Free Trade Doesn't Equal Fair Trade | American Manufacturing Creates U.S. Jobs

Free Trade Doesn’t Equal Fair Trade | American Manufacturing Creates U.S. Jobs

The following is the transcript from an interview with Don Rongione, President and CEO of Bollman Hat Company, and founder of American Made Matters. The interview was first presented on The American Made Movement podcast. Listen to the interview by subscribing to the podcast. RedWhiteBlue.co is a proud member and supporter of American Made Matters.

Paul: Hi, this is Paul with RedWhiteBlue.Co and today we are here with Don Rongione, President and CEO of Bollman Hat Company, and founder of AmericanMadeMatters.com. Don, thank you for your time this afternoon.

Don Rongione: You are welcome Paul. It’s good to be here.

Paul: Tell us a little bit about what is American Made Matters?

Don: American Made Matters is really a consumer movement that is focused on trying to educate our citizens as to why buying American made product matters, and that includes a focus on building jobs, strengthening our economy, providing security and independence for our country, safety of the products that are made here for our consumers and families, stronger local communities, and ultimately it is about strengthening the American dreams.

So we are trying to educate consumers that buying American made products strengthens the American dream. We are not really a political focused group. We don’t have a lobbying arm.  We are trying to create a branding identify that would be commonly used on US made products, on packaging, and marketing materials that our consumers are coming to recognize and seek, and ultimately favor when making their purchasing decisions, and that branding or logo will become something that is quite common in civilized American made craftsmanship, durability, quality, safety and engineering.

Paul: Well, I got to say that the logo and branding looks topnotch on your website, but why did you even create this type of organization?

Don: Well, it came as a result of a painful personal experience that I had in my company. Bollman Hot Company is the oldest American hat manufacturer. We date back to 1868, and we have been manufacturing hats here in Pennsylvania for nearly 145 years. About six years ago, we went through a very painful downsizing in our US manufacturing plans as a result of really just losing a lot of orders at the most price competitive levels in the market.

We were at one point doing more than $5 million a year in business with Walmart as an example and several other fairly large customers, private label business as opposed to our own brand. And because we couldn’t meet the price points that they were requiring of us they took their business elsewhere and so at one particular time we had to downsize nearly a hundred employees, and some of those employees had worked for us 30 or 40, even 50 years of service. Some were second, third, even fourth generation of their families to work for us, and they were loyal, hardworking, and talented people, but through no fault of theirs we just didn’t have the orders to support their jobs, and so we had to go through this incredible and painful downsizing in order really to survive.

And it really got me thinking about, “Well, what I can do to prevent that from never happening again?” both for our company and other companies that are facing a similar plight and we came up with concept of what we called, “Save an American job,” at the time and created a logo and a branding identity, and launched the website in Facebook, and immediately attracted a handful of members, and formed a board of directors. We began to talk about the mission, scope, and vision for our group, and decided that we were certainly about saving jobs, but it went beyond jobs. We really need a broader message and change the name of the organization to American Made Matters and relaunched in 2010 as American Made Matters. Today, we have 73 members and sponsors. 62 of those members are manufacturers all trying to continue to produce at least a portion of what they sell in the States and they are very passionate about trying to provide jobs for their employees and respect in their communities were quite proud of how its grown.

Paul: That’s wonderful Don. It sounds like you have a lot of traction and it is definitely a great important mission that you are striving to create with this organization.

You have this logo and it is going to be on different products throughout the United States. And many people say why does it matter? Why is purchasing products made in USA important? Why do you think that is?

Don: Well, I have already addressed some of the reasons from our perspective on why it matters. The US made product is going to be safer to the consumer because of the rigorous testing that US manufacturers undergo to where they get products approved in many industries, our compliance with clean air, safety standards, and occupational work by safety standards, which makes for a safer work environment as well as a safer product.

The environmental aspect of what I just discussed with not having to ship apart across the world to reach the primary destination. Obvioulsy, jobs. It has been documented that for every one manufacturing job there are four to five residual jobs in research and development, tracking, secretaries, attorneys, accountants, providers of supplies and machinery to make these products, and that is more powerful than any other sector of our economy. It has been said that service provides 1.2 residual jobs in comparison to the four or five per manufacturing. So obviously a tremendous amount of employment opportunities, which creates wealth and stronger communities, people buying homes, and getting the economy firing on all cylinders.

In the security and independence of our country that we can make things that we need to provide for our citizens, makes us a more secure nation and a more independent nation. From a consumer perspective, our products are more durable, they last longer, they provide years of safe use, as opposed to products that are going to fall apart or require repairs in the short period of time and not provide the durability over time. So while it is certainly true that in many cases the US made version of a product is going to be more expensive, we think it ultimately creates better value for consumers more often than not. As well as all these other benefits that are imperative to the strength of our country, and providing for future generations.

Paul: It sounds like from a consumer standpoint, it is all about education, right? It is just short-term thinking where you go into your local Walmart and you are buying everything made overseas because it has a low price point. But in reality, if I am hearing you correctly, the manufacturing industry that’s what we need to improve upon to improve America’s economic outlook? Is that correct?

Don: Yup. It is certainly my strong feeling. Our nation is going through some tough economic times and people are hurting and when they are hurting they are looking to conserve their cash and sometimes their shopping price and they are not looking at where it is made. I would suggest that we are all in a better place when we try to buy the US made version because it will provide better durability and more satisfaction to the consumer but also provide all of these other benefits that are critical to the future of our country.

Our tagline kind of says that, “What you can do for your country and our future,” so it is kind of like, the reply to JFK’s famous speech. And we think that kind of tells the story that this is the answer of what you can do for your country and our future, and that is to look for American made products. And we think our branding identity which will be more obvious on products than just a very tiny country of origin “made in USA” will help make it more efficient for consumers to find that product because we often hear, I try to buy made in US products but I cannot find it. Well, our branding logo will provide an easy way to do that.

Paul: It reminds of the joke my mother said a couple of years ago. Someone asked her about her jacket and said, “I love your jacket. Where did you get that from?” And she goes, “Oh, this old thing? Do you know how old it is? It was made in the USA.” Sad but it’s true. We laugh, but I mean, let’s switch gears to that for a minute. How did we lose our competitiveness in jobs to other countries. How did we get here in the first place?

Don: Well, certainly there are a number of causes to it. I mean, many would say corporate greed created it where either management of companies or their shareholders who are seeking larger profits and better margins, sought to find low cost producers. And that evolved from a major manufacturing sector being in the North East and the Mid-Atlantic sections of the US to going into south and then ultimately over to Mexico or Honduras, and ultimately over to China.

There is certainly some element of to that. When one company does it in an industry and then starts to undercut price, sometimes the other competitors in that industry have no choice but to follow suit in order to survive because they no longer can charge what they previously charged, and retain market share. And we certainly witnessed some of that in our company where we certainly wanted to produce everything in the States, but in some cases we could not. And it was a matter of well, we’re just going to be out of this business or out of business completely unless we find some of these products that are made elsewhere and offer them while we work to try to identify through our own brands new markets that are going to be less price sensitive.

In other cases I think that the wage scale in this country made it very difficult for some industries to survive and they need it because labor content was such an important part of their cost. They needed to find lower labor content in order to be competitive in their markets. Unions in some industries years ago when they were much stronger pushed wages higher and benefits higher to a point where it became really a non-competitive environment for those manufacturers when companies cropped up in other places in the world. The auto industry is a great example of that. It has been documented some of  GM’s policies with respect to wages and health care benefits for their work force, which was a great thing when they were riding high.

Paul: We saw what happened to the automobile industry and that was a mess. To put it lightly.

Don: Yeah. That’s right. We cannot expect the government to be bail out every industry and certainly American Made Matters is not looking for the government as the solution. We are looking for the consumers as the solution because the US consumer is still the largest consumer group in the world. We still consume a tremendous, I think upwards 30% of the world’s goods and therefore there is great economic clout that comes along with that and that’s our focus at American Made Matters.

Paul: To kind of take it back to how we got into this situation, I am a firm believer in saying we didn’t wake up in 1985 in some large corporation in the North East Coast going, “You know what would be a great idea? Let’s manufacture in the Honduras, no better yet China. It would save us a lot of money!” Something had to evolve to get us to that situation. Is there anything that our government policy did over the past two decades that really, we have the NAFTA trade agreement things like that. I mean, in your own words what role does the government play in kind of fostering this situation?

Don: Well, I think that there was a mindset in Washington and it was on both sides of the aisles and various administrations of free trade. Well, free trade doesn’t equal fair trade and so this policy of free trade which they felt was going to be a great thing in terms of holding down inflation and providing economic value to consumers, and creating a competitive marketplace, served to send jobs in great numbers elsewhere. We are down to some 12 million manufacturing jobs in this country which is a fraction of what once was. NAFTA certainly is an example of that and then there are other things like we don’t really have a strong manufacturing policy in this country so the government’s not favoring the US manufacturers in any way.

There own procurement policies, there’s not much teeth in a lot of that. And a lot of that you know, where they are supposed to be, seeking US sources for a lot of their purchases, and that doesn’t happen in reality. I have a personal example of that where when the US military was going to a beret for the army my company sought to try to secure that contract. But because at the time we had greater than 500 employees, there was what was called a small business administration set aside a “SBA set aside” which was suppose to favor the companies that have fewer than 500 employees. Well a company from Canada came down, set up manufacturing operations in the states, and got a major portion of that contract. We received no contract and within a year we had well under 500 employees so that was kind of the irony of the government’s SBA policy on that procurement.

Because there is no teeth in policy to fight currency manipulators, our government talks about it. Various legislators will talk about how China is manipulating their currency and that can hold down the price of their goods by as much as 30%. Some would say if their currency was allowed to fluctuate with the economy and the government deliberately keeps it down in order to bolster their exports and our country doesn’t really do anything to fight that. We talk about it but nothing really happens. So I mean those are some of the things that the government has done to play a role in allowing this to happen as oppose to preventing it from happening or stopping it at some point.

Paul: So it sounds like to kind of change course direction here the solution is in an organization such as AmericanMadeMatters.com, getting this logo out there on to products, educating consumers and to purchase, and support the manufacturing industry in America, and purchase US goods that’s one angle. And then moving forward, you as a consumer, as an American citizen, and as a voter what can I do to help change things in Washington? If you have that dream meeting with the President next March whoever it may be and he sat down and said, “Don, what is the solution to getting this ship turned around?” What would be some tidbits you share with him?

Don: Now I am meeting with the President of the United States, is that what your question is?

Paul: Yes. If you are meeting with the President of United States, you could tell him what he  should do, you could them what the American people need to do in reply to the wonderful statement here “What you can do for your country and our future”, but what is the overall encompassing theme of the solution. How can we help turn the tide?

Don: Well, the theme for American Made Matters obviously is this consumer focus. So our effort is to educate the consumers to all of these benefits that I have spoken about that help our economy and help the future of our people and the government can certainly be supportive of helping with that educational effort. But then it really comes down to organizations like American Made Matters who are trying to get that word out which we do from our website, and Facebook, and Twitter, and participating in a number of events that are cropping up across the United States that are promoting US made goods and US manufacturing. So that is the role that we play and I would certainly ask for any support we can get in getting that education accomplished.

As far as what the government can do like I think putting some teeth into some of the trade laws and not allowing countries to manipulate the currency. Or if they are going to, then there has to be remedies to that which could be in the form of tariffs or limits in terms of the amount of their product that would be able to be able to come into our country. Certainly a strong manufacturing policy taking some of the onerous laws off of manufacturers not in terms of lessening safety standards or environmental standards, but just trying to enforce those standards whether the product is made here or elsewhere in the world. Some kind of benefits to encourage investment in US industry. Some of these industries are gone and it requires a lot of capital to start up a manufacturing environment, and trying to provide opportunities for small businesses to raise the capital, to invest and manufacture in the States, and recreate the jobs would be essential. So you see a lot of candidates talk about jobs and helping manufacturing, but I don’t really see specific plans that give me confidence that anything is going to change. So I don’t look for the government as a solution, but if I am sitting across from the President of United States those are the things that I would say. We need this help and we need it now before it is too late.

Paul: And it starts with the people, if I am hearing you correctly.

Don: Absolutely.

Paul: It is to educate the consumers, this is what you need to do and remove the short-sightedness and look around you, and you want to know what you can do to improve our economy? Don this is what you are saying to do. AmericanMadeMatters.com. Don Rongione, President and CEO of Bollman Hat Company, and the Founder of this wonderful organization. Don, thank you so much for your time.

Don: You are welcome.

Paul: And we wish American Made Matters the best of luck. RedWhiteBlue.Co supports you 100% of the way. If there is anything that we can do or our readers, please let us know.

Don: Great. We appreciate your support Paul. Great job on your side!

Paul: Thank you.