The video explores the challenges and opportunities in revitalizing the U.S. manufacturing industry, particularly focusing on the textile sector. Highlighting a mix of small and large businesses, the video examines how supply chains can be improved through domestic production, regionalization, and investments in technology. It considers the historical shifts in manufacturing jobs, the impact of globalization, and current trends in de-globalization and regional development.

Speakers in the video argue for a shift from globalization towards creating a self-sustaining economy that supports local communities. They discuss the environmental and economic benefits of an all-American supply chain. The video illustrates the importance of maintaining industrial expertise domestically for national security and to combat future global challenges like climate change.

Main takeaways from the video:

Please remember to turn on the CC button to view the subtitles.

Key Vocabularies and Common Phrases:

1. globalization [ˌɡloʊbəlaɪˈzeɪʃən] - (noun) - The process by which businesses or other organizations develop international influence or start operating on an international scale. - Synonyms: (internationalization, worldwide integration, universality)

globalization has been our economic paradigm for the last half century.

2. regionalization [ˌriːdʒənəlaɪˈzeɪʃən] - (noun) - The process of dividing an area into smaller regions which are not limited by geographic boundaries. - Synonyms: (regional restructuring, area division, decentralization)

Post pandemic, there's a new regionalization of industry taking place, and jobs are starting to move back.

3. supply chain [səˈplaɪ tʃeɪn] - (noun) - A system of organizations, people, activities, information, and resources involved in supplying a product or service to a consumer. - Synonyms: (production line, supply network, logistics network)

We're gonna follow an all-American supply chain that starts right here in this cotton field in North Carolina.

4. paradigm [ˈpærəˌdaɪm] - (noun) - A model or pattern for something that may serve as an example. - Synonyms: (model, pattern, prototype)

globalization has been our economic paradigm for the last half century.

5. neoliberal [ˌniːoʊˈlɪb(ə)rəl] - (adjective) - Relating to a modified form of liberalism tending to favor free-market capitalism. - Synonyms: (free-market, laissez-faire, economic liberal)

Well, it all starts with the neoliberal assumption that it didn't matter for the well being of a country whether you were making computer chips or potato chips.

6. textile [ˈtɛkˌstaɪl] - (noun) - A type of cloth or woven fabric. - Synonyms: (fabric, cloth, material)

Since the 1980s, manufacturing jobs have plummeted. Textiles were hit especially hard.

7. decoupling [diːˈkʌplɪŋ] - (noun) - The process of disconnecting or separating something from something else. - Synonyms: (separation, disconnection, disengagement)

Under Lighthizer and the Trump administration, the US pulled out of the Trans Pacific Partnership deal, and that signaled a decoupling from China.

8. localization [ˌloʊkəlaɪˈzeɪʃən] - (noun) - The process of making something local in character or restricting it to a particular place. - Synonyms: (regionalization, domestication, indigenization)

You've been watching the second of three FT films on the localization of economies.

9. incentive [ɪnˈsɛntɪv] - (noun) - A thing that motivates or encourages someone to do something. - Synonyms: (motivation, encouragement, inducement)

Show us the commitment that you mean what you say by giving us some sort of reason to believe that 18 months from now, the narrative doesn't flip.

10. hubris [ˈhjuːbrɪs] - (noun) - Excessive pride or self-confidence. - Synonyms: (arrogance, conceit, pride)

There was this kind of hubris that the world had changed, and that market forces forever now were going to move us in the direction of economic growth.

Manufacturing in America, post-globalisation- FT Film

Where is it written that we can't lead manufacturing in the world? How do we get faster? How do we get more efficient? How do we think about automating, turning those jobs not just into a job that uses my hands, but a job that uses my heart and my mind? It's an adrenaline rush. You want to be the best? I'm getting flushed about it. I mean, it excites me that much. So the great question before us is not whether globalization will proceed. How so? What we were told is we needed to normalize our relationship with China. There's nothing normal about it. Last man standing in an industry is not the winner. He's just the last loser.

Absolutely love working in the apparel industry, being proud that you made something. At the end of the day, being proud that it's made in the US. I feel like business is good because I haven't seen a slowdown since we came off mass. globalization has been our economic paradigm for the last half century. But things are changing, and countries and regions are de globalizing and localizing for all kinds of reasons, from more fractious geopolitics to environmental concerns and labor standards. In this film, we're gonna look at why it's important to make things at home, and we're gonna follow an all american supply chain that starts right here in this cotton field in North Carolina.

You know about, what, 1012 farmers out here? Bayard Winthrop is the CEO of clothing company American Giant. Their supply chain involves cotton gins, mills, knitting and sewing factories. And it's all done within about 120 miles of here. That not only cuts down on shipping costs, it also means he knows his clothing is in line with american environmental and labor standards. So that's cotton yarn. For Bayard, it's about keeping relationships and expertise close to home. You also get this benefit, which is standing in a cotton field, meeting cotton farmers, talking about varietals, talking about what they're doing from a crop production standpoint, creating that connection to the men and women that are involved in the highly complicated process of making the things that we consume everyday.

Are you wearing one of your products, by the way? I am, yeah. Mary's eye t shirt and a button up shirt and jeans. Oh, my God. But I mean, so this is where those clothes started, and this is where they're finished. Just down the road at Eagle sportswear. So the original idea behind the company was to reclaim some of that very high quality american made stuff. I had felt that being around the making of products, the care and the passion and the skill and the craft and the work that goes into that was not just important from an understanding about how you build quality product, but emotionally important and societally important. The idea that there isn't a good textile capability in the United States anymore is nonsense.

I wanted to make this film about us manufacturing because I believe that we're at a turning point. Since the 1980s, manufacturing jobs have plummeted. In the constant drive to make things cheap. Factories and jobs were moved overseas. Textiles were hit especially hard. But I want to show you how, post pandemic, there's a new regionalization of industry taking place, and jobs are starting to move back. It's about being focused not on what's cheapest, but on creating better jobs for local communities.

From the 1970s, for about 30 years, my father actually ran factories in the midwest. And I remember how important it was to him to really give people a sense of pride and place. So what went wrong? Well, it all starts with the neoliberal assumption that it didn't matter for the well being of a country whether you were making computer chips or potato chips. Robert Lighthizer was handpicked by Donald Trump to be his trade representative. He's been working on trade for a long time, including under the Reagan administration. And he says advocates of unfair globalization, like Bill Clinton, were always wrong headed. Free trade is about price optimization and consumption. I think the important thing is production. Production leads to good jobs, good wages, and solid, fundamental american communities.

And if there's a sacrifice of the price of a t shirt or your third television set in order to have strong communities in America, that's the sacrifice that I'm willing to make. He believes the drive to globalization saw the US effectively giving away its own prosperity. Trade deals like NAFTA between the US, Canada, and Mexico, and also the entry of China into the WTO, assumed that the US could outsource its industrial base, while focusing mainly on service sector jobs, and that as global trade grew, countries would become freer and more like the US.

There was this kind of hubris that the world had changed, and that market forces forever now were going to move us in the direction of economic growth and freedom throughout the world. And all these notions, which are lovely except just dont exist. No generation has ever had the opportunity that all of us now have to build a global economy that leaves no one behind. I call it the trifecta of stupidity. The combination of NAFTA, the WTO, and PNTR, letting China have permanent preferential treatment. And the result was we lost five or 6 million jobs and hundreds and hundreds of thousands of manufacturing jobs and 60,000 factories and communities all over the country were decimated. And you saw families breaking up and opioid addiction and all of these things. It was the exact opposite of what all these people had predicted.

I've been quite critical of the Trump administration, but Lighthizer had the right idea on trade, and in particular the outsourcing of IP and jobs by big us multinationals. But there were some companies that made it through in that period. The key is that they tended to be smaller, private, family owned, and that made them better able to take more aggressive risks. Private companies of a similar type as public companies invest about twice the amount in things like worker training, factory upgrades, R and D. And that's because they're not subject to the sort of short term pressures of Wall street. And it's these types of companies that american giant specifically chose for their clothing supply chain.

After the farm, it's time for the gin. That's where the seeds are removed and the cotton is baled up. Another major upgrade we did this year was our new gin stand. They put our name in here, so it's here to stay. And we want to add another one one day. So this is a huge investment, and you take a risk every time you're purchasing a piece of equipment like this. Yeah, I feel like we take a risk every time we get on I 95, too. So we have risk takers and we have people that are going to sit.

Tatum has worked as a model, as a trucker, and now owns and runs this gin. After investing hundreds of thousands of dollars in new equipment, she's hoping to ramp up production. It's a very precarious business, but she finds some stability by building a network of relationships with local farmers, truckers and other gins. Well, the way we make money at this particular gin is simply by selling the cotton seed. And we sell to oil mills, we sell to dairy farmers. We'll sell to you if you want to feed your deer, which we've had a few people do that. It's all in the relationships you make with certain folks.

So this is the cotton seed. This is basically a mountain of money sitting here. Well, I like to think of it that way, but there's a mountain of problems and expenses outside the door. Hurricane Ian closing in on the east coast. Despite the big investments that a small Jenner like Tatum puts into her business, the entire cotton crop and all her profits can be wiped out with one big storm. With the farming, they have crop insurance. You know, in my industry, there's not any protection if I don't gin any cotton.

We have to plan way ahead to know how to handle these situations. And, you know, honestly, none of us can control the weather, and we just have to pray hard and be positive. You have to have one of these if you own a cotton gym. Why? Because your blood pressure is out of the roof every day. Seriously, we want to be real specific on each farmer as best we can. And we're able to do that with the technology that we've upgraded in here to monitor the incoming moisture and outgoing moisture. And in the end, the bottom line is, we want you to make money. It's unbelievably exciting. When we turn on the first motor and there's a sequence across the console, it is just like an orchestra. I'm getting flushed about it. I mean, this excites me that much. Sorry.

As well as small enterprises like Enfield, the Carolina cotton supply chain has big companies like Parkdale, the largest cotton yarn producer in North America. It's still private and family owned, meaning that they can invest a lot of their money back into new technology. Executive VP Davis Worlick shows me around one of the facilities. We invest heavily in technology to create better efficiencies, to create better quality. Roughly around $500 million in the last ten years. To create more automation, to have the latest, greatest equipment, to prepare the fiber and to spin the yarn. Davis tells me that in this facility, what would have taken 2000 workers now takes 200. But those 200 jobs require a lot more technical expertise.

This machine works on 55 bales of cotton at a time. The bales come from different farms, so the machine is programmed using software to make sure that they're lined up to create the right blend. All it's trying to do is take small bites off the top of each bale. That way, not one single bale is overly represented. It's a part of the mixing process. In the old days, workers risked losing fingers to the high velocity toothed cylinders that clean the cotton. But these carding machines are a lot safer. For Parkdale. It's all about being able to compete in a global marketplace, leveraging efficient production in the US to go up against the cheap cost of labor overseas.

We're constantly striving to make things more automated in order to be able to compete. And I think that has been one of the reasons we're still here. Automated guided vehicles move the spools of cotton. And here's a rota working at 100,000 revolutions per minute, twisting individual fibers into yarn with sensors triggering a robot to move the cone onto a conveyor belt for packing. Many people in us manufacturing feel that free trade was never really free because it didn't account for the lower labor and environmental standards that allowed a lot of countries overseas to make things more cheaply. Andy Warlick Davis dad says it's like letting other athletes start a hundred meter race closer to the finish line. Competition's good, and Americans thrive on competition.

Now, free trade, that's a unicorn that I've been chasing for 30 years, trying to find anybody in the world that practiced it. My best way of describing it is it's economic treason. About 20% of the world's cotton comes from China, and most of that comes from Xinjiang, a region mired by human rights and forced labor concerns. The US has actually now banned imports of Xinjiang cotton. Historically, us continents had to fight not just cheap asian labor, but a strong dollar, too. And faced with stiff competition, a lot of us companies moved their own factories overseas years ago or quit the market altogether.

What we've got to do here is make sure that we don't put american industry in a last man standings, the winner situation. Because last man standing in an industry is not the winner. He's just the last loser. Proponents of globalization might point out that world trade in manufactured goods has also more than doubled since 2000, and extreme global poverty has fallen to a third of what it was in 1990. Of course, it's not so straightforward. Digital trade, rather than trade in traditional goods and services, has really bolstered those numbers over the last few years.

And manufacturing matters for so many reasons. Not just the jobs and the economic security that it brings, but the ability of a country for national security reasons to be able to manufacture things like masks or vaccines or semiconductors. It also allows countries to maintain the industrial expertise that will allow us to get ready for the next big challenge, like climate change. Every dollar spent in manufacturing has a total impact of $2.68 in the overall economy. According to some estimates, us manufacturing attracts $1.9 trillion in foreign direct investment. It employs almost 13 million workers, accounting for $2.8 trillion in GDP. And it accounts for nearly 60% of all private sector R and D.

And I believe that it's actually the smaller and mid sized companies in the industrial space that are really a hidden strength in the us market. It's the difference between a good stock and a good company. Instead of highly globalized, highly financialized supply chains dominated by a handful of multinational firms, you get smaller, more regionalized ones that can increase their productivity with lean manufacturing and really be much more nimble in the marketplace.

This is something that Joe Biden, I think, really recognizes. He's been quite explicitly moving the federal government away from a focus on consumers. And cheap is better at all costs to income and job led growth. We've created nearly 700,000 manufacturing jobs just in the last 19 months. Businesses are investing here in America at record rates. When he says that he's going to build an economy from the bottom up and middle out, that's what he's talking about. How can we make sure that we're creating those good jobs all across the country, but that workers are benefiting from the gains of growth? And at the same time, we're focused on making sure that the kind of growth that we see in this country is not just equitable, but it's addressing some of the most important social needs. We're addressing climate change.

Heather Boucher is one of the many figures in the White House pushing place based economics. One of the things that I think we never really wrapped our head around is that if one person loses their job, you might be able to go across the street or find another job. But when a whole factory closes, that affects the entire community. Making sure that we're attending to place has been a number one priority. How do we help places thrive? How do we help places recover?

30 years ago, the US was leading the textile sector. So what we were told is we needed to normalize our relationship with China, so then they would play by the rules. So their accession to the WTO granting them permanent normal trade relations status, there's nothing normal about it. We have suffered greatly. We have communities that don't manufacture anything anymore that used to be titans in industry. 470 million pairs of jeans were sold in the US last year alone.

Some people argue that if we replace globalized manufacturing with more localized supply chains, it would push up prices. And that would be a huge problem when inflation is already sky high. But supply chains and agriculture and textiles are some of the most polluting in the world. A consumer that is nudged towards buying fewer things of better quality and more locally would help the planet. And decarbonizing our supply chains in certain sectors doesn't have to push up prices a huge amount. There are already signs of a us comeback in manufacturing. In high margin, mission critical, strategic goods like semiconductors, you can see it. But also in low margin goods like textiles. That's an industry that employs more than half a million people in the US, with shipments totaling $65 billion.

We have seen historic investment in the us textile production chain, as well as in our Central American Free Trade agreement partners, including Honduras, Guatemala and El Salvador. We expect over a billion dollars of new investment going into Central America this year alone for textile. That's an indication that the world's changed. For how long? I don't know.

Bob Lighthizer points to the trade deficit with China. The US spent its money on cheap consumer goods. China used those dollars to buy up us assets like stocks and real estate, and the value of those multiplies down the line. So we are impoverishing our children in a very real way in exchange for our third television set or for gym shoes. And it's a nutty idea. And the only argument in favor of it is that we're getting cheaper stuff, or that there's some foreign policy objective, or that you're a us business that is making money on imports.

Under Lighthizer and the Trump administration, the US pulled out of the Trans Pacific Partnership deal, and that signaled a decoupling from China. From this day forward, it's going to be only America first. America first. I think we have to have an attitude towards China and economic integration very similar to the way China has an attitude towards us. They clearly believe in decoupling. So lighthizer did pull up that scrim on the idea that free trade was good for everybody all the time. But even before Trump took office in 2015, you had China coming out with its Made in China 2025 plan, which was really about regionalization. And Biden's ban on high end semiconductor chips to China did more in a couple of weeks to change supply chains than Trump's entire presidency did.

Well, guess what? The supply chain is going to start here and end here in the United States. What really strikes me is how both Democrats and Republicans are moving much more towards a place based economic view, away from the neoliberalism of the eighties and the nineties and the naughties at the Carolina cotton works.

They dye in finished fabrics, specializing in workwear, automotive interiors, fast fashion, and flame retardant clothing for the military. I remember before Trump was elected, the Trans Pacific Partnership TPP, it was a foregone conclusion that we were going to enter into that and say what you want about Trump. He pulled that off the table and it breathed a breath of fresh air through the lungs of the us textile industry. Faced with a tough domestic labor market, this is another private family run factor factory where they have invested to automate replacing low skilled jobs that had a high turnover.

That meant removing human labor from the packaging process and investing in an automatic system for dispensing soda ash, ensuring that the right amount at the right time and temperature is dispensed. It's worth noting that much of the machinery in this factory is Swiss or German, which speaks to how those countries have prioritized high end manufacturing. This swiss dyeing machine can handle more types of different fabric. If you look inside here, you can see the fabric is dwelling down here. You see a red dot that's coming from this. And when it senses that there's no motion, that's an indicator that the fabric could be tangled, and it'll set off an alarm and call for an operator coming here and try to get it out of.

Brian believes made in America also has to be part of the conversation. I remember when. When I got to know Bayard and the idea that he was going to manufacture a hoodie in the US and he was going to sell it on the Internet. We had been doing business in a world of high volume manufacturers that were always looking for a way to take a nickel out of a yard of fabric. And all of a sudden, this guy shows up with an obvious high quality product. And I tried to explain to him that it was a bad idea, and because it's very expensive to do what he's proposing. And, you know, his approach was, I'm not terribly concerned about the cost of mine versus the cost of everyone else's. We're going to build a meaningful brand and we're going to build it in the US. And over time, people are going to migrate, and it's going to become somewhat of a following.

I'm struck once more by how so much of the success here comes back to family. Brian runs this factory with his brother, Hunter. Their father, Page, who's now passed away, started the factory and brought his sons on board. And he feels very much still present in the way things are done here. He even has an empty space in the car park. You know, if dad could come walking in here today, I think his jaw would drop and hit the floor, because a lot of the things that we are doing are things that were on his wish list years ago. And I might have been in that camp to be conservative and less aggressive to make those investments. And I guess God just spoke to us and said, the time is now, opportunity is here. Swing for the fences. And that's what we've done.

William Lucas is the general manager at Eagle Sportswear, where they cut and sew american giants clothing range. He remembers a time when there were so many jobs in the textile industry that you could quit your job, walk across the street, and get another one straight away. Absolutely love working in the apparel industry, being proud that you made something. At the end of the day, it's being proud that it's made in the US. It's in my blood, and once it gets in your blood, it's just. I can't ever imagine not doing it.

He says that the good times came to an end with NAFTA in the early 1990s, when a lot of us based businesses closed and manufacturing was moved offshore. But this factory has survived under one owner or another. Innovation here doesn't have to mean just investing in new technology, but in people, too. They've implemented what's known as the Toyota system, with modular sewing. Instead of one worker sitting down to repeat the same process all day long, a team of workers each does all the different jobs in their chain. They've cut the time it takes to make a zipped hoodie from 60 minutes down to 43, and reduce the defect rate from as much as 10% all the way down to 1%.

And it's a one piece flow, taking it all the way down the line, doing the different operations until it's complete over on the side. I see. So there's no wasted effort. Exactly. They kind of become their own bosses, and they are pushing each other all day. And if you have a person that's slacking off or something, they're going to go to that person, hey, you need to speed up. You need to cover your zone. So they kind of manage themselves, and that's what they get paid off of.

It's their efficiency at the end of the day. Oh, that's interesting. Is this the sort of thing that is ever done with robotics these days, or do you really need a human being to like, they tried it so much in the car industry, you can do it because it's something that's stable with this, with knit fabric. It is so flimsy. You need that human touch. It was that human touch, that Dexdenne that saw the textile industry respond so well to the pandemic. And Byer calls me up and says, william, do you want to do face masks for the government? And I'm like, sure.

Never made a face mask in my life. It was a hurdle. We had to buy new equipment and retrain everybody. We went from zero to making 60,000 a week within a month's time. Human nature is, we don't like change, but we can do it. Todd has seen a lot of changes since he started working in the industry. Straight out of high school 34 years ago, he gets the feeling that business is booming.

I feel like business is good because I haven't seen a slowdown since we came off mask. There used to be a lot of textiles plants around when I was small, and they slowly started going away and everything. But the way that we do it is actually still the old fashioned way. And to me, and maybe I'm just biased and stuff because I'm doing it, it's the best way because you're hands on. So do you feel like you've been able to make a good living working here? You know, I raised a child. I was able to get him through school and stuff. And he's 30 years old now.

You know, he has his family, and of course he's not doing this. You know, he's doing something else, which, you know, I want him to, you know, and stuff. So it's not always been easy. You know, it's always a struggle because, I mean, how much money is enough money? You know, I'm sure rich people, you ask them how much money is enough money, and there's. I don't know if there's an answer to that, you know? So some people believe that we shouldn't care about low margin industries like Texas styles. Other people think that making baseline apparel is going to become more important in a de globalizing world. Either way, the us educational system has changed to prioritize four year degrees over two year vocational training programs that would turn into jobs like the ones we see here.

I wanted to meet Claudia Hamill Jenkins to talk about education. She's the daughter of farmer Jerry Hamill, who supplied cotton to american giant and who passed away just a year ago. He discouraged his daughter from going into farming. She became a high school teacher instead. But from textiles to auto mechanics, it's hard to find teachers to do this kind of vocational training. The saddest part to me is that we can't get the teachers to teach these programs. Once teachers are retiring, we don't have people to fill them. So we're not getting that interest sparked in students early enough to continue on at the local community college.

Do you get a sense that things are tipping at this point and there is going to be more interest in these jobs and, you know, coming back to do this kind of work? Well, I have to hope, because that's how daddy always taught me, that you have to look forward and you have to have hope that there will be a return and people will see that if you can find things locally, if it is you know, from dirt to shirt. If it's grown here, if it is ginned here, and if it's spun here and manufactured here, and you can find it in your local store, that they will see that it comes back to them in that same community. But if we don't have places for people to work and to make an honest living, it is going to pull people further apart. They're not going to live in rural areas and these areas are just going to disappear.

The hollowing out of rural America isn't something to worry about just for nostalgic or romantic reasons. States like North Carolina matter a lot politically. And if we can't bring jobs and a more robust economy back to these areas, we won't have a stable politics either. When you have these two worlds that are emerging, you begin to see the cracks in society that I think you're seeing now. And you see that in our politics, you see that in our media, you see that in the way that we're communicating with one another. Those two worlds need to become much more integrated.

When we go to the supermarket, when we go to the hardware store, that the decisions that we're making have implications throughout the economy. But from a cultural standpoint too, it's great for politicians to stand in front of a microphone and say, let's bring jobs back to America, but show us the commitment that you mean what you say by giving us some sort of reason to believe that 18 months from now, the narrative doesn't flip and we all of a sudden want to sell industries out. Huge opportunity to onshore and nearshore production chains that do these things so much better, so much more environmentally conscious and so much more human rights conscious.

But the reality is, price is king in our industry. This is the largest economy in the world and the price of admission is not that high. And it should be. They should pay their fair share, just like every american taxpayer. One fundamental thing is you can't be the only person that's pure in the world and still prevail. It won't happen. It never happened, and it's not going to happen now. This is a time for change. It's a time to reward businesses that do the right thing for their communities, their workers, and for environmental standards.

But we also need manufacturing to create more resilient and redundant supply chains here and elsewhere. We've been following a company that makes hoodies, but guess what? They can also make masks, wind turbine covers, upholstery for electric vehicles. We need to bolster and build on that kind of expertise. Not everybody in this country wants to be a banker or a software programmer, and that's not what we need. We need a mix of jobs, a diverse economic ecosystem in which people get to use their heads, their hearts and their hands.

Economics, Global, Technology, Us Manufacturing, Textile Industry, Local Supply Chains, Financial Times