The long, rough ride ahead for 'Made in America'

Mon Apr 17, 2017 4:40pm EDT
 
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By Nick Carey

RUSTON, Louisiana (Reuters) - Mini motorcycle and go-kart maker Monster Moto made a big bet on U.S. manufacturing by moving assembly to this Louisiana town in 2016 from China.

But it will be a long ride before it can stamp its products "Made in USA."

The loss of nearly one out four U.S. factories in the last two decades means parts for its bike frames and engines must be purchased in China, where the manufacturing supply chain moved years ago.

"There's just no way to source parts in America right now," said Monster Moto Chief Executive Alex Keechle during a tour of the company's assembly plant. "But by planting the flag here, we believe suppliers will follow."

Monster Moto's experience is an example of the obstacles American companies face as they, along with President Donald Trump, try to rebuild American manufacturing. U.S. automakers and their suppliers, for example, have already invested billions in plants abroad and would face an expensive and time-consuming transition to buy thousands of American-made parts if President Trump’s proposed “border tax” on imported goods were to become law.

When companies reshore assembly to U.S. soil – in Monster Moto’s case that took two years to find a location and negotiate support from local and state officials – they are betting their demand will create a local supply chain that currently does not exist.

For now, finding U.S.-based suppliers "remains one of the top challenges across our supplier base," said Cindi Marsiglio, Wal-Mart Stores Inc’s (WMT.N: Quote) vice president for U.S. manufacturing and sourcing. Wal-Mart partnered with Monster Moto and several other U.S. companies in a drive to increase spending on American-made goods by $250 billion by 2023 in response to consumer demand for American-made goods.

Their experience has shown Americans’ patriotic shopping habits have limits, namely when it comes to price.   Continued...

 
Kerry Goldsmith and Brian Jackson construct mini-bikes at motorcycle and go-kart maker Monster Moto in Ruston, Louisiana January 25, 2017. Picture taken January 25, 2017.  REUTERS/Nick Carey