When it comes to making RV products, some suppliers that previously made accessories elsewhere are finding success by bringing production back to the United States.
Not only are these companies creating American jobs, but they now have stronger quality control, considerably lower shipping costs and more flexibility when it comes time to change how a product is designed or introduce new products to the market. In short, the companies are finding that the tagline “Made in the U.S.A.” rings with bottom line benefits.
“Over the past few years, businesses are increasingly reshoring their production,” says Jonathan Tsarong-Blomker, an auto industry consultant with Anderson Economic Group. “The U.S. will continue to see reshoring at least in part among its developed world peers.”
Indeed, a recent study shows that consumers are willing to pay more – and in some cases much more – for products made in the United States, something
U.S. manufacturers and retailers might want to consider, according to Tsarong-Blomker.
“Many people in the United States are willing to pay a significant premium for products that are made here as opposed to places like China,” he says. “The ‘Made-in-the-U.S.A.’ symbol is still a symbol of quality for many Americans and people are proud to support jobs here in the U.S.”
Two prominent RV suppliers are part of the re-shoring movement. Hydralift switched production of its motorcycle and ATV carriers from China to the U.S.A., while ADCO moved its production of custom RV covers from Mexico to California.
The two manufacturers say that, while making their products in other countries had some benefits – mostly in terms of cost – bringing production back to the United States has resulted in better quality control, increased sales, more products and added American jobs.
“Nothing is better than building in-house,” says Brad Michaels, general manager of Hydralift, based in San Clemente, Calif.
Hydralift, which makes small vehicle lifts that fit on the back of motorhomes and fifth wheels, spent four years manufacturing its lifts in China. There were benefits, mostly cheaper labor and related costs.
“When we were made in China, the cost was great,” Michaels says. “Really, all of it was pretty good and it was a hard decision to move away from China and come back to the United States. But the determining factors were that we could build in-house and have stronger quality control.”
Bill Robinson, an economist at the University of Nevada Las Vegas, says there is one chief reason why U.S. companies go offshore.
“Leaving the U.S. – if you intend to sell to U.S. customers – is all about costs,” Robinson says. “There are lower wages and benefits, fewer rules and regulations, possibly lower taxes.”
But there are challenges as well.
“It is harder to manage from long distance,” Robinson says. “Your trade secrets may not be secret for long and it may be tougher to find skilled workers, depending on the country when you move production overseas.”
Production in the U.S., he says, means that manufacturers are closer to their customers, their operations can be managed easier, production can be more nimble when it comes to responding to market conditions, and there is less likelihood of a disruption to product supply in case of an unexpected event.
“While there are reasons for shifting away from the U.S., there are costs associated with doing so,” says Tsarong-Blomker with Anderson Economic Group. “There is the cost of holding higher levels of inventory, shipping over long distances for long times, (import/export) duty, loss of control over products, and greater risks including less control, theft of intellectual property. This is not a decision that should be taken lightly. It’s not just about wages.”
For Hydralift, coming back to the U.S. also meant a pretty big reduction in shipping costs and the creation of 46 jobs for Americans.
“We wanted to build here,” Michaels says. “We always wanted to build in the United States, but the costs were so high that we could not compete. So we went off-shore.”
What Hydralift found out, however, is that lower costs aren’t everything.
“The quality of our lifts was pretty good, but we weighed the cost of shipping, because that has to be added to our cost, and quality defects also have to be put into your cost analysis – which is something that not everyone thinks about,” Michaels says. “But when someone picks up your product in a package and says: ‘Wow, that is quality,’ that says a lot. It’s a huge plus.”
What’s more, Hydralift now can take care of design issues or add enhancements instantly.
“We can immediately and quickly take care of things and you can’t do that overseas,” Michaels says. “When we had problems overseas, I would have to wait six months for the next shipment to make any corrections and then hope that they understood the change. Sometimes communication was difficult.”
Coming back to the U.S. wasn’t easy. It took about two years for Hydralift to make its return as it tooled up and made other preparations for its comeback. By 2010, the first U.S.-made lift rolled off the new assembly line in San Clemente, Calif.
“We had to ramp up things for a couple of years,” Michaels says. “We built our first 100 lifts in the U.S. and it was the best product that we ever produced up to that date and it has just gotten better, and better and better.”
Michaels says there was no cost savings in the move. But that was pretty much expected.
“The difference was, we spent a lot of money and tooled up to build everything in-house here in the U.S. and to take control of everything we do, so there was no cost savings, but our returns and quality control in production skyrocketed,” he says. “Our returns absolutely stopped. Our defect rate is less than a tenth of 1 percent. It’s unbelievable.”
That zero defect rate has meant a lot to the company. It’s boosted Hydralift’s reputation as a quality manufacturer and even helped build its bottom line.
The results are proof that Hydralift’s move was the right decision at the right time. Sales soared.
“Our sales definitely skyrocketed,”Michaels says. “Was it because we are made in the United States or because we make a superior product here and our reputation has grown? Or was it because we make the kind of lift that nobody else can make?
“I think it’s because of the way we do business now and we could not do that business before because we were not made here in the U.S.”
RV PRO July Issue Online
To read more from this story, including ADCO’s experience bringing its production back to the U.S., and other industry coverage from our July issue, click here.
Here are some of July’s highlights:
- Progressive Industries Surging to Success
- Proudly Made-in-the-U.S.A. Products
- 2016 Hall of Fame Inductee Profiles
- Luxury Fivers Riding High