Made in the U.S.A. (Chief Concern).

Since the 1880s, our company has prospered as an apparel manufacturer. Today, however, I believe we are one of only a few that make its products entirely in the United States. While it's hard for any of us to know for sure how September 11 will affect us, what does seem clear is just how important we are to each other in this country. But as I've watched production move increasingly to other parts of the world, I've come to view the decline of our manufacturing base as a growing national crisis. It's clear to me that the country is losing its ability to create wealth through manufacturing.

The companies that have descended from the original Warren Featherbone organization have always been family operated, and we therefore feel it's important that we maintain domestic production and provide jobs for the people who are part of our community in Gainesville, GA. That's the emotional side of it. But the hard business case is undeniable as well. Economic wealth is created through manufacturing, agriculture, and extraction. According to the Department of Commerce, our manufacturing base comprises 22 sectors, of which textiles and apparel is just one, and 18 of those 22 sectors have developed trade deficits.

The Far East is where most apparel comes from, and I don't see that changing--although there is growing competition from Central America and Mexico. The trouble is, the long supply chains inherent in offshore production can result in a flow of goods that doesn't match consumer demand. When the goods delivered to the loading dock aren't what customers are shopping for, stores must resort to the desperate measure of price markdowns. Markdowns are a big issue: According to a Harvard Business Review article, department store markdowns grew from eight percent of sales in 1971 to 33 percent in 1995. The numbers tell us retailers are not making a lot of money, even with all of the sup posed supply chain improvements.

Our experience as the supplier of Alexis PlaySafe baby garments to Dillard's Inc., a chain of more than 300 department stores, shows that U.S.based apparel manufacturing and material sourcing can work. Every year, Dullard's measures the gross profit margin of all its vendors. Last year, they found that our products were 20 percent more profitable than the average of all its vendors, most of which sell imports. Our products are more profitable because of far fewer markdowns. Our short supply chain enables us to ship every week so the store only buys the goods that are selling. Forecasting and ordering is based on fresh data, and the stores don't end up with unwanted inventory.

This seems to be a pretty good indicator that a shorter supply chain and quicker response time work. If retail chains are to continue making money, there will have to be a different model with a much shorter time lag between the indicators of customer demand and the arrival of products. Apparel is highly sensitive to seasonal changes and fashion trends, so quick response to demand is vital.

The concern goes beyond store profits, however. To me, there's a national imperative that we strengthen manufacturing to maintain America's high standard of living. This has gone largely unnoticed because the recent period of economic expansion created many jobs, but mostly in the non-manufacturing sectors. Because many people are working, family income has not suffered, but average wages are not increasing. If you were to factor out the supplemental income from a second or third wage earner, the results might look a bit different.

I'm not alone in this viewpoint, either. We took a group of about 20 people to the Toyota assembly plant in Kentucky. It was the most impressive plant I've ever seen, so much so that I bought a Camry. Realizing General Motors has gone from being the largest car assembler in the U.S. to being the largest car assembler in Mexico, I asked the manager at Toyota how many of their cars are made in Mexico. He said, "We don't make any there because it's too far from the market." Which prompts me to ask: Why doesn't everyone know that?

Charles E. "Gus" Whalen Jr. is the CEO of Alexis PlaySafe, a Warren Featherbone company. The privately held Gainesville, GA, concern produces infant clothes and children's swimwear under the Alexis and Pool Pal brands.