As a teenager in Southern California, Taylor Shupe confidently declared plans to one day lead a global company, an ambition that would surely take him to China. By the time he was 15, he was studying Mandarin.
During a college semester in China, Shupe lined up a factory that could make products for his latest venture: selling protective cases for laptop computers.
Later, he oversaw production for a startup called Stance, which relied on factories in China to make premium socks in bold colors and surfer patterns with price tags reaching $25 a pair. His current business, a sock company called FutureStitch, also makes most of its wares in China.
But along the way, the world in which Shupe came of age yielded to something different. The era of globalization that shaped his early entrepreneurial forays was centered on China. The next phase, now unfolding, is dominated by hostilities between Washington and Beijing.
The animosity and suspicion were on full display this past week as a congressional hearing investigated the links between the Chinese government and the wildly popular social media platform TikTok.
“TikTok is a weapon by the Chinese Communist Party,” declared the chair of the House Energy and Commerce committee, Cathy McMorris Rodgers, R-Wash.
Shupe, 39, had dedicated most of his adult life to sending jobs across the Pacific. He is now intent on bringing them back by transferring production to a new factory up the coast from San Diego.
The trend he has embraced, known as reshoring, is the result of a series of momentous alterations to the global economy over the past decade. Labor costs rose in China. President Donald Trump slapped tariffs on Chinese imports. And President Joe Biden ratcheted up pressure designed to contain China’s economic might. In Washington, two political parties that agreed on almost nothing achieved consensus that China represented a threat to the American way of life.
By the time the pandemic arrived, multiplying the costs of transporting goods across the Pacific, Shupe was already feeling a sense of urgency to make products closer to home.
“With goods coming from China, there’s always going to be the Pacific Ocean that you have to transcend,” he said.
He opened his new factory, in Oceanside, in the summer. On a recent afternoon, 20 people were working there, wielding machinery to apply decorative designs to blank socks imported from China. But Shupe plans to more than double his workforce by the end of the year.
“We’re headed to a state of hyper-localization,” he said as he zipped down the freeway toward the factory in his Tesla, at alarming speed. “The big disruptions that have occurred over the past three years have definitely exposed the sort of risk that we didn’t think existed. Which brands want to set up new supply chains in China now?”
Shupe had to factor in the pitfalls of continuing to rely on textiles from China amid horrific accounts of human rights abuses against Uyghurs, the ethnic minority in the Chinese province of Xinjiang – a major source of cotton. American sanctions prohibited any products linked to Xinjiang from entering the United States.
“Made in China” has also become a branding liability.
First and foremost an entrepreneur, Shupe and his fellow startup founders divined that high-end socks were a retail frontier waiting to be exploited, a mass commodity that could be transformed into a platform for individual expression. But expression entailed values.
He understood that the Americans whose feet he was wooing were increasingly prone to viewing China as unsavory.
Manufacturing socks in the United States was part of a new narrative, one that puts his customers on the right side of history, investing in American communities and responding to climate change by limiting carbon emissions from the shipping of containers across the ocean.
“Consumers want to know where things are made more than ever,” Shupe said. “And how things are made.”
He had engineered an answer to that second question by teaming up with local government agencies to hire formerly incarcerated women, most of them Black and Latina.
People like Tasha Almanza, a mother of four who had served time for selling drugs, were at the center of the brand’s narrative.
“We are women working together,” Almanza said, adding, “This has given me the opportunity to rebuild my life.”
Shupe is leaning hard into this story of redemption. He is manufacturing socks but trying to sell social purpose.
“When you think about the employees that we’re hiring, who just so happen to be the most forsaken of any other employment group in the United States, and their stories of struggle, this is real power,” he said. “And everything else coming from China, not only is it hollow of those sort of social elements, it’s a net negative politically.”
You could buy into that framing, or you could react to it skeptically, divining opportunism. Either way, it signified a shift in the conversation.
Making products in the United States with American workers is gaining currency.
A National Trend of Reshoring
Most of the attention to bringing back manufacturing has centered on weightier concerns than socks.
Trump encouraged the production of COVID vaccines, in part by reserving supplies of key ingredients and equipment needed by domestic pharmaceutical companies. Biden expanded on those efforts, accelerating vaccine availability.
Biden maintained the Trump administration’s tariffs on Chinese imports, while opening a new front in the trade war: computer chips. Under the CHIPS and Science Act, signed in August, the president unleashed $52 billion worth of direct subsidies to encourage companies to produce computer chips at factories in the United States.
The government has also used tax credits to promote the domestic production of electric cars and batteries.
The result has been an industrial construction boom across the United States.
By the end of 2022, the chip industry had dedicated almost $200 billion to build and expand 40 factories in 16 states, generating 40,000 future jobs, according to the Semiconductor Industry Association.
A similar sum of money has been promised for American plants making electric cars and batteries, according to the Natural Resources Defense Council, an advocacy group.
For now, growth in domestic manufacturing is dependent on federal largesse.
“The national security concerns and the geopolitics with Taiwan – those factors are motivators,” said Eskander Yavar, a managing partner at BDO, an international business consulting firm. “If there’s no subsidies in place, I think reshoring becomes a slower roll.”
Yet this is the very point of the subsidies, Yavar added. They are designed to make it more attractive to invest in the United States, closing the often-considerable gap between the costs of producing goods domestically versus in a low-wage country.
‘Creating Something Here’
Even as wages have risen in China in recent years, the cost of making socks in California remains significantly higher than manufacturing in China, Shupe acknowledges. That basic reality is not likely to change soon.
Still, he is betting that Americans will ultimately prove willing to pay more for products made at home.
Raised in Orange County, on a classic, sun-splashed chunk of the Pacific Coast, he surfed and skateboarded as a kid, gaining familiarity with the sartorial concerns of people who sought to look cool and feel comfortable at the same time.
At 12, he was hawking boxes of chocolates and trinkets door to door. Then he worked as a delivery boy at a florist run by a man from Taiwan, using it as an opportunity to learn rudimentary Mandarin.
Shupe was raised a devout Mormon, though he is no longer an adherent. He was dispatched as a missionary to Taiwan, an experience he now views as a colonial enterprise, even as he appreciates what it gained him: complete fluency in Mandarin.
“The objective was to convert,” Shupe said. “I became very competitive.”
Two years later, he returned to the United States and enrolled at Brigham Young University. By the time he landed in China for an exchange semester at Nanjing University, he was eager to line up a supplier of neoprene for his business making protective sleeves for laptops.
He found a factory in southern China. The business grew, and Circuit City became his largest customer. But when the chain of electronics stores disappeared into bankruptcy in 2009, Shupe liquidated his inventory and shut down the business.
The same year, he joined with three other entrepreneurs to start Stance, a brand premised on the idea that socks were ripe for reinvention. They initially focused on skateboarders, using stretchy material that applied light compression to stop them from sliding down calves, while employing the designs of artists from Southern California.
They worked with a factory outside Shanghai to make their products. Shupe supervised production, initially flying every few weeks between California and China. But the lack of daily supervision caused trouble. After six perpetually jet-lagged months, he moved to China, living near the factory for six years.
When he started FutureStitch in 2017, he held on to Stance’s operation in China.
From the beginning, he had intended to eventually establish a factory in the United States, but a series of developments accelerated the timetable.
First came the trade war, and then the pandemic, adding cost and delay. A single COVID case in 2020 at his factory in China forced the entire workforce to quarantine, shutting down the operation for three weeks.
FutureStitch has contracts to make socks for Stance and other brands. Every month, it ships 20 to 30 containers – each 40 feet long – to Southern California from China. But the costs of transportation multiplied. The time needed to get products to market increased to 10 weeks from three.
This was especially troubling given Shupe’s fixation with customized goods. He was pursuing plans to release socks with images of events like the game-winning shot in the NBA Finals and the triumphant horse crossing the finish line at the Kentucky Derby.
“You look at the moment, the heat of the meme,” he said. “By the end of the month, it’s not even a tenth what it was.”
Here was the impetus to set up the new factory in Oceanside.
His interest in social justice, combined with more pragmatic staffing considerations, prompted him to recruit women who had spent time behind bars.
Many employers avoid hiring people with criminal records, viewing them as risky. Shupe saw the potential for highly motivated employees who had already demonstrated resilience. His workers were uniquely invested in their jobs.
“We have to be here, or we go back to jail,” said Almanza, 44, one of the factory’s first hires. “ We’re working for a bigger purpose, because we’re trying to change our lives.”
She had previously been a phlebotomist, drawing blood at a hospital, where she earned nearly $28 an hour. Then a man she worked with began stalking her, she said. She filed a sexual harassment complaint and was fired for poor attendance, she said, even though she had been missing shifts out of fear for her safety.
Suddenly jobless, she lost her apartment. She had struggled with drugs earlier in her life but had been clean for 17 years. She relapsed, and then resorted to dealing meth to feed her family, she said.
In June 2021, she was arrested and charged with conspiracy to distribute. She spent two months in a county jail, and two more at a federal detention center, pleading guilty in exchange for a sentence of a year of supervision.
At the government office where she applied for cash assistance, someone told her about FutureStitch. She applied, was hired at $20 an hour and was soon promoted to supervisor.
At the factory, she pilots a forklift and participates in yoga classes taught by the head of human resources, Sarah Porter.
While many hourly workers in the United States must endure bosses who schedule shifts with little notice, upending family life, FutureStitch has turned the equation around. Employees can give notice as late as a day in advance if they can’t work. They are excused to attend meetings with probation officers.
“I want us to be not just a place of employment,” said Porter, who is Shupe’s sister. “I want us to be a sanctuary.”
The experience of the single mothers on staff has also supplied some marketable insights, such as the casual torture of putting shoes and socks on small children with other ideas.
This was the genesis for his latest obsession, a cross between a shoe and a sock that has a strong sole, yet can be worn by itself and tossed in the washing machine.
On a recent morning, Shupe convened his design team to examine a prototype. The outsole will be made of Vibram, which is made in the United States from recycled materials. And the product could be fashioned through five stages of manufacturing, compared with the 80 or 90 involved in some footwear.
“It has all the right formulas for ‘Made in the USA,’” Shupe said.News Source: Yahoo