Saturday, May 14, 2005

U.S. Company Resists Job Outsourcing Trend

ABC News
U.S. Company Resists Job Outsourcing Trend
Canadian Who Runs U.S. Apparel Company Cites Advantages of Manufacturing in America

- The company has 1,600 people sewing, working three shifts a day, finishing a T-shirt or sweatshirt every 11 seconds. It's the kind of thing that strikes fear in the hearts of Americans who could lose their jobs to foreign workers.

But this is not a sweatshop in Honduras. This is America -- downtown Los Angeles.

"While everyone else is offshore chasing pennies, we're staying here and making dollars," said Marty Bailey, vice president of operations for the company, American Apparel.

Everything American Apparel does -- from weaving fabric to cutting, sewing, boxing and shipping -- is done right here.

Efficiency in U.S.A.

The driving force behind the company's philosophy is Dov Charney, a Canadian immigrant who believes the United States is the place to be.

"I can cut 10,000 pieces in the morning," said Charney, the company's CEO. "The next day, I can have them sewn. And the next day, I can have them on a truck headed for New York City."

Charney has doubled his sales in each of the past four years. Now, the company has 32 retail stores catering to a young, hip clientele -- and more stores coming.

Production workers earn an average of $12.50 an hour, a lot for the clothing business. But the company saves millions on shipping costs, and avoids the sewing mistakes and delays that come with foreign manufacturing. They can pay attention to every detail right here at home.

The company calls its clothes "sweatshop-free." Employees get benefits and make more money the more they produce. Charney says the new economic battle will be over automation, quality, speed to market and creativity.

"Sometimes, it doesn't come from a product developer, but just a worker," Charney said. "I've had garment workers help me develop products."

ABC News' Brian Rooney originally reported this story April 24, 2005, on "World News Tonight."