In part one of this series, we take a tour of New Balance's Methuen factory, the latest component of New Balance’s “made in America” vision. In part two of this series, we’ll detail what that their broader vision looks like and the challenges the company faces when it comes to domestic production.
If you walk through the front entrance of New Balance’s new Methuen, Massachusetts, facility, you’ll notice a plaque that touts their shoes as being “Made in the USA.” Walk further into the heart of the factory, and you can’t avoid the giant American flag draped across the wall.
New Balance’s Methuen facility only manufactures one shoe: the Made 990v5 running sneaker, which COO Dave Wheeler was sporting the day of our tour. We observed how workers construct the shoes, which sell for $184.99, from beginning to end. The factory began operations in January this year. The 80,000-square-foot facility, located roughly 28 miles north of Boston, was a $20 million renovation project of a property New Balance purchased in 2019. The company currently aims to produce 750,000 pairs annually by the end of the year, all “made in America.”
What is the value of “made in America”?
The company’s technical standard for placing the “Made in USA” tag on its shoes is that 70% of materials used are sourced in the United States. Companies often use their own standards for the “Made in USA” designation, but the Federal Trade Commission has certain rules in place that dictate how exactly a product is labeled, depending on the type of claim a company makes.
The Methuen facility, for now, has three value streams, or cohorts of workers: green, blue, white. The three value streams, which are cordoned in their own areas within the facility, carry out the same functions, but are at different levels of maturity in terms of tenure and production output, Derek Cobbe, New Balance plant manager, told Retail Brew.
The green value stream, which started in January, can produce about 50 cases of shoes per day—or 600 pairs. The blue team is at about 35 cases daily, while white—the newest team— wraps up 15–20.
Each value stream has roughly 35–38 associates, and the factory in total employs a little over 100 workers. New Balance hopes to double the roughly 90-person workforce that it started with by the end of the year.
- Cobbe mentioned that within each value stream, workers are moving toward every unique step in an average of 22.5 seconds.
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Once a case is completed, a quality-control inspector samples 30–50% of the shoes and evaluates them based on certain criteria. Cobbe said the gold standard is for 99 out of every 100 shoes to reach the end of the production line without any issue. The balance for production standards entails weighing quality and efficiency with safety.
“Our associates are very familiar and comfortable and have the opportunity to talk about quality and what might not be working for them, to get them to a place before you put them into a line, they’re ready to go. And that’s why that number should be 99% minimum,” Cobbe said.
In Lawrence, Massachusetts, where New Balance has a mill that has been operational for 40+ years, New Balance is more capable of smaller-volume unique collaborations, like retro shoes—including the 998—which uses repurposed material the company has on hand.
- Wheeler added that carrying out staff functions, from design all the way through delivery, is also much easier when production is centrally located.
One of the benefits of having domestic facilities located in one area of the country is that they can work in tandem, New Balance CEO Joe Preston told Retail Brew. The Lawrence mill was the site where New Balance trained its first cohort of workers who would eventually move to Methuen upon opening.
“The closer we can get from when they’re purchasing the product and using it and being able to react from that, makes us much stronger, but controlling our destiny is ultimately at the root of what we’re trying to do, and domestic manufacturing is a great example of it,” he said.—KM
Glenda Toma and Naula Ndugga contributed to this report.
