Lost in a sea of troubling economic data is one bright spot: America is once again competing for -- and winning -- factories and manufacturing operations.
FORTUNE – Until the end of World War II, America's economy was almost completely self-sufficient. Everything it consumed it also produced. The big shift away from manufacturing came as the U.S. sought to speed the recoveries of war-ravaged Europe and Asia. Trade barriers fell significantly and soon American companies were sending emissaries abroad, looking to do business cheaper by expanding their operations overseas.
The golden era of manufacturing would never come back. By the 1980s, manufacturing made up 25% of U.S. labor; it has fallen to about half of that in recent years as technological advances that greatly reduced the costs of transportation and communication also made it cheaper to have operations outside the U.S.
But in the after glow of the Great Recession, something surprising is happening: U.S. manufacturing appears to be on the cusp of an awakening – if not a full rebirth. Companies like Illinois-based Caterpillar (CAT), the world's largest maker of excavators and bulldozers, is shifting some of its excavator production from abroad to Texas. U.S. furniture maker Sauder is moving production back home from low-wage countries. According to the report by Accenture, some 61% of manufacturing executives surveyed by the consultancy said they were considering more closely matching supply location with demand location by re-shoring manufacturing and supply.
K'NEX, the only US construction toy company focused on Building Worlds Kids Love™ is pleased to be one of the 2011 inductees into the Made in the USA Hall of Fame. Administered by the Made in the USA Foundation, the Made in the USA Hall of Fame was established to celebrate the best that America produces.
Out of 76 nominees, 22 companies were selected to join this unique Hall of Fame in 2011. In addition to K’NEX these companies include New Balance®, Ethan Allen®, Harley-Davidson® and other iconic American brands.
“Being inducted into the Made in the USA Hall of Fame is a real honor,” said Michael Araten, President and CEO of K’NEX. “As we approach the 20th anniversary of K’NEX in 2012 our commitment to US manufacturing only grows. Both K’NEX and our sister company The Rodon Group are humbled to be included in this group alongside some of America’s great brands.”
K’NEX Brands has two operating units – K’NEX, the only US construction toy company focused on Building Worlds Kids Love™; and The Rodon Group, an American custom plastic injection molder specializing in high volume, small plastic parts for over 100 industries. Both K’NEX and The Rodon Group are active members of the organization American Made Matters whose mission is to educate consumers about buying US-made products to help strengthen the American Dream. Both companies are third generation family businesses located in Hatfield, PA where they are proud to be a part of the local community while encouraging American entrepreneurship.
The Rodon Group, a custom plastic injection molder, recently upgraded their manufacturing facility with three new cooling towers as part of a continued commitment to U.S. manufacturing and environmental sustainability.
Amazement. K’NEX President and CEO Michael Araten says that it is one of the most common responses he receives when he tells people that K’NEX building toys are manufactured in Hatfield, Pennsylvania. “So many people are used to toys from overseas that they don’t even consider that these products may be manufactured not just in the United States, but in their own backyard,” Araten said. “That is the perception that we’re hoping to change.”
If amazement is the initial response to the news that K’NEX products are manufactured in Hatfield, the sentiment only deepens upon hearing the uniquely American story behind the colorful plastic building sets.
Joel Glickman was 50 years old in 1990 when inspiration struck in the form of cocktail straws at a wedding.
Mr. Glickman, tinkering with the straws, envisioned the possibilities of a construction toy built around the concept of rods (like the straws) and connectors to hold them together.
By the time his idea (now called K’NEX) hit the toy market in late 1992 Mr. Glickman had spent two years refining the concept only to have it rejected by the major toy companies including Hasbro and Mattel.
Committed to the idea, he pushed ahead manufacturing the K’NEX pieces at his family’s plastics factory, The Rodon Group, in Hatfield.
Glickman’s hunch was correct — the idea was a good one and in the nearly 20 years that have followed, the family-owned and operated K’NEX has become one of the world’s leading integrated construction systems for children and the winner of more than 200 international awards and recognitions. The line has grown to include sets with not only rods and connectors but also bricks, personality parts, and motors for movement, now sold by retailers around the world. A focus on Building Worlds Kids Love™ has resulted in Sesame Street, NASCAR, Monster Jam and Mario Kart Wii-licensed K’NEX building sets along with K’NEX branded building sets for kids ages 2–12.
Committed to manufacturing in the United States at a time when most toys are made overseas K’NEX is the only U.S. Construction toy company, with more than 90 percent of its parts still manufactured its by sister company The Rodon Group. In business since 1956, the Rodon Group makes billions of parts each year in its 125,000 square foot eco-friendly facility and is one of the largest family-owned and operated injection molders in the United States. In addition to K’NEX, The Rodon Group serves a diverse group of industries including consumer products, medical, construction, and pharmaceutical.
“At K’NEX and Rodon, we’ve learned that manufacturing in America can actually be more cost-effective than manufacturing overseas,” said Araten.
“Furthermore our nation was founded on an entrepreneurial spirit, and the ability to shape our own growth by inventing and making everything we use. Continuing to shed our manufacturing base is akin to trying to run a race without running shoes — you can do it, but you are at a tremendous disadvantage.”
It’s a disadvantage that K’NEX is trying to stem through its membership in various Made in America advocacy groups including American Made Matters, headquartered in Adamston, PA. Araten, K’NEX and Rodon are optimistic about the possibility of bringing more manufacturing jobs to America and increasing the understanding of why American made matters among consumers. It’s just another challenge for a company used to surprising doubters — a fact made even clearer by the rejection letters that line the walls of K’NEX Headquarters as a constant reminder that in America all things are possible.