And this just in: The Ford Motor Company will build its new subcompact Fiesta in Cuatitlan, Mexico. With subcompacts becoming more and more attractive to consumers as gas prices soar, the Fiesta could prove to be one of Ford’s top sales performers. I, for one, would most certainly prefer to be in a subcompact supply chain vs. an SUV supply chain.
The choice of Mexico is a blow to the image of U.S. manufacturing as well as its financial heaalth, but hardly an unexpected one. Big Manufacturing in the U.S. probably needs to be on the endangered species list. The reason: it is all about price/performance ratios. In contrast, smaller companies can compete on quality (like Intense Cycles, the subject of my previous post). And when it’s a U.S. vs. Mexico competition on quality, the U.S. can win.
When I saw the news about the Fiesta, I was reminded of a recent visit by a close friend who was born in Mexico, lived in the U.S. for many years, and has recently returned to his country of birth.
We were in the kitchen and he was in the process of brewing some coffee in a press pot. When he lifted up the metal lid (the part with the plunger attached), he noticed that it was about 50 percent corroded on the inside.
“Looks like something made in Mexico,” he commented.
In fact, the lack of quality in everyday products is a common complaint of Mexican citizens, particularly those who are relatively well off. Many make regular shopping expeditions to the U.S. for this reason, filling their suitcases with American goods that they somehow manage to get past Mexican customs. In Mexico, “Made in U.S.A.” means something.
In my opinion, we need to work harder to prove the value of “Made in U.S.A.” to our own consumers.
If you look around your own home, you’ll see that there are products for which people (like you and yours) are willing to pay a premium. Are there some fine German knives in your kitchen? Clothes in your closet that were irresistible in spite of the price? A high-end putter that you simply had to have? Perhaps these are arbitrary examples, but there’s a long list of items people buy in spite of the price rather than because of it.
Bottom line: If your products end up in the hands of individual consumers, it’s time to think about launching a premium line of products if you don’t already have one. Quality can be sold, and I’ll give just one quick example. The Quinn Broomworks of Greenup, Illinois sells brooms that are lighter and sweep better than the conventional, not-made-in-USA brooms you can find in big box stores and supermarkets. These brooms also cost more, and they aren’t easy to find. But the company, which touts its made-in-America approach, has been in business for three generations and it’s still going strong.