Nike, once assaulted for the poor working conditions in their factories around the world, has found the solution.
The solution is not to improve those jobs. The solution is the FlyKnit shoe. Here is why it’s interesting (from Wall Street Cheat sheet):
The Flyknit, a lightweight shoe made from synthetic yarn, is built using proprietary technology on a machine that automatically knits the complete upper part of the shoe in a single piece before attaching it to the tongue and the sole. That basically means that the average 37 pieces that need to be put together to make a standard Nike running shoe are cut down to just two. The software, which Nike plans to patent, is also capable of altering the look and strength of the shoe.
The company says the computer-controlled weaving technology will cut labor costs and production time drastically. It could even result in shoe manufacturing moving back to the United States.
96% of Nike’s current shoe production is done overseas including Indonesia, China, and Vietnam.
So, bully for the US, we may get some high tech manufacturing back. My question, though, is whether all those overworked, underpaid Indonesians are going to wish they had their jobs back. No one in the US would want one of those Nike hand assembly jobs, but in some geographies, the loss of high labor piece work jobs will be as devastating as the loss of steel jobs to Pittsburg.