Could the bygone era of American manufacturing be poised for renaissance?
If you ask industry veteran Jeff Kussard, there’s a growing movement in the audio industry, at least, to start making loudspeakers domestically again. And this isn’t just a deluded dream of a few old timers, either. Kussard—who has worked for brands like Capitol Sales, Russound, and Harman—has been crunching the numbers for clients of his consulting business, and there is a growing convergence of factors paving the way where it’s starting to make real economic sense to bring some manufacturing in this business back home.
Some of these factors include hard costs like shipping and duty, logistics and the amount of time products sit on the water prior to being shipped, and subsequent holes in inventory that may occur if your product is selling well. There’s also the growing market trend from consumers.
“There are a lot of people going, ‘Why can’t we bring some of this back,’ and ‘I’d even be willing to spend a little bit more if it meant that,’ Kussard explained. “The tipping point on the book cost side of things these days is that all the conversation about labor practices in China, and the focus that this market is placing on that, is driving labor costs up.”
And those costs are just going to continue to rise.
There’s also overhead, from staff travel to travel to Asia four or five times a year—along with the subsequent employee morale. The first trip to Asia might seem really glamorous, but by the third time in a year, it wears on people, Kussard recalled.
While you have all of these business costs, financial and non-financial alike, there’s also the economic toll that offshoring has taken on so many once-thriving blue collar manufacturing towns in this country. Kussard comes from one such town in Wisconsin. When he goes back to visit, he’s struck by how these formerly large production manufacturing communities have been bulldozed over or their buildings are sitting derelict.
“The whole culture has changed,” he said. “The pride that you used to feel there in terms of, ‘we create stuff. We make stuff that people need and want.’ It’s a whole different attitude,” he said.
That sentiment is echoed in cities across the country.
“There’s a convergence of all these factors,” Kussard said. “It feels that there’s a tipping point, and I’m really happy to be a part of it.”
There’s already been a similar trend in the auto industry, Kussard noted. Asian and European car manufacturers have moved manufacturing back, and there are financial incentives that state governments offer to support this. There are also new car companies investing in the sector, like Tesla and a new smart car brand Elio Motors.
Kussard has been working with a few clients on the idea, the most significant of which is MISCO, short for Minneapolis Speaker Company. Back at CES in January this year, he reconnected with an old industry colleague, Dan Digre, owner of MISCO. Kussard recounted their initial conversation that lit a spark for the two. Dan had been there for a few days in the high-end audio suites at the Venetian. “He said, ‘I’m looking at all these really cool speaker brands here, all these American speaker brands, and yet they’re all Asian-sourced stuff. Even the guys that are building their own boxes here are buying drivers overseas and putting them in.’”
MISCO happens to OEM audio products for some very demanding vertical markets: aviation, medical, and military—along with the less demanding but very unique casino gaming market. The company has roots in hi-fi, as well as creating products for commercial sound contracting suppliers. As an OEM, MISCO is aggressively looking to partner with consumer audio companies to manufacture products for from its Minnesota factory.
With CEDIA on the horizon, Kussard’s mission there will be to to continue this effort to network with consumer audio brands about partnering with MISCO. He’s had some initial conversations with some of the American brands getting involved with Dolby Atmos, which looks like a good opportunity for them, he said.
“Some of the brands are starting to run into some real challenges in terms of what to do to find the right drivers to meet the Atmos spec,” Kussard said, because the requirements are so different with the height-channel modules. “MISCO happens to have a few pieces in its current catalog that seem to fit the mold pretty well,” he added. “One of our conversations at CEDIA will be to get closer to the whole Atmos conversation and explore the opportunity to bring some solutions to that environment.”
This of course is in addition to meeting with as many American speaker brands as possible to explore those opportunities for partnership. “We’ve already developed some really good traction,” Kussard said. “We’re in conversation with about 10 speaker brands right now, and we just started this dialogue in the past couple of months.”
The brands that Kussard is talking to on behalf of MISCO span across the spectrum, from traditional in-ceiling and custom install speakers that sell for a few hundred dollars per pair to the end user, as well as speakers that sell at “stratospheric” price points.
“Here in America, we’re perfectly capable of competing with anyone, is the attitude that comes across,” Kussard said. “That’s why I’ve got so much energy for the project.”