The story of New Balance, the Boston sneaker company, helps explain why it’s so hard to make shoes in the United States — and why tariffs are a reason it’s possible at all.
Of all the sneakers available to U.S. consumers, New Balance’s are the only ones with styles made on U.S. soil. Its three factories in Maine and two in Massachusetts are remnants of an industry whose manufacturers, in droves, abandoned the Northeast for low-cost Asia and beyond.
A quarter of all athletic shoes New Balance sells in the States are made in those factories; the rest are made overseas. New Balance has not packed up entirely because it believes it should not.
One reason it has been able to make that choice: Government-imposed duties on shoes made in cheap-labor China and Vietnam, the world’s No. 1 and No. 2 shoe manufacturers, make New Balance’s higher labor costs competitive.
The minimum hourly wage in Vietnam is 33 cents, according to Mark L. Fleischaker, Washington-based trade counsel to the Rubber and Plastic Footwear Manufacturers’ Association (RPFMA). Tariffs mean that retailers and manufacturers with factories there must pay the U.S. government what amounts to a retail markup before selling their wares here.
Employing 1,300 people, New Balance’s U.S. factories are viewed as an endangered species. Last week, U.S. Sen. Olympia J. Snowe, R-Maine, invoked them in urging caution over trade-policy discussions.
Snowe called for Obama administration negotiators to ensure that a pending free-trade agreement with Vietnam take care not to threaten companies such as New Balance.
“These are precisely the kind of jobs that we must support, particularly since more than 28,000 jobs in the footwear industry have gone overseas in the past 15 years,” Snowe said in a Senate Finance Committee hearing. She sent a letter echoing those concerns to U.S. Trade Representative Ron Kirk.
Advocates for domestic footwear manufacturers worry that the Trans-Pacific Partnership with Vietnam and eight other countries could cause irreparable harm if shoe tariffs are lifted. They have asked negotiators to, at minimum, maintain tariffs on styles of Vietnam-produced shoes made domestically, too.
“Companies that want to compete with what’s currently produced in the U.S. would be very happy with an elimination of tariffs because then they could begin to compete more effectively,” Fleischaker said.
New Balance and makers of specialty boots, such as firefighting gear and fishing waders, that are RPFMA members say dropped tariffs could force factories to close.
“If we go to zero duty on these tariff items, there’s no change on the winners, but the losers are the people that make shoes here,” said Matt LeBretton, who handles trade-policy issues for New Balance as public-affairs director.
Negotiators hope to complete talks on the Trans-Pacific Partnership by year’s end, said spokeswoman Carol J. Guthrie.
“We know that there are certain sensitive products — both for the United States and our negotiating partners — that will require intensive discussions as the negotiation moves forward,” Guthrie said Friday. “Footwear is one of those sensitive issues for the United States.”
© 2012 The Philadelphia Inquirer
Distributed by MCT Information Services
It is sad, but our Government will cave in to Nike, and all other shoe importers. The sad part is that the big companies say it will lower the cost to consumers, but we all know it just means more money for them. We the people of Maine need to let our elected officials know how we feel, it is our only hope of saving these jobs.
I have only purchased Made in Maine New Balance sneakers since 1983, and I want to be able to keep doing so for many years to come.
And what’s the point of “lowering the cost to consumers” if those consumers no longer have a job and as such can’t buy your product? I have been buying Maine-made New Balance shoes/sneakers since moving back to Maine in ’95.
Despite New Balance has started to hire more employees, i think it is just a matter of time before New Balance comes out and pronounces they are shutting down US factories for overseas manufacturing And the day is more near than far.
I wrote a letter to the owner of New Balance a few years back thanking him for everything he does for the State of Maine, and the communities of Skowhegan and Norridgewock. He replied and said he has no intention of ever closing down manufacturing in the USA, and he sent me a pair of Made in the USA socks to boot.
If people want to save the factories, let the owner know how you feel.
PS. I am not a New Balance employee, and I am not in the manufacturing field.
ITS JUST A MATTER OF TIME AND THE DOORS WILL CLOSE IN THE US ! HOW CAN YOU COMPETE WITH .33 PER HOUR ?
Don’t buy there crap! It is the only way!
By making a better product, by buying the better, instead of the cheaper, product.
If you want to know why American businesses close-down and ship overseas, take a cold, hard look in the mirror.
Every time you buy some cheap piece of crap that breaks a year (or month ! ) later from WalMart, you’re putting Americans out of work, sending money overseas, and ending-up looking pretty dumb for buying cheap instead of sturdy.
My NewBalances last easily twice as long as cheap imports, are more comfortable, and keep Mainer’s proudly working.
We still make a lot of products here in America. You can pick-up the phone and talk to someone IN America if you have a problem or suggestion. There ARE American companies that succeed that are going that extra mile for you.
Write your reps and let them know that you are not going to forget when they betray American businesses, employers and employees.
INSIST that American companies INVEST IN American Education, American production, and American JOBS.
And STOP buying crap from American companies that DON’T.
Bravo!!!! You could not have said it any better!!!!!!
People seem to have amnesia. This whole problem started when everyone got relatively cheap and easy credit that they couldn’t afford to pay back, so that they could buy cheap crap they didn’t need.
Look at all the bankruptcies filed in Maine, people went out and bought all sorts of “toys” they couldn’t afford. When they finally realized they not only were NEVER going to be able to pay back their credit loans, but couldn’t even afford the monthly minimum payments, they just filed for bankruptcy.
They put themselves out of work by spending money on crap instead of on making themselves more employable, instead of spending on their own education and job training.
The biggest con people in Maine have fallen for is the con of easy credit. You’re still poor even though you’ve been approved for a credit line. Carrying a balance on that credit line just proves that you’re poor AND stupid, AND destined to REMAIN poor.
Poverty is a choice, living within your means is a choice. Investing in your future is a choice.
Buying an ATV instead of taking some college or vocational courses is a choice.
Judging from all the bankruptcies filed in state over the last few years, a LOT of people have made some very, very bad choices.
My hope is that most of them have learned a valuable lesson, but until the public schools make an effort to teach people some basic financial skills, I don’t see things changing very dramatically in a positive way.
If you can’t do basic math, you can hardly be expected to figure out how much that cheap and easy credit is REALLY going to cost you over time.
I’ve counseled people who’s eyes rolled in the back of their heads when I showed them, on paper, just how much carrying their credit balances end up costing them.
The conclusion is always the same – they would have been better off just going without the non-essentials, the “toys”, the buying of crap they didn’t need that didn’t actually DO anything to help them create a better future.
Credit IS a great thing – when it’s used properly. When it’s used improperly, it wrecks the economy, costs Americans jobs, and sends investment capitol and businesses overseas.
As a nation, we have spent a lot of time and energy ensuring that the last two or three generations believe that there are no consequences to their actions, and therefore no need to take on any kind of personal responsibility such as responsible financial management, personal betterment through education, etc. Overextended on credit? Just declare bankruptcy! Unemployable due to lack of education? Go on the dole! Spilled hot coffee in your lap? Sue the restaurant! Nothing is MY fault, why should I have to suffer for it?
We have only just begun to reap the consequences of what we have sown.
All you would need is about 3 of those jobs to survive…at $8 an hour you’d be lucky to pay your gas costs for getting there and back….
Guess what, we live in a time when the husband and wife NEED to work. That $8.00 an hour is a good second income!!!!! Also, I bet they get more than $8.00 an hour at New Balance.
That’s still less than 200% the federal poverty rate if the married couple has any children. They would qualify for government services. Thats tax payer money. So much for the employer, little government within a big government, taking care of it’s people.
I would go barefoot in the snow before I bought shoes from Vietnam.
Interior, darkend room, speaker swings flashlight wildly around room – (speaking quietly) Did you hear that? I know I heard a noise…(full voice)OMG!!! What is it? I’m scared. (places flashlight under chin, sobbing) I don’t know what is going to happen. I…I…keep hearing this pounding, thudding…ohhhhh….make it stop. Please make it stop. (quietly, almost a whisper) Please make it stop. (collapses to floor, hands over head, flashlight rolls away)
Thank you, thank you. I hope you have enjoyed my solo performance of ‘The Last Nail in Maine’s (America’s) Coffin’. I’ll be here all week.
I hope LePage doen’t read this article…..33 cents an hour, he will tear down the mural and the wall behind it for those wages.
I will buy nothing but New Balance sneakers from now on with no consideration of price. Thank you New Balance for being a great American company. By the way, I don’t recall seeing any American flags with Made in USA when I am shopping for sneakers. I hope it is proudly printed on the box.
Keep in mind that around 75% are still made overseas. You have to look at every tag, or go to factory store. I have done it since 1983 and I have no regrets, thanks for supporting New Balance.
The footwear made outside the US are crap. They have pointy heels that fit no one’s foot. It is a crying shame that so many companies that made shoes in the New England states, went out of business and took the jobs of so many talented people away also. A relative of mine sewed sample shoes for Viners in Bangor. I hand sewed loafers for Viners for a short while also.
If military has to buy shoes made on American soil, then where would they get there shoes if the last factories that make shoes in the United States close?
The government purchases boots and shoes made in China right now for government employees!!