Last Friday, the CEO of Nike made a bold prediction: If Congress pushes a huge trade deal with 12 Pacific Rim countries past the finish line, the company might create 10,000 manufacturing and engineering jobs in the United States, expanding its current domestic workforce by more than a third.
“The truth is that companies that only care about low wages, they’ve already moved,” Obama said in his speech to Nike’s employees. “They don’t need new trade deals to move. They’ve already outsourced.”
Most of them. Nike has been instrumental in pushing production for the U.S. shoe market almost entirely overseas (New Balance is a notable holdout, with its factory in Maine). There are a few thousand workers producing for Nike in the United States, but they’re rapidly disappearing -- there were 13,922 as of April 2014, and Nike’s manufacturing map lists 8,408 as of this past March.
In August, there will be one fewer factory, and 80 fewer workers, when New Buffalo Shirt Company closes its doors. The story of how it closed is a parable of how relatively low-skilled manufacturing jobs have melted away.
The printing factory has been an institution since 1940, when it opened as AMCO Monogram & Embroidery in downtown Buffalo, N.Y. In 1995, the founders’ grandson Jon Weiss relocated to a facility with upgraded equipment capable of manufacturing for a global market. The renamed New Buffalo Shirt in Clarence, N.Y., printed apparel for star-studded concert tours, as well as for major brands like Nike, Disney, Puma and Hard Rock. All the while, they kept refining their manufacturing processes to produce more stuff with fewer people, winning awards for a printing technique they called “New Buffalo Style.”
That wouldn’t be enough to save the plant.
In 2013, Montreal-based Gildan, Inc. -- an international apparel manufacturer that had $2.4 billion in sales in 2014 -- bought New Buffalo Shirt, as well as a facility in Honduras that Weiss had opened a few years before for $7 million. On April 30, the company announced it would be closing the Clarence facility and moving all the work to Honduras, closer to its sewing plant. The company has been repeatedly criticized for its failure to protect workers in several plants in Latin America.
“Consolidating all screenprinting operations into a single location will allow us to achieve a more efficient supply chain and cost structure to service our customers,” spokeswoman Stéphanie Gaucher wrote in an e-mail. “Gildan has been divesting from certain of the company’s business relationships, which were primarily serviced out of the NY facility, in order to exclusively focus on specific brands and divest of any business that conflicted with that of our printwear customers.”
Gaucher did not elaborate on whether those brands will continue to include Nike.
The plant’s former owner, Jon Weiss, took a position as vice president for apparel embellishment at Gildan and declined to comment for this story. But people who know him and his wife, Linda Weiss, doubt they planned for the factory that had been in the family for three generations to shut down.
“They’re the type of people that if they known that, they would’ve kept it,” says David Hartzell, the town manager of Clarence. The Weisses were pillars of the community, he says, donating T-shirts to raise money for affected families when a plane crashed nearby in 2009. And along with a civic-minded business, the closure of New Buffalo Shirt also means the disappearance of 80 jobs.
“The Weisses were great about hiring a cross-section of the town,” Hartzell says. “Everybody just kind of accepts it, but I think it’s really sad. New York has a big push to bring in a lot of high-tech jobs, but I wish they would keep some of the minimum-wage jobs, too.”
So the New Buffalo Shirt Factory won't necessarily close because it wasn’t profitable. It will close because it’s not quite as profitable anymore to do that kind of commodity production in the United States when a lower-cost option is available just down south. And if the United States does conclude the Trans-Pacific Partnership, a lot more destinations will open up -- which means Honduras could lose its plants, as well.
Now, Obama might be right that trying to keep industrial screenprinting jobs in the United States is a lost cause. But is increased trade really what will allow companies to create American jobs? Mark Muro, a scholar at the Brookings Institution who focuses on advanced industries, points out that local manufacturing is already in vogue -- low energy costs and proximity to engineers make it desirable for companies to make some of their highest-tech products close to home.
“It could be that for non-trade reasons, they may be trending towards some kind of debut anyway,” Muro says. “There’s a rationale for actually them commencing development and production in North America, given that automation will reduce labor arbitrage. But that cuts against large employment at the same time.”
Translation: The stuff that makes the most sense to make in the United States is also that which requires the least labor, which might make that 10,000 number hard to hit. Meanwhile, any remaining low-skilled production is likely to disappear.
A decade ago, Jon Weiss had a favorite saying: "The bitterness of poor quality remains long after the sweetness of low price is forgotten." In his voice mail message last week, though, he struck a different chord.
“Quote of the day,” Weiss says. “Without order, nothing can exist. Without chaos, nothing can evolve.”