 4,000 U.S. manufacturing jobs. 
But Amazon is a multinational company, and notoriously a harsh place to work.  Its employees have complained of being exploited - too often to be ignored.  If it does acquire American Apparel, Amazon would do well to invest in a fashion designer who can do better than H&M or Zara so its financial losses are not recuperated by exploiting the workforce.

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