Made in Georgia: Smaller, leaner factories lead uptick

by Julie Evans | Apr 19, 2013
If manufacturing in the United States is making a comeback, a textile mill in this import-ravaged town south of Atlanta offers a glimpse of the blue-collar renaissance.

1888 Mills opened in 1996 during a brief hiatus in the decades-long decline of U.S. manufacturing jobs. The highly automated factory makes towels, a cut-sew-dye operation typically handled by low-wage workers in Pakistan, Bangladesh or Brazil. It is one of the few remaining U.S. towel makers.

But 1888 carved out a niche in the plusher-than-most towel business. And it was ahead of the so-called “on-shoring” curve with computers replacing workers and customized, turn-on-a-dime production runs.

Now a new deal with Walmart could help cement 1888’s domestic success - and further propel a resurgence in manufacturing that has seen Georgia add 15,000 manufacturing jobs in the past three years. In January, the giant retailer promised to spend an additional $50 billion over the next decade buying American-made goods.

The much-publicized deal will triple the number of Walmart stores that carry the Griffin company’s terry cloth towels. To meet the demand, 1888 is adding 35 workers and investing $2 million in new equipment.

Walmart also promised to buy more Georgia-made products from the Sleep Studio in Newnan, Mohawk Industries in Calhoun and Norcom in Griffin.

“There will be more manufacturing coming back in this country, not only in textiles, but in a lot of industries,” Doug Tingle, the vice chairman of 1888 Mills, said recently after showing a reporter around the factory. “Will it be like it was before it all went away in the 1990s? No. But a lot of folks see the importance of manufacturing jobs and consumers are attuned to the fact that if it’s made in America they will buy it.”

The United States was once a country of makers, men and women who manufactured steel, airplanes, socks and computers. In the 1930s, one-third of the workforce toiled in factories. Generations of blue-collar Joes and Janes entered the middle class via strenuous, often repetitive labor.

Manufacturing work peaked in 1978 with 19.4 million jobs, according to the Bureau of Labor Statistics. Last year, only 11.9 million Americans still made things.

Georgia, more than most states, felt the effects of the earlier farm-to-factory switch. Industrialists realized low-wage, non-union Southern laborers could just as handily run a loom or fasten a bolt as their Northern and Midwestern brethren. By 1998, Georgia tallied 557,800 blue-collar jobs, about one of every seven statewide.

“Certainly the foundation of a healthy economy is a robust manufacturing sector,” said Michael Zinser, a partner with the Boston Consulting Group who co-authored a report titled Made in America, Again. “It drives a lot of ancillary services and innovation and, at the same time, those are the types of jobs that pay better, demand higher skills and, ultimately, allow people to create better lives for themselves.”

Low-wage Georgia fared better than most states as the off-shore wave carried manufacturing jobs to Mexico, China, Bangladesh and Pakistan during the 1980s and 90s.

The Great Recession, though, equalized the out-sourcing pain. Three years ago only 343,300 people worked in factories, a 35 percent drop in little more than a decade.

“There’s nothing, nothing here in Griffin,” said Octavius Morris, 29, looking for a job at the local employment office 45 minutes from Atlanta. Morris has survived on temp work since losing his textile job in 2008. “New manufacturing jobs would be great, but I don’t see any improvement here.”

Unemployment in Spalding County, home to Griffin, was 12.2 percent in February, well above state and national averages. Major textile companies, including Springs, Thomaston, Dundee and American Mills once employed 4,000 people in Griffin. They’re all gone now.

1888 Mills, though, thrives — both domestically and overseas. Towels have been made in Griffin since 1888, hence the name. Tingle, who went into the mill at age 16 and formed the company with other textile executives nearly 20 years ago, runs a half dozen mills in Griffin, Pakistan, Bangladesh and Ghana.

While a steadfast proponent of U.S.-made goods — the Griffin towels carry the Made Here logo — Tingle won’t reduce production in the overseas plants, which employ 14,000 people. It’s cost-prohibitive, he said, to make lower-quality towels, bedding, drapes and hospital gowns in this country.

Heavier, fluffier, multi-colored towels are a different matter. Finely spun yarn whirs through 41 computerized Italian, Swiss and Japanese looms, a labor-saving investment that requires only three operators to run the Griffin weaving room. In all, 180 people work at the mill, earning between $12-$14 an hour. Gone are the days of legions of aproned ladies toiling amid clouds of lint.

1888 sells towels to Costco, Hyatt, Fred Meyer and, increasingly, Walmart. A multi-year deal will introduce Made Here towels to another 1,200 Walmarts by early 2014.

“Their initiative to bring manufacturing jobs back to the U.S. is just right in our wheelhouse,” Tingle said. “All companies are in business to make a profit, but they’re doing the right thing creating jobs and keeping the U.S. economy going. Manufacturing is so vital to our economy.”

Walmart announced the Made-in-America campaign in January. Companies that make towels, appliances, paper products, air filters, sporting goods, games, coolers and a host of other products will be able to boost U.S. production.

Mohawk Home of Calhoun, for example, will increase rug and mat shipments to Walmart. Chris Ann Ernst, a senior vice president for the Sleep Studio, said the Walmart deal has added a dozen workers at the Newnan factory which makes foam bedding.

An average of $5 billion a year to Walmart — which reportedly spent $335 billion the last fiscal year on the purchase and transport of goods — isn’t, relatively speaking, a big deal. Moreover, Walmart has long been criticized for selling cheap stuff made in low-wage China and beyond. An alleged bribery scandal in Mexico and a deadly fire in Bangladesh also shone harsh lights last year on Walmart’s overseas sourcing.

Michelle Gloeckler, a Walmart senior vice president who heads the Buy American campaign, said the initiative had been in the works for more than a year and was “independent” of any public relations push.

“The business person in me looked at this and said, ‘There are business reasons and benefits for bringing (jobs) back,’ ” Gloeckler said. “We believe that this is good for jobs. (But) the impetus for doing this is it’s good for our business.”

American-made goods cost more than many foreign-made products due largely to labor and raw material costs.

But “some segments of consumers are willing to pay more for a Made-in-America label,” said Boston Consulting’s Zinser. “There is general sentiment that people do find the label to have a higher quality and they’re interested even for patriotic reasons.”

Walmart’s size can force other retailers to follow its moves, though Target, Macys and others haven’t announced any similar plans. But major U.S. manufacturers including Apple, General Electric, Whirlpool and Caterpillar, at a tractor factory near Athens, have announced they’ll repatriate some manufacturing.

The U.S. gained 450,000 manufacturing jobs between 2010 and 2012, according to the Bureau of Labor Statistics. The growth has helped fuel the slow economic recovery, contributing one-fourth of the nation’s GDP growth between 2009 and 2011, according to the U.S. Commerce Department.

“Manufacturing, in general, chased the Lorelei of low-cost labor for a long time,” Airbus American chairman Allan McArtor said in a recent interview. “But it doesn’t pay if you have to do the work twice. The U.S. is demonstrating that it has a more innovative workforce, more productive and with less turnover. The quality is also higher.”

Airbus may hire 1,000 workers to build airplanes in Mobile, Ala. Boston Consulting’s Zinser expects the Southeast, with its lower wages and growing population of consumers, to benefit mightily from any renaissance in manufacturing.

Last year, according to Bob Pertierra, a vice president with the Metro Atlanta Chamber, the majority of his business-recruitment leads involved distribution centers. This year, manufacturers occupy most of his time.

Reasons are numerous. Labor and raw materials costs are rising in China as are freight costs between Asia and the United States. Cheap natural gas makes production in this country more affordable.

Walmart and 1888 Mills said the need to quickly fill specialized orders — Georgia consumers might prefer a blue towel border this summer rather than a green border in stock — necessitates onshore production.

Still, the manufacturing resurgence remains a trickle, not a torrent. Computerization at plants like 1888 Mills will keep employment in check. Ninety percent of Tingle’s production will remain offshore. And the usual business laments — economic uncertainty, access to capital, Washington dysfunction, taxes and regulations — might hinder a renaissance.

1888 Mills, though, is running 24 hours a day, six days a week.

“There will definitely be more manufacturing coming back,” Tingle said. “And we’re going to be a big part of it.”