It’s the kind of news that makes American manufacturers sleep a little better at night.
Reverie, a Silver Creek company that makes adjustable beds and mattresses, is planning to move a small portion of its production from Taiwan back to the United States as it shifts its local manufacturing from Dunkirk to an cavernous old canning factory in Eden.
“For some time, we’ve been trying to figure out a way to bring manufacturing back to the United States,” said Martin Rawls-Meehan, the company’s president and chief executive officer.
For starters, Reverie is moving just a small slice of its overseas production, mostly for its high-end adjustable beds, to Eden, but Rawls-Meehan said he’d like to shift more work on its less pricey products to America in the future.
“It’s going to be a work in progress,” he said. “We have to decide how successful it is before we decide to move some of the entry level products here.”
It’s a symbolic victory, but when you’ve been beaten down as much as the Buffalo Niagara region’s manufacturers have over the last 30 years, you hang your hat on whatever you can.
The move won’t create any local jobs. Reverie is simply moving its production – and the roughly 30 factory jobs – at its too-small Dunkirk plant to space it’s leasing in the old canning factory at 8800 Main St. in Eden. Its Silver Creek call center, which employs 15 people, is staying put.
Reverie, and its parent company Ascion, had been talking about expanding its manufacturing base in Western New York for a couple of years. The company won $800,000 in funding from the Western New York Economic Development Council in 2011 for a $7.2 million project to build a new 87,000-square-foot facility in Chautauqua County for its manufacturing work and call center operations, creating 50 new jobs in the process.
But council officials said the project fell through because Reverie had trouble lining up local suppliers.
“The challenge has always been on the supply chain side,” Rawls-Meehan said.
Even so, taking just a little bit of work from overseas and bringing it back to the Buffalo Niagara region feels good. After all, Trico Products emptied out a couple of sprawling local factories a quarter century ago so it could cash in on cheap labor along the Texas-Mexico border. We’ve lost 46 percent of our factory jobs since 1990, and cheap overseas labor is a big culprit in that drop.
But now, we’re hearing more about companies, like Reverie, returning work to America. Apple Inc. said it will start making computers in the U.S. Ford Motor Co. has brought some car production back home from China and Mexico.
It isn’t stopping the decline in manufacturing, but it might be slowing it a bit. “Onshoring is still in its infancy, and largely limited to anecdotes,” said Michael Doelga, a TD Bank economist who studied the onshoring tend in a report late last year.
Rising wages in China are a main catalyst for onshoring. Wages in China grew by 19 percent a year from 2005 to 2010, according to Boston Consulting Group. Since 2005, U.S. manufacturing wages have dropped by 2 percent after inflation.
In Reverie’s case, the company has always made its mattresses in the United States, but all of the adjustable bases for its beds were produced in Taiwan. It also makes beds and frames for other companies, such as Tempur-Pedic.
“Starting out, it was just easier for us to be overseas,” said Rawls-Meehan, who co-founded the company in 2003.
But making those frames in Taiwan adds about $20 to $60 in shipping costs to each unit. And it forced the company to keep inventory levels higher to compensate for the longer shipping times.
Shifting the production of bed bases here will help Reverie fill orders faster and also allow it to give customers more customizing options, such as a variety of fabric choices, when they purchase a higher-end model that’s made here.
If the shift works, Reverie could shift more work here on its lower-end models, and that could mean added jobs.
“If all goes well, it will be significant,” Rawls-Meehan said.