Two California Companies Are Forced To Manufacture Their Products In China
The following originally appeared on Manufacturing & Technology News.
This is a story about two little Los Gatos, Calif., companies that were producing products in the United States, only to find their creations cloned by people in China who they say ultimately forced them into manufacturing there. The first is the venerable Macabee Gopher Trap company, and the second is the lesser-known FlairHair.
FlairHair was founded in 2006 by Los Gatos, Calif., Central Avenue resident Dave Nance who, to cover his head while he was golfing, designed a visor with spiky artificial hair coming out of the top. Nance applied for a patent and began marketing FlairHair at trade shows.
But in 2007, FlairHair knock-offs began showing up on the market — the idea stolen by a Chinese businessman who saw Nance at a trade show. “I hired an attorney and we filed suit against them in Santa Clara County court,” Nance said, “but the Chinese kept producing and selling the hats.”
A local judge ultimately told the Chinese manufacturer to quit producing the knock-offs.
“We came to a settlement with them, whereby they’d shut their operations down,” Nance said. “We thought that would stop it, but even then they continued selling the knock-offs.”
No wonder. Nance was able to obtain licenses from colleges, the NFL, MLB, NBA and NHL to produce visors sporting their teams’ logos. More than a million FlairHair visors have been sold.
At one point, Nance employed seven people, with FlairHairs being manufactured in Missouri. Now, Nance has three employees and the visors are manufactured in China. “There’s no way with the knock-off people in China continuing that could we afford to manufacture anywhere but China,” Nance said. “They’re just driving business to their homeland.”
The original FlairHair visor sells for $19.99. Nance thinks the Chinese knock-offs are now selling for $9.99. “They’re crap,” he said of the imitators.
The Chinese cloner got around the court settlement by making the spiky hair detachable from the visor, whereas Nance’s hair is sewn in. “They got their own patent, where they made some minor changes and are continuing to sell full bore,” Nance said.
The Macabee Gopher Trap story is quite similar. Invented in 1898 and patented in 1900, the Macabee traps became a staple among farmers in California and elsewhere. Even as Silicon Valley paved over the fertile “Valley of Hearts Delight,” Macabee traps remained on top, in part, Macabee general manager Ronald Fink said, “because our name is extremely valuable.”
At the beginning, the traps were produced at the Macabee family home on Loma Alta Avenue in Los Gatos, which remains the company’s headquarters today.
But in 2004 a Chinese importer came knocking. “He had made some traps and had test-marketed them at Ace Hardware in Marin County,” Fink said. “He knew it was marketable and he sent us a letter saying, ‘This is what we make in China.’ He knew we were a family business and he thought he’d give us the opportunity [to manufacture in China] before he gave it to our competitors.”
Fink took the letter to the Macabee family, saying, “There’s no way we can ignore this.” He likened the letter from the Chinese importer to “extortion.”
“They came to us with a product. They didn’t say, ‘This is what might happen.’ They said, ‘This is what will happen.’ It was a case of do or die,” Fink said.
So Fink began testing the Chinese-manufactured traps to see if they were up to snuff. “We probably threw away thousands of traps, but there were no failures,” he said. “The steel is just as good.”
His only complaint is that when the traps arrive in town, the boxes are damaged from shipping. “We have to rebox everything,” he said. “We still operate with pride, but we no longer have pride of manufacturing.”
The last “local” Macabee Gopher Trap was produced in Los Gatos in May 2008, and six Cambodian refugees that Fink had hired were laid off. “They’re like family,” he said. “They’re all legal aliens who worked for us for 20 years.”
Fink says one of the men, who was making about $40,000 a year at Macabee, is now close to being homeless because he’s been unable to find a job. The other five former employees remain unemployed as well.
Fink blames Congress for the fall of U.S. manufacturing.
“Maybe we should have been a little stronger when we let China into the World Trade Organization because the dirty little secret is that Americans like cheap products and now we’re beholden to the system,” Fink said. “How do you bring the jobs back? I don’t know. The dogs are out and they’re running wild.”