Welfare-Case Companies: HPI, America's Last Ironing Board Maker
Without tariffs on its Chinese competition, America's last ironing board manufacturer wouldn't survive.
While every other US-based housewares-products company including Polder, Honey-Can-Do, and Rowenta jumped ship and moved manufacturing overseas, Home Products International (HPI) bucked the outsourcing trend and kept its ironing-board plant right here in the good old US of A. But HPI's manufacturing high road has been riddled with potholes. In 2006, the company, saddled by the rising cost of raw materials, became insolvent and filed for Chapter 11 federal bankruptcy protection. Thanks to a $60 million loan from Bank of America (BAC), HPI was given a chance to undergo financial restructuring. The company reemerged as a market leader, selling its line of household products under the "Homz" brand to leading retail outlets like Target (TGT), Walmart (WMT), and Amazon.com (AMZM).
In order for HPI to overcome its next hurdle, it needed intervention from Uncle Sam. Like so many American companies facing globalization and struggling to keep their American-made products competitive with low-cost Chinese imports, HPI's ironing-board business was in danger of, well, folding. Although the HPI plant manufactures ironing boards as cheaply and efficiently as possible (cranking out as many 720 boards per hour at the average hourly wage of $15), it simply couldn't compete on the sloped playing field of China dumping its ironing boards here at below-market value. The factory was in danger of closing and adding its 200 workers to Indiana's unemployment rolls.
US trade officials put an end to China's trade practices by imposing anti-dumping taxes of 70-150% on Chinese ironing boards. Additionally, in response to US complaints that China has long undervalued its currency, China has recently committed to allowing the yuan to appreciate against the dollar which could make American products more competitive in China.
Opponents of the tariff on Chinese ironing boards say the move will come at the expense of US consumers in the form of a more expensive product. Let's hope the extra cost will be outweighed if and when the shirts pressed on those boards are worn on the backs of more workers in American plants.
And if you thought that those retractable tables that have helped six generations of housewives keep their lives wrinkle-free would have become obsolete -- this is the era of perma press clothes, wrinkle spray, and handheld steamers, after all -- the 7 million people who buy them every year may tend to disagree. To be fair, the ironing board hasn't been completely immune to innovation. After 150 years, "the next evolution in ironing" has arrived with the Revolution 360 ironing board courtesy of HPI and its Seymour plant. The ergonomically designed board, which rotates 360 degrees, is available at Bed Bath and Beyond (BBBY) for $129. Perhaps the new tariffs will prevent China from making a 275-degree version for $49.99.
While HPI is certainly doing its patriotic duty of preserving American jobs, before we hold a ticker-tape parade in its honor, it should be noted that the company isn't entirely above outsourcing its manufacturing jobs. In addition to its three factories north of the border, HPI runs (or has run) a sewing plant in Reynosa, Mexico. (The company didn't respond to requests for interviews.)
With all the hoopla surrounding the situation in Seymour, should we expect a re-release of John Mellencamp's mid-80s hit single with updated lyrics? "I've seen it all in a small town. Watched the government levy tariffs against an ironing board plant's Chinese competitors in a small town..." Catchy, isn't it?
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