American Giant’s Bayard Winthrop On the Coronavirus and Made in USA

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Bayard Winthrop of American Giant was our keynote speaker at the AAPN Annual Conference 2014. He was amazing. We first learned about Bayard from long time member Bryan Ashby at Carolina Cotton Works. Bryan helped Bayard find sources for US Made fabric. Bryan's partnership with American Giant has been well documented in the WSJ and other national media. 

Of course we agree with Bayard's strong position on building domestic supply chains, which he did one producer at a time. This is therefore a good time to remind the industry that in 2001, when we opened our membership to the Americas, we did so because many of our Made in USA members actually had expanded their production south into the region. We did not 'leave' Made in USA, we followed Made in USA to where they were going. 

When we began to explore the region, it was surprising to see how many of the major players in every link of the 'US' supply chain had production there. They were established. Since 2001, volumes have grown, capacity has increased, companies have consolidated, coalitions have made investments, producers have verticalized and AAPN has continued to organize the region industrially.

So, yes, by all means, Made in USA supply chains can and should be built. And yes, being dependent on China, Asia, SE Asia, South Asia and anywhere with an ocean between us and them is now exposed. In a world divided into China and not-China, the US and the Americas make about 17% of all apparel – and growing. Enjoy this personal editorial:

COVID-19 and the Cost of Cheap
Linkedin, March 5, 2020
Bayard Winthrop, Founder & CEO of American Giant

I was up at 2 a.m. last night, sleepless, with COVID-19 on my brain. I’d gone to the store earlier in the day and I couldn’t buy Motrin for my kid (she’s got a cold). The shelves were empty. The store was out. “This is crazy,” I thought as I turned it over in my mind. I began thinking of the potential ripple effects we may all soon experience as a result of being so dependent on another country for the things we need in our daily lives.

We don’t make anything in the U.S. anymore. For the past 40 years, we’ve steadily given up the capability of making the things we need most – from medicine to iPhones, heavy machinery to clothing. It’s all made elsewhere. We've done all of this in pursuit of “cheap,” promised by the “experts” that if things cost less, everyone benefits. So we moved everything overseas. Big Tech, Big Pharma and Big Apparel, among others, have all benefited, driving their costs down by chasing cheap labor, low environmental regulations and inconsistent worker safety standards. And they’re reaping the profits.

COVID-19 is a wake-up call. Our entire economy is dependent upon goods made elsewhere, particularly China (yes, Motrin too). This highly complex, multinational supply chain is fragile and vulnerable to fundamental disruption. When we don’t make things ourselves, we lose control. If China stumbles, or worse, decides it wants to slow down medicine coming to the U.S., it can. If another virus emerges, god forbid worse than COVID-19, or some other conflict where we are at odds with China, they control whether we get our medicine, our technology, our clothes – just about anything that we need to live our lives.

The big question to me is: how important is it to continue to make things in the United States? Does it matter, or should we all just pursue “cheap” at any cost? I think that is a profound question, and one that has implications far beyond COVID-19.

If we decide that making here is important, what are the critical questions we need to answer and the things we need to do? These were the thoughts churning through my head at 2 a.m.:

Cheap Isn’t Everything. Cheap shouldn’t be the North Star for all our business decisions. It isn’t the only question. In fact, cheap is expensive. We pay for it in lost jobs, terrible environmental consequences, hollowed out communities, human rights violations and a loss of control.

Don’t Hand the Keys to Potential Bad Actors. Making things ourselves gives us control. It eliminates an unhealthy dependence on potential bad actors who don’t always have our best interests in mind. Making things gives us jobs, which gives us communities, which gives us a thriving and resilient economy. I believe COVID-19 is just one of many future events that will expose just how vulnerable we are as a nation.

Define “Fair Trade.” For too long, policy makers in D.C. on both sides of the aisle have embraced trade deals and policies that benefit China and facilitate the flow of manufacturing dollars overseas. This includes trade deals that hold our domestic manufacturers to far higher standards than our Chinese counterparts, ignoring violations of environmental standards, human rights abuses and intellectual property theft. It is time to reverse this trend and hold our Chinese counterparts to the same high standards that we hold our own manufacturers. If those standards are too high for foreign manufacturers to reach, then our dollars should stay here where our communities and infrastructure will benefit.

Think and Act Long Term. Business and government leaders need to join forces and lead an effort investing in our future – this means the technology, R&D, infrastructure, digital networks and worker training necessary to put us on a more competitive footing with the rest of the world. This is a bipartisan issue that requires we come together and begin the work of reclaiming our position as a leader in manufacturing. Germany has provided a standout example of how investing in people and technology creates a manufacturing sector that leads the world.

Recover our Balance. We need to balance out with the rest of the world. Right now, we’re way out of whack. Today the vast majority of everything we need is made elsewhere. That’s insane. And as we’re witnessing, it makes us vulnerable. We need to change that by making a little more here and see what happens. The short-term impact on jobs and communities, and the long-term impact on our independence and security will be profound.

How do you Start? By Starting. Unwinding a complex global supply chain in favor of a domestic one isn’t easy. In fact, it’s hard as hell and may not be feasible in some cases. But we, as business leaders, need to understand the critical, strategic benefits of making things in the U.S. and begin to make that difficult change. This can happen if companies just start, at whatever scale they can. Imagine if the Gap started making their t-shirts in the Carolinas? Or if Apple re-deployed some of their huge cash reserves towards building a world-class fabrication facility in Texas? What if Johnson & Johnson committed to sourcing some of its basic medications from American suppliers? Every segment of our economy is in a version of this predicament. We share the blame and the opportunity, so let’s get started.

I believe this is possible because I have first-hand experience making things here. About a decade ago I started a company called American Giant and embarked on a journey to build an American-made clothing company. My goal was simple. Make great products. Make them in the U.S. Make them for the masses. Everyone I talked to said it wouldn't work. “That ship has sailed,” they said.

But we stayed the course. It was hard. Really hard. But today we're making everything from blue jeans to jackets, flannel shirts to leggings, all from a remarkable supply chain entirely in the United States. We did it by building our own manufacturing capabilities, partnering deeply with existing American suppliers, relentlessly innovating and refusing to hear “no.” We now have an American-made supply chain that competes in a globalized world, and our work has provided jobs to people, brought life to local communities and given us tremendous environmental advantages. And maybe just as importantly, it has given us some measure of protection from the COVID-19 outbreak that is currently roiling the Big Apparel brands and their global supply chains.

COVID-19 is a useful wake up call. For all of us. For business leaders, for consumers and for politicians to take a hard look at where we are, where we want to go and what kind of country we are trying to build. Let’s not let this opportunity pass us by until the next, worse crisis hits. Let’s get to work building a more resilient America.