New Balance advances plan for sixth New England factory
Here is something you don’t see every day: a new shoe factory.
Sure, Greater Boston is home to some of the industry’s finest. Reebok, Converse, Saucony — to name just a few.
But only one local athletic-shoe company, New Balance, still makes some of its kicks in the United States. And even New Balance hasn’t opened a new manufacturing plant in two decades.
That’s about to change. New Balance, led by chairman Jim Davis, is back at it, with plans to open what it calls a “Factory of the Future” in Methuen next year. The state Economic Assistance Coordinating Council approved $900,000 in state tax credits Wednesday to help subsidize the $33 million project, and the city is pitching in with $272,000 in property tax breaks.
The Methuen property, at least to start, won’t house massive assembly lines. New Balance has committed to putting 60 new jobs in the 80,000-square-foot building that it bought in April. It will occupy slightly more than half of the space, leaving room to grow. The focus will be on testing advanced manufacturing techniques, 3-D printing, and research and development.
That number represents a modest addition to New Balance’s formidable operations in New England: Its 1,300 manufacturing workers are spread among three plants in Maine, as well as one in Brighton and one in Lawrence, not far from the Methuen site.
But the investment reinforces how promoting US manufacturing has become almost a religion over at the New Balance HQ in Brighton. It costs more to make shoes here, even after shipping costs are factored into the equation. But Davis, who controls the company, believes strongly in keeping manufacturing alive, retaining the jobs and traditions that other running-shoe companies have outsourced to overseas partners. The economic impact goes well beyond those five factories. Think of the suppliers that New Balance supports — companies such as Dela Inc., a laminate manufacturer in Haverhill, or Vibram’s Quabaug rubber products plant in North Brookfield.
New Balance still does plenty of offshoring, too. However, a spokeswoman says the company makes about 3 million pairs of shoes a year in New England. That number could be growing, thanks to military shipments that began last fall. New Balance had lobbied fiercely to get the Pentagon to buy running shoes domestically, like the agency does with other components in a recruit’s kit; the Defense Department relented after Congress got involved. So far, New Balance has moved more than 50,000 locally made pairs of shoes to the military after winning part of the Pentagon bidding.
With all the emphasis on local manufacturing, you might think New Balance would be cheering on the tariffs that the Trump administration is planning for Chinese imports.
The military shoes need to be made entirely from US products. But New Balance’s New England plants rely on a global supply chain for most of its shoes, including some imported components from China. Gorman testified that the 25 percent tariff on Chinese goods could add millions of dollars in extra costs, risking the viability of New Balance’s “Made in USA” business. For now, she says, the US supply chain remains too limited to accommodate all of New Balance’s needs.
Maybe that will change over time, if more shoe companies choose to go domestic. Executives at Waltham-based Saucony had seriously considered doing so, for example, to compete for the Pentagon work. But that dream ended when parent company Wolverine Worldwide sold off its military contract business in 2017.
For New Balance, the race continues: This multimillion-dollar Methuen investment is just the latest example of how the company is breaking away from its rivals by embracing domestic manufacturing, rather than running away from it.