Farmingdale mattress, pillow maker rests easy as it moves production to U.S.
A Long Island maker of mattresses, pillows and sheets whose manufacturing was 100% offshore five years ago is moving production back to the United States.
Domestic manufacturing now accounts for more than 40% of revenue at Bedgear LLC, and that is expected to exceed 50% in 2024, said chief executive Eugene Alletto.
Like other manufacturers, the closely held Farmingdale-headquartered company has grappled in recent years with rising trade tensions and associated tariffs on Chinese goods plus an international supply-chain bottleneck brought on by the COVID-19 pandemic.
In response, Bedgear is implementing a "just-in-time" and "just-in-case" supply chain designed to keep inventory lean and resiliency high should supply-chain issues worsen, Alletto said.
The reshoring model, in the works for six years, is borrowed from Detroit's auto industry.
"Raw materials and components come from around the world for final assembly in the United States," Alletto said.
The initiative has prompted Bedgear to quadruple the headcount at its 300,000-square-foot Rock Hill, South Carolina, manufacturing facility, known internally as "The Rock." Negotiations are ongoing with government agencies for a second manufacturing and distribution facility in the Southwest, he said.
Bedgear, whose marketing of its "performance" products aims to create a lifestyle brand, offers items tailored to customers' sleep preferences. For instance, some pillows are designed for side sleepers, and some mattresses are designed for couples who want firm support on one side and a softer surface on the other.
Alletto envisions supplying to retail consumers a custom-made sleep solution in less than two days to the domestic market.
"We can manufacture that bed and have it delivered anywhere in the United States within 36 hours," he said.
Alletto said he has not pulled the plug entirely on manufacturing in the Far East. Production continues in Taiwan, South Korea, Vietnam and China for sheets and other products aimed at Asian markets.
The Federal Reserve Bank of New York earlier this month reported that global supply-chain pressures in February had dipped below the historical average for the first time since 2019. The index measures changes in delivery time, backlogs and transportation costs to gauge the supply-chain climate faced by importing companies.
Despite political discussions about "decoupling" the economies of the United States and China, bilateral trade continues to grow. In 2022, imports from China increased to $563.9 billion from $526.8 billion in 2021 and $448.9 billion in 2020, according to the U.S. Census Bureau and the U.S. Bureau of Economic Analysis.
The 2022 deficit with China widened to $366.1 billion from $334.8 in 2021.
Strategies by U.S. companies to move production out of China have centered on "friendshoring," "nearshoring" and "onshoring."
Onshoring refers to the return of overseas manufacturing to the United States, as done by Bedgear. Some companies have chosen to move operations to nearby countries, known as nearshoring, or to countries whose policies or values are seen to align with those of the United States, friendshoring. Canada is cited as an example of both.
Thomas Cook, managing director of Blue Tiger International, an East Moriches trade consultancy, said that labor "is a huge challenge" for companies that would seek to relocate factories to the United States, and on Long Island in particular.
"If you open a new factory here on Long Island, you'd struggle to get people to do that blue-collar work," he said.