Why we left our factories in China
June 29, 2011: 10:33 AM ET
Fed up with the poor quality of having their products made in China, American businesses like Sleek Audio are moving production back home.
By Sheridan Prasso, contributing editor
作者：Sheridan Prasso 特约编辑
FORTUNE — When Mark Krywko and his son, Jason, launched Sleek Audio, a small business making in-ear headphones for iPods and other audio devices from a Florida town near St. Petersburg, they asked several U.S. manufacturers for quotes on how much it would cost to make their product. It was, of course, oh so much cheaper in China, so they contracted with a factory in Guangdong province and launched their first product in 2007.
Mark Krywko和他的儿子Jason创办的Sleek Audio公司是位于佛罗里达St. Petersburg附近小镇上的一家小型企业，主要生产为iPods和其它音频设备配套的内置耳机。当时关于生产他们产品的成本报价，他们讯问了过几家美国制造商，结果是当然在中国生产要便宜的多，因此他们联系了一家在广东省的企业并于２００７年生产出首批产品。
But last year, fed up with low quality, too much travel, communications problems, shipping delays, rising costs, and — worst of all — a ruined shipment of 10,000 sets of earphones that cost millions and nearly brought the company to its knees, the father-and-son team made a big business decision: quit China and move their manufacturing back to the U.S. “It became very difficult and taxing on us,” says Jason. “Now we control the quality of the product. No more waiting for production has been a wonderful thing.”
Sleek Audio is part of a trend called reshoring, in which primarily small businesses decide that China is a hassle and that they want to bring their operations closer to home, where the recession has lowered costs, created workers eager for jobs, and made it easier to justify U.S. manufacturing. Reports have emerged from California, Texas and all across the country as small businesses — and even large ones like GE (GE) and Caterpillar (CAT) — take advantage of local incentives and move back at least some of their manufacturing operations for products sold in the U.S. market.
Sleek Audio公司的状况就是被称为“重新支撑（reshoring）”趋势的一部分，目前大部分小型企业认为在中国麻烦太多，他们希望他们的运作更接近自己的家，因为经济衰退已经导致成本降低，工人们渴望得到工作，这使得美国对制造业的调整更加容易。有报告显示包括佛罗里达、得克萨斯以及全国范围的小型企业——甚至包括像通用电气(GE) 和卡特彼勒(CAT) 这样的大型公司——都在利用当地的优惠条件，至少已将某些为在美国市场销售的产品的制造业务转移回了美国。
Sleek Audio’s costs are about 15% to 20% higher because of the move back, but the company’s redesign of earphones that replaced a formerly Chinese-made plastic component with U.S.-made high-end aluminum, titanium and special carbon fiber, resulted in a higher quality product that justifies the price. It not only gets a “Made in USA” label, but Sleek Audio’s redesign of the SA7 earphone won a 2011 Best of Innovation award from the 2011 Consumer Electronics Association. “Even though there’s a tremendous cost savings when you go to China, in the end it really isn’t that much,” says Mark. “It’s the hidden costs — the delays, the shipping costs, you pick all that up on a learning curve.
Sleek Audio公司的成本由于生产地的转移大概增加了１５％到２０％，但是该公司替换了原先在中国制造的耳机的塑料部件，改用美国制造的高级铝钛合金和特殊碳纤维材料进行重新设计，生产出了更高质量的产品并且价格也进行了调整。这不仅是得到了一个“美国制造”的标签，而且Sleek Audio公司重新设计的SA7型号的耳机还赢得了消费电子协会颁发的２０１１年度创新奖。“即使你去中国可以节约巨大额的成本，但最终其实远远没有想象的那么好，”Mark说，“它还存在隐藏的成本——延误，船运成本等，你要把这些全部都作为学习曲线（learning curve）。”
When Sleek Audio got off the ground in 2005, they first found that U.S. manufacturers were quoting prices of $19 or $20 for one particular component that the Chinese were offering to make for $2. But when the Krywkos decided to quit China last year and asked around again about making the part the U.S., this time the answer was $8. A box that used to be quoted for $4 to $5 in the U.S. before was quoted at $3 now. And the Krywkos found a defense contractor doing industrial design that they hadn’t known existed before, just a 10- to 15-minute drive down the road. “The economy has allowed us to get better deals. Now that we’re aware and we know the pricing, we can say, ‘You can’t charge us this much.’ But companies now realize that if they want to be competitive, they have to lower their prices here and work on quantity.”
A big part of the problem in China is that small companies cannot afford to have someone there full-time to oversee their operations. That means they have to travel, or stay up until 2 a.m. to talk to people on the phone in China over even minor problems, says Mark. Small companies often get their production runs squeezed in between larger orders, meaning that they can get short shrift. “Great care would be used to satisfy us when we were there,” says Mark. Adds Jason: “We’d go there and they would do it perfectly, but when we’d say go ahead and make 10,000 to 20,000 pieces, that’s when the differences would happen.”
Now, with manufacturing to their specifications done just down the road, the Krywkos have much more control. And they estimate that their orders from various U.S. companies now support 100 jobs. They haven’t been able to make everything here — in fact, a particular type of Rosewood can’t be found in the U.S. But while 35% of their components are still made in China, they plan to have 80% back here by the end of this year. “Our long-term goal is 90% to 95% of everything we make made here in the U.S.,” says Jason. “We’ve been getting thank you emails for bringing it back to the U.S. It feels very good.”