Moving manufacturing where the labor is cheap isn’t sustainable — but consistently innovating is, Under Armour (NYSE: UAA)CEO Kevin Plank said in a speech recently.
Shoe manufacturing has largely moved abroad to Asia from Europe and the U.S., a function of inexpensive labor in those countries, Plank told an audience at technology tradeshow CES in Las Vegas on Friday.
Now, however, consumers are increasingly demanding locally-sourced goods, making manufacturing in the Americas a more attractive bet, he added.
“We should be bringing jobs back, not just to America, but tightening supply chains all over the world,” Plank said. “We have the ability to do it better. It’s time for all of us to make an investment.”
Plank recalled different ways he’s measured the success of Under Armour, But he also said a successful business “means jobs. It means the better welfare of people.”
Instead of depending on cheap labor, Plank said that Under Armour hopes to invest more in Baltimore, where the company is headquartered. Last year, the company said it would add 1,000 jobs to a facility there, as part of Plank’s commitment to be Baltimore’s “new front porch.”
“We cannot muscle our way to the next chapter,” Plank said. “We need to be thinking … leveraging technology to make footwear manufacturing better.”
Plank’ star-studded speech, featuring Arianna Huffington and Michael Phelps, comes amid tension between president-elect Donald Trump and business leaders who manufacture overseas.
Trump has called out individual companies that are moving manufacturing overseas, but higher labor costs and lagging robotics have challenged domestic job creation.
Plank said Under Armour is hoping to streamline its local manufacturing through technology. He said the company is investing in a “math house” to build a robust data analysis center, and has even introduced technology hardware and connected shoes “just to show it was possible.”
“What are we going to do if Apple and Samsung start making apparel and footwear? How are we thinking ahead of that curve?” the CEO asked. “Anything that makes sense to have a chip in it, it should….we expect to build it first,” Plank said, adding: “We’ve always been a technology company, not any one of us can afford not to be.”