New Balance: U.S. Manufacturing Commitment

by: Molly Line

As companies across America look to cut costs, shipping jobs overseas, finding a ‘made in the USA’ label can be hard to do, particularly when it comes to apparel and footwear.

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There are more than 30 companies that manufacture footwear in American, but only one athletic shoe company that still makes shoes in the United States. Boston based New Balance churns out 7 million pairs a year from five New England factories- two in Massachusetts, three in Maine.

25% percent of the company’s shoes sold in North America are made or assembled by U.S. workers .

According to the Bureau of Labor Statistics, over the last decade, from January 2000 to June 2010, more than 5.6 million manufacturing jobs have been lost in the United States. That’s a staggering decline of nearly 33 percent.

New Balance CEO, Rob Demartini, admits it’s a challenge to stay competitive in the world market but says the company’s commitment to domestic manufacturing is firm.

“It’s really part of the fabric of the company. we’ve been manufacturing athletic shoes since 1938,” said DeMartini. “We think in an industry where there a lot of shared manufacturing, knowing how to make the product, helps us. It also gets us a lot closer to the consumer.”

Since it’s founding in 1906, New Balance has grown into a global brand with world wide annual sales topping 1.6 billion dollars.

“I think every business faces challenges everyday and I think the differentials that exist between markets are getting closer together as the global economy is becoming more intertwined,” said DeMartini. “Yeah, it’s definitely a challenge, but we accept it and have been very successful at it.”

DeMartini said the company is growing modestly, despite the recession, due to efforts to keep manufacturing lean and streamlined.

Regional manufacturing manager, Claudio Gelman, says a dedicated workforce deserves the credit for increasing production speeds and maintaining quality.

“Six years ago it would take us eight days, from the moment of cutting a shoe, I’m talking about the made in the USA shoe, to packing,” said Gelman. “Which means there was a lot of inventory, which we’ve reduced 90 percent and a lot of travel time that we’ve reduced by 60 percent. And the lead time, the time it took to make a pair of shoes, went from eight days to three hours.”

New Balance also maintains a manufacturing and client base in Asia and Europe.

“We’re growing in a number of places right now, our Asia business in particular. In Korea and China we are growing very rapidly. We’ve had a strong business for well over 20 years in Japan. It’s our second biggest market outside of the US and we’re feeling very good about that business,” explains DeMartini. “In Europe, where Adidas is kind of on the continent and Nike had been there longer than us, we have our challenges but we’re making real inroads in a tough elite running market in Germany and France and that’s got us very encouraged as well.”

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