No Offshoring For These Shoes

Fast Company has a very interesting story about one CEO who kept his shoe business right here in the states. He's not a bleeding heart, and he's not motivated for political reasons, he just thinks it is the best business decision.

It is all too tempting to paint a portrait of John Stollenwerk as the Patriot CEO, vividly brushed on a canvas with strokes of red, white, and blue. Stollenwerk is the president, chief executive, and owner of Allen-Edmonds Shoe Corp., one of the last remaining shoe manufacturers in America.

At a time when more than 98% of all shoes sold in the United States are made in other countries, Stollenwerk is often held up as the lonely holdout against the dark forces of offshoring. Earlier this year, his company was honored with a Making It Better in America award from a business lobby in Wisconsin, where Allen-Edmonds is based. And even George W., on the campaign stump in Milwaukee last October, hailed Stollenwerk as a savior of American jobs. "He made the conscious decision to fix it up to make the right decisions," said the president in perfect Bush-ese, wearing a pair of black Allen-Edmonds "Stanton" loafers, "so he could keep people working here in Wisconsin."

But don't be fooled by the giant American flag outside the Allen-Edmonds headquarters. Sure, Stollenwerk is patriotic and certainly proud that he has kept jobs for the 700 U.S. workers in his plants. But Stollenwerk is not the crusading CEO he's been made out to be. Peel away the patriotism, take the man off the pedestal, and you'll find that things are more complicated than they seem. This unassuming leader isn't refusing to go overseas because of some abstract principle. It's all about the shoes, and he still believes that Allen-Edmonds can make them better — and serve customers faster — in the United States. "It's nothing for or against foreign manufacturing," says Stollenwerk, 64. "It's about the quality." Yes, he could cut some corners and probably boost profits substantially. But Stollenwerk just isn't a corner-cutting kind of guy.

Moves that lead to short-term profits aren't always the best long-term moves. And as almost every B-school in America teaches, the goal of business is to maximize long-term shareholder gain. If Americans really make a better shoe, then customers will pay for it, and it justifies the increased expense. That could lead to good margins and good long-term profitability.