How Do You Build a Made in USA Supply Chain? American Giant CEO Shares How to Get It Done

U.S. Trade Representative Katherine Tai and American Giant CEO Bayward Winthrop. Photo via YouTube

U.S. Trade Representative Katherine Tai on Thursday interviewed Bayard Winthrop, founder and CEO of American Giant, about how his company built a Made in America apparel line. Plus: White House officials shared how they're aiming to strengthen manufacturing in key sectors.

Mark Gitenstein spent much of his career in policy and political circles, including stints on Capitol Hill and as an attorney based in Washington. In recent years, he's been a part of the diplomatic world, and currently lives in Brussels, where he serves as U.S. ambassador to the European Union.

But Gitenstein grew up in a far different environment. His father, Seymour, owned a flannel shirt factory in Florala, Ala., which at its height employed about a thousand people who made 24,000 shirts a day. But by 1988, the business was dead, another victim of an apparel industry that largely moved offshore.

"My father provided good-paying jobs for 50 years, built a hospital for his employees, and sent 2,000 of their children to college," Gitenstein said. "But the population of Florala today is one-third smaller. The most recent Census numbers show only a few hundred full-time jobs for a town of now only 2,000 people."

As Florala was dying, Gitenstein recalled having conversations with his father about the economics behind factory closures, bringing up terms like "comparative advantage" he had learned in his college introductory economics class. Seymour Gitenstein did not buy it.

"His response was, 'Mark, that's B.S., that factory was a lot more than an economic statistic. It was a livelihood, a social network,'" Gitenstein recalled.

But while Gitenstein's family factory is not coming back, there is another American company today making flannel shirts: American Giant. The popular apparel brand, known for its famous hoodie and other stylish attire, built out an entire American supply chain to manufacture its products.

And at a time when the United States is undergoing a policy shift away from unfettered trade to a worker-centered approach, American Giant's success stands as proof that rebuilding domestic manufacturing is possible.

American Giant CEO Bayward Winthrop joined U.S. Trade Representative Katherine Tai at the Alliance for American Manufacturing offices in Washington on Thursday for a discussion on why making things in the United States matters - and the type of policy needed to build the momentum to do it. Gitenstein joined virtually. Heather Boushey, chief economist for Investing in America at the White House, took part in a separate panel discussion alongside Daleep Singh, deputy national security advisor at the White House.

Tai served in the role of interviewer for the event, asking Winthrop about his decision to manufacture apparel in the United States at a time when so much of it had gone overseas. Winthrop explained that in previous jobs, he had to often break relationships with local manufacturers in pursuit of negligible profit margins - and he wanted to see if it was possible to do things differently.

"I was thinking a lot about that. I was thinking a lot about, 'Is that my legacy? That I'm going to chase 15 cents and break relationships with people that stood by me with a lot of stuff," Winthrop said.

"I decided that I wanted to build an apparel business that I knew I'd be proud of," he continued. "I didn't know if it'd be big or small or successful or not, but I knew it was a business I wanted to run, and American Giant sort of emerged out of that."

American Giant certainly has found success. Along with its ever-popular hoodie, the brand has built out an American supply chain to manufacture a growing line of apparel, from T-shirts and pants to jeans and dresses. It wasn't an overnight endeavor, he noted, but happened "company-by-company, farmer-by-farmer," Winthrop said.

Building an American-made supply chain involves a lot of relationship building, Winthrop explained. American Giant's supply chain starts with farmers who grow cotton in North Carolina. That cotton gets ginned, and is sent to a yarning plant to convert cotton to yarn, then to a knitting facility to turn it into cloth. Then, it moves onto a facility for dying and finishing, then a cut and sewing facility to be made into the final product.

A big success for the company was its introduction of an American-made flannel shirt, something that Winthrop repeatedly was told was not possible. "It mattered to me because I felt it symbolized something to me that we lost, and I wanted to get it done," he said.

Another big achievement? The introduction of a T-shirt to be sold at Walmart for $12.98. Winthrop recalled that what makes that product so important is that it shows an affordable, Made in America apparel product can be produced at scale for a major retailer.

"It takes a commitment of time and a commitment of volume, and Walmart to their enduring credit, committed to that," he said.

While Winthrop and his company have found success in the apparel business, the Biden administration has also pursued industrial policy to grow and strengthen domestic manufacturing in critical sectors, including via new laws like the CHIPS and Science Act and Inflation Reduction Act.

Boushey told Alliance for American Manufacturing President Scott Paul that a confluence of events inspired the Biden White House to pursue industrial policy, including supply chain shortages because of the Covid-19 pandemic; the need to address climate change; and rising wealth disparities stemming from deindustrialization.

"The outcome that we're always looking for, the point of all this, the point of our economic policy, is for workers to be paid a good wage, for families to thrive, for communities to thrive," she said. "That's the ultimate outcome we're looking for. It flows through having competitive, viable industries in things that matter that we need to produce."

The past several decades have shown that the private sector on its own is not equipped to handle some of the strategic challenges we face today. But the public sector-private sector approach favored by the Biden administration, Singh noted, is one that can trace its roots back to previous successes stretching all the way back to Alexander Hamilton.

At the same time, the United States and its allies are going to need to continue to respond to China's massive industrial overcapacity, which threatens sectors from steel and aluminum to solar and automobiles. It's now clear China is now using that overcapacity for global leverage. "It's not abstract. You can see it in the numbers," Singh said.

Maintaining and strengthening American manufacturing is critical to our national security, Singh said

"The more you make of something, the more creative and productive you can get," he said.

"We can't outsource an industry like manufacturing abroad and think we are going to have equality and prosperity in our society."

Watch the entire program here or via the video embedded below.

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