Kangol hats are best known for covering the heads of celebrities like Samuel L. Jackson, Gwen Stefani and LL Cool J. But last year, they generated buzz for landing a new hot spot: an American factory.
Bollman Hat Co., the British brand’s American maker, used a Kickstarter campaign to help move production from Guangzhou, southeast China, to Adamstown, Pa., about 60 miles from Philadelphia. The 149-year-old hat maker, which already made some styles in the U.S., hired 20 workers and now makes about a quarter of its Kangol hats in its hometown.
At a time when American manufacturers are under pressure to “reshore” their overseas operations back to the U.S. and labor costs are on the rise in China, Bollman predicted its move would win plaudits for creating jobs at home without hurting its bottom line.
“We make decisions with our heads and our hearts,” said chief executive Don Rongione. The son of a Philadelphia overcoat cutter, Mr. Rongione said his father taught him “the importance of buying and wearing things made in this country.”
But the company has struggled to turn a profit on its knitted Kangol hats made in Adamstown. Producing a hat in Adamstown costs 1.28 times more than in China, including international shipping. That’s in part because U.S. workers are paid $15.50 an hour on average, six times what their Chinese peers earned.
Finding American workers as fast and skilled as their Chinese counterparts has also proved challenging. U.S. employees are slower at certain tasks, such as joining the seams at the back of the caps. “Linkers” in Adamstown complete such work on 200 to 250 hats a day, compared with 350 to 400 by Chinese linkers.
“It takes time for you to do a very good, quality hat,” said Veronica DeLeon, a 42-year-old Kangol machine operator who started as a linker.
To address the skills gap, Bollman has invested in training. Using some of the $78,450 it received in two grants from Pennsylvania for the initiative, the hat maker brought in four experts to teach new hires how to use the Kangol machines, including two people from England who had worked with the original equipment.
The custom-made machines are particularly difficult to master. Ms. DeLeon said she spent about three months learning how to operate the equipment. But she added: “I love the challenge.”
Productivity and efficiency have improved over time, but Bollman continues to have a hard time finding candidates. Two linking positions remain open. “You don’t find people with these skills in the marketplace,” Mr. Rongione said.
Harry Moser, president of the Reshoring Initiative, an organization that promotes bringing manufacturing jobs back to the U.S., says Bollman’s hiring challenges are specific to company, and wouldn’t necessarily be faced by other firms moving operations to America. Last year, reshoring and foreign direct investment led to a net gain of 27,000 manufacturing jobs, according to data compiled by the Reshoring Initiative.
Companies that have shifted to American factories, however, say they have encountered hurdles, particularly around hiring and high production costs.
Todd Shelton, an East Rutherford, N.J.-based clothing manufacturer, brought production of his eponymous brand’s classic all-American styles to the U.S. from China in 2006. In 2012, he decided to move all manufacturing in-house.
Recently, when looking for an entry-level sewing operator, he wasn’t able to find a viable candidate. After a three-month search, he eventually redistributed the work among existing employees.
The lack of skilled workers interested in manufacturing is “a massive concern” for Mr. Shelton. Manufacturing workers “can’t just zone out on Facebook” but are committed to a task all day. “It’s a difficult job,” he said.
Higher labor costs, meanwhile, have pushed some labels to increase their use of technology. When making products in the U.S., “you’re going to have to invest in automation,” said Michael Araten, chief executive of K’Nex Brands L.P. The toy maker began to transition production to a Hatfield, Pa., factory in 2011, after manufacturing overseas for over a decade. It now makes about 90% of its toys, including Lincoln Logs and plastic Tinkertoys, in the U.S.
But automation isn’t as easy for apparel makers, whose processes are more difficult to replicate using automated technology, Mr. Araten added. “Don [Rongione] faces a unique challenge,” he said.
Mr. Rongione said the company met with robotics consultants but couldn’t find suitable hat-making equipment.
Bollman is employee-owned through a stock-ownership plan. Last year, the company was unable to make a contribution to the plan, and its 260 employees received no cash from profit-sharing.
Despite the challenges, Mr. Rongione says the company is filling orders it hasn’t been able to in the past, thanks to a greater control over inventory and domestic production that’s close to customers. Lead times for hats from China had been 110 days, whereas Adamstown can turn a hat around in “hours or days,” he said.
While some workers “may have some anxiety” about the trade off between more jobs and no profit-sharing this year, Mr. Rongione said, “you’ve got to make sacrifices for the long term.”
