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November 1, 2005

No Longer Made In America

The decline of manufacturing in North America is most often tabulated in lost jobs. Painful though that is, it is mostly a political argument that, through repetition, loses its sting. What’s more telling sometimes is to see iconic America products that simply go away.

Forward began the process of finding such products by identifying 20 that can be well documented. Please visit www.msci.org/forward to add to the list with products that are no longer made in America.


Nearly half of manufacturing plants (45%) now source components and materials from China. Of those, 74% indicate the dollar volume of components and raw materials sourced from China has increased over the last three years;

18% say the volume has increased by more than 20%. Some 45% of primary metals manufacturers and

41% of fabricated metal plants indicate that Chinese competitors have caused their plant’s profitability to decrease (the highest percentage among industries), compared to just 17% of food manufacturers.

16% of primary metals makers indicate that their profitability has decreased significantly due to Chinese competitors.


GYM SHOES 
Nike
Converse
Founded in 1962 as Blue Ribbon Sports, Nike Inc. operates 109 apparel contract factories and 12 equipment factories around the world. As recently as FY2001, Nike manufactured approximately 14% of its apparel in the United States; the remainder is manufactured by independent contractors located in 33 countries worldwide. Nike acquired Converse shoes in 2001 and shifted production from the United States to Asia.

BRAS
Top Form
The world's largest brassiere maker manufactures bras for U.S. brands such as Maidenform. The company manufactures 56% of its product in China, 36% in Thailand and 8% in the Philippines.

BICYCLE HELMETS
Asia has become the manufacturer for nearly all helmet companies except the Italians and Germans for at least part of their lines. Many of the familiar North American brands, such as ProRider, HeadStart, Mongoose and Bell, are made by a handful of companies in China and Taiwan.
GUN TRIGGER LOCKS
Master Lock
More than 90% of all trigger locks on the market today are made in Asia.
SURGICAL GLOVES
Ansell
SSL International P.L.C.
Glove and condom maker Ansell stopped producing surgical gloves in the U.S. in 2001, outsourcing to sites in Malaysia and India. This ended latex surgical glove manufacturing in the U.S. following the closure of British-owned SSL International P.L.C.’s U.S. plant.

U.S. manufacturing contributed $11,735 billion to the nation’s GDP in 2004, 13% of the total.


Neodymium-iron-boron magnets
Magnequench
Using Pentagon grants, General Motors developed a new kind of permanent magnet material in the early 1980s, and began manufacturing the magnets at its subsidiary’s, Magnequench, factory in Anderson, Indiana. Over the past few years, Magnequench moved virtually all its U.S. production operations—and soon its headquarters and research facilities—to Mexico, Singapore and China. In 2004, when Magnequench moved its production facilities to China, it marked the end of U.S. production of the world’s most advanced permanent magnets, tiny but crucial components in computers, automobiles and consumer electronic products—as well as cruise missiles and the Joint Direct Attack Munition bomb.
GOLF CLUBS
U.S. consumers spend approximately $2.8 billion a year on golf clubs, some 70% of which come from China. Many top U.S. companies, such as Titleist, Cobra and TaylorMade, use Chinese parts in their products.
RADIOS
Radio Corporation of America (RCA)
In 1986, RCA was purchased by GE, which subsequently sold its consumer electronics business (which included radios) to Thomson Multimedia, a company owned by the French government. Today, the vast majority of AM-FM radios are manufactured overseas, including those made under U.S. brand names such as Motorola.

Fabricated metal products accounted for $23 billion in U.S. exports in 2004.


MUSICAL INSTRUMENTS
Fender Musical Instruments Corp.
By 1990, Fender had sent some of its guitar manufacturing to a plant in Ensenada, Mexico. Other Fender products, such as its entry-level Squire brand, are made in Korea.
BLUE JEANS
Levi Strauss
Levi began moving production of its trademark blue jeans overseas in the late 1990s in an effort to cut costs and stay competitive. By 2002, the company had shuttered virtually all its domestic operations and increased production in countries such as China and Costa Rica. In 2004, Levi closed its last two sewing plants in the United States.
BICYCLES
Huffy Bicycle Co.
China has emerged as the world leader in bicycle production. It produces 80% of the world’s bicycles—79 million units in 2004—and exported 51 million bicycles to the United States, Japan, Australia, South Korea and Indonesia last year alone. Today, a standard fireball-red Huffy bike made in China sells for $40 at Wal-Mart—about 50% less than what it cost when Huffy was in Celina, Ohio. The bikes are assembled in a plant in Sha Jiang Town, Shenzhen, China, where 800 workers live for free in dorms and earn between 25 cents and 41 cents per hour.
TOY WAGONS
Radio Flyer Inc.
The maker of the little red wagon that has been symbolic of childhood for generations of American children closed its plant in 2004, laying off nearly half its 90 employees. Radio Flyer's tricycles, scooters and most of its other products were already made in China.
AUTOMOBILES
Ford Mustang
Although “final assembly” takes place at the automaker’s Flat Rock, Michigan, plant, the Ford Mustang is listed as being “65% U.S. / Canada” origin, with the transmission manufactured in Mexico and the engine arriving from Germany. The Ford Motor Co. operates factories in Thailand, Malaysia, Philippines, Mexico and India, along with six assembly locations in the U.S.
TOYS
Mattel Inc.
Mattel makes about half of its products in Asia, and most of its popular Barbie dolls in China. Last year, the country exported $7.58 billion worth of toys from almost 8,000 toy factories which manufacture an estimated 70% of the world’s toys.

Two-thirds of the world’s copiers, microwave ovens, DVD players and shoes are made in China.


MAJOR LEAGUE BASEBALLS
Rawlings 
The only supplier of baseballs for Major League Baseball, hand-sews baseballs exclusively in a 450-person factory in Turrialba, Costa Rica.
FILM
Eastman Kodak Co.
Once the world’s biggest manufacturer of cameras and photographic film, the Rochester, New York-based company has moved the majority of its production offshore over the past two decades, particularly to Mexico and China. Earlier this year, Kodak closed its photographic paper manufacturing plant in Rochester to move operations to Harrow, U.K. Kodak’s factory in Xiamen, China, makes film for the consumer market.

U.S. CURRENT-ACCOUNT TRANSACTIONS
[$ in billions—seasonally adjusted]

  Imports of goods and services and income payments Exports of goods and wervices and income receipts Balance of current account [all figures are negative, i.e., below $0]
1997 $301 $290 $25
1998 $320 $300 $45
1999 $350 $300 $65
2000 $410 $340 $100
2001 $450 $365 $102
2002 $380 $300 $102
2003 $415 $305 $130
2004 $500 $365 $175
2005 $590 $410 $200
COOKWARE
National Presto Industries
Cheap, high quality goods from overseas ate away profit margins at National Presto Industries. As a result, the Wisconsin-based company closed its domestic manufacturing operations in 2003 and moved production to China.
SEMICONDUCTORS AND MICROCHIPS
A critical component of almost anything computerized or which uses radio waves, the once dominant U.S. semiconductor industry has largely moved offshore in the past decade. The U.S. share of 300 mm wafer production capacity will be less than 20% of the world’s total in 2005. Meanwhile, Asian share will reach 65%.

The NAFTA agreement requires that imported goods bear some
identification of their country of origin.


CANDY
Primrose Candy Co.
The maker of Marshall Field’s signature Frango mints moved its factory to China last year after 73 years in Chicago, Illinois.
CONSUMER ELECTRONICS
Apple
The ubiquitous iPod is produced almost completely overseas. The player’s design is handled in California, Washington state and Hyderabad, India, while its chips are fabricated in Taiwan and it is assembled in China and Korea.