Kevin and Candace Thaxton lost their pets due to toxic dog food imported from China; over 3,000 homeowners complain of family health problems due to imported drywall; and more than 10.5 million children’s toys were recalled due to safety concerns. Importing products from foreign countries is a common practice for many companies, but in some cases there are significant risks involved if it isn’t handled the right way.
According to the World Trade Organization (WTO), China’s exports grew nearly fivefold, to $1.2 trillion, from 2000 to 2009. China’s share of global exports rose from 3.9 percent to 9.7 percent, according to United Nations Conference on Trade and Development data. And in the furniture industry, China’s share of the world export market soared from 7.5% to 25.9%.
At Leggett & Platt, we are watching imports on finished mattresses through several data points and they are on the rise. Does it matter? It will if you are the producer on the retail floor that gets thrown out because of a lower cost solution that is being brought in from Asia. I guess one could say, “So what – suck it up! We are a capitalist country, and if you can’t provide a lower cost product to me then maybe you should import also!” Be careful. What happens when that momentum picks up speed and it directly impacts your business? Now you are shutting down a factory and putting families that helped you build your company out in the street and in the unemployment line in a very uncertain economy. Does it matter then? How about the retailers out there who continue to demand the lowest cost solution without any regard for quality? Do you end up selling your customers a crap product that ultimately comes back and damages your brand and the trust you have built with them? So at what cost are we importing?
I recently talked to Jamie Diamonstein, president of Paramount Sleep, about his approach to importing products. He said, “We have outsourced too much manufacturing in the United States, and we need to do more to support this country and its labor force. I honestly believe that the components we buy here in the U.S. are of a far superior quality than anything you can get overseas. We want to build our mattresses using the best components that we know are quality-controlled right here in the U.S.” Jamie believes this so much that he brought in Adam Reiser, the founder of Made in USA Certified. Adam’s group certifies a company so that they can make a legitimate claim that their products are in fact made in the U.S.A., not just assembled here. Jamie said, “There are so many people in our industry misrepresenting the ‘Made in the U.S.A.’ tag and we wanted to rise above that, so we brought in Adam Reiser.” Made in USA Certified is the same company that Wal-Mart uses to certify companies making that same claim. “We can certify a qualified claim, which means the product has no less than 51 percent of it made in the USA, or the top level, which is a claim that needs no qualification – 75 percent or greater of the product is made in the U.S.A.,” said Adam. Jamie told me that Paramount Sleep and all of the Paramount Sleep Alliance are over 90 percent made in the U.S.A.
Adam told me that his business is growing at a rapid rate. I mentioned that Wal-Mart just signed on, and they have a new company starting soon that has over 6,000 vendors, each representing 10-30 products. Why so much growth? Because of fraud. And according to a recent Harris Poll, “The majority of Americans indicate feeling that it is either ’very important’ or ’important’ to ‘buy American.’ For the product types tested, the strongest such feelings expressed were for major appliances (75%), furniture (74%), clothing (72%), small appliances (71%), and automobiles (70%). If the consumer PREFERS to buy American over an import, doesn’t that mean something? Sealy must think so, given the fact that they place the “Made in the U.S.A.” tag on the majority of their products.
China was once the go-to when you thought about low-cost manufacturing, but that is not necessarily the case anymore. Costlier labor, energy, and transportation, as well as improved output and labor costs here in the U.S., is resulting in a closing of the gap. I do believe that companies in the U.S. need to deliver quality products at competitive prices, but given the chance to buy American vs. an import, and knowing what I know today about the impact it has on American families, I know where my money is going. I am not saying that a company has to be 100 percent when sourcing; I know that Leggett & Platt isn’t 100 percent in all our business units, but I will say that we all should put a stronger focus on it when we can. It is also good to know that there is a group like my buddy Adam at Made in USA Certified that will keep the pretenders separated from the good guys who are making a real attempt to deliver quality products made in the U.S.A.
What do you think? Have imports had a positive or negative impact on your business? Your life? Share it in the comments section PLEASE!