Podcast Summary: The Journal – "How to Make a $12.98 T-Shirt... in the U.S."

Release Date: January 3, 2025

Introduction

In this episode of The Journal, hosted by Jessica Mendoza alongside contributors Suzanne Kapner and guest Bayard Winthrop, the spotlight is on the remarkable journey of producing an affordable, American-made T-shirt sold at Walmart for just $12.98. This narrative delves into the intricacies of bringing manufacturing back to the United States, exploring both the challenges and triumphs involved.

The $12.98 American-Made Shirt

The episode opens with Jessica Mendoza introducing a seemingly ordinary patriotic T-shirt found at Walmart, priced at an unexpected $12.98.

[00:05] Jessica Mendoza: "My colleague Suzanne Kapner covers retail, and recently she wrote about one particular shirt sold at Walmart."

[00:19] Suzanne Kapner: "It's a hundred percent cotton T-shirt. It has the words American made on the front and there's a little American flag patch near the hem on the bottom."

Jessica emphasizes the shirt's affordability and its entirely American-made origins, highlighting two standout features: its low price and domestic production.

[00:45] Suzanne Kapner: "What's remarkable is that it was entirely made in the United States. The cotton was grown here, it was ginned, it was dyed, it was sewn. All in the U.S. Is that unusual."

The Decline of American Manufacturing

The conversation shifts to the broader context of American manufacturing, tracing its decline from the 1960s to the present day.

[03:40] Jessica Mendoza: "Chances are, if you check out what you're wearing right now, it wasn't made in the US. My shirt was made in Indonesia, and my pants were made in Vietnam. But that wasn't always the case."

[04:07] Suzanne Kapner: "It started changing gradually in the 70s, 80s... companies began outsourcing to places like China where the cost of manufacturing was much, much less expensive."

Today, less than 4% of clothes Americans purchase are domestically made, a stark contrast to the 95% in the 1960s. This outsourcing has led to significant job losses and economic downturns in manufacturing communities.

[04:36] Suzanne Kapner: "We had whole communities in the south, you know, Southeast especially, that were manufacturing towns where generations of families worked at the same mills for decades. And these businesses have closed over the years..."

Bayard Winthrop and American Giant

Enter Bayard Winthrop, founder of American Giant, a company committed to reviving American-made apparel.

[02:53] Bayard Winthrop: "We are an entirely made in America clothing company that started about 12 years ago and we're primarily online though we've got six retail stores."

Bayard's personal commitment to American manufacturing stems from his frustration with the outsourcing prevalent in the apparel industry, aiming to create high-quality, affordable American-made clothing.

[05:08] Jessica Mendoza: "Those job losses bothered Bayard... And he felt like there had to be a better way. American Giant came."

Building an American Supply Chain

Creating American-made apparel isn't straightforward due to the fragmented and diminished supply chains domestically. Bayard had to meticulously rebuild the supply chain from the ground up.

[06:09] Jessica Mendoza: "In the US, so many factories and suppliers have shuttered that strong textile supply chains are a lot harder to come by. To make his sweatshirt, Bayard would have to cobble together his own supply chain."

[06:48] Bayard Winthrop: "I knew nothing to start, and that really isn't an overstatement. I knew nothing. I didn't know who to talk to. I didn't know who to ask."

Through persistent efforts, Bayard connected with key players like Carolina Cottonworks and Eagle Sportswear, essential for sourcing cotton, knitting, dyeing, and sewing domestically.

Partnership with Walmart

A pivotal moment in American Giant's journey was securing a partnership with Walmart, which transformed the feasibility of producing affordable American-made T-shirts.

[10:27] Bayard Winthrop: "You might think on the face of it that I would be an anti Walmart person, but boy, do I value a company like that that is taking a stand and maybe could."

Walmart's commitment to domestic production provided the necessary assurance for American Giant to scale operations.

[11:21] Jessica Mendoza: "One of the things to come out of that process was an order, a big one, for American Giant to make those American made tees for Walmart."

[11:35] Suzanne Kapner: "What Walmart did that was a game changer is they committed to ordering a certain number of T shirts over a certain time period."

This guaranteed order allowed American Giant to invest confidently in the supply chain, leading to significant operational enhancements.

Innovations in Production and Cost Reduction

To achieve the $12.98 price point, American Giant implemented several strategic innovations:

1. Automated Production: Investing in automated label setting and screen printing machines reduced labor costs and increased efficiency.

   [12:39] Bayard Winthrop: "We spent a million dollars on machines to make production more efficient."

2. Design Efficiency: Utilizing tubular knitting eliminated the need for side seams, reducing both material and labor costs.

   [13:20] Bayard Winthrop: "That's called tubular knits. That's two operations that we've eliminated in the shirt because it's already done."

3. Cost-Effective Materials: Opting for cheaper, rougher cotton yarn lowered material expenses without compromising the shirt's integrity.

These measures collectively allowed American Giant to offer high-quality, durable shirts at an accessible price.

Challenges and the Future of American Clothing Manufacturing

Despite the success with Walmart, American Giant's journey underscores the complexities of reshoring manufacturing:

[14:19] Bayard Winthrop: "Making stuff in America is really hard. I think in textiles the supply chains become so disaggregated and atomized."

While American Giant proves that affordable American-made clothing is attainable, scalability remains a significant hurdle for larger companies lacking established domestic supply chains.

[15:40] Suzanne Kapner: "I think it's just difficult for like a large American clothing company who has... their supply chain overseas to make these changes."

The episode concludes on a reflective note, acknowledging that while the movement towards American manufacturing is growing, it remains nascent and faces substantial obstacles, including the closure of textile mills and the complexities of modern supply chains.

[15:42] Suzanne Kapner: "It's happening slowly and it may... but this is like a nascent thing, and it's kind of one step at a time."

Conclusion

This episode of The Journal offers an insightful exploration into the challenges and possibilities of American manufacturing in the apparel industry. Through Bayard Winthrop's endeavors with American Giant and the pivotal support from Walmart, the narrative illustrates that while making affordable, high-quality American-made clothing is possible, it requires substantial dedication, innovation, and strategic partnerships. The journey underscores a broader conversation about the future of manufacturing in the U.S., highlighting both the potential for resurgence and the significant barriers that remain.

For more insights and detailed stories on money, business, and power, subscribe to The Journal on Spotify and other platforms.