Manufacturing Media Network Since 2013.

As Black Diamond bolts to China, red lights should be flashing.

By Bart Taylor August 4, 2019, 12:03 pm MDT

Last month I acknowledged I'd been overly optimistic about the outdoor industry's appetite to bring manufacturing back to the U.S. Just days later, Utah-based Black Diamond stunned employees by announcing 70 layoffs as part of plans to move manufacturing back offshore, reversing a decision made in 2015 to reshore manufacturing to Utah.

Bad timing.

As disappointed as former employees and Utah’s business community must be, the reaction from national voices in outdoor industry has been predictably muted. There persists a quiet resignation that the products of outdoor recreation have to manufactured anywhere but here. It’s an ethos shaped primarily by the reality of apparel manufacturing, where the desire to cut and sew domestically runs headlong into an immovable labor challenge. We simply don't have the requisite production workforce to make as many soft goods in the U.S. as brands would like.

But BD isn’t moving apparel production back offshore. They're moving metal fabrication, for products designed and engineered in Utah. It’s precision fabrication that’s often located in the U.S. in other industries; work that may be more expensive than in Asia but seems feasible here.  

Black Diamond president John Walbrecht doesn't see it that way, explaining in an SNEWS interview:

"[T]his isn't driven solely off financial decisions. It's the ability to gain access to technology that we don't have. I don't have those machines, I don't have the technology, I don't have the manufacturing capabilities or the knowledge to do that. In some cases, there's one that does. We had to turn to facilities in the world that had this technology. As an example, we ended up in an electric automobile facility in order to develop the JetForce avalanche backpack."

If Walbrecht's search was exhaustive -- and here's more of his explanation -- it's a hard slap in the face for U.S. manufacturing. America's manufacturing opportunity is to extend its design and engineering acumen to new manufacturing technologies onshore. It's a discernible trend in the manufacturing ecosystem -- so much so we’re adding a design-centered Innovation Award to the 2020 Colorado Manufacturing Awards

BD’s rationale surprised local manufacturing professionals I contacted. One founder of a design-to-manufacture firm in Denver surmised:

"The move . . . doesn't make a lot of sense to us. They have been making carabiners in the U.S. since 2015 because of quality issues and recalls from products made in their Chinese factory. . . . I see nothing in their new products that use any different machinery, unless the type of carabiners that they are designing are something special and new that hasn't been shown to the public yet. Sounds like the U.S. manufacturing was just a stopgap to address production issues to me, and now they have it sorted so back it goes overseas where the labor is cheap."

Another put it this way: 

"I would interpret that Black Diamond did not have a staff (and/or perhaps management) with the expertise needed to advance their design, nor the equipment to run it efficiently in-house, so they believed it would be more expedient and less capital-intensive to outsource rather than reinventing the wheel. Taiwan is certainly cheaper, which may have been more of a driving force than Black Diamond is letting on."

As difficult the decision -- and for Utah's outdoor industry sector, it's yet another punch in the gut -- Walbrecht is in good company. He's insulated from industry backlash -- and from criticism from D.C. Black Diamond ain't Harley-Davidson.

I'm not as sanguine. I was also told, "Surely this does not mean that the proper American company could not have done just as well or better." 

This was a financial decision. To fabricate here is more expensive for some of BD's outdoor products. But it shouldn't deter communities that are home to outdoor industry companies from developing a manufacturing supply chain to support brands that want to manufacture their products where they're inspired, designed, and engineered. America can be competitive in outdoor industry products. That BD chose China, and not Utah, should again be a call to arms.   

Bart Taylor is publisher of CompanyWeek. Reach him at btaylor@companyweek.com.

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