By Lloyd Graff
Thanks to reader Roger Meyers for sending me an informative article from Forward ONLINE about manufacturing coming back to the United States.
One of the companies prominently mentioned in the piece is Wham-O Corporation, maker of Frisbees and Hula Hoops. Wham-O’s products are not exotic, but they take up a lot of container space per dollar value. With container costs from China up to $4500 from as low as $3000 at the bottom of the recession, Wham-O has rejected offshoring. Their products are not labor-intensive to produce, primarily using injection molding presses. They are cheap, light and bulky. A container of Frisbees may hold only $5000 worth of product, so a 50 percent increase in container costs is a substantial piece of the overall cost, according to Kyle Aguilar, President of Wham-O.
We heard a similar story from Mitch Liss of Edsal Manufacturing of Chicago, a prominent maker of metal shelving for Home Depot, Lowe’s, and Grainger. Shelving is bulky and awkward with low labor costs versus material and freight. Liss says his cost for products sold to the big box retailers is significantly lower in America than importing them from his Chinese plant.
When you figure the cost of inventory on the boat, corruption, intellectual property theft, bad carbon footprint publicity, quality glitches and port headaches, you can see why manufacturing products in North America is beginning to come back like a Frisbee in the wind.
Question: If the Chinese can’t be competitive on Frisbees have they peaked as an exporter?