Is “Made in the U.S.A.” good marketing or sound business?
Starbucks, the ubiquitous coffee chain, has recently decided to start purchasing mugs manufactured here in the United States — specifically in East Liverpool, Ohio — as reported by the New York Times. In fact, since President Obama’s State of the Union Address this past January, which highlighted an agenda to increase domestic manufacturing output, several companies such as General Electric and Whirlpool have added hundreds of domestic manufacturing jobs. Just last month, a Brookings Institution report showed that manufacturing jobs in the U.S. had grown by just over 3 percent.
But is the end goal really to bring jobs back to the country? There’s a lot to say for the fact that Starbucks’ small-scale insourcing may be more about branding and marketing. According to the Times, only eight jobs were added to American Mugs, the firm now hired by Starbucks. The mugs themselves are part of a new line of products from Starbucks entitled “Indivisible.” Profits from the sales of these items will go towards Create Jobs for USA, a program founded by the coffee company.
Credit: Starbucks Coffee Company
After all, what better way to appeal to more consumers when over 60 percent of Americans agree that outsourcing is hurting our economy? Howard Schultz, chief executive of Starbucks, makes an argument for the need to find a balance between responsibility and profitability. But businesses, especially publicly traded ones, also have a strong responsibility to shareholders who expect a profit.
Then again, could there be a more fundamental business approach to the switch? Some argue that with an increasingly stronger Chinese currency and higher transportation costs, manufacturing in the United States might actually make some sense for businesses. The numbers, however, are at the moment still quite weak. In an interview with the Times, Gary P. Pisano, a professor at Harvard Business School, remains skeptical: “I’m not sure we’re seeing a sea of change.”
But even if this is just marketing, who’s to say that that’s a bad thing?