In August of 1997, my wife Kara and I embarked one of the most American of all American undertakings- we started our own business. The business was making boardshorts for kayakers, and it was a pretty simple affair in those first few months- I was sewing the shorts and Kara was setting the snaps and grommets, as well as answering the phone and figuring out the money. Our business assets consisted of 5 sewing machines and a few patterns traced out on cardboard. But it was a business in the most traditional sense of the idea: we were making things and selling them. 15 years later Immersion Research Inc is still around and, among many other things, we still sell shorts. We’re also still based in the small town of Confluence, PA, but we’re a lot bigger, and as you might expect our business has changed tremendously over the years. You could measure this change in a lot of obvious ways- how much we sell every year, or how big of a building we occupy, but beyond that, there has been one seismic shift in how IR operates that tells more about not only our growth, but how we think about our business and reflects so much about choices that we made as we grew. This shift is in how we make the products we sell.
The simple story is that we used to make everything ourselves, but nowadays we make most of what we sell in China. On the most basic level, this change makes it difficult to even describe what IR is. When I’m asked my occupation on an application, the first thing that comes up as an obvious answer is “manufacturer”, but thats not really true any more. “Designer” isn’t quite right either. We’re heavily involved with both of those activities, but neither describes us. The topic is also a source of constant interest for our customers. Hardly a week goes by without someone asking me or someone at IR the simple question: “where is your stuff made?” Sometimes people are just genuinely curious about production, but more often than not, it’s a question meant to size up the moral integrity of our business. It’s a frustrating situation to encounter, mostly because I have seen all sides of this debate first hand and know the issue is not one argued using broad philosophical arguments about values. The full story of why we outsource production is primarily a direct reflection of what we wanted IR to be, and how we negotiated the playing field and rules of the game set before us to accomplish that. But beyond that, Kara and I have also learned a tremendous amount about ourselves (both good and bad) and have seen first-hand some of the most serious challenges that face our country as a nation of people who traditionally have always made things. In many ways our story encompasses all of the intricacies of outsourcing in a microcosm.
In the beginning, though, I just wanted make shorts. I had asked for a home sewing machine one year for Christmas, and somewhere around 1995 or 1996, I had learned enough about sewing to try and tackle something more ambitious than the fleece hats and socks I was turning out by the dozens. I had always worn boardshorts (the linerless kind you wear surfing) while kayaking, and they seemed like the next logical step. They weren’t too hard to make, and they were not only more useful that fleece socks, they looked a lot more impressive as a finished product. My strategy was pretty simple. I cut up a pair of shorts I liked and traced out the individual pieces on cardboard to make patterns and then began the arduous process of trial and error while I figured out exactly how these patterns went back together. A few weeks later and about 30 pairs of shorts that looked like something out of high school production of Robinson Crusoe, I had made one pair of shorts that weren’t too bad. I was completely enthralled.
Almost immediately, I wanted to take it to the next level, and like a carpenter, I realized that I might need better tools. After some phone calls to an industrial sewing machine warehouse in Pittsburgh (this was before the internet, when research was a bit more arduous) I found out that to make a pair of retail- quality boardshorts, I need no less than 5 different kinds of industrial sewing machines. While the number of machines needed to make such a simple product was almost shocking, I admit that I was secretly thrilled. Everything about it was exciting- not only that I could turn out something with my own hands that looked like it was right off the shelf in a Patagonia store, but that I would have to learn to use all of these cool machines to do it.
The next step was to somehow convince my wife Kara that it made sense to get these machines, and I pitched it by saying that we could start a business making shorts for kayakers. I honestly didn’t really believe that it made any sense at all, but I really, really wanted to figure out someway to justify buying those machines, and a “business” was as good a scheme as any. Kara, to her her credit, was dubious, but luckily for me, I think we were both ready for some kind of change in our lives. Besides learning to sew, I was basically a kayak bum. Or a “kayak instructor” with a penchant for travel. In the winter of 1996, for instance, following my 7th season teaching kayaking I spent 2 months kayaking Borneo followed by another couple of months in Mexico. Kara was at the same time wrapping up an 8 year stint on the US Kayak Team and dealing with a fraction of a second miss on the Olympic team. It was a great life in many ways, but at the same time we were getting tired of being dirt poor, and I think we were both ready for a new challenge- one that perhaps offered more of a future. We really had nothing to lose, beyond whatever the cost of the machines.
My basic argument to her was that we had both seen that kayaking was attracting younger and younger people, and we could make a brand of surf-type kayaking apparel for this new demographic. It actually wasn’t a terribly far-fetched idea- and the more I made my case, the more I actually started to believe it. Kara must have also, because in the summer of 1997, we decided (or more realistically, Kara agreed) to spend every penny of our life savings- around $5000- on industrial sewing machines to make shorts. For a living. We also agreed to rent out some space across town in an old Ford garage. Keep in mind at that point I had made one (1) pair of shorts, and we knew absolutely nothing about industrial sewing machines, much less pattern making or anything else related to running a business, but my thought was why should those details stop us? Once I could make a pair of perfect boardshorts, everything else would fall into place.
Every business needs about a dozen lucky brakes to survive, and I think if you don’t come from money (and Kara and I truthfully do not come from money) you really need to double that number. It turns out deciding to start a youthful, lifestyle-driven kayaking apparel company in 1997 was not only our first stroke of good luck, but perhaps the biggest and most important one of our company to date. While I had casually speculated that kayaking was getting younger based on the students I was teaching, I was in no way prepared for what happened to our small sport between 1997 and 2002. It was a change that not only completely altered our sport, but also almost certainly saved IR from probably the most poorly thought-out business plan of all time.
It turns out that along with getting younger, kayaking was getting a lot cooler and as a result, much, much bigger. What had traditionally been a sport that you did with your Dad and the rest of the canoe club was starting to look a lot more like surfing or snowboarding. Movies like “KAVU Day” were suddenly portraying a distinct kayaking lifestyle that was based on travel to exotic lands and hucking huge drops and partying- an endless summer. This was augmented by the new generation of playboats that were absurdly short and had planing hulls- crafts that not only looked like surf and skate boards- but also allowed for tricks with names ripped right out of Transworld Skateboarding. As a result, participation was also exploding, with some stats showing 400% annual growth. Kayaking companies like Dagger, Perception and Wavesport were starting to offer dozens of new whitewater designs every 8 months- a stark contrast to boats from a different era like the Crossfire or Dancer that were on the market for years and years with little competition. Even national ad agencies picked up on the trend- the generic symbol in TV commercials for “youthful outdoor sports” became a whitewater kayak.
Maybe it was the excitement of starting something new, or the feeling that we were part of a new generation of kayakers that were changing the sport, or maybe even that we weren’t getting in the water every single day (it gets old, believe it or not), but those first few months were glorious. Kara was answering the phones and taking orders, ordering fabric and paying the bills for part of each day, and setting snaps and grommets and trimming shorts for the rest. For my part, I was sewing all day, totally engaged on how each machine worked, how patterns folded together to make a three dimensional object, and how to handle fabric in just the right way so it looks great coming out of a sewing machine. It was simple work, but it was our own business that we started ourselves, and on top of it all, there was also this unmistakable feeling that we might be onto something big. We were afraid to say it, but we were both thinking this is how Burton started. I believe everyone in our industry thought that then- the growth was incredible.
By the end of the summer it was becoming clear that we needed to take the next step and hire some help. Kara and I were working our ass off with no end in sight, and something had to give. So we brought in our first sewer- Bea McClintock. Three months later, we hired her daughter, Lisa. and then we hired another, and another. By the summer of 1999, we had about 8 people on payroll, and our product line had grown to include rash guards- our well known “Thick and Thin Skins”. We also had bought more machines, and what was once a source of immense curiosity was now turning into more of a chore. We had bought more machines to accommodate the new sewers, as well as new machines to make the new types of garments. Gonna make rash guards? OK- you’re going to need a flat seaming machine, a cover stitch and a serger. You’d better make that two sergers because production will back up there if you have just one. These machines can require a lot of attention, and even though I was still trying to sew full time, I was also the head mechanic. And some of these new machines- particularly the flat seaming machine- could be nightmares. I could spend 8 hours at a pop trying to get that machine sewing properly.
As we started this almost absurd rate of growth, we were buoyed by an unusual aspect of Confluence, given how small it was. From the mid-70’s until the early 90’s, Confluence had a sewing factory called “Faymore” that employed almost 200 people. It was a contract sew house- meaning that, like most all sewing factories, they didn’t make their own brand of garments. Instead companies like Lands End and LL Bean “contracted” out jobs to Faymore if they could offer a competitive price. It was housed in the old High School building, and for the years it was open, it was perhaps the golden age of Confluence. The sewers there- or “operators” as they are called in the industry- were part of the Dickensesque sounding International Ladies Garment Workers Union (ILGWU), but the jobs they had were good ones- in many cases these jobs were a real bridge to the middle class. And this factory employed a giant percentage of the town’s population.
This golden age, though, came to an abrupt end in 1992 when NAFTA passed. Suddenly the bids that Faymore offered weren’t nearly as competitive as they used to be. The owners moved a majority of their business to points South, Faymore shut down, and the high school sat vacant. This was a trend seen all over the country- one you can measure by looking at the fate of the ILGWU over the years. In 1969- the peak of domestic sewing- the ILGWU had almost 500,000 members, but by 1995, a shrinking ILGWU joined with the larger Textile union for a combined 250,000 members. Later on, in 2004, the shrinking union merged again with the restaurant and hotel workers.
In 2000, though, we were bucking that trend. In the beginning of that year we passed 20 employees- most of whom were sewing machine operators- and we needed to move to a bigger place. There was, of course, an obvious answer. The Faymore factory had been shut down for 8 years, but it was still set up for sewing. The power, air lines, everything you’d need to walk in and start sewing was still sitting there. In fact there were still dried-up coffee cups and half-eaten candy bars left on some of the machines. The owner was a gentleman in his late 70’s or early 80’s who had once owned sewing factories all over the area, and I think he was intrigued by the idea that we were hiring some of his old employees. After a brief phone call and lecture about the elevators, he agreed to rent us the whole building.
On the day that we moved into the Faymore building our new landlord came down to check it out. We had arranged a moving truck to bring all of the machines across town, and were frantically trying to figure out how to place everything and get it all wired and working, so we were somewhat oblivious of our landlord strolling around the cavernous, 18,000 square foot gutted, 30’s-era high school. I was also feeling really, really damn impressed with myself, and I was completely caught up in the moment. In a couple of years we had built this business and in the process become the pride and joy of our our community and local economic development agency by hiring all these people. Not just any people either- we were hiring sewing machine operators, showing how manufacturing jobs were still viable in the US. Not week went by where some local paper wasn’t writing an article about us, or we were asked to speak to a class about manufacturing. Nevermind that we were one of the fastest growing business in paddlesports. Moving into the Faymore building was our manifest destiny and we were going to do it right this time. We were going to save the town AND reinvent kayaking.
After a bit our landlord came up to me and started talking about some details about the power and again with the elevators, which to be honest, were very sketchy. Then he started to ask me how many people I was employing. Perhaps figuring that by hiring some of the people he had let go we were relieving some guilt, I said 20, but was quick to add that there was no end in sight. “No end in sight. Huh.” was his reply. Not quite reading the situation correctly, I followed up with “Yeah- I love the idea that we make things, and the fact that we make stuff for our own brand rather on a contract basis gives us an edge that a contract sew house might not have. Besides, I feel we’re doing the right thing hiring all of these people”. I remember saying these words because it was the exact same thing I had said dozens and dozens of times to bankers, economic development people, students- anyone who asked about our business. It was my standard PR talk. “Well”, he said, “If you want my advice, I’d wouldn’t make any promises. You never know what can happen”.
I can’t recall my exact reaction to this but I know what I was thinking – Whatever. This was coming from a guy who had shut down 5 factories in the area, including the one were standing in. Besides, he made simple stuff sweaters and dresses, so of course he was getting crushed. We made kayaking gear which was really hard to do, and more or less impervious to off shore competition. In any event we moved into Faymore that day and started a real factory. Three phase power. Air compressors. A full set of machines that could make almost everything under the sun. In the summer of 2000, nothing could convince me that were on the wrong path. Kayaking was exploding, and we were right in the middle of it. Companies like Hobie were calling me to ask about licensing deals, and we started sponsoring gigantic cash prize events, like the IR Triple Crown. On top of all that, we now occupied the largest building, and we were the largest employer in Confluence.
If things had remained this good, there wouldn’t be much of a story. We’d be rich, and our factory would look like the one Steve Martin runs in “Father of the Bride”. In the end, this optimism and excitement lasted for about 12 months after moving into Faymore before reality started to settle in. By the summer of 2001, we had over 40 people working at IR, with well over 30 of them sewing full time. We also had expanded our line considerably. With the help of Jess Whittemore, we had added skirts and drytops to our catalog, along with a whole host of accessories. However, despite the excitement of the new products and the insane growth we were experiencing it was becoming clear that what we were doing was not only unsustainable, but increasingly it was making Kara and me miserable. In the beginning, when it was just Kara, me, Bea and Lisa and a couple of other sewers, there was a real sense of teamwork- the absurdity of what was happening was energizing, and we felt like we were in it together. We were also on top of things- we were the right size for the amount of demand we had. By that summer, though, not only was that sense of camaraderie all but gone, but it was also clear that the basic structure of IR wasn’t working, and it was going to get worse.
The first issue was that with 30-some people sewing at IR, my job had almost nothing to do with kayaking gear- I was fixing, adjusting and setting up sewing machines more or less full time. I had been trying to find a mechanic for the past year with little success (that trade had left with NAFTA evidently), so I ended up enlisting the help of an out-of-work, mechanically inclined bike mechanic to fill in. Even with the two of us circling the room, we could barely keep up with the demands. Only after everyone left in the evening could I even begin to start to worry about other things like sales and product design. The machines- which once were an object of such keen interest were now a complete albatross around my neck. In addition, these machines were expensive. Everytime we wanted to add a feature or sew something a different way, there was a real chance we would be spending over $3000 on a new machine to do it. Over the course of 4 years, I estimate we spent around $75,000 on machines.
The second issue was a deep, fundamental misunderstanding on Kara’s and my part about the difficulties of running a factory in Confluence. When IR was small and growing, I had a very idealistic and naive understanding of how we would run IR, and it seemed that we really had walked into the perfect situation. A depressed, small town in Appalachia, an empty sewing factory, and dozens and dozens of trained, unemployed sewing machine operators looking to get back to work. We would build it, and they would come, happy to be back at Faymore and a new Golden Age. But the truth was much more complicated. For one, when Faymore closed in 1993 a lot of of the people who worked there moved on to new types of jobs. Certainly anyone who had any exposure to the news saw that sewing jobs (along with every other low tech manufacturing job) were flooding out of the country, and the women at Faymore had a front row seat for that spectacle. To wait around for the sewing factory to reopen was pointless. By the time we moved into Faymore in 2000, Confluence had returned to pretty much the exact state it was in before Faymore opened- a small Appalachian town plagued by unemployment and no opportunities.
If we had been in a larger city, we might have been able to cast a wide net to find new employees, but Confluence is like a fishbowl on Mars- its a very isolated, small town. So when it came to hiring large numbers of people (40 people, after all, was about 5% of the population) we really had to take the good with the bad. The good in many cases were women who worked at Faymore and had done well, but for whatever reason had not needed to move on when it closed. The bad, however, were just what you might expect from any small town with almost no employment opportunities. As we grew and the “good” list was more or less tapped out, the prospects of who we were going to hire going forward were pretty dismal. In addition, the tired adage about the weakest link was holding true, and the quality of our products were always compromised by the worst employees. This, of course, is not a new problem for any business, but often times we would want to let a bad employee go, but we were stymied about how to replace them. The choices were usually limited to another 35 year old with no job experience lasting more than a few months, or me- which by then was out of the question unless it was an absolute emergency. We were also driven to simply get product out the door- by that point Kara and I had borrowed way more money than we could ever afford to pay back if IR fell apart- and there was a ever-present, crushing pressure to ship product every day. We knew keeping a bunch of lousy employees on board was terrible for morale, difficult to manage and hurt quality, but as long as things were limping along, we really weren’t in any position to change it.
In either case, good or bad, there was also a social work aspect to the job that was a real grind. I wish there was some other way to put it, but having 40 women from a small town working under one roof was really tough. These ladies not only all knew each other, but also knew everything about everyone in their extended families- which all seemed to intertwine at some point in the not-too-distant past. Everyday new tensions arose out of new fights, old fights, fights between people’s relatives, fights that went back years. On top of that, I could see high-school cliques re-forming right before my eyes. People would team up to make the life of another operator miserable, or want to work next to each other, or get mad if someone got moved to another part of the sewing floor. More often than not, the task of keeping production moving had nothing to do with how a machine was functioning or how a particular operation was done, but rather making sure that we had a good seating arrangement. Kara- who had grown up in Confluence and had seen this same drama play out with the exact same cast her whole life-was particularly sensitive. I think that she expected after she left Turkeyfoot High School in 1987 she would never have to deal with this ever again, but lo and behold she was right back in the middle of it.
The truth is that the right person probably could have run that factory and run it well- after all, Faymore was built using the same raw materials- but that person was not me. Not only did I not have the right personality to wrangle the daily- no minutely- details in getting 40 people to work as a team, I never wanted that job to begin with. I started IR because I wanted to make kayaking gear- which was true- as long as it was just me making it. The lesson I was learning was that making something for yourself and making something for lots and lots of people are as unrelated as any two jobs on earth can be. It was starting to be clear why companies like Patagonia, Marmot, the Gap- pretty much every clothing company you can think of- really do not own any sewing machines.
Above and beyond the questions of workforce and job descriptions, though, there was a real time bomb ticking in the way that we were doing things that had to be dealt with. Understanding the problem requires a basic knowledge of how the ordering in our industry works particularly with what we call “preseasons”. Kayaking like most outdoor sports is seasonal with the bulk demand from our product coming in the Spring and early Summer. Moreover, IR like most outdoor gear manufacturers sells over 90% of its products not directly to customers, but to retailers. The last aspect of this supply chain is the length of time it takes to prepare all of these goods to get into the hands of retailers in time for the spring rush.
This whole system is tied together by advanced orders placed by retailers called “preseasons,” and it starts in August at the Outdoor Retailer show. Here, outdoor manufacturers of all types show their products for the upcoming season to 10,000 retailers from all over the world. The retailers then have until about October to place an order for the next year. Note that even though a retailer may place a preseason order in October, in most cases this order won’t ship and won’t have to be paid for until the spring. These preseasons may represent 60% or more of what the retailer may buy for the entire year. It’s a good system- the manufacturers learn what they need to make and can start production early, and the retailers get a discount for placing these orders early, along with the knowledge that regardless of how popular an item is, they are almost guaranteed to get at least what they preseasoned.
As IR grew, we ran into a very fundamental problem. We were running out of time to make all of these preseason orders. If IR’s preseason order deadline was Oct. 1, that gave us until about February before stores in the South started wanting paddling gear. Take out holidays for Christmas, New Years and Thanksgiving, and you see that it’s not a lot of time to make literally 60% or more of what we need to make for the entire year. Given our situation, our only option was to start making inventory earlier- before preseasons orders were due. By 2001, we were starting to make inventory for 2002 as early as August on some products- way before we had any idea how popular they would be. In addition, consider that we had to buy the raw materials for these products, and in the case of some materials like fabric for paddling jackets, this could require three months to make.
Besides the guess work involved with doing this, there was a huge problem with the cash cycle. Look at it this way. In order to make enough paddling jackets to deliver for 2002, we really need to start ordering fabric in the spring of 2001. The fabric delivers in August, and we start paying people to make jackets. In October, the preseasons come in, and hopefully we guessed right on the number to make. If we made too many, we wasted money, and if we made too few, retailers are going to be furious at us shorting them on a preseason. In May of 2002, many of these jackets head out to stores in Colorado, where the retailers have “terms” or credit- they can pay us 30 days after delivery. Which means that if everything goes perfectly, we get paid in June. A full year (and then some) after we started paying for these jackets. On top of all of this, we were borrowing from the bank in the form of a “line of credit”- much like a credit card- that needed to have a zero balance at some point in the year. We were paying interest on all of this money that we were borrowing for over a year, and we would need to start building for 2003 before we had even collected for 2002.
You don’t need to be a financial whiz to see that this was going to collapse. By the fall of 2001, we had to really consider our options. The first would be to hire 150 people for the 3 peak production months and let them all go for 9 months, and re-hire them again. This made no sense on every level. The other option was to pick up different kinds of products that would round out our production year so we could keep around 75 people working full time, year round. This also was not attractive- not only did the idea of expanding our sew floor at that point seem a step in the wrong direction, but financially, we were in no position to borrow more money for a new venture. Moreover, the options were risky at best. The first thing that comes to mind is ski wear, but skiing is so much more mature than kayaking it makes it almost inconceivable that we would be able to break into that market.
We also could have started to fill military contracts, and looking back, this was the most reasonable option if we wanted to keep running a sewing factory. To be honest, if we had taken that route- given what happened with the US military over the following 10 years- we might be very, very wealthy. What made this possibility even more real was that we were in Representative John Murtha’s district, and any political person can tell you that he brought untold millions in military contract work to our district as the chair of the House Appropriations Defense Subcommittee. Indeed, as word got out that we were “revitalizing the sewing job market” in our area, we were frequently solicited by guys putting together bids on military contracts- everything from socks to backpack straps to bullet proof vests.
Ultimately, Kara and I turned them down. The primary reason was that we still wanted to make kayaking gear and maybe even more importantly- create a brand and all that entails. While making socks would be easy enough, it didn’t sound that interesting. Also, and this seems so ridiculous now, we thought that kayaking would continue to grow, and it wasn’t out of the question that IR might be a household name in the not too distant future.
The last option, of course, was to have our stuff made somewhere else. By then, we had come to realize the shortcomings of trying to run a sewing factory to maintain a seasonal business, and how farming out the work would be the answer to so many of the problems. A contract sew house may have 1000 people working on the floor, and they take your job- say for a 1000 drytops, and they make them all in 2 weeks. Done. See you next year. They can also make another 5000 rash guards at the same time. Essentially, a contract sew house could make our entire inventory for a year over the winter- and to top it off, we wouldn’t have to pay for it until it ships to us. The cash cycle collapses from 13+ months to 3 or 4. Lastly, and this looked sweetest of all, someone else would fix the machines and manage the sewing floor.
Honestly, our first instinct was not to look to China. China seemed huge and difficult and expensive. We instead tried to find local- or at least domestic sew houses. To be truthful, this was not out of a sense of patriotism, either; we just thought given how complicated our products were, it would be easier to make them somewhere easy to get to. The problem with this was that besides the handful of factories specializing in items protected by the military or a lobbying group and huge tariffs, no one was sewing anymore in the US. I recall calling one factory in Pennsylvania, and after talking with the owner for a few minutes about what we were doing, he stopped me and said “Son, were going to go out of business within the year. I’m gonna save you the trouble and say thanks but no thanks”. Our second choice was to look to Latin America- once again, not for any practical reasons, but more because we liked kayaking there. After a good deal of hunting around, we found a factory in Ecuador to make shorts for us. It’s a long story for another time, but for now lets just say it was a fiasco. Besides cultural differences on how we define “on schedule”, virtually none of the raw materials we need to make kayaking gear are made anywhere close to Ecuador, and this resulted in long, Kafka-esque waits in hot customs offices trying to clear rolls of fabric coming into the country. The next obvious option was China.
One of the most common questions we get when people find out we make stuff in China is “How did you find a factory?” with the implication it’s not only very difficult, but fraught with potential scams and insurmountable cultural issues. The reality is that it was incredibly easy. In 2002, with pressure mounting to outsource at least some of our gear, I called our friend Bob Holding at Lotus (by then owned by Patagonia) and asked him where they made some of their jackets. He gave me the name of a Hong Kong based company with factories in Southern China, and after a few emails, I was on a plane to Hong Kong with patterns and some samples. We were on our way. Ultimately, the trail to making garments in China (and I am guessing pretty much everything) is a very well-worn path. If you wanted to make a whole bunch of something, and you have the money and the instructions on how you want it made, they will make it. It’s really that easy.
Ten years later, we have done work in at least a half a dozen different factories across China, Vietnam and Taiwan, and we’re starting to get good at it or at least learn all of the ins and outs, and how to address the major problems you face when you make expensive, technical garments on the other side of the world. I honestly can say that the job we do now isn’t easier than running a sewing factory- designing, managing the production of, and servicing kayaking gear is a tremendous amount of work. You also lose a tremendous amount of control when you outsource production. When you run your own factory, you can micro manage every step of every process, constantly tweaking things to ensure quality. When you make stuff in someone else’s facility- particularly in a large factory far, far away, you end up simply making the best instructions possible and hope for the best. But on balance, I can say without question that it’s a far better job for us. Kara and I were never cut out to run a sewing factory even if it was a possibility.
During these ten years we’ve also gotten a lot of flack for making gear in China, and, having told our story, I’d like to make a few points in our defense and perhaps clear up a few misconceptions. The first thing I’d like to point out is that making kayaking gear in China is not cheaper at least not for us. Most of the cost of what we make comes in expensive raw materials from Japan, Taiwan and Korea, which overshadows the savings in labor. Throw in travel, taxes, and the almost inevitable small repairs we have to make to garments when they come in, there is virtually no cost savings. There has been a lot of talk of manufacturing jobs coming back to the US due to this same issue, but as of yet, this trend has not really touched low-tech manufacturing jobs like sewing.
We also frequently get compared to other companies in our industry who still make products in the US. The response I have to that is simple: each company comes from a different set of circumstances that have to be considered. To begin with, many of these companies are much smaller than we are. There was a time in IR’s growth where we were completely sustainable. Our products we simple enough and the order volume was small enough that we could do it all in the time allotted to us. But for better or worse, we grew past that. On the other hand, the larger companies we are compared to are all in bigger cities with a much, much larger labor pool and, to be perfectly frank, sewing labor in the US nowadays almost exclusively comes from a non-white population- an option not available to us in Confluence. In addition, these larger factories also make products outside of paddlesports to keep their floor busy year-round. Don’t misunderstand me, I have a tremendous amount of respect for the companies that do this, but Kara and I ultimately decided to stay focused on paddling gear, and this is something that is apparent in the DNA of our brand. We are kayakers, we hire kayakers, we deal with kayaking all day- thats all we do. I strongly believe that if we were still running a factory, we would be a very different kind of business even if kayaking gear was still in the mix. The truth is that many of the larger paddlesport companies that have over a 100 people don’t have but one or 2 paddlers on their entire staff. This is not a bad thing- for one thing they’re a hell of alot better at running a factory than we are- it’s just not who we are.
The last issue we are saddled with is China’s record of poor labor conditions, human rights and environmentalism. The truth is that China’s labor and environmental situation is as complicated and multifaceted as it is anywhere else in the world, and I won’t pretend that I can untangle it. Yvon Chouinard, the founder of Patagonia, has written extensively on this subject particularly on the environmental side of things and I’d offer his book as a good place to start on this subject for those interested. I can, however, offer a few brief observations. For one, Patagonia still makes many, many of it’s products in China. Secondly, we have made products in a factory partially owned by Patagonia, where the employees were protected by the Human Rights watch. This factory had the highest turnover of any factory we ever worked in- simply because the people wanted more hours of work than allowed. Lastly, we have worked side-by side with Chinese workers in their factories for countless hours over the past few years, and have never seen anything resembling a sweatshop, or even close to underage labor. I’m not saying these problems don’t exist;they’re just not ubiquitous.
Of course, China has huge, almost insurmountable problems just like we do here in the US. Even to an untrained eye, you can see that the cost of China’s billion-person industrial revolution is not only creating the largest middle class in the world but also an environmental apocalypse. I have travelled all over the east coast of China, and I’d like to think that if most Americans could see the environmental cost of cheap Chinese made products, they’d have second thoughts about what and how much they buy. And in the US, I have seen what the loss of domestic manufacturing has done to the US economy first hand at Faymore. My god, as a nation we make make almost nothing anymore. The largest IPO of the decade was Facebook, which makes nothing and employees almost no one. What happened to the days when a car company was the most valuable stock on the market? In many ways, I think we are seeing the Pax Romana in the US: the long slow end to an empire driven by a country whose culture is based almost entirely in leisure.
How to fix this is anyone’s guess. As far as we’re concerned, the first step would be to find a highly skilled and sophisticated sewing factory in the US that was environmentally sound and could assemble our products at a cost that is commensurate with our demographic’s disposable income for sporting goods. In addition, our consumers would have to greatly reduce their expectations of paddling gear, for many, many of the products they currently demand are made with materials that are so nasty to produce they can no longer be made in the US anymore. This is clearly not a likely scenario.
We started IR only 15 years ago, but the sport was so much simpler and smaller in those days. I think the sad truth is that just like starting a computer company in garage, I’m not sure that you could start a paddlesports company on a home sewing machine in the basement anymore. In 1995, a urethane coated paddle jacket with one velcro pocket and a sewn-on woven label would put you on par with the best in the business. Nowadays, customers and buyers demand unbelievably sophisticated waterproof breathable fabrics with custom zipper pulls, stitchless pockets, or even small things like color-matched laces. All of these things require a huge capital investment and an enormous knowledge base to put together, not the kind of resources two kayak bums have at their disposal.
We were lucky though, and we were able to start IR with really nothing, and see it through to where it is today: a great company managing a lot of money and very sophisticated products with customers all over the world. I’m proud to say that we’re one of the most recognized brands in paddlesports. One of the greatest and most nostalgic aspects of this, though, is that at one point Kara and I made everything we sold. Just the two of us. And even to this day I still see shorts made from those years, and when I do, no matter who it is or whether I know them or not, I always tell them that those shorts were made when IR was just two people. Its a source of tremendous pride. I can’t tell you how many times I have wished for a simpler life like that: a job where we could make great garments one at a time, no China, no employees, no bank loans, just the two of us, and some sewing machines. It would, of course, involve a fantasy world where we could order 50 yards of fantastic custom-made fabric at a time and all the machinery needed to make these things cost almost nothing, but it’s still a great dream, and a reminder of who we are and how we started.
John Weld has been kayaking since 1979, and currently runs Immersion Research with his wife Kara. He blames Tom McEwan for most of this.