NORTH CANTON, Ohio -- He's already brought space heater production back to Ohio from China, and if Ben Suarez has his way, vacuum cleaners will once again come off the assembly lines at Hoover's former plant here.
The chief executive of Suarez Corporation Industries on Tuesday announced plans to move its small appliance production from China to North Canton's former Hoover site and trumpet its Made in the USA label.
So far, the company has brought about 300 jobs to the U.S. by shifting heater production here. It expects to add another 200 by the end of the summer as it increases production of EdenPure heaters and starts making EdenPure vacuum cleaners.
"Most companies don't want to manufacture in Asia. They have to because companies want to produce products at a price that customers are willing to pay," Suarez said. But lower labor costs come with a big catch - waiting months to get products to customers in the United States.
Suarez said those long wait times were causing him to lose business. Customers buy his $350 space heaters when they're cold and want to be hot right away. Waiting two months was far too long.
Engineers at Suarez spent the past three years reworking its heater, making it cheaper to produce and working with local companies to supply parts. Last year, the company started making heaters at a temporary plant in North Canton. Those workers will move to the Hoover building this summer.
Suarez plans to pay workers $7.50-$14 per hour at the North Canton plant, far under the $20 hourly wage paid by Hoover before it shifted production to El Paso, Texas and to Mexico. Even at that reduced rate, Suarez said his manufacturing costs will be higher than they were in China.
"But when you take in the factor of shipping it over here, we're pretty close," he said.
He added that the company expects sales to rise because it recently won a distribution deal for heaters with the Lowe's home improvement chain and because Americans want to buy products made in this country.
Suarez' marketing research has shown a 30 percent increase in consideration when products include a "Made in the USA" label.
Oded Shenkar, a management professor at the Ohio State University's Fisher College of Business, said many companies are reconsidering producing goods in China.
"You have rapidly rising costs in China, fairly dramatic increases not only in wages but in benefits," Shenkar said.
While still cheaper than paying American workers, the difference is not as extreme as it once was. Add to that rising costs for transportation and the uncertainty related to worldwide shipping products, and it makes sense to at least consider local production, Shenkar said.
Hugh Sherman, dean of the college of business at Ohio University, said companies that are trying to get products to market quickly are better off producing things locally.
"People are so used to convenience, if it's not in the store when they want it, they'll walk away and not come back," Sherman said.
Unlike other recent economic development announcements in the state, Suarez is not getting any state or federal tax breaks to create jobs in North Canton. The city will refund to the company up to 50 percent of the city income taxes paid by its employees for the first two years of operation.
Suarez said although his company spent three years studying how to bring production back to Ohio, once it made its decision last year, everything happened very quickly.
"We just didn't have the time to apply for" state aid, he said. "Our season was coming up. If we weren't producing by July 1, we were going to miss our window."
A direct sales company, Suarez has been in Northeast Ohio for more than 40 years, selling EdenPure appliances, inexpensive jewelry through its Lindenwold brand, dietary supplements and medical devices through its BioTech Research brand and collectible coins and trinkets through its United States Commemorative Gallery brand. Though it is shifting some production here, the company will continue to import many products from Asia, officials said.
Suarez said durable goods such as appliances and exercise equipment makes up about 70 percent of the company's sales.
With such as wide range of products offered, he added that he expects the North Canton manufacturing operations to grow as it moves production here from China or develops new products. Before signing a lease on the manufacturing space in the Hoover site, he said he identified 11 nearby acres for possible future expansions.
"There are no certainties in the business world, but I think we'll be creating thousands of jobs over the years," Suarez said.
Leasing the space in the Hoover site is a big win for real estate magnate Stuart Lichter and his Industrial Realty Group. He bought the building in 2008 for $5 million. Most of the building's office space and retail space is still empty, but Lichter said the manufacturing space is now fully leased.
He added that his company is especially happy because this summer, between Suarez and other manufacturers, the former Hoover site will have about 800 workers. When Hoover announced its plans to leave North Canton, it had about 750 workers.
"How cool is it that we might get some really good vacuum cleaners made here," Lichter said.
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