CVI Industry News - Outsourcing Mania: Saving U.S. Manufacturing

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Company : Industry News

Outsourcing Mania: Saving U.S. Manufacturing

CVI's Venetia Huffman, Vice President of Operations and Compliance, remarked on the current state of manufacturing in the U.S. and globalization of the industry as a whole in Virginia Business Magazine's 2011 Hampton Roads Maritime and International Trade Guide.

Saving U.S. Manufacturing
By Venetia Huffman
Vice President, Operations and Compliance
CV International, Inc.
Published in Virginia Business Magazine's 2011 Hampton Roads Maritime and International Trade Guide

A recent nostalgic trip to Danville Virginia revealed the painful and disturbing truth about the manufacturing sector within the United States. Once the center of a vibrant, successful and very profitable 100-year old apparel fabrics and home fashions manufacturer, the city of Danville now resembles a vacated town from the Old West, complete with boarded and decaying buildings, empty streets, and a maudlin view of a lost way of life.

Built on the banks of the local waterway by a group of businessmen, Riverside Cotton Mills was formed in 1882 as a producer of yarn and fabric. As the twentieth century arrived, the mills eventually changed name to Dan River Inc., a fitting tribute to its location and soon synonymous with the true character and spirit of a U.S. manufacturer. It was a company employing thousands of local citizens, impressive sales were in the millions, and its fabrics were the primary component in items having brand names like Levi Strauss, Brooks Brothers, Liz Claiborne and L.L. Bean. Dan River was also later renowned for high quality bedding products, showcasing many a consumer’s home in the USA and abroad. The Dan River Inc. label exemplified the greatness and best of American ingenuity and ambition in the area of manufacturing.

So what happened to the continuity and longevity of that powerful American ingenuity which was the lifeblood of towns such as Danville? The decline and eventual disappearance of Dan River Inc. isn’t necessarily attributed to a single occurrence; nevertheless, it is undeniable that the company found itself fighting for survival against Far East manufacturers, who could offer the same textiles and home fashions at much lower costs. Imported consumer items have bred a “disposable” attitude among the American public, to which U.S. corporations necessarily, yet regrettably, had to respond. With a desire to purchase cheaply and toss away when the mood strikes, it is not difficult to imagine a U.S. manufacturer’s inability to compete long-term within such an environment.

The Dan River story is anything but an isolated example. In a former era, the U.S. apparel industry employed over one million people, and by latest reports this number has now dwindled to some 200,000. Previously coveted U.S. made furniture is now largely manufactured in various Far East locations. Electronics with a “made in the USA” label are as difficult to find as the label “made in China” can be easily discovered. Everything from adult diapers to photo frames is made efficiently and inexpensively through the use of outsourcing.

This is not intended to be an overall disparagement of a global economy. On the contrary, globalization of international trade has expanded the capabilities of small companies and factories to increase profits by making their products available to a broader spectrum of buyers. The introduction of the ocean container in 1956 was a monumental step in re-shaping the world’s economy by reducing cargo handling, minimizing damage, maintaining product integrity, and allowing intermodal movement of valuable goods. Additionally, the use of ocean containers permitted unknown factories in countries such as China and India to reach beyond regional domestic shipping and recognize unprecedented expansion in the international marketplace and has allowed US entrepreneurs to access international markets as well. Unfortunately, the compulsion for outsourcing has gained a feverish level, with the ultimate price tag for U.S. consumers’ demand for cheaper, easily disposable products conveniently ignored.

The landscape of America is dramatically different than when manufacturing companies such as Dan River Inc. basked in profitability. Perhaps the time has arrived to analyze the apparent transformation of our nation from a position of self-sufficiency to one of almost complete reliance.

Is it too late or even possible to overcome the mania of outsourcing? Is there enough interest and commitment from both our government and our citizens to make the obligatory sacrifices which could renew U.S. manufacturing power and prestige? If the answer to these questions is a resounding “yes!” then consideration should be given to offering tax incentives for corporations manufacturing in the U.S., along with keeping equipment and accompanying technologies within our borders, and promoting a labor force which proudly works efficiently for a respectable but reasonable wage level.

Finally, but likely with the most difficulty, each individual consumer must re-evaluate the importance of a less expensive item to one which is USA made. If outsourcing manufactured goods and services continues as the most desirable option, we may witness more evidence of abandoned and decaying ghost towns in our midst.