A new documentary titled American Made Movie describes the decline in American manufacturing and points to a possible path to its revival. The 82-minute film debuts this month and opens with a baseball metaphor, showing how this all-American game works through the use of hundreds of foreign-made gear and clothing (just like in the NFL).
* American Made Movie is opening in theaters this Friday, August 30th beginning in Chicago and Atlanta prior to several other cities.
The film describes, with data and expert interviews, how U.S. manufacturing declined in the last 40 years and how technology, globalization and the search for low-wage countries had greatly contributed. Much of this information has been well known for decades, but the film comes alive with the personal stories of the companies, their executives and the workers.
The leading businessman in the film is Mark Andol, who owned General Welding and Fabricating in upstate New York. He gradually saw overseas competitors take away his business and sell almost identical products to his former customers. Overseas shipping costs, even for heavy goods, no longer are a hindrance to outsourcing, as North Carolina furniture manufacturers also have learned. The end of Andol's story celebrates the 2010 opening of his first Made in America store, selling only products completely made in the U.S.
The Louisville Slugger story in this film involves outsourcing across the Kentucky state line to Indiana. After years of manufacturing bats in New Albany, Indiana, the company brought manufacturing back to the Louisville plant, where everyone felt it always belonged.
The film proposes a more balanced relationship between production and consumption. The filmmakers ask consumers to seek out locally made and American-made goods, rather than shopping at "big-box stores" like Walmart who emphasizes low prices on products that are manufactured overseas.
Walmart claims, "We work directly with manufacturers, eliminating costly markups." Charles Fishman, the business reporter who wrote The Walmart Effect asks, "What is the high cost of these low prices?"
Walmart's market power is such that many of its suppliers face a stark choice: take dictation from Walmart, or lose half or more of their business. To survive in the face of Walmart's pricing demands, makers of everything from bras to bicycles to blue jeans have had to lay off employees and close U.S. plants in favor of outsourcing products from overseas.
Just ask Steve Dobbins, CEO of 75-year old Carolina Mills, a company that supplies thread and yarn to textile manufacturers --- half of whom supply Walmart. His company grew steadily until 2000. Then his customers (with Walmart's gun to their heads) began a hemorrhage of offshoring in order to find the dirt cheap labor necessary to meet Walmart's low price demands. Carolina Mills shrank from 17 factories to 7 within three years. The way Walmart "works with" its suppliers has been disastrous for American workers.
Now it's no longer Wall Street versus Main Street. The basis pointers like Walmart have gone global. No continent is immune (Africa is next). No community can escape. No one's job is safe.
American Made Movie (Trailer)
The irony of ironies is that the basis pointers revel in Creative Destruction, a concept borrowed from Karl Marx and popularized by Joseph Schumpeter after WWII. In Capitalism, Socialism and Democracy, Schumpeter wrote that "the same process of industrial mutation...that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one. This process of Creative Destruction is the essential fact about capitalism."
The cycle of destruction is endless. Walmart buys so much product that they dictate pricing to suppliers, driving down the suppliers' profits, and putting other suppliers out of business. All along their supply chain, workers end up out on the street...over a few basis points difference in unit costs.
Now we have "Electrify Africa" --- another one of Obama's great ideas for more globalization, in that, it uses U.S. taxpayers dollars to build an infrastructure that U.S. businesses can use to outsource more American jobs --- as well as enable a new "emerging market" for their products. As it is now, millions of U.S. taxpayer dollars are already being used to ensure that foreign countries comply with labor laws in the "free trade agreements" so that U.S. businesses can legally offshore more American jobs to other countries.
While the documentary American Made Movie is based on old news (that manufacturing is in decline and that we should buy American), the individual stories make for compelling viewing. Unfortunately, most Americans are unable to "buy American" because most families who shop at big-box stories like Walmart can't afford to buy the more expensive locally produced goods --- because employers in America refuse to pay their workers living wages.
Walmart, the most stingy company on the planet Earth (in the entire solar system) is owned by one family. Remember, this is the same company that refuses to increase pay and benefits for its employees --- and fires those who try to change that. Christy Walton alone rakes in over $1.2 million EVERY SINGLE DAY from Walmart dividends.