Speaking eruditely in the lunchroom of the Lawrence factory, Wilson explains he is able to overcome the higher domestic labor costs through automation, where as plants in China are virtually without high-tech machinery. We produce in Lawrence with 22 individuals what it takes overseas with 100. About 15 percent of the costs in Lawrence is labor. Wilson does not lay blame on government regulations for providing difficulty for in-state shoe manufacturing because he says laws such as safety in the workplace are important, but adds unions can be vexing to the already troubled Massachusetts industry. Unions hinder communication with management and employees, worker involvement, and getting the job done.
Unions make it less efficient and more difficult.
The Lawrence factory is union-free, but recently the Union of Needletrades, Industrial and Textile Employees has been pressuring other parts of the company. The Investments Wilson says part of the reason shoe manufacturing fled the United States is that Asian companies made the necessary technological advances and domestic firms did not. The highly technological parts of the sneaker were made outside the U.S., so instead of shipping these special parts to domestic factories, some companies found it easier to move their factories to where these parts are made. New Balance augments its U.S. production by contracting work out to both domestic and overseas shoe factories. Many of its shoes are made domestically using some Chinese materials.