NEW BOOTS IN THE WORKS – CORPORATE INNOVATION

Red Wing Shoe Company has been manufacturing in Red Wing, Minnesota since 1905.

Yet it took a concerted effort recently to reverse the tide of globalization and turn out an all-new boot, from “cut to box.”  The process to produce a new line of work boots, for the first time in two decades, took more than two years (ref. WSJ).  And, the development required coordination from all the moving parts of the company.  First, the corporate leaders needed to hire more production engineers to help take the idea from concept to manufacturing.  Then the company’s designers created a boot with larger pieces that required less sewing – in an effort to offset the higher U.S. labor costs.  And, then, the factory’s employees had to learn a different way to connect soles to “uppers.”  Consequently, Red Wing had to build a new production line.  And, ultimately, the Burnside leather boot was launched by Red Wing in May.  CEO Mark Urdahl says that, “The reality was that we had not developed a lot of new products for U.S. manufacturing . . . You start to lose the skill set – through retirement and attrition – of people who have the ability to develop footwear here.”  Red Wing is one of the many companies who have acknowledged the push to grow U.S. manufacturing, also factoring in the downsides of globalization and increased opposition to free-trade policies.  For several decades, shoe brands like Nike and Timberland have used a network of factories around the globe with millions of low-paid workers to produce at least 98% of the footwear purchased by Americans.  The number of people working in U.S. footwear manufacturing has fallen by more than 50% since 2001.  Rebuilding U.S. manufacturing presents challenges for industries like footwear, electronics and bicycles, where most of the supply chain has moved abroad.  Even Red Wing, a company with a long history of U.S. production, private ownership and control over key raw materials and distribution, has, until recently, made 2/3 of its shoes abroad.  Red Wing, known for high-end work boots with safety features for oil rigs or railroads, reports that it sold 5.2 million pairs of shoes and boots last year – 1.3 million of those were fully-made in the U.S.  Urdahl reports that, “As a privately-held company, it’s not about minimizing profits . . . but we’re also trying to maximize all interests, the community, the brand.”  Sounds like a good start – Red Wing is to be commended for their all-out efforts to start to bring back U.S. manufacturing.

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