Over the last few months, a series of articles, news reports, and blog posts regarding working conditions in Asian manufacturing and assembly plants - specifically at Foxconn, the electronics manufacturing giant - have sparked a debate over whether US brands are doing enough to prevent unfair labor practices and abuses from occurring at production facilities abroad. In January, The New York Times printed a front page article detailing the human cost of building the iPad and, just last week, the FLA released a report on working condition inside Foxconn that cited numerous labor violations.
The recent coverage of these issues inspired us to devote a blog post to our personal experience working with contract manufacturers in China and the reasons we chose to outsource product development and mass-production to a developing country. Please keep in mind that this blog entry is based entirely on personal experience and observations during a two-week trip to China where we toured five different footwear-related production facilities. We cannot speak for the footwear industry as a whole, or the working conditions that exist at non-footwear related manufacturing facilities (such as those at Foxconn). We’ll start by discussing where our products are made and the conditions under which they are produced, and then we’ll explain the underlying reasons why we pursued this route.
Our products are will be manufactured by a publicly traded Taiwanese company called Pou Chen (www.pouchen.com). Pou Chen owns dozens of footwear factories throughout China, Taiwan, Indonesia, Vietnam, and Mexico. The facility we’re using is near Zhongshan, a medium-sized industrial city close to Hong Kong. This particular facility was chosen because of its reputation for manufacturing quality waterproof products, notably hiking shoes and work boots from top-tier US brands including Timberland and The North Face. It employs about 60,000 people and occupies a large gated campus that includes a design center, rubber factory, box factory, mold factory, production lines, testing labs, cafeterias, dormitories, and sampling rooms. The sheer size of the facility is staggering, but not unlike many of the large-scale manufacturing and assembly plants that exist in Southeastern China.
The overwhelming majority of workers at this factory are from Northern China and appeared to be in their late teens and twenties. Employees work ten hour shifts, six days a week, and are paid overtime after 40 hours. We do not know the average wage. Most factory workers live on-site in dormitories. Housing, meals, and health care are provided by the factory, the costs of which are factored into employee wages. Workers are given three weeks off in January/February for Chinese New Year, but otherwise the factory stays open year round. It is not a particularly glamorous lifestyle, but factory life is one option for young Chinese looking to be independent and earn their own living. From what we understand, most worker’s live at the factory for a few years, save as much as possible, and either return to school or move on to more skilled labor. In recent years, the cost of labor has increased significantly as workers are seeking other opportunities closer to home. Economists expect this trend to continue as China continues to develop economically.
Contrary to popular belief, labor costs have little to do with the motivation for outsourcing. Container rates on ocean freight are now so high that shipping costs now significantly offset the savings on labor. The answer has more to do with sourcing and purchasing the right components and materials. Each of our models has about thirty individual pieces purchased from over a dozen individual suppliers. And all of these suppliers have offices within a two hour drive of our production facility. When a prototype arrives with, let’s say, the wrong type of copper-brushed eyelet, we can make the adjustment and have a new prototype built in a matter of days. Making that correction from a production facility in the United States would take weeks. The high concentration of third-party suppliers with offices in Southeastern Asia translates to shorter development timelines, faster turnaround on samples and prototypes, and decreased transportation costs. Producing footwear in Asia is simply faster, more flexible, and more efficient.
There are alternatives. Some high-end leather boots are still made in the United States and New Balance owns five factories across New England where they manufacture a limited line of Made in U.S.A. sneakers (they are the only athletic footwear company who manufactures any products domestically). We look forward to exploring these options in more detail down the road. But, as a small brand looking to produce less than 20,000 pairs a year, it simply is not feasible at this point in time.
Having made the decision to outsource, it is our responsibility as a brand to ensure our manufacturing partners abide by fair labor laws and practices. This is a responsibility that we take very seriously. We are keenly aware of the issues that exist at some manufacturing facilities and will continue to work with our own offshore partners to ensure that all Forsake products are assembled in a fair and responsible work environment.
For more information on global footwear manufacturing, check out this 2010 industry report. And feel free to ask any questions. We can be reached via Facebook, Twitter, or email at info@forsake.co.