Made AGAIN in the USA
“We thought we could save our local jobs if we moved our manufacturing back to the U.S.” says Michael Araten, CEO of K’Nex, a toy manufacturer known for such iconic products as Tinkertoys and Lincoln Logs.
K’Nex is one of a growing number of companies moving its manufacturing back to the United States after decades of outsourcing production overseas. The process, known as re-sourcing, is gaining momentum. Even some of the nation’s largest corporations are making a commitment to domestic manufacturing. Recently, Walmart announced that it would purchase an additional $50 billion in American made products over the next decade.
Cost was the main reason companies started outsourcing and now with labor rates and shipping costs increasing in countries like China, cost is a large factor in the new trend of re-sourcing back home. But that is not the only factor for businesses have finally discovered that the Made in the USA label is worth something for there is a surging consumer demand for domestic products.
But re-sourcing is not as easy as it sounds. Even though the demand for American made products continues to rise, domestic production comes at a price. It often requires a significant investment in new infrastructure and equipment but the greatest obstacle is a lack of skilled labor.
So, as domestic manufacturing gains attention in the press, critics question whether the buzz is warranted. The companies that have re-sourced have only been back in the U.S. for a few years, and it’s hard to say whether it’s a success.
While Michael Araten can’t speak for the nationwide impact of resourcing, he believes that bringing manufacturing back to the U.S. has been a success for K’Nex. “We have the advantage of being an entrepreneurial family business that is small enough to be nimble and big enough to make an investment”, he says. “We’re not going to give up; until we make 100 percent of our products in the U.S. our work isn’t done.”