Speaker 1: Pushkin. Today's show is about some very big, very timely ideas, globalization,
Speaker 1: supply chains, the future of American manufacturing. Today's show is
Speaker 1: also about something very simple. A sweatshirt. A plain cotton
Speaker 1: sweatshirt with a zipper and a hood and a pocket
Speaker 1: to put your hands in when they get cold. The
Speaker 1: sweatshirt is made in America, it costs one hundred and
Speaker 1: thirty eight dollars, and it is wildly popular. I'm Jacob Goldstein,
Speaker 1: and this is what's your problem. My guest today is
Speaker 1: buyered Win, founder and CEO of American giant. Byron's problem
Speaker 1: is this, how do you make clothes in America and
Speaker 1: compete in a global economy. I grew up in the
Speaker 1: East Coast, and I grew up in a wealthy town
Speaker 1: in southern Connecticut where all the successful parents that I
Speaker 1: was around worked on, at least in my imagining of it,
Speaker 1: worked on Wall Street. And I got pretty fixated on
Speaker 1: that as a young kid and wanted to wanted to
Speaker 1: figure out a way to make money, I think, and
Speaker 1: kind of put my head down and did that for
Speaker 1: als of my college years and eventually got a job
Speaker 1: on Wall Street and realized pretty quickly that it was
Speaker 1: the wrong thing for me, and I had always grown
Speaker 1: up I always loved consumer products. I love clothing, and
Speaker 1: I have these very strong memories as a kid of
Speaker 1: my first pair of blue jeans and my first flannel shirt,
Speaker 1: my first Champion sweatshirt, all these things that these very
Speaker 1: sort of strong associated memories I was young, and I
Speaker 1: think that sort of informed for me an idea that
Speaker 1: I wanted to make something. So Bayard started working at
Speaker 1: companies that made stuff that sold physical products, and that
Speaker 1: was great for him, but those companies, like a lot
Speaker 1: of other American companies at the time, were moving production overseas,
Speaker 1: and that created a new problem for byired. The more
Speaker 1: I did that, the more I became really clear about
Speaker 1: both a disconnect from the product itself and there was
Speaker 1: a real loss attached to that, and a feeling that
Speaker 1: I couldn't control quality as well, and I didn't feel
Speaker 1: that sense of responsibility and stewardship over the stuff that
Speaker 1: I was making. And then there was also a human
Speaker 1: part of that that I felt that these people that
Speaker 1: had built relationships with that we were providing jobs for,
Speaker 1: that we were picking up and leaving. And as I
Speaker 1: got older, that really started to wear on me, and
Speaker 1: I began to contemplate the idea of American giant with
Speaker 1: a really simple idea, which was, I'd grown up around
Speaker 1: these great American brands Levies and Wrangler and wool Rich
Speaker 1: and all these amazing brands that had built very high
Speaker 1: quality products stood for something in my imagining of it,
Speaker 1: and I felt that the particularly an apparel, there were
Speaker 1: no brands like that left, and I wanted to do
Speaker 1: something different. I felt that not only could we make
Speaker 1: beautiful product here nearby, but also do it in a
Speaker 1: way that was consistent with our values, that respected environmental
Speaker 1: laws and human rights laws. And I thought the moment
Speaker 1: was right. E commerce was emerging, there was a bunch
Speaker 1: of advancement that happened in manufacturing and technology and data
Speaker 1: that I felt could build sort of a new American brand.
Speaker 1: And so in two thousand and twelve, we launched with
Speaker 1: a single product, a sweatshirt, a full zip sweatshirt. I'm
Speaker 1: wearing it now actually, and that sweatshirt we kind of
Speaker 1: poured my life into. I sort of everybody I spoke
Speaker 1: to told me it could be done in the United
Speaker 1: States anymore, and we battled our way through that. In
Speaker 1: real partnership with a bunch of people that remain suppliers
Speaker 1: of ours today. And late that first year, Slate magazine
Speaker 1: wrote an article about that sweatshirt. They called it the
Speaker 1: greatest hoodie ever made, and that kind of changed everything
Speaker 1: for us. I looked up that Slate article. It was
Speaker 1: published on December fourth, twenty twelve, so pretty much exactly
Speaker 1: ten years ago. So I don't know. Congratulations your ten
Speaker 1: year anniversary of making it as a company. Thank you.
Speaker 1: We're gonna do We're gonna do something special for that anniversary,
Speaker 1: by the way, So I appreciate you noticing that. Okay,
Speaker 1: So like tell me about seeing that article, Like someday,
Speaker 1: what happened? You get up to somebody email it to you.
Speaker 1: What happened? Yeah, So the article hit and I got
Speaker 1: a phone call on the fourth at about five pm
Speaker 1: from the people that were managing our website and in
Speaker 1: a panic, and they said, you see what's happening here.
Speaker 1: I had no idea. I said, know what's going on?
Speaker 1: They said, we are getting orders now, we are getting
Speaker 1: hundreds of orders a minute. We would you get in
Speaker 1: a typical day, one hundred orders in a day? Probably
Speaker 1: not even actually back then, this is like a good
Speaker 1: news bad news situation. You're like, great, but oh my god,
Speaker 1: we don't have the sweatshirts. Well, so in the in
Speaker 1: the short time it was it was sort of unfettered
Speaker 1: great news. I mean, it was really what you hope
Speaker 1: for dream about as as an entrepreneur starting something. It
Speaker 1: really was wonderful. There was a there were tins of
Speaker 1: challenges like could we get the servers, could we get
Speaker 1: the site loaded the web? Yeah, yeah, so there's some
Speaker 1: short term crises, but but big picture it was really great.
Speaker 1: But pretty soon what happened is, you know, by the
Speaker 1: next morning, we'd sold out of everything we had. We
Speaker 1: had a bunch of stuff that was in the supply
Speaker 1: chain coming, yarn and fabric coming that would carry us
Speaker 1: all the way through till about June. So six months
Speaker 1: ahead we said, boy, why don't we put up a
Speaker 1: blog post and say we're sold out. But you know, Jacob,
Speaker 1: if you want a sweatshirt, you can give us your name,
Speaker 1: in your size, and your preferred color and we'll ship
Speaker 1: one to you and it may not get there till
Speaker 1: May or June. And that blog we sold out of
Speaker 1: everything in the pipeline within a day. Or two. And
Speaker 1: so that's when things got really challenging. I mean, I
Speaker 1: think we then had to sit down. Here we were
Speaker 1: in December sixth or seventh. We thought, the article has
Speaker 1: just hit. It's Christmas. Everybody's in a kind of a
Speaker 1: holiday buying mood. We're not going to get back in
Speaker 1: stock at the earliest until July. Is anybody going to care? Then?
Speaker 1: Should we order a hundred sweatshirts or a thousand or
Speaker 1: ten thousand? I mean that was a fool's errand to
Speaker 1: try to predict that well, and we were no better
Speaker 1: about it than you know, you and I might be
Speaker 1: trying to predict the future. And so we made decisions,
Speaker 1: we said, and by the way, those were scary decisions,
Speaker 1: because if we decided to bring in ten thousand sweatshirts
Speaker 1: and we only sold a hundred, and we would have
Speaker 1: bankrupted the company. Right, You've got to you've got to
Speaker 1: pay for the materials. You've got to pay for the
Speaker 1: materials now, and you don't know if you're going to
Speaker 1: sell a thousand or ten thousand. Yeah, And going through
Speaker 1: our head was in July, it's going to be ninety
Speaker 1: five in New York City, and no one's going to
Speaker 1: be buying a sweatshirt and this article is going to
Speaker 1: be old news. And so just to wrap the story up,
Speaker 1: what happened was that demand kept going. And one of
Speaker 1: the things I think we did in retrospect that was
Speaker 1: smart is we reached out to our customers and and
Speaker 1: we sort of have been this since the beginning. We
Speaker 1: were just very honest with them and we said, look,
Speaker 1: this is what's going on, and this is one of
Speaker 1: the challenges about domestic supply, and this is the situation
Speaker 1: that ran and all of our I mean maybe not
Speaker 1: all of them, they seemed like all of them were
Speaker 1: like cheering us on, saying that is the best. I
Speaker 1: don't worry. As soon as you can. If it's a
Speaker 1: year from now, I don't care. And people sat in
Speaker 1: lists wait lists that lasted for months. And then here's
Speaker 1: the kicker. In June or July of that year, I
Speaker 1: don't remember when, and far How checked back in with
Speaker 1: the business. I don't even know if you talk to
Speaker 1: me about it. But he wrote a follow up article
Speaker 1: that was titled the only problem with the greatest hoodie
Speaker 1: in the World is you have to wait six months
Speaker 1: to get it, And that did it again. It like
Speaker 1: tipped us back into this chaos. And so anyway, we
Speaker 1: were in this rhythm of trying to predict the future,
Speaker 1: probably being conservatives, so we didn't get too far of
Speaker 1: our skis financially, and we were constantly trying to catch
Speaker 1: up with demand without over committing to inventory. And that
Speaker 1: went on for long time and actually outship our capacity
Speaker 1: of our facility that we were making the sweatshirts in
Speaker 1: at that time, which was out here in California. We
Speaker 1: purchased a facility in North Carolina and had to scramble
Speaker 1: to get that up and running. So it was a
Speaker 1: chaotic time, but incredibly grateful for it because I don't
Speaker 1: think we'd be here today without without that, you know,
Speaker 1: that year of insanity and then all the demand that followed.
Speaker 1: And so when you're in that position of being essentially
Speaker 1: having demand massively outstrip your supply, you have some set
Speaker 1: of choices. Don't sell a sweatshirt to everybody who wants one,
Speaker 1: Tell people they're gonna have to wait a long time,
Speaker 1: raise the price would be a classic response to that.
Speaker 1: I mean, which of those do you wind up doing
Speaker 1: over the course of that year or so well, we
Speaker 1: talked about all of them. I'm talking about all of them.
Speaker 1: I mean, yeah, there were people that were saying, like,
Speaker 1: go to China, Like what are you doing? Like go
Speaker 1: go get on the phone and have the switcher made overseas.
Speaker 1: There was every option you could think. I was on
Speaker 1: the table and and but to your question, I think
Speaker 1: we put a couple of stakes in the ground. We haven't.
Speaker 1: We did this with the pandemic too. It's always clarifying
Speaker 1: to me to figure out, what do you what are
Speaker 1: your core principles, what do you believe in One was
Speaker 1: that we were not gonna we won't go sacrifice quality,
Speaker 1: We weren't going to change our philosophy about how we
Speaker 1: made things, and we were gonna be honest with our customers.
Speaker 1: And and that looked like big, big delays. And you know,
Speaker 1: people ask me a lot like co did you do
Speaker 1: that on purpose? And boy, it's great to be backward
Speaker 1: And I'll tell you that um with the business was great.
Speaker 1: But but but having customers have to wait for that long,
Speaker 1: he is asking an awful lot of customers And that
Speaker 1: was not Uh. I wouldn't want to repeat that again,
Speaker 1: but that's the route. And it was just to sell sweatshirt, said,
Speaker 1: you can't swell all the sweatshirts people want. It's got
Speaker 1: to be a very mixed kind of blessing. Well, there's that,
Speaker 1: and there's the there's just the reality of the deep
Speaker 1: sense of trust that a customer puts in you and
Speaker 1: they decided to spend their money on something you make.
Speaker 1: And when you do that and you can't fulfill it
Speaker 1: and you're asking them to wait and it's gonna be
Speaker 1: another month, and this just changed it. Just you don't
Speaker 1: want to be in that situation. So it was a
Speaker 1: it was a it restored a lot of my faith
Speaker 1: in humanity and um and as I said earlier, I
Speaker 1: think we were totally honest about the whole process and
Speaker 1: that helped. But it was a it was a rocky
Speaker 1: couple of years there, for sure. So okay, so that's
Speaker 1: the that's the dramatic beginning. UM I wanted to talk
Speaker 1: about the present now. I would imagine in the long run,
Speaker 1: to make clothes for any significant market in the US,
Speaker 1: you have to do a lot of innovating, right Like
Speaker 1: you have to figure out how to be efficient, how
Speaker 1: to use technology. And so I'm curious what you have
Speaker 1: learned yeah, I mean, I think it just if I
Speaker 1: may just to kind of frame it up a little bit,
Speaker 1: because I think it's important to kind of contextualize it somewhat.
Speaker 1: I think if you, as a framing principle, say we
Speaker 1: are going to make things in the United States, Let's say,
Speaker 1: as a country, you make that decision, we're gonna we're
Speaker 1: gonna make We're gonna be a bit more protectionist in
Speaker 1: our leanings. And I would suggest that company countries like Japan,
Speaker 1: South Korea, Germany, Switzerland have adopted slightly more protectionist policies
Speaker 1: than the United States have, and as a result, they
Speaker 1: have to turn inwards to say, how do we remain
Speaker 1: competitive in a highly competitive world. The United States, on
Speaker 1: the other hand, largest marketplace in the world. The cost
Speaker 1: of entire United States is very very low. We've we've
Speaker 1: made a decision to have trade barriers be very low.
Speaker 1: And the result is is that there's overstating this. To
Speaker 1: make the point, there's less incentive to invest in capabilities
Speaker 1: domestically if there's an alternative right around the corner for
Speaker 1: apparel companies, let's say to say, why don't I go overseas? Sure? Well,
Speaker 1: I mean it's also the case though, if you look
Speaker 1: at Germany or South Korea, basically other rich countries that
Speaker 1: are more protectionists and have manufacturing, they're not making a
Speaker 1: lot of clothes, right like those companies. They're making high
Speaker 1: tech things where you have highly skilled workers using fancy equipment.
Speaker 1: They're using their sort of natural international advantage, right, and
Speaker 1: so clothes seem particularly hard. Tell me how you do it, like, so,
Speaker 1: I'll give you a couple of examples and maybe want
Speaker 1: to go a little bit deeper on. In a typical
Speaker 1: apparel manufacturing facility, what you'll see is what it's called
Speaker 1: batch sewing. So you'll see a line of operators made
Speaker 1: five operators in a line, and they'll be sewing a
Speaker 1: sweatsher and each operator will have a single task. It
Speaker 1: might be Jacob's task to sew a sleeve onto a body,
Speaker 1: it might be mine to attach a hood to a body.
Speaker 1: And the next person's going to attach the zippers, and
Speaker 1: the final person's going to attach the labels. There's a
Speaker 1: bunch of ancillary problems with that. One is is that
Speaker 1: you've got a massive amount of inventory tied up and
Speaker 1: in working process, and so you are you're the amount
Speaker 1: of inventory that's sitting on the floor is huge. You've
Speaker 1: got quality control problems. So let's say Jacob had a
Speaker 1: long land out in the town last night and he's
Speaker 1: attaching sleeves to bodies. He's doing incorrectly. Catching that qualities
Speaker 1: problem oftentimes takes hours, might take the next operator after
Speaker 1: a thousand units have moved down the line to him
Speaker 1: or her where they get caught. So there's a whole
Speaker 1: bunch of things there that are maybe a bit harder
Speaker 1: to see. I call them soft costs or hidden costs.
Speaker 1: And so one response that we've done there is we've
Speaker 1: moved that batch approach to sewing into what we call
Speaker 1: module or sew or bump. So and that is getting
Speaker 1: those same operators. First, they've got to stand up. That's
Speaker 1: a big, big change. To get operators to get out
Speaker 1: of their seats and stand all day, that's a big ask.
Speaker 1: And then have operators to cross trains, so that Jacob
Speaker 1: doesn't only know how to attach sleeves to bodies, but
Speaker 1: he now knows how to attach sippers and hoods and labels.
Speaker 1: He can do every function. One thing that that does
Speaker 1: is it eliminates a vast amount of your working process
Speaker 1: that's a big deal. It implements quality control that every step.
Speaker 1: That's a big deal, so you catch quality cotrol issues
Speaker 1: the minute they happen. The other thing is if you
Speaker 1: are productive as a team, which most of our teams are,
Speaker 1: and you beat your expected output, you get bonused for
Speaker 1: every additional unit you make in a given day. They're
Speaker 1: they're making more money, they're learning more, they're not just
Speaker 1: doing a single operation that's kind of a deadening on
Speaker 1: one thing all day, every day. So that that's an
Speaker 1: example of one of the changes that we've made. The
Speaker 1: reason why you don't see that more in the US
Speaker 1: is that the capital investments big. You've got to you've
Speaker 1: got to invest in the equipment. Number one, the stand
Speaker 1: up couldn't cost a lot of money. Number two, you've
Speaker 1: got to train your operators, cross train all your operators.
Speaker 1: That takes time. So let me ask you this, I mean,
Speaker 1: why couldn't someone at a factory in Asia do that?
Speaker 1: Or could theyre they you could? You could, yeah, and
Speaker 1: you and you do see that sometimes in Asia. The
Speaker 1: paradox is that there isn't a ton of an incentive
Speaker 1: to do it. But you do see it. You see
Speaker 1: it domestically too. You see it in Asia. You see
Speaker 1: some of the some of the facilities in Asia modernizing
Speaker 1: and using TOTA systems. I'm not sure I'm right about this.
Speaker 1: I think there's less of the sentive to do it
Speaker 1: in textiles because you can throw cheap labor at the problem.
Speaker 1: In place like that, there's less of the capital equipment.
Speaker 1: I guess part of what I'm looking for is, like,
Speaker 1: you know, besides sort of branding and price, which are
Speaker 1: clearly important, like what advantages do you get out of
Speaker 1: being in the US, And maybe one of them is,
Speaker 1: you know, more access to capital so that you can
Speaker 1: buy the fancier machines and a more highly skilled perhaps
Speaker 1: workforce that can you know, respond to this innovation. I
Speaker 1: don't know. I think that's I think it's one. I
Speaker 1: think I think the more profound ones are proximity to market, right, So,
Speaker 1: I think I think that you when you're close by
Speaker 1: from a manufacturing standpoint, your ability and my judgment to
Speaker 1: have higher quality control standards, closer relationships with your suppliers
Speaker 1: and is enhanced. So having spent a lot of time
Speaker 1: manufacturing things overseas, I can just tell you when you're
Speaker 1: five time zones away and a language barrier in between.
Speaker 1: It's much harder to on top of quality. I don't
Speaker 1: care what anybody says, it's just hard. You spend a
Speaker 1: lot of time on planes and trying to figure out
Speaker 1: what's going on, and oftentimes you find stuff when you know,
Speaker 1: too late, when it's on a truck or on a boat,
Speaker 1: and you're you know, you've got quality failures on their
Speaker 1: way to you. But look, Jake, the bottom line is
Speaker 1: it costs more money to make stuff. Here's what's sort
Speaker 1: of the frontier now, like on the manufacturing side, Like,
Speaker 1: what's the kind of frontier problem you're trying to solve now?
Speaker 1: So we are working really hard now to take some
Speaker 1: of our learnings and pushing them up stream into our
Speaker 1: fabric providers and our dyers and our finishers and stuff,
Speaker 1: and getting them to work with us in inventory and responsiveness.
Speaker 1: So for example, you know, using working with let's say
Speaker 1: Carolina Cotton Works, one of our key suppliers in Gaffey,
Speaker 1: South Carolina, so that we can when we need another
Speaker 1: six thousand yards, we can let them know, pick them
Speaker 1: up a day or two later, and move them up
Speaker 1: the road by you know, in a few hours and
Speaker 1: be going again and constantly trying to lower work in
Speaker 1: process and increase response times that we can be into
Speaker 1: market much faster. So that is a game of increments.
Speaker 1: That really is a game of increments. And it seems
Speaker 1: like that's sort of abstractly how you get manufacturing clusters, right,
Speaker 1: you have these related businesses. I mean, if you go
Speaker 1: to lots of places in Asia where they make everything,
Speaker 1: there's like a million different companies that do each other
Speaker 1: stage and they all work with each other. I mean
Speaker 1: it seems like that's what you're trying to build at
Speaker 1: a regional level, basically in the southeast US. Yeah. Yeah,
Speaker 1: if you begin to build a let's say a fabric
Speaker 1: supply capability that is supplying American giant quickly high quality,
Speaker 1: they can pivot that and look at a poulstry for furniture.
Speaker 1: They can pivot that and look at a poultry for automobiles.
Speaker 1: And so there is this spidering out that happens, is
Speaker 1: that capability develops. It really does build, to your point
Speaker 1: a network of suppliers and capability regionally. So if you
Speaker 1: look like places like Gaffe, South Carolina or Spartanburg, South Carolina,
Speaker 1: they are becoming manufacturing centers. Gaffney place where we get
Speaker 1: a lot of our yarn out of Gaffey, we get
Speaker 1: a lot of our fabric out of Gaffney. Gaffey has
Speaker 1: got a really vital and vibrant little manufacturing textile industry
Speaker 1: that's growing. And the more people that work there, the
Speaker 1: better they get, the more customers they attract, them where
Speaker 1: they can expand outside of specific industries. So that's absolutely right.
Speaker 1: In a minute, Bayern and I will talk about the
Speaker 1: costs and benefits of free trade. We'll also talk about
Speaker 1: why the cost of his American Giant Classic hoodie went
Speaker 1: from seventy nine dollars to one hundred and thirty eight dollars.
Speaker 1: Now back to the show, I think it's worth talking
Speaker 1: about cost and price for a minute. In that article
Speaker 1: ten years ago, it said your classic hoodie was seventy
Speaker 1: nine dollars, which adjusted for inflation, is right around one
Speaker 1: hundred dollars today. The Classic hoodie costs one hundred and
Speaker 1: thirty eight dollars today, so it's a lot more expensive
Speaker 1: even adjusting for inflation. Tell me about tell me about
Speaker 1: the price, Like, how do you how do you arrive
Speaker 1: at that price? So I think a few things. I
Speaker 1: think for starters, you know, one of the things is,
Speaker 1: as when you start off a company and you have
Speaker 1: an idea you probably can relate to this is that
Speaker 1: you make a product, you pour your soul into it,
Speaker 1: and there's an inherent insecurity about gosh, is it really
Speaker 1: worth what we're investing in this thing? And will customers
Speaker 1: pay for it? And so we had underpriced the garment
Speaker 1: in the beginning, and I think a lot of that
Speaker 1: was frankly just insecurity. In my part, I just feeling like,
Speaker 1: you know, maybe we don't need to make much of
Speaker 1: a margin here, because if we charge, you know, one
Speaker 1: hundred and nine dollars for this thing, will people ever
Speaker 1: pay for that? And I think that was my reference
Speaker 1: about the Slate article in the beginning, about really kind
Speaker 1: of taking me to give me a boost a confidence
Speaker 1: that I feel like you needed. Now. At the same time,
Speaker 1: one of my board members said to me, congratulations, you've
Speaker 1: just sold a bunch of under margin products a bunch
Speaker 1: of people and so and so he was, in a
Speaker 1: not very subtle way saying, you think that you're what
Speaker 1: you're standing for that supporting US jobs and US communities
Speaker 1: and that level of quality is worth something. Prove it
Speaker 1: whether your customers will pay for it. It's a good question,
Speaker 1: good point, good challenge. So that's part of the answer.
Speaker 1: Part of the answer to is that is that over
Speaker 1: the last couple of years, cotton, our inputs have increased
Speaker 1: a lot. Really, two things have increased. The cost of
Speaker 1: cotton got very, very expensive over the last couple of years,
Speaker 1: number one, and the cost of domestic labor got a
Speaker 1: lot of expensive. We couldn't get people to work in
Speaker 1: the supply chain, and so those two inputs drove our
Speaker 1: costs up a ton, and cottons come down a bit,
Speaker 1: labor is not. So it's accombination of all those things.
Speaker 1: And you know, I think my hope is is that
Speaker 1: there's an opportunity to bring that one thirty eight down
Speaker 1: if input costs come back down. But the reality is
Speaker 1: we are you know, we are subject to to things
Speaker 1: like domestic cotton prices. So you mentioned labor costs going up.
Speaker 1: It's obviously been a tight labor market nationally. You know,
Speaker 1: one of the things I was curious about is what
Speaker 1: would it mean for your business if Congress raised the
Speaker 1: national minimum wage to fifteen dollars. My answer to this
Speaker 1: is always it's an incomplete question, because if if what
Speaker 1: you're saying is, should Congress raise them in wage to
Speaker 1: fifteen or twenty dollars an hour, but at the same
Speaker 1: time allow every textile business to avoid those minimum wage
Speaker 1: laws and make stuff in China, All you're doing is
Speaker 1: you're putting out a bunch of people and businesses out
Speaker 1: of business. You're just making it incredibly difficult digging textiles
Speaker 1: to compete. So so would it if the Congress raised
Speaker 1: the minimum wage of fifteen dollars an hour and didn't
Speaker 1: change it, would it would basically put you out of business?
Speaker 1: Is that? What? Is that? What? Now? I don't if
Speaker 1: it puss out business, but it would. It would It
Speaker 1: would increase our input costs, and so we would then
Speaker 1: have to you know, we we can just absorb that right.
Speaker 1: But to answer your questions, simply, if midium waves laws
Speaker 1: go up, our input costs go up, it means that
Speaker 1: we have to pass those costs onto our customers. And
Speaker 1: so do I my favor of mindum ways laws. Absolutely
Speaker 1: do I think that they should get higher. Absolutely. I
Speaker 1: think we should just have trade agreements that reflect that.
Speaker 1: That provides some measure of protection to the men and
Speaker 1: women that are trying to build you know, good working
Speaker 1: class jobs and communities all across the country and not
Speaker 1: get just hammered by competition for places that are not
Speaker 1: compliant with those rules. And so in that universe, we
Speaker 1: have a higher minimum wage in the US and new
Speaker 1: rules that either impose tougher labor standards, say on China,
Speaker 1: or or impose a higher tariff on imports from China.
Speaker 1: And so what we have in the end then is
Speaker 1: more expensive sweatshirts made in the US. Your sweatshirt is
Speaker 1: more expensive, and so are sweatshirts imported from, say China. Yeah.
Speaker 1: So I think forty years ago we said, hey, listen,
Speaker 1: we're gonna trade to everybody. And by doing that, what's
Speaker 1: going to happen is China is going to be dragged
Speaker 1: into the modern world and they're going to be a
Speaker 1: really good partner to us. And in fact what's happened
Speaker 1: is over the last forty years we've had a massive
Speaker 1: transfer of capability and capital to China, and China's become
Speaker 1: a more intractable foe, not the Chinese people, the Chinese government,
Speaker 1: a more intractable float for the faux of ours today
Speaker 1: when they were forty years ago. On the other hand,
Speaker 1: had our trade agreement been based on what I think
Speaker 1: Janet Yellen is referring to as friend shoring, meaning we're
Speaker 1: we're gonna do business with people that share basic values
Speaker 1: with us, things like freedom of the press, freedom of speech,
Speaker 1: rule of law, minimum wage standards. Then you have access
Speaker 1: to the United States marketplace. That would include everyone from
Speaker 1: Israel to France, to Germany, to South Korea to Japan,
Speaker 1: all countries that basically adhere to a set of standards
Speaker 1: that we view as being basically human values. I think
Speaker 1: that is the type of trade agreement where if you
Speaker 1: want to have access to the American marketplace, you've got
Speaker 1: to adhere to a set of standards that would translate
Speaker 1: over time, hopefully into consumers operating a bit more maybe
Speaker 1: European or Japanese or South Korean, where there is a
Speaker 1: bit less consumption, a bit higher emphasis on quality. Things
Speaker 1: cost a bit more, but they last to think a
Speaker 1: bit longer. And if you look at the underlying data
Speaker 1: in the textile worlds, it's discompanying. I mean, you know,
Speaker 1: the average I'll just bore you as statistics for a second.
Speaker 1: The average American family today spends about sixteen hundred dollars
Speaker 1: on apparel and footwear per family. In nineteen eighty, in
Speaker 1: today's dollars, the average American family spent about sixteen hundred
Speaker 1: dollars per family, So that in dollars to dollars has
Speaker 1: not changed much. But in nineteen eighty it represented about
Speaker 1: eighty items. Today it represents about one hundred and eighty
Speaker 1: five items. And the average American family throws away about
Speaker 1: eighty pounds of clothing a year, and so there's been
Speaker 1: a structural shift among the American marketplace towards cheaper stuff
Speaker 1: that we throw away, and I think that's got terrible
Speaker 1: implications for the environment for us as consumers, for our
Speaker 1: ability to provide good jobs to places that need them,
Speaker 1: and so I would advocate for that. I think you
Speaker 1: have to do it over time, and you get through
Speaker 1: it slowly. My preference as a consumer would be to
Speaker 1: be able to buy clothes that are made in the
Speaker 1: developing world ethically, basically right, because I do feel like
Speaker 1: lots of people in the developing world, like more than
Speaker 1: a billion have gotten out of poverty in that forty
Speaker 1: year period because of trade, and that that is basically good,
Speaker 1: and I agree with you that lots of bad things
Speaker 1: have come along with that. And I'm curious, like, are
Speaker 1: there any apparel companies that you think manufacture in the
Speaker 1: developing world and do so in an ethical fashion? It's
Speaker 1: very very hard. Yeah, So I appreciate your your not
Speaker 1: being Yeah, yeah, I appreciate the dream. Yeah. What about Patagonia,
Speaker 1: Like I kind of believe Patagonia, Like, am I right
Speaker 1: to believe Patagonia? I think I think you are right
Speaker 1: to believe Patagonia. But if if you if you read
Speaker 1: what Patagonia says, they recognize that they operate in an
Speaker 1: imperfect manner. I mean they say we try to do
Speaker 1: more more good than harm. And I think inherent in
Speaker 1: that statement is we make things in China, and inherently
Speaker 1: making things in places that are far away means they
Speaker 1: have to sit on container ships for long distances. To me,
Speaker 1: either way, I agree with you. By the way, I
Speaker 1: think trade and capitalism lift people out of poverty. No
Speaker 1: no better way to do it than I'm aware of.
Speaker 1: But I think that we also have to reconcile to
Speaker 1: what extent are we are we comfortable with trading with
Speaker 1: countries that maybe practice things that are you know, our
Speaker 1: human rights violations or that environmental violations. Do we care?
Speaker 1: And if we care, what do we do about it?
Speaker 1: And I would suggest that what you do about it
Speaker 1: is that you make trade deals with countries that that
Speaker 1: respect basic standards of behavior. Those would include, for me,
Speaker 1: democratic elections, free and fair, freedom of speech, free, free
Speaker 1: a good and functioning judicial process, and they're Unfortunately we
Speaker 1: trade with a bunch of countries that don't. Don't Are
Speaker 1: there countries in the developing world that meet those standards?
Speaker 1: For you? Yeah, I think a lot of countries in
Speaker 1: our hemisphere. By the way, Mexico are much better, Yes,
Speaker 1: much better, hunt us El Salvador, Mexico. There's a lot
Speaker 1: of good and that that that reshowing to this hemisphere
Speaker 1: is happening quite quickly, and that is a very good thing.
Speaker 1: It's environmentally good, doesn't have to travel so far, doesn't
Speaker 1: to go on containerships forever. And those countries by and
Speaker 1: large are genuinely trying to have good institutional functional norms
Speaker 1: that we can so yes, absolutely there are yep and
Speaker 1: I and just to be clear, I think the one
Speaker 1: end of the spectrum is a you know, total protectionist
Speaker 1: that that doesn't work for anybody. I just think we
Speaker 1: have to ask some questions about what should be in
Speaker 1: our trade agreements, and how do we think about domestic capability.
Speaker 1: And you know, I think the counter to your argument
Speaker 1: about I would love to have textiles in a developing world,
Speaker 1: me too, But I also want to have good vibrant
Speaker 1: jobs for people. You come from my supply chain. Some time,
Speaker 1: go to some of these rural communities in the Southeast,
Speaker 1: and you know, you see lots and lots of towns
Speaker 1: that have no jobs. And that's a that is a
Speaker 1: tough thing to reconcile too. That you know, we've we've
Speaker 1: got a responsibility there as well, that we've got to
Speaker 1: figure out ways for young men and women, maybe they
Speaker 1: only have high school degrees, that are looking for jobs
Speaker 1: to help, you know, help chip in, help pay their way.
Speaker 1: We've got to prove I think we've got to provide good, viable,
Speaker 1: dignify jobs to those people's safe jobs, jobs where they
Speaker 1: can move up. And I think it is a shame
Speaker 1: that we let our biggest companies ignore that. And I
Speaker 1: think they are ignoring that. I think they're they're they're
Speaker 1: choosing a cheaper way that is, we're turning a huge
Speaker 1: amount of value to their shareholders, and they're not wrestling
Speaker 1: with a lot of the things that I think societally
Speaker 1: we need them to be wrestling with. Right now, we'll
Speaker 1: be back in a minute with the lightning round. Now
Speaker 1: it's time for the lightning round. Let's close with the
Speaker 1: lightning round. Just a bunch of questions somewhat lighter in
Speaker 1: tone than this conversation we've been having. Are you ready
Speaker 1: to pivot to the lightning round? Ready? So? I know
Speaker 1: you used to work at a snowshoe company, and I'm
Speaker 1: a big fan of skiing and cross country skiing and sledding,
Speaker 1: but I never really got into snowshoeing. Can you like
Speaker 1: briefly sell me on snowshoeing. Oh that's an easy one, Jacob. Yeah,
Speaker 1: snowshoeing is it requires? If you can walk, you can snowshoe,
Speaker 1: no lift ticket required. There's nothing quite as magical as
Speaker 1: parking on the side of a road and putting on
Speaker 1: a pair of snowshoes and walking really twenty yards into
Speaker 1: a snowy forest and suddenly it is silent and you
Speaker 1: are immersed in wilderness and quietude. Unlike anything you look experience,
Speaker 1: and so I think you can do it with families,
Speaker 1: young people, old people. You don't need to pay to
Speaker 1: do it. I just think it's magical. I think it's
Speaker 1: magical and it's a it's a great fun activity for
Speaker 1: the whole family. If you were going to start another
Speaker 1: company that didn't make clothes, what would you do? Uh?
Speaker 1: I love to make pizza, So I want to start
Speaker 1: a pizzaia in some beautiful spot. What. I don't care
Speaker 1: about making money anymore. That's your dream and that's your escape.
Speaker 1: Your escape fantasy has moved to Napa. I don't think
Speaker 1: it's Napa. I don't think it's the North. I think
Speaker 1: it's getting back home. Yeah. Well, last question, Uh, what's
Speaker 1: one piece of advice you'd give to someone trying to
Speaker 1: solve a hard problem? I don't give up. I really
Speaker 1: think that the mistake that that that entrepreneurs make a
Speaker 1: lot is that they don't keep their legs pumping against
Speaker 1: the blocking sled. I think that you know, eventually things
Speaker 1: start to break your way. It's not always the case,
Speaker 1: but I think I have found that when I'm at
Speaker 1: my most tenacious and I hang in there, the longest
Speaker 1: things break you away eventually good. I got one more.
Speaker 1: What's it? What's a tip to what's a tip to
Speaker 1: make clothes last longer once you've bought something like, I
Speaker 1: like my clothes to last a long time. I don't
Speaker 1: like getting buy good stuff by good stuff, I know.
Speaker 1: But once I've bought good stuff, what do I do?
Speaker 1: Buy good stuff? Were wash them less? Huh? I mean,
Speaker 1: I don't know if you got kids or not. I
Speaker 1: got kids. You know, they will wear a sweatshirt and
Speaker 1: it's in the it's in the laundry pile. It's like, no, no, no,
Speaker 1: that that sweatshirt does not need unless you pitch your
Speaker 1: spaghetti on it. If the pitch that's my advice. Ask
Speaker 1: me a question again, And the next time I masted,
Speaker 1: I'll say, sniff the pits. Don't wash you need to? Yeah,
Speaker 1: buy good stuff and and wash them. Don't wash them
Speaker 1: that often. That that I don't make your clothes last
Speaker 1: a lot longer. I try and hang dry my stuff.
Speaker 1: Am I fooling myself that that helps? No? No, no, no, no,
Speaker 1: that's right. I mean that's right. I mean you put
Speaker 1: you put fabric, you have cotton, You have cotton to
Speaker 1: be caught in garments and and synthetics. You know, they
Speaker 1: are under high heat. Not it's not great for them
Speaker 1: and they get banged around a lot. So yeah, hang,
Speaker 1: drawing is great, Okay, yeah, but just wash them less
Speaker 1: and you'll be doing a good for the environment while
Speaker 1: you're at it. Byard Winthrop is the founder and CEO
Speaker 1: of American Giant. Today's show was produced by Edith Ruslow,
Speaker 1: edited by Robert Smith, and engineered by Amanda k. Long.
Speaker 1: I'd love to get your suggestions for who else I
Speaker 1: should talk to for the show. You can email us
Speaker 1: at Problem at Pushkin dot fm, or you can find
Speaker 1: me at Twitter at Jacob Goldstein. I am Jacob Goldstein
Speaker 1: and we will be back next week with another episode
Speaker 1: of What's Your Problem.