Made In America Is Becoming A Selling Attribute

March 30, 2012 – Manufacturing & Technology News – On his campaign swing through Ohio recently, Republican presidential hopeful Mitt Romney made his first stop in the state at the last remaining U.S. factory making metal fence posts: American Posts of Toledo, Ohio. It was a political rally with a perfect photo op. The company’s marketing and sales literature states that its posts are: “Made in America. Made by Americans. Made with American steel.” With every post it makes stamped “Made in America,” it was enough to attract Romney’s attention. It has also been good for attracting business. “Made in America” is selling.

“There has been a lot more ‘Buy American’ feeling in the country,” says American Posts CEO William Feniger. “There is also fear among people [in retail] who are buying in this country that they need to make sure that they keep us alive and buy from us because if something would happen [to Chinese supply] then where are they going to buy these fence posts from? They buy a lot of them — a lot of them. They could put themselves in a corner that they don’t want to be in.” Buyers at Ace Hardware and Menards have embraced “Made in America” as a selling point. “In the last few years there is more of an emotional atmosphere among consumers who feel that they need to support the people who are making things in this country,” says Feniger. “It’s not overwhelming. It’s not a huge tidal
wave, but it’s more than it was six or eight years ago.”

Feniger says he understands the competitive nature of retail and why big box stores like Home Depot buy cheap products from China. “But one of the things I want them to understand is that if I hired 20 people, that when they leave work here on Friday afternoon and have yard work to do on the weekend, they are the ones who are going into Home Depot. When they are buying posts from overseas, the guy who makes those posts over in China is not walking into the Home Depot store and spending his paycheck. If I don’t hire those 20 people, that is 20 fewer people who will walk into an American store and buy something.”

The U.S. market for metal fence posts is between 20 million and 30 million posts per year. American Posts is now producing about 10,000 to 15,000 posts in an eight-hour shift, up from 2,000 to 2,500 in 2005. In 2011, the company produced more than six million fence
posts, accounting for 18 to 20 percent of the U.S. market. It’s goal for 2012 is to manufacture eight million posts, which it can do by adding a second shift and providing its customers with just-in-time delivery. Eventually, it hopes to supply 40 percent of the U. S. market. The Chinese make up the rest of the market. China’s domination of the U.S. market has been achieved through illegal trade practices, says Feniger.

“The thing that irks me the most is that I don’t mind competing and trying to be creative and work hard, but I find it despicable that our country has allowed the Chinese to manipulate their currency to the point where it makes me uncompetitive, and I hate that. That is one of my biggest beefs and we just sit back and let them do it.” When asked by Manufacturing & Technology News what he thinks of the Republican House of Representatives killing the currency reform bill that overwhelming passed the Senate,
Feniger replied: “I don’t care if there is a D or an R behind their names. The whole group in Washington is so disgusting. The idea that we allow China to manipulate their currency so that they can sell fence posts to Home Depot and make it impossible for me to compete is just disgusting. There is a hidden agenda [in Washington] that we don’t even know half the details why and probably don’t want to know.” Obama has done nothing to address China’s illegal industrial subsidies, incentives and currency practices and probably won’t, says Feniger. Mitt Romney says that he will confront China from day one of his presidency. But Obama made the same promise when he was campaigning four years ago through the Midwest. As president, why wouldn’t the same thing happen with Romney — reneging on his promises — given the geopolitical, economic and financial forces that would temper his actions toward China? “That could easily happen,” Feniger replies. “But I’m willing to roll the dice that he can make the change because I know one thing: If we put Obama back in
the White House, I am surely not going to see anything better than what I have seen in the past and it could get even worse because there will be no checks on him.” Feniger has no problem supporting Romney for president. “He’s committed to the idea that America
has to get back to making things and I think he’s a good businessman,” says Feniger. “Do I think he is a polished politician? No. I wish he was, but I believe he has the basics of a
good businessman. He has a track record of more successes than failures, which is really important in business. For the last couple of decades, we tried the ‘political’ candidate
and it hasn’t worked and it is not working. We’ve lost too many jobs and taken too many steps backwards. I’m willing to roll the dice and take a businessman and I’ll take
my shot with a businessman who maybe doesn’t have the political savvy that Obama has. You are not going to get me to look at Gingrich or Santorum either. I don’t care if
they are politically inclined and can talk in public. Their track record is terrible — their voting record is even worse and I don’t want more of the same.”

When Feniger, who has been in the steel service center industry for decades, purchased American Posts in 2005, the company was run as a mom-and-pop shop, producing on antiquated machinery with a laborintensive process. At the time, there were at least 10 other U.S. companies producing steel posts. But those companies were not able to make the investments to compete effectively with Chinese producers who were paying workers $5 a day, compared to $12 an hour in the United States. Unlike the other U.S. producers,
Feniger automated his line. “As we started to make that investment, we saw more and business available and it became something that we got more and more excited about as the market began to get more visible to us,” says Feniger. There is no reason for the Chinese to be competitive with American Posts, says Feniger. “I don’t want to
compete against any country that says they want to sell their product in the United States as a loss leader and they don’t care what they sell it for because the government is going
to subsidize them,” he says. “I can’t compete with that. But I can compete if they have to buy their steel like I do and make their product and roll form it, paint it and package
it the same way I do. Plus they have the freight costs of having to ship it here.”

What can other American companies that make basic products learn from American Posts? “Before someone just runs from a fight or gives up a battle, they need to look into what they are facing without the fear that it is being made overseas and you can’t compete so you quit,” says Feniger. “It takes a lot more investigating. It’s worth taking the time and effort to see what you are really competing against. Is it a fear that is really there? Or if you took your time and put your ingenuity to it, could you compete? People run from a fight because of the awe and aura over the last decade that because they are making it in China they can’t compete here in Toledo or Nashville. That is bull. In many
areas, we can compete and in many areas we can beat them.”

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