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NYTimes
New York Times
25 Mar 2023


NextImg:The Lure of the ‘Made in America’ Sales Pitch

As a teenager in Southern California, Taylor Shupe confidently declared plans to one day lead a global company, an ambition that would surely bring him to China. By the time he was 15, he was studying Mandarin.

During a college semester in China, Mr. Shupe lined up a factory that could make products for his latest venture: selling protective cases for laptop computers.

Later, he oversaw production for a start-up called Stance, which relied on factories in China to make premium socks adorned with bold colors, surfer patterns and price tags reaching $25 a pair. His current business, a sock company called FutureStitch, also makes most of its wares in China.

But along the way, the world in which Mr. Shupe came of age yielded to something different. The era of globalization that shaped his early entrepreneurial forays was centered on China. The next phase, now unfolding, is dominated by hostilities between Washington and Beijing.

The animosity and suspicion was on full display Thursday as a congressional hearing probed the links between the Chinese government and the wildly popular social media platform, TikTok.

“To the American people watching today, hear this. TikTok is a weapon by the Chinese Communist Party,” declared the chair of the House Energy and Commerce committee, Cathy McMorris Rodgers, a Republican from Washington state.”

Mr. Shupe, 39, had dedicated most of his adult life to sending jobs across the Pacific. He is now intent on bringing them back by transferring production to a new factory up the coast from San Diego.

The trend he has embraced, known as reshoring, is the result of a series of momentous alterations to the global economy over the past decade. Labor costs rose in China. President Donald J. Trump slapped tariffs on Chinese imports. And President Biden ratcheted up pressure designed to contain China’s economic might. In Washington, two political parties that agreed on almost nothing achieved consensus that China represented a threat to the American way of life.

By the time the pandemic arrived, multiplying the costs of transporting goods across the Pacific, Mr. Shupe was already feeling a sense of urgency to make products closer to home.

“With goods coming from China, there’s always going to be the Pacific Ocean that you have to transcend,” he said.

He opened his new factory, in Oceanside, Calif., in the summer. On a recent afternoon, only 20 people were working there, wielding machinery to apply decorative designs to blank socks imported from China. But Mr. Shupe plans to more than double his work force by the end of the year.

“We’re headed to a state of hyper-localization,” he said as he zipped down the freeway toward the factory in his Tesla, at alarming speed. “The big disruptions that have occurred over the past three years have definitely exposed the sort of risk that we didn’t think existed. Which brands want to set up new supply chains in China now?”

Mr. Shupe had to factor in the pitfalls of continuing to rely on textiles from China amid horrific accounts of human rights abuses against Uyghurs, the ethnic minority in the Chinese province of Xinjiang — a major source of cotton. American sanctions prohibited any products linked to Xinjiang from entering the United States.

ImageTaylor Shupe, the founder of FutureStitch, sitting with others around an oval wooden table. A board behind Mr. Shupe shows markings from a previous meeting.
Taylor Shupe, the founder of FutureStitch, meets with his design team at the company’s plant in the United States.Credit...John Francis Peters for The New York Times

Made in China has also become a branding liability.

First and foremost an entrepreneur, Mr. Shupe and his fellow start-up founders divined that high-end socks were a retail frontier waiting to be exploited, a mass commodity that could be transformed into a platform for individual expression. But expression entailed values.

He understood that the Americans whose feet he was wooing were increasingly prone to viewing China as unsavory, and even malevolent.

He understood how social media and celebrity endorsements could drive consumer impulses. Traditional advertising couldn’t rival the power of an Instagram post showing an N.B.A. legend donning Stance socks, or the Jay-Z song that celebrated the glories of the brand. (“This ain’t gray sweatsuits and white tube socks. This is black leather pants and a pair of Stance.”)

China was a damaging detail in the story of Mr. Shupe’s product. Manufacturing socks in the United States was part of a new narrative, one which puts his customers on the right side of history, investing in American communities and responding to climate change by limiting carbon emissions from shipping containers streaming across the ocean.

“Consumers want to know where things are made more than ever,” Mr. Shupe said. “And how things are made.”

He had engineered an answer to that second question by partnering with local government agencies to hire formerly incarcerated women, most of them Black and Latina. They bore trauma from past experiences with substance abuse, domestic violence and prostitution. They confronted racial discrimination and unemployment rates reaching 35 percent. And there were the everyday struggles of single motherhood, rent to pay and groceries to buy in a society that tended to write them off.

People like Tasha Almanza, a mother of four who had served time for selling drugs, were at the center of the brand’s narrative.

“We are women working together,” Ms. Almanza said. “We’re here to empower each other. This has given me the opportunity to rebuild my life.”

Mr. Shupe is leaning hard into this story of redemption. He is manufacturing socks but trying to sell social purpose.

“When you think about the employees that we’re hiring, who just so happen to be the most forsaken of any other employment group in the United States, and their stories of struggle, this is real power,” he said. “And everything else coming from China, not only is it hollow of those sort of social elements, it’s a net negative politically.”

You could buy into that framing, or you could react to it skeptically, divining opportunism. Either way, its existence signified a shift in the conversation, the advancement of values.

Making products in the United States with American workers is gaining currency.

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FutureStitch’s factory, in Oceanside, Calif., was opened in the summer. Mr. Shupe plans to more than double his work force by the end of the year.Credit...John Francis Peters for The New York Times
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“We are women working together,” said Tasha Almanza, who views her staff position at FutureStitch more than a job. “We’re here to empower each other.”Credit...John Francis Peters for The New York Times

Industrial construction boom

Most of the attention to bringing manufacturing back has been centered on weightier concerns than socks.

Mr. Trump encouraged the production of Covid vaccines, in part by reserving supplies of key ingredients and equipment needed by domestic pharmaceutical companies. Mr. Biden expanded on those efforts, accelerating the availability of vaccines.

Mr. Biden maintained the Trump administration’s tariffs on Chinese imports, while opening a new front in the trade war: computer chips. Under the CHIPS and Science Act, which was signed in August, the president unleashed $52 billion worth of direct subsidies to encourage companies to produce computer chips at factories in the United States.

Administration officials heralded the law as liberation from the constant vulnerability of relying on chip-makers in Taiwan, a self-governing island only 100 miles off the Chinese coast that is claimed by Beijing.

The government has also used tax credits to promote the domestic production of electric cars and batteries.

The result has been an industrial construction boom across the United States.

By the end of 2022, the chip industry had dedicated almost $200 billion to build and expand 40 factories in 16 states, generating 40,000 future jobs, according to the Semiconductor Industry Association. A similar sum of money has been promised for American plants making electric cars and batteries, according to the Natural Resources Defense Council, an advocacy group.

For now, growth in domestic manufacturing is dependent on federal largess.

“The national security concerns, and the geopolitics with Taiwan, those factors are motivators,” said Eskander Yavar, a managing partner at BDO, an international business consulting firm. “If there’s no subsidies in place, I think reshoring becomes a slower roll.”

Yet this is the very point of the subsidies, Mr. Yavar added. They are designed to make it more attractive to invest in the United States, closing the often-considerable gap between the costs of producing goods domestically versus in a low-wage country.

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Credit...John Francis Peters for The New York Times
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Credit...John Francis Peters for The New York Times

“This is about creating something here.”

Even as wages have risen in China in recent years, and even as shipping has proved volatile, the costs of making socks in California remains significantly higher than manufacturing in China, Mr. Shupe acknowledges. That basic reality is not likely to change any time soon and leaves the fate of his proposition uncertain. Still, he is betting that Americans will ultimately prove willing to pay more for products made at home.

Raised in Orange County, on a classic, sun-splashed chunk of the Pacific Coast, he surfed and skateboarded as a kid, gaining familiarity with the sartorial concerns of people who sought to look cool and feel comfortable at the same time.

From early childhood, he was constantly engaged in one entrepreneurial venture or another.

“Every Christmas, I’d ask for things that would allow me to generate money,” he recalled. One year, it was a lemon crusher allowing him to make lemonade. Other years, he got a cotton-candy machine, a snow-cone maker, a rock polisher — all harnessed to yield products he sold to the neighbors.

At 12, he was hawking boxes of chocolates and trinkets door to door. Then he worked as a delivery boy at a florist run by a man from Taiwan, using it as an opportunity to learn rudimentary Mandarin.

Mr. Shupe was raised a devout Mormon, though he is no longer an adherent. He was dispatched as a missionary to Taiwan, an experience he now views as a colonial enterprise, even as he appreciates what it gained him: complete fluency in Mandarin.

“The objective was to convert,” Mr. Shupe said. “I became very competitive.”

Two years later, he returned to the United States and enrolled at Brigham Young University. By the time he landed in China for an exchange semester at Nanjing University, he was eager to line up a supplier of neoprene for his business making protective sleeves for laptops.

He found a factory in southern China. The business grew, and Circuit City became his largest customer. But when the chain of electronics stores disappeared into bankruptcy in 2009, Mr. Shupe liquidated his inventory and shut down the business.

The same year, he joined with three other entrepreneurs to start Stance, a brand premised on the idea that socks were ripe for reinvention. They initially focused on skateboarders, using stretchy material that applied light compression to stop them from sliding down calves, while employing the designs of artists from Southern California.

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Details of an art and crafts projects at FutureStitch.Credit...John Francis Peters for The New York Times
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Mr. Shupe is betting that Americans will ultimately prove willing to pay more for products made at home.Credit...John Francis Peters for The New York Times

They worked with a factory outside Shanghai, to make their products. Mr. Shupe supervised production, initially flying every few weeks between California and China. But the lack of daily supervision caused trouble. Machinery mysteriously disappeared from the factory. Orders got screwed up amid long-distance communication problems. After six perpetually jet-lagged months, he moved to China, living near the factory for six years.

When he started FutureStitch in 2017, he held on to Stance’s operation in China.

From the beginning, he had intended to eventually establish a factory in the United States, but a series of developments accelerated the timetable.

First came the trade war, and then the pandemic, adding cost and delay. A single Covid case in 2020 at his factory in China forced the entire work force to quarantine, shutting down the operation for three weeks.

FutureStitch has contracts to make socks for Stance and other brands. Every month, it ships between 20 and 30 containers — each 40-feet long — to Southern California from China. But the costs of transportation multiplied. The time needed to get products to market increased to 10 weeks from three weeks.

This was especially troubling given Mr. Shupe’s fixation with customized goods, which require speed to take advantage of momentary trends. He was pursuing plans to release socks with photographic images of key highlights in sporting events — the game-winning shot in the N.B.A. Finals, the triumphant horse crossing the finish line at the Kentucky Derby.

“You look at the moment, the heat of the meme,” he said. “By the end of the month, it’s not even a tenth what it was.”

Here was the impetus to set up the new factory in Oceanside.

His interest in social justice, combined with more pragmatic staffing considerations, prompted him to recruit women who had spent time behind bars.

Many employers avoid hiring people with criminal records, viewing them as risky. Mr. Shupe saw the potential for highly motivated employees who had already demonstrated resilience. His workers were uniquely invested in their jobs.

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Mr. Shupe said he believed that the customers he was trying to sell his products to were starting to view China as unsavory.Credit...John Francis Peters for The New York Times
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And although Mr. Shupe had always planned to eventually establish a factory in the United States, a series of developments accelerated the timetable.Credit...John Francis Peters for The New York Times

“We have to be here, or we go back to jail,” said Ms. Almanza, 44, one of the factory’s first hires. “It’s our freedom that’s on the line. We’re working for a bigger purpose, because we’re trying to change our lives.”

She had previously been a phlebotomist, drawing blood at a hospital, where she earned nearly $28 an hour. Then a man she worked with began stalking her, she said, cornering her when they were alone in a lab. She filed a sexual harassment complaint, and was fired for poor attendance, she said, even though she had been missing shifts out fear for her safety.

Suddenly jobless, she lost her apartment. She and her children crammed into a mobile home parked in a friend’s driveway, and then bounced between cheap motels.

She had struggled with drugs earlier in her life but had been clean for 17 years. She relapsed, and then resorted to dealing meth to feed her family, she said.

In June 2021, she was arrested and charged with conspiracy to distribute. She spent two months in a county jail, and two more at a federal detention center, pleading guilty in exchange for a sentence of a year of supervision.

At the government office where she applied for cash assistance, someone told her about FutureStitch. She applied and was hired at $20 an hour. She moved her family into an apartment and was soon promoted to supervisor.

At the factory, she pilots a forklift and participates in yoga classes taught by the head of human resources, Sarah Porter.

Where many hourly workers in the United States must endure bosses who schedule shifts with little notice, upending family life, FutureStitch has turned the equation around. Employees can give notice as late as a day in advance if they can’t work. They are excused to attend meetings with probation officers.

The company is constructing a skateboard park to allow mothers to bring their older kids to work.

“I want us to be not just a place of employment,” said Ms. Porter, who is Mr. Shupe’s sister. “I want us to be a sanctuary.”

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Ms. Almanza at a park after work with her sons Koda Alto and Makoah Alto. She is a single mother who once spent four months in jail for a drug offense.Credit...John Francis Peters for The New York Times
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Sarah Porter, who is the company’s head of human resources, said she wanted the workplace “to be a sanctuary.”Credit...John Francis Peters for The New York Times

Mr. Shupe is the father of three, but the presence of single, working mothers whose time is especially compressed has supplied him marketable insights into the everyday problems of footwear, such as the casual torture of putting shoes and socks on small children with other ideas. This was the genesis for his latest obsession, a cross between a shoe and a sock that has a strong sole, yet can be worn by itself and tossed in the washing machine.

On a recent morning, Mr. Shupe convened his design team to examine a prototype. The outsole will be made of Vibram, which is made in the United States from recycled materials. And the product could be fashioned through five stages of manufacturing, compared with the 80 or 90 involved in some footwear.

“It has all the right formulas for ‘Made in the U.S.A.,’” Mr. Shupe said. “This is about creating something here in the United States with interesting design. We’d have to story tell about this.”