When Black & Decker announced in late November that it would close its Maryland manufacturing facility, it meant another 1,300 U.S. manufacturing jobs would be gone forever. Although some of the power tool maker’s production is still in the U.S., the company announced a year ago that it would begin transferring production and service operations from facilities in the U.S. and England to low-cost locations in Mexico, China and Central Europe.

B&D is just one of many U.S. companies forced by harsh economic realities to make the tough decision to move manufacturing operations offshore. Many more will likely follow, further eroding the customer base for American industrial distributors.

In remarks at the I.D.A./ISMA fall convention, Industrial Supply Manufacturers Association president Hardy Hamann and Industrial Distribution Association president Mort Harris both addressed the new realities facing distributors today. Their comments should serve as a clarion call for distribution. Distributors must get down to the serious business of cutting costs out of the channel and helping their manufacturing customers lower their costs in order to compete globally.

“We cannot get caught in the trap of believing that the future of business will be just like the past. Those distributors who change and create new relationships with their customers and meet the needs of customers will have the competitive advantage,” said Harris. 

“In spite of the challenging economic climate, I believe that American manufacturers and their distributors are ready to deal with the new realities,” added Hamann. “There is little doubt that we will never be able to compete with the low manufacturing costs in China, but there is no doubt that American manufacturers are introducing new products faster than ever before.” Hamann said there is also no doubt that American manufacturers support their products better than anyone else in the world and that American manufacturers are privileged to work with the most sophisticated, professional distributor network in the world.

Now, it’s up to each of us to prove Harris and Hamann right.

This editorial appeared in the January 2003 issue of Progressive Distributor magazine. Copyright 2003.