This category covers establishments primarily engaged in manufacturing fabric-upper footwear having rubber or plastic soles vulcanized, injection molded, or cemented to the uppers, as well as rubber and plastics protective footwear. Establishments primarily engaged in manufacturing rubber, composition, and fiber heels, soles, soling strips, and related shoe making and repairing materials are classified in SIC 3069: Fabricated Rubber Products, Not Elsewhere Classified; those manufacturing plastic soles and soling strips are classified in SIC 3089: Plastics Products, Not Elsewhere Classified; and those manufacturing other footwear of rubber or plastics are classified in SIC 3140: Footwear, Except Rubber.
316211 (Rubber and Plastics Footwear Manufacturing)
The rubber and plastics footwear industry in the United States was worth slightly less than $1 billion in 2000. The market reeled from a decline in consumer spending on athletic footwear but tried to capitalize on the shift in demand toward outdoor footwear, including rugged shoes for hiking and winter-sports footwear. The other shift in consumer tastes—toward casual street fashion—was not of particular help to this industry as leather products tend to dominate that category of footwear.
The United States is the world's largest importer of footwear, accounting for one-quarter of the world's imports. Asian and Middle Eastern manufacturers are responsible for about 70 percent of worldwide production. The major manufacturing countries include China, India, and Indonesia, where many U.S. companies also produce a large portion of their own shoes to take advantage of lower labor and materials costs. This fact has, in recent years, generated controversy for the footwear industry as a whole, as news of harsh labor practices in U.S. manufacturing facilities unleashed a backlash against the use of sweatshop labor in particular, and exploitative labor practices in general, and spurred calls for regulations establishing worldwide labor standards, including minimum wage and safety provisions.
This industry consists primarily of two product categories. One area includes the waterproof footwear worn over shoes to protect them from inclement weather. Such products are often referred to as overshoes, rubbers, galoshes, and arctics. Also included in this area are rubber boots that are not worn over shoes but protect the feet from mud and water. In addition to the retail market, protective footwear is more or less guaranteed a strong institutional customer base with restaurants, large construction crews, municipal snow-removal workers, and a host of other industries in relatively stable need of protective footwear. Within these limits, there is a great deal of specialization, with products often tailored specifically for different occupations.
The second area consists of rubber soled canvas shoes, generally known as sneakers. While nearly all sports shoes have a rubber or plastic sole, and athletic shoes other than the canvas sneakers featuring rubber soles and a fabric upper are considered in this category, those with leather uppers belong to other SIC classifications.
The rubber footwear industry is largely based on the ability of rubber to protect against water and rain. An early breakthrough was made around 1920 by a Scottish chemist, Charles Macintosh, who developed rubberized waterproof cloaks that became known as "mackintoshes." Later, Macintosh's associate, Thomas Hancock, devised ways to process rubber so that it could be used as a material for footwear. By the 1990s, the manufacture of footwear required more rubber than that of any other product except tires. The sewing of uppers to rubber soles had been superseded by the use of adhesives or vulcanizing directly.
There were 50 manufacturers of rubber and plastics footwear in the late 1990s. They employed 6,425 workers in 2000, down from 9,600 in 1995. Of these, 5,009 were production workers earning an average of $9.35 per hour. U.S. employment in the industry had decreased steadily since the early 1970s due in part by moves to lower cost suppliers overseas. This pattern was predicted to continue into the early 2000s.
In the late 1990s, U.S. manufacturers produced an average of 50 million pairs of rubber or plastic-soled, fabric-upper shoes per year. Just under half of these were athletic shoes, including sports shoes made with cleats and spikes. Athletic shoes, however, accounted for about 70 percent of the shipment value for this area.
Total industry shipments declined from $1.13 billion in 1998 to $1.02 billion in 1999. In 2000, shipments dropped under the $1 billion mark to $976 million. The cost of materials fell from $542 million in 1998 to $497 million in 2000, and the number of total industry employees declined from 8,198 to 6,425 over the same time period.
Sportshoe manufacturer Nike received worldwide criticism because of substandard conditions and harsh treatment of workers, including corporal punishment and child labor abuses, at its factories in both Indonesia and Vietnam. The firm hired the Goodworks International Group, headed by former United Nations ambassador and mayor of Atlanta, Andrew Young, to review a new code of conduct for its overseas factories in the late 1990s. Nike also expanded its U.S. advertising team, adding Goodby, Silverstein & Partners to help counteract the bad publicity. Criticism of Nike, however, has hardly abated, despite its return its continued profit margins; in fact, it has generalized into a more widespread outcry affecting the entire apparel industry. Labor activists, human rights groups, and religious organizations have forced politicians to take action against such practices, and President Clinton created a task force to mitigate the abusive child labor practices employed by U.S. manufacturers in Third World countries. As the issue becomes more integrated into social consciousness, manufacturers in this industry will be further obliged to take note, while some analysts expect that refraining from such practices can be turned into a selling point.
Leaders in this industry included large, diversified shoe and apparel manufacturers and smaller firms focusing on more specific products. Decker's Outdoor Corporation, employing 200 workers, generated revenues of $112.9 million in 1999 from its outdoor rugged footwear and sports shoes and sandals. Vans, Inc. of Orange, California, produced a range of footwear for casual and rugged wear, including snow boots and biking shoes, employing 1,040 people and posting sales of $234.0 million. Converse, Inc., a global manufacturer based in North Reading, Massachusetts, with sales of $244.7 million and 2,650 employees, was a leader in this category thanks largely to its popular All-Star brand of canvas, rubber-soled sneakers. LaCrosse Footwear, Inc., based in LaCrosse, Wisconsin, with 1,250 employees, specialized in protective, sporting, and occupational footwear, generating sales of $128.3 million.
A number of established names also participated in the rubber and plastics footwear industry, but derived most of their revenue from the $14.7 billion sneaker industry, of which products in this category are only a part. The leading manufacturers of this larger industry were Nike, controlling 34 percent of the market; Reebok, a distant second at 13 percent; and Adidas, with 6 percent.
Supporting the industry's technological development front was the Shoe and Allied Trades Research Association (SATRA), which maintains a Footwear Technology Centre in England. This group of 180 scientists, technicians, and support staff assists its 1,200 members in 70 countries by helping to control manufacturing costs and improve quality by evaluating materials and production. It aids the business side of the industry through its consulting activities and by developing management information systems tailored to the industry. Its members are footwear manufacturers, material and machinery suppliers, repairers, and retailers.
SATRA has done a great deal of pioneering research, providing industry members with technology too costly for the smaller companies in the footwear business to develop on their own. For example, SATRA has developed beneficial concepts in the areas of ergonomics, color durability, the environment, materials standards, quality control, and computer applications like CAD/CAM, robotics, and bar coding.
"A Floor Under Foreign Factories?" Business Week, 2 November 1998.
"Athletic Footwear Marketscope." Sportstyle, 17 May 1999.
"Footwear, Rugged and Casual." Sportstyle, 24 May 1998.
"To Protect and to Serve." Footwear News, 3 May 1999.
United States Census Bureau. 1997 Census of Manufacturers. Washington, D.C.: Department of Commerce, 1999.
United States Census Bureau. Current Industrial Reports. Washington, D.C.: Department of Commerce, 1999.
United States Census Bureau. "Statistics for Industries and Industry Groups: 2000." Annual Survey of Manufacturers. February 2002. Available from http://www.census.gov .