http://cptv.vo.llnwd.net/o2/ypmwebcontent/Chion/SM%20KissUsminer101311.mp3
The Senate has approved a measure that would allow Washington to raise tariffs on goods arriving from China. It’s aimed at addressing what many US manufacturers say is an unfair advantage that China gains by keeping its currency pegged artificially low. The lure of cheap manufacturing in China has been eroding US jobs for decades.
WNPR’s Sarah Miner tells the story of the obstacles faced by one small Connecticut business trying to reverse the trend.
Ask Amy Davis how she went from teacher to business owner and CEO – and she will tell you about her 'ah hah' moment.
"I was driving my kids to school and one of them needed a tissue. Without thinking about it, I felt like I didn't have time to stop, I started to search for the box of tissues which of course I never found. But in the process of doing that, reaching over to the right side of the car, my car started to veer to the right and when I looked up, I had nearly taken my neighbor's fence out. I thought there had to be a better solution."
In 2007, Davis was at Sacred Heart University in Fairfield earning her MBA. She was given an assignment – come up with a unique product and develop ways to market it.
"Take the bottom off the tube. Take packet out - Open it. Take out the tissues. Reinsert them lengthwise into the tube. Replace the bottom. Take off the top and pull out center tissue. Put it in your cup holder, and you're ready to go."
Thus began the evolution of the Kiss-U tissue tube which fits in to a car cup holder. But as she tried to go from student project to small business, Davis quickly ran into roadblocks. She was unable to find a factory that would take a gamble on her product without any current big contracts. Discouraged – she turned to a website that connected her with international factories – and received multiple bids on the work. It was through this online service that she found a factory in Guan-Ju China that would start producing the kiss-u tissue tube.
"One of the benefits of doing work in China, is that one factory sourced out all the pieces that went into the production of this. I only had to work with one factory. They were a great company, they did a great job and they worked hard to get the production in on time."
As her product gained popularity with placement of the tube in select Walgreens, she still hoped to make her product in the United States.
"I als feel very strongly right now that the product should be produced where your market is – and a labor intensive product like this should probably be produced where labor is cheap. But it's also paper intensive, and paper is produced all over the world – and there is no reason why it shouldn't be produced where it's market exists. It reduces the carbon footprint, it's better for environment, better for local jobs, and right now Americans and Europeans both need jobs."
In order to start production back in America, Davis had to secure a business loan that would help the company gain financial legitimacy with U.S. factories. With help from the Women's Business Development Council – she did just that.
"We minimized the risk of getting rejected from the bank when she applied for a business loan."
That is Fran Pastore, the CEO of the Stamford based non-profit. Her team at the WBDC was instrumental in helping Amy develop a business plan that the banks would understand – and accept.
"Women on average get rejected 4 times for a business loan before they secure a loan for common purposes."
And heading back to the states has enabled her to lower her overhead with reduced costs for shipping.
"If I didn't have the financing through Chase Manhattan Bank, I would still be working with China. I would still be financing it on my own. As soon as my factories saw I had a line of credit from Chase – now I'm a legitimate company, not just little amy davis from Weston, Connecticut trying to produce this great product."
(sound of machines working)
This is Plasticoid in East Windsor, Connecticut– one of the 6 American manufacturers helping produce the Kiss U Tissue tube. The company is responsible for building the plastic end cap that seals the bottom of the tube. Owner Jonathan Shoham feels very connected to Davis’s product and her vision.
"Manufacturing is so important for the United States because when I get a manufacturing job, say for Amy Davis, I have to buy raw materials from another American company that actually makes the raw materials. The manufacturing jobs create a wagon wheel of jobs so if I get one job it spins off six to seven jobs for other businesses – that's what makes manufacturing, unlike service industry, so much better for the economy because it creates not just one job but many jobs."
Amy Davis's original plan was to come up with a simple solution for a common problem. She’s grown that idea into a million dollar company and figured out how to create American jobs in the process.
For WNPR, I'm Sarah Miner.