New Balance CEO on Made in the USA

" It has been bleeding that's been bleeding jobs to cheap foreign labor is apparel 99%. 99% of all the footwear sold in the US is manufactured abroad but one company is defying that trend. Now new balance which is not only athletic footwear company still making -- right here in the USA joining us now to tell us how that's possible CEO. A new balance -- You we are all surprised to hear that so much of footwear production is overseas whats going on. Bush has been a trend for at least twenty years -- leaving the US but. A new balance and make issues of New England since 1938 and we still might point 5% of our product in our five factories so we we figure out how to make it work now. It did you keep the 25% here because of the you know by USA clause or. Or because in fact that you're able that you do you're doing it for economic reasons well it's a little bit of wolf we feel very strongly that by running factories and in an industry that. Outsource is so much of its production with partners that we know how to run our factories better because we do run five of herself so we get that benefit. We also -- supply -- flexibility which gives us the ability to respond to the business closer because we're making it here on offshore and then last not least we started. The company was purchased by the current ownership there were six manufacturing employs. Today there's thirteen hundred. We feel a huge commitment to those communities and we get the best craftsmanship and industry so we're able to Michael work can you give us a break down as -- as to your sales. You you're 25% in the US 75 elsewhere. We're about to 65% US the balance overseas across a number of countries so a good portion of what is being produced over there. Is being shipped here for sale most of them. Production it's done is most of the domestic production is sold here but it does go to some countries. As well. Well my point is this if 65%. Is domestic sales you only producing -- it by 5% of your out of your product here. Then other than balance is being produced somewhere else should -- want to bring those jobs back here. If we can find the right formally do that we well we also operate a factory in the UK -- it has some more model what we do our US factories now rob mentioned the value tax rebate out of China. Are you seeing any of that. What we have seen over the last year I think -- touched on this is the cost of doing business in China is rising into the agree there's been a gap it's narrowing significantly. Driven partly by the cost of doing business there and partly by the fuel increases that we went through last year. And another thing I'm saying just to jump then a lot of companies not only with manufacturing but with call senators and then trying to we saw over the past few years it's a big headache often do business overseas if you can bring it home if you can keep it home I think that's often me. The first point of departure for a lot of companies because it saves a lot of headaches I would imagine you can have more control when your name is literally on the door. What do you know. A lot of people point the finger cap and trade say -- at a cost more to manufacture stuff here do you see any bumping your in your cost of doing business here for cap and trade. Bill is passed you know I'm not sure the impact today yet but -- we're looking at a very closely and and we're committed to that domestic manufacturing so we will figure out how to make that work now your sneakers the beautiful by the -- and by the investor relations and everybody ever reward. Where -- sales of these spread out through the whole US we are spread out across the domestic business is all across the US and we've got business that's both fully assembled. The fully made here and also business that's assembled there. Nike biggest competitor. Yes what would they do with sir it would what is their manufacturing look like is that a 100% overseas I don't believe they do anything to massively affect I know they don't they they're probably manufacturing and six are different countries with very strong partners and they're very capable competitor so we've taken very seriously. The talk of of value added tax bomb being bandied around here right here in the united states of value added tax cost a lot. Would have a big impact on the business yeah Gaza. Just from to -- to absorb that into the the consumption and I think come off the economy. Most recently. You know I think consumers really have a re looking at the weather's been in the -- put more premium -- not what we're interest good good question -- this leads to this question your prices have stayed the same are going down since the recession Scully you know pretty much put a dent in people's. Ability to -- We have benefited I think in this this the running shoe market in the apparel market is pretty resilient in consumers are -- not stressed by getting them exercising. We've seen prices actually go up not -- five cents a pair in average retail of last year even though the economy SA has been in the downturn. How much is apparent issues. These are about a 130 AM this one is about hundred point. Now is the empty table I take a more expensive -- The white -- to be good for you yeah you look better in the facility here's what's what's what's your price range. We we do business from about 65 dollars all we have 240. And where's your where's your sweet spot we like to work -- writer above eighty dollars we have about a 170. New balance stores and just sell our product and they'll do business above that level branded stores -- stores where that. Other all the countries -- one right over right here six I'm an RA yeah. And IDC a push to any of them excesses there. Are people more willing to -- into branded store that divided this exit a footlocker. I think you've got consumers that shop up and down the channels but you know one of the things that we feel good about this is a business where people buy quality. And if you get them what they want they'll pay for. Who do you have any big name NBA stars weigh in the balance we don't endorse athletes not at all straight across -- we just don't feel like we need that to differentiate ourselves. Interest occurs what do think about not enjoy that that policy is not as it."

" I was actually just gonna say I mean we we actually had met till tonight but I I confess some bit of a sneaker attic and I think one -- the the things I see as an observer of new balances that the loyalty and I think that speaks to probably your question about the branded stores -- not -- endorsements that. You know -- may fill the shelves of a big box retailer but the enthusiasts I know that we -- new balance they absolutely love them they won't running anything else and I think that's something. That you billed overtime and you cultivate as a brand so. To me that the -- Simpson accents. Now all right -- it's only suggests maybe. I don't know you can -- in some new balance cleats and it may work -- sign up Derek -- we might get everybody on yeah look on her former mayor later was aware muscular board. I don't go rob you nineteen Arabs and they."