Globalization has its advantages: cheap socks and affordable smart phones among them. But for some manufacturers, the global economy has taken a toll. In recent decades, increased competition from low labor-cost countries has made it difficult for many companies to manufacture their products in their home countries.
M&B Hangers in Alabama, USA, is a prime example of the dilemma facing American manufacturers. As a maker of wire hangers for the dry cleaning and textile rental industries, the company has weathered two decades of change. “Look back to the year 2000 in the United States where there were 17 hanger plants and five large companies that made hangers,” said Milton Magnus, M&B’s third-generation president and owner. “We were actually competing with people selling products at less than our raw material costs.” By 2008, his family’s factory was the only one still producing hangers in the United States.
Navigating an uneven playing field overrun by bargain-priced competition, Magnus’ more-than 70 year-old company faced a choice: embrace bold new manufacturing methods or outsource production to China. To the relief of the workers in their Leeds, Alabama plant, M&B Hangers chose the first option.