“So your toys are made in Honduras?” asked a skeptical friend.
“Sure, that’s what the box says, but the full story requires a little more exploration,” I responded.
“What’s there to explore? Your must be making your toys in Honduras to take advantage of the low wages,” she said thinking she had us pegged.
“Aha! I figured that’s what you were thinking. A lot of people think that. But that is not the reason at all. If we wanted to make things cheaply don’t you think we would do so in Asia like everyone else?”
“Perhaps, but Honduras is still much cheaper than the US, right?” she replied.
I paused and then said, “Well that is an interesting question. Yes, unskilled labor is paid less than in the US, but this is only one cost. It took us over a month to open a bank account, a key shipment was delayed at Honduran customs for two and half weeks as we awaited a simple signature, negotiations that should take fifteen minutes take hours, nobody responds to emails, and shipping something from Miami to Honduras is more expensive than shipping that same thing from Shanghai to New York. Not to mention, Honduras is in the middle of a serious political crisis, which has periodically disrupted our business. All things considered I’m not sure how much cheaper Honduras is than the US.”
“OK OK. I get it. Honduras is a challenging environment to conduct business in. Then shouldn’t you either go to Asia or just stay in the US?”
“That logic is precisely where the idea for Tegu came from!” I said excitedly. “Honduras is the third poorest country in the Western Hemisphere. It has fallen behind its neighbors. Yet despite the poverty we see opportunity. Honduras has ample natural resources and human capital. We thought we could steward those resources for the benefit of Hondurans. We want, for the sake of the Honduran people, to see them catch up with their neighbors.”
“Well that is a heartwarming story, but why not write a heartwarming story here in the US? We’re in a huge recession. Unemployment is at 10 percent. People are losing their homes.” She was still not convinced.
“That has been one of the greatest blessings about starting a company right now. We have worked with dozens of great American companies, not to mention we created our own jobs! We purchase professional services from firms in places like California and Michigan. We contract engineering and prototyping services from shops located in places like Indiana, New York, and Missouri. We purchase supplies and materials from states including Georgia and Ohio. And of course, we purchase machinery from all over the US! Had we not started Tegu, we would never have had the honor of working with so many great American companies during these difficult economic times.”
“Wow. I didn’t think about that. You’re working with all of those American companies?”
“Yeah. It really is great.” I said cheerily.
“OK. So you’re helping Honduras and the US at the same time. That is cool. But you’ve got to be purchasing something from China?”
“You caught us!” I said chuckling. “We do source from China, but not in a clandestine way. We source only from factories that meet the highest quality, environmental, and working conditions standards. Contrary to what we hear on the evening news, China is not only sweatshops. There are many reputable companies in the country. Sometimes finding them feels like searching for a needle in a haystack, but good companies can be found. Let me give you and example. We hired a US-based consulting firm to help us find Chinese magnet suppliers. Chinese companies are the only significant producers of the magnets we use in the world. This study uncovered the best suppliers that meet our standards and we will only work with this group of suppliers. We could easily get a WAY better price elsewhere, but we hold ourselves to the same standards in China as we do everywhere else.”
“I think I’ve got it. Your toys are made in Honduras, but with the help of people across the globe. Hmmm … I guess ‘Made in’ doesn’t really mean what it used to in today’s world.”
Reassuringly I said, “Exactly. We are proud that our toys are Honduran, but we are also proud of our US heritage and global perspective. This is reflected in everything we do. You will notice that our packaging says ‘Envisioned in the United States, Purposefully made in Honduras’. We think this captures our view of the world very well.”
“Well, I guess it’s not just about low wages then?”
“No … It’s about much, MUCH more!”