Shoe maker finds “New Balance” with Innovation & Technology

Can a manufacturer make quality running shoes in the U.S. and prosper? Jim Davis, owner of New Balance thinks so and he's willing to spend $15 million or more a year for high-tech equipment and employee training to do it.

Davis' company makes about 25 percent of the $1.1 billion total output of his New Balance shoes in the U.S. with 1,200 American workers in five factories. He wants to boost that percentage to the 70 percent of total production that his company once had in the U.S. before huge increases in demand prodded New Balance to follow many of its competitors overseas.

New Balance says it can stay competitive with Nike and Reebok with innovations such as automated sewing machines that enable his five- and six-member employee teams to turn out a pair of shoes in 24 minutes, at a cost of $4 per pair. By contrast it takes individual Asian workers about three hours to make the same shoe which retails for $70.

According to Business Week Magazine, Davis' U.S. factory workers make $14 an hour in wages and benefits while workers in Chinese shoe factories earn 40 cents an hour. New Balance says the $1.30 cost advantage in Asia for a shoe that sells for $70 is insignificant because it's offset by the advantages of producing in the U.S. where New Balance can fill store orders faster and retool for style changes more quickly.

From AFL-CIO Label Letter