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10 American Industries Still Hanging On

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Bloodied, battered, but not yet down for the count, there are still pockets of US manufacturing scrappy enough to keep the lights on in the face of overseas competition.

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For most of the last century, the United States dominated global manufacturing -- no country could compete with America's output.
In recent years, however, the news about domestic manufacturing has been discouraging, if not devastating. Industry surveys have shown a decline in most sectors as the US continues to lose its factories to cheaper labor markets overseas, and especially to China.

In 2010, the last remaining American flatware factory shut its doors. So did the nation's last sardine cannery. Recent years have seen the shuttering of America's last coat hanger factory, last button down shirt factory, and the entire sheetrock-producing town of Empire, Nevada -- which fell victim to the desiccated US housing market.

Surprisingly, however, there remains a handful of heroic holdouts. Bloodied, battered, but not yet down for the count, there are still pockets of US manufacturing scrappy enough to keep the lights on in the face of overseas competition. Here's a look at 10 survivors worth celebrating.



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BOWLING BALLS

Modern bowling took off in the 1950s, kicked into a boom by the invention of the fully automatic pin-setter. By the mid-60s, there were around 12,000 bowling alleys across the U.S., mostly in working-class urban centers. But that was the industry's peak. Dogged by that blue-collar image, and dependent for much of their income on dwindling league play (see Robert D. Putnam's classic treatise Bowling Alone: The Collapse and Revival of American Community for the wider ramifications of this), bowling collapsed in the 1970s and '80s. By the late '90s there were less than 7,000 "bowling centers," (as the biz likes to call them now) in the country, and the decline has continued despite attempts to move the sport upmarket. Current estimates put the number of centers at less than 5,800.

Still, though league play continues to disappear and centers dwindle, there's some good news. The industry has managed to refocus itself as a family-recreation and special-event past-time, and seen the median incomes of bowlers increase. And while big players like Brunswick Corp. have moved most of their bowling equipment manufacturing overseas, plucky Ebonite International, located in Hopkinsville, Kentucky, is keeping it local. Along with its own Ebonite brand of balls and equipment, the company sells under several different names, including Hammer and, since a successful 2007 expansion, the Columbia 300, Track and Dynothane brands.
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SPARKLERS

Few products say summer in America like the sparkler. But without Diamond Sparkler of Youngstown, Ohio, it would be a cold winter for domestic sparkler production. Diamond has been in Youngstown since 1985, when Phantom Fireworks operator B.J. Alan bought Chicago's Acme sparkler manufacturer and brought its operations to Ohio. At that point, cheaper Chinese sparklers had snuffed out all but three US producers. By 1999, Diamond would be the lone holdout that hadn't shifted to imports. Not because it found a way to profits, however. Besides a brief tariff-related windfall, Diamond Sparkler never been a moneymaker for its parent firm, whose owner said he bought the division because he couldn't "envision something as American as sparklers, with its association with the (Fourth) of July, not being made in this country."

Youngstown, a onetime steel center whose population has dropped to barely 40 percent of its peak as that industry melted away, can claim only 20 year-round jobs at Diamond's factory. (Another 40 are hired for the peak season.) But city leaders are grateful, saying those jobs provide a much-needed light in a corner of America where business has mostly gone dark. "Phantom Fireworks is a small big business to us," Thomas Humphries, local Chamber of Commerce chief, told American Way magazine. "They always seem to find a way to hold on to a great core of people."
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COMPACT DISCS

The physical is dead, long live the download. That's what entertainment observers have been saying since the turn of the century and they're not wrong. Last year CD sales fell by 20% from 2009, marking the fourth year in a row of increasingly brutal decline. But despite this, Sony DADC this spring announced a $72 million expansion of its existing Terre Haute, Indiana, manufacturing plant, in which it makes compact discs, Blu-ray equipment, video games and other electronics, while employing some 1,312 people (the planned expansion will add another 100 jobs). Why? Well, partly, it's just consolidation. With the closing of its Pittman, New Jersey compact disc plant, Sony DADC is merely shifting operations east (and shedding 200 jobs – the Pittman plant employed 300 people). And partly, it's a question of demographics. You, future-embracing consumer that you are, may be eager to embrace the world of on-demand downloads or dodgy torrents, but Aunt Gertrude in Duluth is going to be hanging on to those newfangled CDs until the day she dies. And there are a heck of a lot of Aunt Gertrudes out there, with a good decade or so left in them.


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PIANOS

A Steinway grand, consisting of over 12,000 parts, is handmade, constructed by 450 individuals over the course of a year. Small wonder then, that in the decades between 1870 and 1930 the most expensive item an American owned other than his house was generally his piano. Since the 1930s and the advent of electronic home entertainment, of course, the piano, once the must-have of any genteel parlor, has gone with the wind. The great US piano manufacturers – Chickering and Sons, Davis & Co., J.C. Fischer, Mason & Hamlin, and Baldwin, to name only a few-- are all ghosts, swept away by changes in taste and more affordable Asian-made brands.

Only a few, tiny boutique piano-makers such as Mason & Hamlin, based in Massachusetts, and grand old Steinway, based in Queens, New York, and purveyor of high-end state of the art models that retail between $50,000 to $120,000 as well as budget, overseas-built Boston and Essex brands, are left. They cater to the very rich looking for status symbols, and an ever-dwindling market of performers -- over 98% of all concert pianists play Steinways -- and musical institutions.
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SOCKS

To get an idea of what's happened to the American sock industry, take a look at Fort Payne, Alabama. Until a few years ago, the town of about 14,000 billed itself as the "Sock Capital of the World." They weren't spinning a yarn, either: As late as 2007, according to the Hosiery Association, if an American put on a pair of socks, the odds were about 1 in 8 they'd be rolling a product of Fort Payne/DeKalb County onto their hooves. Most of the area's workforce was employed in its sock mills, which then numbered 125 to 150. Today only 20 remain, providing roughly 600 jobs, down from 8,000 just a decade ago.

The "Sock Capital" sign that greeted visitors off Interstate 59? Gone. There's a new sign, on the front door of the oldest hosiery mill in town, that hints at the industry's unraveling: "We are not hiring at this time. Thank you for coming."

What started pulling out the thread was -- you guessed it -- globalization. An influx of cheaper hosiery, imported from the likes of China, Pakistan, and Honduras, started around the turn of the 2000s. It flipped the American sock industry on its head faster than argyle came back and again went out of style. Domestically made socks went from three-quarters of US sales to one-quarter between 1999 and 2006.

Thanks to a quirk of national politics, Fort Payne caught a break in 2005, when then-President Bush needed to swing a single vote in Congress to get his Central American Free Trade Agreement out of deadlock. The city's congressman, Robert Aderholt, was a holdout against the deal, and he took the opportunity to hold the bill hostage with a single demand: Restore the tariffs, which had been lifted in 1984, against socks seamed in Honduras. The White House complied, and the duty returned at the end of 2007. The move had little effect in the long run, and sock factories are still fleeing Fort Payne for Honduras.
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IRONING BOARDS

The fact that there's only one ironing board manufacturing plant left in the Unites States has nothing to do with changing tastes in laundry after-care, or the viral spread of track-suits and t-shirts, and everything to do with retail consolidation and globalization.

Located in Seymour Indiana, HPI Seymour, owned by Chicago-based Home Products International, has been around since 1942, when it started as a tool-and-engineering shop. In the 1950s it switched to ironing-board only mode, successfully marketing a range of high-end ironing boards around the world.

But today the plant, which employs 200 people (down from 400 in 2000) and pumps out 720 boards an hour, is fighting the same stiff winds that have wiped out so much of U.S. manufacturing, despite a market that sees some 7 million ironing boards sold every year. Big chains like Wal-Mart (WMT) and Target (TGT) are still customers and anti-dumping tariffs as high as 157% against its rapacious Chinese competitors have kept the lines rolling at the plant so far. But with the chains increasingly sourcing cheaper and cheaper products from Asia, and with the tariffs coming under pressure from observers who wonder if artificially high ironing board costs for 7 million consumers are worth 200 jobs in Indiana, HPI Seymour's 69-year-old history is probably nearing its end.


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PENCILS

Without tariffs against Chinese imports, you might as well erase pencil manufacturing from the ledger of American industry. And even since the US government took anti-dumping action against Chinese exporters in 1993, China's dominance of the industry here has barely slowed: American companies in 2008 produced only 14% of pencils sold stateside, whittled down by half from just four years prior.

While the duties (running as high as 53%) provide some relief, the remaining nub of an American pencil industry just can't compete on price, especially when it comes to the familiar yellow No. 2, a school staple. Major US producers, like Dixon Ticonderoga and Newell Rubbermaid's Sanford, have closed plants that employed hundreds in the past few years as they shifted production to Mexico and elsewhere. Other companies largely retreated into specialty graphite utensils, like colored and drawing pencils. "The yellow pencil basically became a Chinese commodity," Jim Weissenborn, whose family has owned General Pencil of Jersey City for 150 years, explained to Bloomberg news in June. "We've had to become a very boutique type of business in order to survive."
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SNEAKERS

New Balance is the only major player in athletic footwear that still operates American factories, and it's hanging on by a shoestring as free-trade negotiations with Vietnam loom. The privately held Boston company has 1,000 US workers in its five New England plants, whose $10-and-up hourly wages are a quaint holdover in an industry that imports 99 percent of its product. "The company already could make more money by going overseas, and they know it," 35-year-old floor leader Scott Boulette told the Washington Post. "So we hustle."

But all the elbow grease in Norridgewock, Maine, won't keep New Balance competitive if an expected agreement with Vietnam eliminates the tariff on imported shoes, typically around 20%. The region's legislators are trying to carve out an exemption to keep New Balance's factories open. The firm's competitors like Nike and Reebok, though, seeing an opportunity for higher profits on imports and, displaying little sympathy for the scrappy northeastern holdouts, have banded together to fight the duty – or "shoe tax," as they call it. "For products that are no longer produced here and haven't been produced here for decades, there's no sense for consumers to be paying it." said Nate Herman, of the industry's lobbying group.

The US footwear industry now employs about 12,000 people, less than half what it did a decade ago, and a mere shadow of the quarter-million jobs it provided in the 1950s. That makes a third-generation Norridgewock shoemaker like Michelle Witham, 40, a rarity in the US. "When I started, people would say, 'Oh, you don't want to work there. They're not going to be around for long. They ain't got a chance,' " Witham told the Post. "But I've been here 20-something years now."

If New Balance lacks allies within the footwear industry, at least it has fans among domestic manufacturing cheerleaders. Scott Paul, head of the Alliance for American Manufacturing, says his closet holds 10 pairs of New Balance sneakers.
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ELECTRICAL RELAYS

The last U.S.-based manufacturer of electrical relays and controls, Struthers-Dunn was founded in Philadelphia in 1923, and moved to South Carolina in the mid-1980s. It specializes in building customized relays -- basically electrically operated switches for controlling high-powered devices in industry and military operations -- for factory automation, elevators, cranes, traffic controls and power generation and distribution. Its 219 series of industrial relays, developed in 1958, is still used today as a crucial element of modern nuclear energy plants. During World War Two, Struthers-Dunn became the first supplier of electrical relays to the U.S. military.

After being purchased and reorganized by a series of parent companies in recent years, the company, now specializing in custom-built industrial controls, is once again a privately-held firm. Where's the rest of the industry? Overseas, naturally, and mainly concentrated in India and other Asian locations.
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CHOPSTICKS

Sometimes globalization brings an ironic twist that actually helps American manufacturers. In the case of chopsticks, it was a double-dose of irony that made Americus, Georgia, a center of wooden utensil production for China. The huge, fast-growing powerhouse, which seems to export the bulk of Americans' everyday consumer products, produces most of the world's chopsticks, about 63 billion pairs annually. It's a simple product that serves a huge market -- a third of the world's population uses the sticks to pluck morsels from their dishes. When China's several hundred manufacturers started running short of wood, though -- remember, that country is building furiously, and it's not heavily forested to begin with -- an opportunity arose for a US company to turn the international-trade tables. Enter Jae Lee, the Korean-born American who in November 2010 founded Georgia Chopsticks to take advantage of China's shortfall and rural Georgia's abundance of wood.

Before long, Americus (fitting name, isn't it?) was processing a few million pairs of chopsticks daily, slapping Made in the USA labels on them, and exporting China's favorite utensil to Chinese. Lee is ramping up production as fast as he can order machinery, and intends to churn out 10 million a day by year's end. At full capacity, the company plans to have around 150 hires. Not bad for a town with a 12% unemployment rate, in a country supposedly burdened by sky-high labor costs.

The irony isn't lost on the workers. "Everywhere you see in America 'Made in China,'" new hire Susan White told Voice of America, "and you wonder if, in China, they ever see 'Made in America.'" They do now.
No positions in stocks mentioned.
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