Mark: Welcome to unsuitable on Rea Radio, the award-winning financial services and business advisory show that challenges your old school business practices and the traditional business suit culture. On this show you’ll hear from industry professionals who will challenge you to think beyond the suit and tie, who are offering you meaningful, modern solutions to help you enhance your company’s growth. I’m your host, Mark Van Benschoten. Take a minute to think about the last thing you bought. Do you know where it was manufactured? Did you take a moment to see whether or not it was made in America before tossing into your cart? Does it even matter where the product originated from? If so, why? With the 4th of July right around the corner, we’re feeling a bit patriotic which is why we asked Kyle Stemple, principal and director of manufacturing services at Rea & Associates, to talk about why it matters to buy American. Welcome to unsuitable Kyle.
Kyle: Thanks Mark.
Mark: Really glad you’re here. One question before we get started, how is your vision?
Kyle: Vision is excellent Mark.
Mark: Excellent vision?
Kyle: Excellent vision.
Mark: Glad to hear that. Can you see into the future?
Kyle: I wish I could.
Mark: There you go. Why buy American?
Kyle: I think there are several reasons Mark. One of those reasons is the quality. American made quality is very, very important. The other thing, not only that, is buying American you’re also going to get the product support that people know and love from American made goods.
Mark: What do you mean by product support?
Kyle: It’s like when you call that 800 number and you sit there and you have to talk to someone who doesn’t even speak English but their name’s John. You will actually get an American individual speaking to you in order to help you with that product support.
Mark: Taking the other side, since we got 20 minutes to fill here we’ll banter back and forth. If I can get it cheaper what’s wrong with that? We’re a capitalist society, it’s a free market. Why can’t I buy something cheaper?
Kyle: I think a lot of it Mark depends on what type of goods you’re buying. There are certain things that you may be comfortable with that or you’re buying cheaper that may be foreign made. Mark I’ve got a lot of clients that manufacture overseas and they’re not doing that all the time just because they want to or it’s cheaper, sometimes we don’t have the number of people it takes to manufacture those goods in the United States. One of the issues is in the United States we’ve got a lot of people that don’t like to work.
Mark: Are you talking about me?
Kyle: No secrets here Mark. One of those things that happens is they don’t have a choice. What we’ve got with some of these individuals, they believe they are above that type of job. One of the things you run into is that there is still a lot of misconception that manufacturing’s dark, dirty and dangerous. People think of that when they work on that manufacturing floor, and it’s not like that today.
Mark: That sounds like that should be the next Arnold Schwarzenegger, “Dark, Dirty and Dangerous!”
Kyle: We’ll see what we can do Mark.
Mark: You bring up something I hadn’t thought about Kyle, a labor shortage. Love it. What you’re offering is we need to go manufacture … because we don’t have sufficient labor, skilled labor here to manufacture that.
Kyle: Mark that’s definitely true. I’m out meeting with clients and touring client facilities every day, and the number 1 concern with not only our clients but even our firm itself is talent and people. Every company out there is dealing with it. Fortunately it’s an employee market, unfortunately the employee market is not that strong.
Mark: That’s very fascinating. I can’t get the skilled labor, I can’t get the talent pool, I need to get this done, whatever this is. I need to go, it’s better for me long term, not just in this next 6 months, 6 weeks, it’s long term, for me to go somewhere else, where I can have a better labor pool to make that product. That becomes something that’s not made in America. Interesting. Have you thought about how do we change that? What needs to happen?
Kyle: I think there are several things going on Mark across the world. One of those things is there is a lot of skilled technical manufacturing coming back to America because of quality issues. The other thing you’re seeing overseas is prior too, not like the US, they have no EPA. They don’t have near the regulations that we deal with in this country. They don’t care about the environment in a lot of those countries. That’s one issue. One of the things that’s happening is a lot of those countries are getting more stringent with their rules and regulations.
Mark: Their costs are going to go up.
Kyle: Right. The other one is that other countries don’t have near the child labor laws that we do.
Mark: Scary.
Kyle: Yeah, it is. Most definitely, yeah. You know, one of the things that’s happening is that they have that pool of people because they can use those young children to sow clothes, or do some of that detailed work.
Mark: As you say that I think of the shirt that I’m wearing and I’m like, “Did some 8 year old have to sit there for 8 hours and stitch my shirt and earn 50 cents?”
Kyle: Mark, please all I’m going to ask you is, please keep your shirt on. I will tell you, it’s probably not made in America.
Mark: It’s not. It’s from a website in London, I know that. It’s probably made somewhere over there. Now you got me feeling guilty, thank you Kyle.
Kyle: That’s all right, mine’s probably made overseas too, don’t feel bad.
Mark: You sit there and you say, “Buy American,” and you feel good, it’s easy to say, “We’re not faced with the decision.” You’re going through whatever store that you’re in, do you look to buy American? Is that part of your process?
Kyle: No, not necessarily because a lot of goods you’re going to buy, sometimes you can’t even tell. If I want to go buy furniture or something that’s a household item that you want quality, I am going to buy American, but there’s a lot of things that in my opinion you can get away with not buying American.
Mark: True. We’re talking about buying American, have you thought about … What about us exporting? Is there a way that we can enhance our exports so The United States is exporting more? Not maybe by an American, but more American products are being sold.
Kyle: Yeah. I think we do have some strategic advantages in certain industries possibly. Supply and demand, it’s one of those things, let the supply and demand world work for you. There are things that we do better that we shouldn’t be importing, we should be exporting. I always say, I always tell companies, “Before you want to go manufacture, design a new product, stick with what you’re good at and do it really well,” rather than just trying to get a family of product that may not make sense and may not complement one another.
Mark: That makes sense. Know what you know and know what you don’t know and try to capitalize on that. Probably more important to know what you don’t know and not get engaged in something that you really have no business.
Kyle: Exactly.
Mark: I tend to be somebody who’s a free market person, let the market determine what’s going to happen. Went through the recession a few years ago in ’08 and ’09 and the bailouts and so forth, and too big to fail concept. Part of me says we shouldn’t have done that, that’s not the free market, that’s government intervention. With buy American you might say, “I’m going to buy American because it’s still cheaper because of the cost, the tariff that someone’s going to have pay in.” I say, “That’s not free market, we’re allowing the American business to maybe not operate as efficiently.” I wish we really could have a free market, but government intervention, not just US but internationally, I don’t think you can ever have that.
Kyle: Mark it’s a really good observation.
Mark: Second one today.
Kyle: Second one this week.
Mark: It’s Thursday, yes you’re right.
Kyle: With the government intervention there are certain things that are too big to fail, and unfortunately yeah I agree with you, the free market would be great. But look at what we’re going through right now in this country with oil and gas, and specifically to where you and I live.
Mark: Right.
Kyle: Oil and gas started going boom and crazy. What happens? The foreign oil producers flood the market, driving the price down. Now it doesn’t make sense for US companies to drill. What I’d like to see the US do, is basically be able to rely on ourselves, be self-sufficient, have the avenue to do everything ourselves, then let supply and demand and free market take over.
Mark: I like that. That seems to make a lot of … Because we’re still dependent, even though having all this ramping up, we’re still dependent, we’re still beholden to somebody else. I agree with you, let’s take care of ourselves.
Kyle: If you look at over time what’s happened, the things that we’ve got ourselves involved in because of oil, or whatever that commodity may be, there’s a lot of things in history that may not have happened if we were dependent on ourselves.
Mark: That’s a good point. Getting back to the labor shortage, it’s 2016 and we’re recording this in June, so we haven’t had any of the conventions yet. I’m not that smart of a guy, we have this labor shortage, why don’t we have a more liberal immigration policy to let people come in and to fill these spots, I don’t understand that.
Kyle: Mark I think that’s a great point. One of the things that I-
Mark: Third one.
Kyle: Third one, man. I’m being pretty repetitive.
Mark: You are.
Kyle: I’m being too nice to you Mark. I’m being too nice.
Mark: I think you are Kyle, I have to agree with you.
Kyle: With what you said there Mark, if you look around I have no problem allowing immigrants to come in and take over. This country was built based on immigrants.
Mark: Correct.
Kyle: The difference, is what I’d like to see them is go through the process of becoming a legal citizen, and give those people the opportunity because I’m telling you, right now for some of the jobs that they’re doing, we don’t have enough people to do. Not only that, too many people think they’re too good for those jobs.
Mark: I agree. They need to go through a process. I’m not saying, open them up, let them come through, but Ellis Island was a process you had to go through and do that.
Kyle: Exactly.
Mark: Off topic here but … Van Benschoten came over in 1671, that’s my heritage. I’m an immigrant also, all the way back to 1671. Not that matters to anybody but … What were you going to say Kyle? I had to get that out there.
Kyle: That was good. That was a good point.
Mark: Thank you, I appreciate.
Kyle: You had me speechless there for a second.
Mark: Now you’ve got me speechless. Labor shortage, we’ve got that figured out. We’re going to put them through a process. We’re going to buy American, because we’ll get a better quality, access to support. We’ve got the labor shortage taken care of, the economy’s booming. We’re high quality because in the end of the day that’s what you really want. You want to get good quality for the dollars that you spend. We get product support, we got people here in The United States. Sounds like we could go play a round of golf Kyle.
Kyle: I think we could Mark. The last thing I’ll say, is our innovation and technology in this country is far above others. We are innovators in this country, or in this world, in this global economy.
Mark: I agree with you. I don’t know if we have any overseas listeners, I doubt we do but maybe we do, we knows. I’m not sure, I’m not bashing them, but I do thing The United States, it’s the belly of innovation. We’re out there pressing the issues, I’m not saying other people don’t invent things but it seems to start here in the United States due to our economy, our tax structure. People beat on that but I think the way we have things set up, our overall work ethic. I think it says, “We’re going to be creative. We’re going to develop new products. We’re going to figure out what the economy’s going to be here. It’s going to work.” Some people are going to make it, some people are going to not make it, but that’s just capitalism.
Kyle: Very true Mark.
Mark: That’s why I’m a Yankee fan. I’m a big fan of the Yankees and capitalism because they tend to figure it out, to be successful.
Kyle: Unfortunately Mark I wish you wouldn’t have said. I think we’re going to start losing half of our followers.
Mark: We’ll be down to 4. From quality standpoint, other countries talk quality. If you said something German made, you say, “That’s quality.” Made in Japan, that’s quality. Do we really have a leg up from a quality standpoint?
Kyle: I think it depends on the industry. If you look at what the Japanese do with electronics, they’re second to none. American, from the technology sector, is probably not as strong. But you look at American made vehicles, where they’ve come over the years is second to none. There are a lot of foreign companies that do great with vehicles too but … A lot of it is industry to industry. It really depends.
Mark: I could see that. It doesn’t mean just because it’s American made in X industry doesn’t mean that it’s not quality. Each country could have a niche as they say, right?
Kyle: Yeah, yeah.
Mark: On the free market, you like too bit of fail?
Kyle: I don’t know that I technically like it, but unfortunately there was so much else riding on it…
Mark: That you kind of had to?
Kyle: That they almost had to, because that’s the problem, we are so big and so many people rely on those companies, whether it’s stock in their 401k, whether it’s a pension plan, whether it’s jobs, the effect that that would have on the American economy if they would have failed is not just at the company level. That problem would have trickled down to our families. We all have families that work, people that work in our families who work for those companies. What people seem to forget a lot of times is the trickledown effect.
Mark: The cascading, right? That’s a good point. On the buy American, is there an incentive from the government about buying American? I’m not aware of anything.
Kyle: No, not necessarily but there are a lot of tax incentives to manufacture and produce in America. That’s one of the things that our government has really focused on. There’s R&E credits, there’s gross domestic …
Mark: R&E? What’s that?
Kyle: Research and Experimental.
Mark: Development?
Kyle: Yeah.
Mark: Launching new products and so forth.
Kyle: I think that’s one of the reasons that the US is so innovative in thought process and what they’re doing, is because we do have an R&E credit. There are things out there, gross domestic production activities like I was telling you that awards manufacturers for manufacturing in the United States.
Mark: The R&E credit … Don’t be content, look for new products. Customers are always demanding something new, go through and do that. Any thoughts on how we bring jobs back to … We were joking around about our shirts, how do we bring those jobs, I’m not asking you specifically on the garment industry, but how do we get those jobs back?
Kyle: I think overall consumer demand for quality is going to bring a lot of things back to The United States, as well as our government has realized we are an industrial nation. We were built on building things and widgets and units. I think the consumer is going to drive a lot of that. But at the end of the day all manufacturing will never be brought back to the United States because we have a talent shortage and we don’t have people.
Mark: We solved that 5 minutes ago Kyle. We’re going to have the people come through the process, legally. We’ve got that solved already.
Kyle: Mark, do you know how many problems we’ve solved in this government in the last 20 minutes? It’s amazing.
Mark: It is I guess wishful thinking.
Kyle: Maybe we should be running for office Mark.
Mark: Maybe we should go to Cleveland in a couple weeks.
Kyle: Exactly.
Mark: Take care of things. Kyle, wrapping up here. Since we already have vision into what your superpower would be, we’re going to ask you another question. If you could be someone else for the day, who would it be and why?
Kyle: I think the President of the United States would be pretty neat. Just to see the type to things they deal with on a day to day basis, that you and I know nothing about.
Mark: It would be interesting. You always see, there are picture on day 1 and the picture that they do when they’re leaving, it’s obviously the aging process but I can’t imagine the stress and what you have to deal with, the decisions. That would be fascinating.
Kyle: Mark have you looked at your picture from 5 years ago to today?
Mark: I’m looking better. I’m looking better, I don’t care what you say. I’m looking better.
Kyle: At least you still have that same smile on your face.
Mark: Thanks for coming on our show again Kyle. Thank you to our listeners for tuning in. Want to learn more about buying American and supporting local industry? Check out www.reacpa.com/podcast for bonus articles and insight. Don’t forget to check us out on iTunes our SoundCloud, where you can subscribe, rate and comment. Thank you for listening to unsuitable on Rea Radio. Until next time, I’m Mark Van Benschoten, encouraging you to loosen up your tie and think outside the box.