Louisville: In a corner of Kentucky just outside of Louisville, family-owned shoe company Keen is opening a new factory this month. The move aligns with the "America First" economic vision championed by the Trump administration, symbolizing a potential manufacturing renaissance. However, the story of Keen's new factory reveals a more complex picture of modern-day manufacturing in America.
According to BBC, manufacturing in the US is no longer the labor-intensive engine it once was. It has transformed into a capital-heavy, high-tech enterprise. Keen's chief operating officer, Hari Perumal, notes that labor costs in the US are significantly higher than in Asia, with staffing expenses running approximately 10 to 12 times more. This economic reality prompted Keen to seek solutions back in 2010, when rising costs in China led the company to begin producing domestically. This decision now provides some protection against tariffs introduced by the Trump administration, yet it is not a straightforward victory.
Shoemaking, much like other industries, remains closely tied to global supply chains, with the vast majority of footwear production occurring in Asia. To make domestic production viable, Keen has heavily invested in automation, allowing the Kentucky plant to function with a smaller workforce compared to overseas operations. "We are making products here in the USA very economically and very efficiently," says Perumal, emphasizing the role of automation and thoughtful product design.
The challenge of reshoring manufacturing is not unique to Keen. Major brands like Nike, Adidas, and Under Armour have previously attempted to develop new manufacturing technologies in the US, but these efforts ultimately did not succeed. Even Keen only assembles 9% of its shoes in America, as scaling production remains complex and costly.
The history of American manufacturing is marked by a dramatic rise followed by a gradual decline. After World War Two, US factories produced a wide range of products, providing jobs for millions and supporting a robust middle class. However, as globalization accelerated in the late 20th century, many industries relocated overseas in pursuit of cheaper labor and looser regulations, hollowing out America's industrial heartland.
Shoemaking has become emblematic of these changes, with approximately 99% of shoes sold in the US being imported, mainly from China, Vietnam, and Indonesia. The domestic footwear supply chain is nearly non-existent, with only about 1% of shoes sold made in America. Pepper Harward, CEO of Oka Brands, which still produces shoes in the US, is familiar with these challenges. His factory in Buford, Georgia, crafts shoes for brands like New Balance and Ryka, but sourcing affordable parts and materials domestically remains difficult.
For companies like Keen and Oka, manufacturing shoes in America requires patience, investment, and innovation. Harward expresses skepticism about whether protectionist policies can drive a significant return to local production. He believes that even with high tariffs, only about 6% of production might realistically return to US soil.
Keen's plans, initiated over a decade ago, are now coming to fruition, reflecting the kind of patient investment possible in a family business. "We are a private, values-led company," Perumal explains, highlighting their ability to make long-term decisions without the pressure of quarterly results. Despite these efforts, reversing decades of globalization remains a formidable challenge for the modern manufacturing landscape.