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Why The American Shoe Disappeared And Why It's So Hard To Bring It Back

Jun 19, 2019
Originally published on June 20, 2019 11:09 am

Updated at 11:04 a.m. ET

For Douglas Clark, the darkest part of working for Nike in the 1980s was watching American shoe manufacturing "evaporate" in the Northeast in a mass exodus to Asia in pursuit of cheaper labor.

"As a true Yankee — and my father was a Colonial historian — you know, it was heartbreaking," he said.

Clark would go on to a long career in footwear, at Converse, Reebok, Timberland, then his own line of shoes at New England Footwear. And there, he would devote eight years to one mission: creating a model to make shoemaking in America profitable again.

This was a tall order. At a time when President Trump speaks of rebuilding American manufacturing, footwear is a telling example of how hard it is to turn back time.

These days, 99% of shoes sold in the U.S. are imported, many of them from China, Vietnam and Indonesia. China's share has declined in recent years, but it remains a key source of America's shoes and shoe parts. That's why some U.S. footwear companies have been loud opponents of Trump's threat of more tariffs for almost everything imported from China.

"We'd love to make shoes in the United States," Steve Madden CEO Ed Rosenfeld told NPR. But "it's very hard to envision a scenario where we'd make the types of products that we make, at the prices that we make them, in the United States."

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For a shoe-factory job paying $12 an hour, the actual cost of shoemaking — when adding benefits — grows to $16 an hour, compared with about $3 an hour in China, said Mike Jeppesen, head of global operations at Wolverine Worldwide, which owns brands like Merrell, Sperry and Keds. And that cost quadruples after wholesale and retail markups, he said, ballooning into a $50 price difference between a pair made in the U.S. versus in China.

"There's really very little commercial reason for why you would make footwear in the U.S. today," Jeppesen said. He acknowledges one exception to that: factories that work to meet constant demand for American-made shoes by the U.S. military.

Indeed, many of the remaining 200-some U.S. footwear factories serve the military, said Tom Capps, whose Capps Shoe Co. in Virginia mainly makes uniform shoes for the government.

Capps said he employs 125 to 175 workers, depending on the factory's workload. That's on the high end for an industry where most firms employ fewer than 10 people, according to the Footwear Distributors and Retailers of America.

Owners of U.S. factories that make nonmilitary shoes in America said they found their own reasons to stay. Many cited their love of the craft and tradition. Capps said he also found a niche by offering a large selection of sizes. Olivier Marchal, of Sense of Motion Footwear in Colorado, worried about the environmental impact of shipping shoes and materials from across the world in Asia.

But U.S. factory owners also listed two major challenges of domestic footwear manufacturing: finding skilled workers and affordable parts and materials.

New Balance is known for still making or at least assembling some sneakers in the U.S. But the company gets "some components for our domestic manufacturing from China, as well as other countries, due to a limited U.S. supply chain," executive Monica Gorman told U.S. trade officials on Monday.

As shoemaking jobs disappeared, so did the support network for the industry. Suppliers of things like the little metal eyelets and colorful leather followed the industry overseas. Many shoe factories turned into warehouses and offices.

San Antonio Shoemakers has been making shoes in Texas since the 1970s. SAS recently got a big contract to make sneakers for the U.S. military.
Carson Frame / The American Homefront Project

Dan Heselton runs Maine Mountain Moccasin out of one such factory that vacated during the exodus.

"We'll post jobs," he said, "and it's very seldom that someone under the age of 40 is coming in the door to apply." Among the workers who remain, arthritis is a common struggle.

"A lot of the people have said multiple times that they definitely don't want their son or daughter doing this," Heselton said. "That's tough to hear."

With the higher costs of U.S. labor and materials, the remaining manufacturers tend to rely on their shoppers choosing to pay more for the "Made in America" brand.

"We know that we can't make a $19 shoe to be sold at Target or Walmart. That's just not going to be possible for us," said Nancy Richardson, CEO of SAS, a midsize company that has been making shoes in San Antonio since the 1970s. "So we focus on having people feel like they get an $800 pair of shoes for $150 or $200."

The mass-market companies, meanwhile, have been turning their U.S. operations more toward design and marketing, leaving all the cutting, gluing and stitching to manufacturers overseas.

Clark wanted to change that. On his mission to return mainstream manufacturing to America, he zeroed in on the cost and complexity of the labor involved in shoemaking.

U.S. factory owners often say they wish people realized just how many parts and processes it takes to make a shoe. There are multiple layers to create the sole alone, including lots of heavy-duty sewing. Securing the bottom of the shoe takes multiple steps. By the time the shoe is ready to wear, dozens of people might have worked on it.

Clark knew about this, and about the U.S. manufacturers' struggles with materials, parts and workers. But he also knew that history was already starting to repeat itself in China. Wages have been going up there. Footwear companies have been moving — yet again — to other countries, chasing lower costs.

This could be the opening for America's comeback, Clark thought. But for it to work, the process had to be simplified — maybe a dozen parts instead of 50 — and more automated. Maybe then, he said, the manufacturing could be "where the markets are, instead of where the labor is."

A few years back, he got a contract with a big brand and a grant to get started. He began with making top parts, or uppers, "that didn't involve a lot of labor," he said.

Footwear manufacturing has long included machines — cutting or gluing soles. But higher-level innovation? Ironically, factory owners said that's happening where the industry is — overseas.

Major brands, like Nike and Adidas, have been developing new technologies, including in the U.S. But they still rely heavily on factory workers abroad. Because unlike humans, robots aren't nimble — they can't notice imperfections or quickly switch to a new fashion style.

"Robots are not forgiving," Clark said.

For Clark, the story had a frustrating end. Developing automation got very expensive and progressed more slowly than expected. He was draining his funds and agreed to sell his factory to a technology company, which knew a lot about robots. The factory is now closed.

Clark had signed a noncompete agreement, so now "I'm essentially retired unwillingly," he said. He had hoped his legacy would be reviving American shoe manufacturing. Instead, he is now in real estate.

Copyright 2019 NPR. To see more, visit https://www.npr.org.

NOEL KING, HOST:

If President Trump follows through on his threat to impose more tariffs on imports from China, one industry that has a lot to lose is U.S. footwear companies. That's because most of the shoes sold here are made in China. Even more of those shoes have parts from China. NPR's Alina Selyukh has been wondering could America ever make its own shoes again?

ALINA SELYUKH, BYLINE: Douglas Clark has been asking this question for decades. In the '80s, he worked for Nike as factories closed all around him in the Northeast.

DOUGLAS CLARK: I'll tell you, one of the darkest parts of being at Nike was when I watched domestic manufacturing evaporate and everything go to Asia.

SELYUKH: Where labor was much cheaper. What followed was a mass exodus. If you chart jobs in footwear manufacturing in the U.S., the graph has the curve of a stiletto, a steep slope through the '90s before it levels out around fewer than 13,000 jobs in the past decade.

CLARK: As a true Yankee, (laughter), and my father was the colonial historian, you know, it was heartbreaking.

SELYUKH: Clark would go on to a long career in footwear - at Converse, Reebok, Timberland then his own line of shoes at New England Footwear - and eight years devoted to one mission.

CLARK: Not only can we create a model for how footwear can be made back in the U.S. in a profitable way, but that that model could transfer to all the other lost industries that have left the U.S.

SELYUKH: This was a tall order. At a time when the president speaks of rebuilding American manufacturing, footwear is a telling example of how hard it is to turn back time. These days, 99% of shoes sold in the U.S. are imported from countries like China, Vietnam, Indonesia. And that's the number that Clark was going up against when he went after the main reason why shoemakers left in the first place - labor costs. Here's Mike Jeppesen, head of global operations at Wolverine Worldwide, which owns brands like Merrill, Sperry and Keds.

MIKE JEPPESEN: Our actual cost price in making the shoes is somewhere around $16 an hour. When we are sourcing from China today, that price is about $3 an hour.

SELYUKH: More than five times more, a cost that ends up quadrupling after wholesale and retail markups.

JEPPESEN: So that's a $50 price difference between a pair of shoes made in the U.S. and a pair of shoes made in China. Simple as that.

SELYUKH: That's why the mass market companies, especially athletic shoes and women's fashion shoes, have focused their U.S. operations more on design and marketing, leaving all the cutting and gluing and stitching to manufacturers overseas. So Clark focused on automating and simplifying this labor-intensive work.

CLARK: Instead of a shoe being made of 55 parts, we had a shoe that was made of 10, or 11 or 12 parts.

SELYUKH: To be clear, shoe-making never entirely left America. But it's down to some 200 factories. The majority of them employ fewer than 10 people. For many, the U.S. military is the main customer, which has to buy made-in-the-U.S.A. But outside of that, large shoe companies will say there's little commercial reason for them to manufacture here. Smaller ones say they stay because they found a unique niche, or want to carry on the tradition or take a stand against the environmental impact of trans-Pacific shipping. To make it work, these firms rely on their shoppers choosing to pay more for bespoke quality and the made-in-America brand.

NANCY RICHARDSON: We know that we can't make a $19 shoe to be sold at Target or Walmart. That's just not going to be possible for us.

SELYUKH: Nancy Richardson is CEO of SAS.

(SOUNDBITE OF FACTORY MACHINERY NOISE)

SELYUKH: It's a mid-sized company that's been making shoes in San Antonio since the '70s, still starting the traditional way, carving the shape of a foot into wooden block called the last.

(SOUNDBITE OF HAMMERING ON WOOD)

SELYUKH: SAS shoes cost around $150 to $200. And the biggest challenge for SAS is finding workers.

RICHARDSON: At one time in the U.S., you might have put an ad and gotten 200 resumes. Today, you might get a handful of people.

SELYUKH: U.S. factories rarely get applicants under 40. Arthritis is a common struggle. As shoe-making jobs disappeared, so did the support system. Suppliers of things like metal parts or colorful leather followed the industry overseas. Doug Clark, on his mission to return mainstream manufacturing to America, knew all this. But he also knew that history was already starting to repeat itself in China, too. Wages have been going up. Footwear companies have been moving, again chasing lower costs. This could be the opportunity for America's comeback, Clark thought. But for it to work, you need robots. A few years back, he got a contract with a big brand and a grant to make shoe manufacturing less manual starting with the top parts.

CLARK: The first thing we did was we basically developed ways to make uppers that didn't involve a lot of labor.

SELYUKH: Footwear manufacturing has long included machines cutting or gluing soles. But higher-level innovation? Ironically, factory owners I spoke with said that's happening where the industry is, overseas. Major brands like Nike and Adidas have been developing new technologies, including in the U.S., but they still rely heavily on factory workers abroad. Because unlike humans, robots aren't nimble. They can't notice imperfections or quickly switch to a new fashion style.

CLARK: Robots are not forgiving.

SELYUKH: For Clark, the story had a frustrating end. Developing automation got very expensive and slower than expected. He ran out of money and sold his factory to a technology company which knew a lot about robots. The factory is now closed. Clark hoped his legacy would be reviving American shoe manufacturing. Instead, he's now in real estate. Alina Selyukh, NPR News. Transcript provided by NPR, Copyright NPR.