Selling bikes, watches and civic pride

Can Shinola change Detroit's bottom line?

April 3, 2014

(For WBEZ/Matt Baer)

What if the answer to saving a great old American city is what made the city great in the first place: Quality stuff, made right at home.

In Midtown Detroit, a new company is taking a big bet on local manufacturing to help bring its city back. And it’s counting on the century-old traditions of a Chicago factory to get there.

You probably have already heard of the company - but not necessarily in this context. In its heyday, Shinola was a popular brand of shoe polish. You might remember the catch phrase it inspired: “You don’t know s**t from Shinola.” But you probably don’t associate it with a squeaky clean watch-making factory in Midtown Detroit.

The new Shinola company headquarters was built inside the guts of what used to be a General Motors research and design lab. It’s where some 60 factory workers and a bold branding team are trying to connect the muscle of the manufacturing floor with a new image and reality for Detroit.

“This is really about quality and making product in the United States and that we can make amazing products in this country - on a small scale and a large scale - and be successful at it,” creative director Daniel Caudill said.

The founders of Shinola, backed by a Texas company called Bedrock Manufacturing, bought out the rights to that old shoe polish brand in 2011, and have been repurposing it into a pristine, new watch, bike and leather goods company ever since.

The company launched its website last year, and the first watches were sold last March. In the first six months, company reps say, Shinola generated more than $20 million in sales.

Caudill says he couldn’t be prouder that they chose Detroit.

“It was really sort of the people and the sense of optimism and excitement that kept us coming back,” he said.

And that sense of pride in Detroit and quality goods doesn’t just come from inside Shinola’s well-branded  business office…

Taenna Schumake was working on the repairs side of the assembly line the day I visited the Shinola factory. As she snapped a newly aligned watch face back together, she explained why precision is important in their work - and not just for keeping time.

“We care about the quality and the way that it looks as far as the hands - or just everything. It’s like because my name is on it, it has to be right,” she said. 

Schumake’s name wasn’t always on watches - that’s true of a lot of people here--their hands worked with car parts or chopped vegetables or washed hair.

Imagine the transition for Yati Hairston, moving from the roar of the automotive world to the whisper of this watch factory.

“It’s quiet in here,” she says, “Sit down, so it’s a whole lot less stress.”

Shinola began hiring in 2012, and they weren’t just looking for watchmakers.They put applicants through dexterity training to make sure they had keen eyesight and nimble fingers - taking those who used to be part of the engine of this motor city and retraining them to tinker inside the movements of a watch.

Robert Swope came from the food industry - and now works in customer service repairs.

“You know you wouldn’t think you’d be able to do something like this in this country. You think you’d have to go to Switzerland or something to be a part of something like this, but I didn’t even have to leave my home town,” Swope told me.

And when a customer opens the American-made wooden box for the $600 watch - that punch of pride in Detroit and American-made is part of what Shinola is selling.

Take their full color ad in the New York Times last year:  “To those who have written off Detroit - we give you the Birdy”

They mean birdy, as in their Birdy watch.

But bold branding doesn’t come cheap: The company spent $10 million on marketing alone in 2013.

The watches do include parts that Shinola brings in from as far as Switzerland and China-- which has brought on some criticism of their American-made claim - but the timepieces  are assembled on factory lines in Detroit.

And if you’re building your brand on “predominantly American made”  and obsession with quality - you’d  better get American suppliers with the same sensibilities - like inside an old tannery on the Northwest Side of Chicago--where old-fashioned is their way of doing business. Shinola chose the Horween Leather Company to supply all of the leather for Shinola's watch straps and leather goods.

The story of  Horween  began in Chicago in 1893 - when Nick Horween’s great, great grandfather Isidore Horween traveled from Ukraine to the World’s Fair in Chicago.

And for a tanner like Horween - Chicago turned out to be a great place to do business.

“A lot of the tanning industry in the United States was concentrated here at that point because the stockyards were here,” Nick Horween said. “The business was easy to develop at that point because so much of what he needed to start the business and so much of what those businesses needed was within miles of the factories.”

The stockyards might be gone - but the factory remains at 2815 North Elston Avenue. And the employees inside follow the exact guidelines on many of the same cast iron machines that Nick Horween’s great great grandfather set up when he opened his first factory in 1905. 

It all starts with animal hides shipped from around North America and Europe - then stored in stacks in the basement of the old building in Bucktown. And tanning takes months: The hides will be taken through a process that includes dehairing, trimming, shaving, tanning and retanning, conditioning drying and coloring….

The steps vary, depending on whether  the hide’s next life will be as a shell cordovan shoe, for instance, or a baseball glove.

“We’re really trying to showcase the natural beauty of the leather,” Horween said. “The quality, the natural characteristics, and also when you make leather like that it looks better when it ages better and it feels nicer.”

And when they say natural - they mean it.

If you take a closer look - you might see some small scratches or minor discolorations in a piece of leather - evidence of a hide’s previous life. Horween pointed out some scratches that he said could be from the animal rubbing up against barbed wire. And some little dots that he said were likely bug bites.

According to Horween, adapting to new technologies is not their style. And his family will spare no expense to continue the traditional way of doing things - so long as it improves their product.

So a business plan bent on quality and American made has kept Horween going for a century. And Shinola is growing: Since I visited, they’ve expanded to a second movement assembly line, and they continue to hire.

But can  that - and a good dose of civic pride - make a real difference in Detroit’s bottom line?

Wallace Hopp is a senior associate dean at the Roth School of Business at the University of Michigan - and it happens he also lives part time in Chicago.

He says Shinola represents a feel good story for Detroit - and the focus on high-end quality goods will help Shinola, as a business, do well for itself.

“A passion for quality goes a long way,” Hopp said. “We forget that at the end of the day you’re buying an experience - and so focusing on that is really important - people will pay for quality.”

But when it comes to Shinola helping Detroit’s economy, Hopp says the company will likely create  more of a ripple than a splash. On the jobs side, for example, they’re only a small factory, with only so many positions.

“The truth is, that most of the manufacturing that we see swinging back into the U.S. has many, many fewer jobs than the manufacturing that left a couple of decades ago,” Hopp said.

But he says, think about how Silicon Valley works: One of the reasons it rules the tech industry is everyone who lives there has experience in the industry. They jump from firm to firm and businesses end up training each others’ workforce, creating a vibrant environment that multiplies success.

“We call it network clustering...you cluster for the benefits of being around other manufacturers. And once upon a time here in Detroit we had a really powerful network for the auto industry.” Hopp said. “Now that’s kind of frayed at the edges, obviously, and Detroit’s not what it once was,  but it’s not nothing in manufacturing.”

So while high end watches and bikes alone might not be enough to scrub away the graffiti and pay Motor City’s bills, over the next few years, Hopp says, Shinola could be a harbinger for a comeback of American manufacturing in the industrial Midwest.

Lauren Chooljian is a WBEZ reporter. Follow her @laurenchooljian.