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Shoe company gambles to keep operations in U
But John Stollenwerk,[link widoczny dla zalogowanych], the president of the company,[link widoczny dla zalogowanych], was not preparing to send his operations overseas. Instead, Stollenwerk gambled on staying put and reconfiguring his factory floor,[link widoczny dla zalogowanych], which reopened Jan. 5,[link widoczny dla zalogowanych], with a new manufacturing method that could increase production and cut down on mistakes. The moves required an investment of $1 million,[link widoczny dla zalogowanych], or 1.1 percent of the company 2003 sales.
Stollenwerk is resisting a tide that has decimated the American shoe manufacturing industry: About 98.5 percent of shoes sold in the United States are now made abroad, according to the American Apparel and Footwear Association, which is based in Arlington, Va.
But the numbers behind his decision to stay show the stark economic choices facing manufacturers. Stollenwerk hopes the million-dollar refitting will save the company 5 percent on each shoe. He could save 60 percent tomorrow,[link widoczny dla zalogowanych], he acknowledged, if he moved his manufacturing to China.
"It costly to stay here because of the wages we paying,[link widoczny dla zalogowanych], the benefits,[link widoczny dla zalogowanych], the rules and regulations of the government for having a safe workplace, for having a clean workplace, the emissions permit, taxes, health care," Stollenwerk said. "They all good things. Don get me wrong."
Allen-Edmonds,[link widoczny dla zalogowanych], founded in 1922, gained much of its following by providing the Army and Navy with shoes during World War II. Many men continued to wear the shoes the rest of their lives. The company,[link widoczny dla zalogowanych], which makes small batches of men dress shoes in a variety of widths that sell for upwards of $200,[link widoczny dla zalogowanych], claims both presidents named Bush as customers.
But patriotism will only get a shoe manufacturer so far these days. In 1968, just before worldwide tariffs on footwear were reduced, 642 million pairs of shoes were manufactured domestically. Last year,[link widoczny dla zalogowanych], that number was 60 million, mostly specialty products made in the Upper Midwest,[link widoczny dla zalogowanych], Southwest and North Carolina, according to the association.
Most shoe retailers need quantity, said Fawn Evenson,[link widoczny dla zalogowanych], president of the association footwear division. Penney, and later Wal-Mart Stores and Target, increased the demand for mass production, she said.
"You just can beat it,[link widoczny dla zalogowanych]," Evenson said of Chinese shoe factories, where she said workers make as little as $100 a week and put in 10-hour days. "These plants are modern,[link widoczny dla zalogowanych], clean, they are unbelievably efficient,[link widoczny dla zalogowanych], and they get a very good price."
Michael Atmore, editorial director of the trade publication Footwear News,[link widoczny dla zalogowanych], said patriotism does not often extend to buying shoes.
"Consumers today are less concerned about where something made than ever before,[link widoczny dla zalogowanych]," he said.
The most obvious competitive disadvantage at Allen-Edmonds is that it pays its workers well,[link widoczny dla zalogowanych], even by domestic standards. The average worker in the Port Washington plant makes about $15 an hour before benefits, Stollenwerk said.
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