Conn Davis - Is American manufacturing making a comeback?

New data shows U.S. manufacturing activity growing at its fastest pace in four years as companies ramp up production and brace for rising global costs. Is American industry finally regaining momentum after years of decline?

Conn Davis is CEO of Byrna Technologies. He joins the show to discuss the latest manufacturing numbers, the impact of global instability and rising costs on American factories, and whether President Trump’s economic policies are helping drive a broader industrial resurgence in the United States.

Transcript

SPEAKER_01 0:04

Hey, welcome back to the Lawrence Larson show, and I apologize for my gravelly voice on a Thursday night. Glad to be with you and always glad to take your phone calls and your emails. You know, I know that fuel prices are up. I feel it every time I fill up my pickup truck. Uh I know that uh other prices are up and inflation is up. But you know what else is up? United States manufacturing is up. And I thought we'd ask Conn Davis about that. He is the chief executive officer for Berna, who took over for Brian Grant uh Gans in March of this year. Conn, welcome to the program.

SPEAKER_00 0:38

Thank you very much, Lars. Great to be here.

SPEAKER_01 0:40

So tell me what's happening with U.S. manufacturing and is this American manufacturing finally roaring back to life under Donald Trump?

SPEAKER_00 0:50

I certainly think we are seeing a comeback in America, American manufacturing. To be honest, when Berna moved its manufacturing to the U.S. years ago, initially we weren't able to find all the components we needed to make our product here domestically. The simple truth is hobbled out manufacturing ecosystem here in the U.S. over decades. But we are truly seeing a shift there. Now Berna sources 80 to 90% of its components here in the U.S. And I think more companies are seeing the value of those domestic focused supply chains from quality control to shorter lead times and avoiding those international choke points. There's a clear tailwind today to U.S.-based manufacturing.

SPEAKER_01 1:30

Hey, Khan, would you mind? Do you have any specific examples we can use? Because I mean, I uh I think I've told you, I may have told you before uh there was a company we talked to years ago that was making an American-made house. And I said, What do you mean, American-made? And they said, all the parts uh come here. And they said, because an awful lot of uh the average house is coming from overseas, whether it's sheetrock or screws or things like that. And there were bizarre examples like sheetrock screws that were 25 bucks a box if you bought them from China, were $125 a box, because the American company that made some of them didn't expect to sell very many of them. And as you said, we've hollowed out that ability to produce. Is there a way to get it back so that when companies do what Berna did and they say we're gonna come back and onshore to America, that they'll be able to find the bits and pieces they need?

SPEAKER_00 2:22

Absolutely there are. So, I mean, we we've seen a lot of pro-growth tax reform, I would say, in the U.S. recently that lets people invest in U.S. manufacturing and see the benefits to that much faster. Uh, also, we've seen a lot of deregulation, cutting back some of the red tape that holds back those investments. Those things clearly are wind in the sales of American manufacturing. But if you look at what we're doing, just the ability here in the U.S. to get the resins to make products and to do them in molds here competitively in America has happened uh over the past few years. And and seeing that investment and that growth in the American manufacturing base uh has been great.

SPEAKER_01 3:03

You mentioned uh resins and things like that. I I had a gentleman call me up, young guy. And he said, Hey, we're making stuff in America. I said, What do you make? He said, Have you done any stack wall blocks? And I said, Yeah, I've done stack walls. I mean, I'm not I'm not terribly good at it, but I'm, you know, I can build a stack wall. He said, Do you know the plastic pin that goes between the upper block and the lower block? And I said, Yeah, they they hold it together so after you put the dirt behind it, uh the blocks aren't going to move out of place. He said, We make those. And I said, You make them in China or you make them here? He said, We make them here. And I thought, there's exactly the kind of product that we ought to be making here, except as you said, there may be a flaw in that, saying, but is the resin here? Can we get the stuff here? Can we find the molds here? And can we actually do it under American regulations? Is the answer to all those yes?

SPEAKER_00 3:52

I think the answer to those things is it's getting better all the time. The the regulatory burden has gone down. The resin supply in the U.S., I mean, with the growth of the American uh industry energy industry, uh, really has seen those resins come back to the United States and be available here. And then the ability for small businesses to go out and get incentives to actually build the molds here in the United States and put U.S. manufacturing to work making the products is huge. You couple that with the fact that you don't have to have all of these things sitting on a boat for months at a time in your supply chain, and you're really able to get lower cost and higher quality product right here in the U.S.

SPEAKER_01 4:32

Hey, by the way, Khan, one of the things I wanted to ask you about is if you have that mold, like you said, that's that's a very primitive kind of intellectual property, but it's still intellectual property. So at least in America, can you have some confidence that if you have a mold, it's not gonna be ripped off? And would you have expected those things to be ripped off if they were manufactured or made in China?

SPEAKER_00 4:57

Uh 100%. You can absolutely control those things so much better with the U.S.-based supply chain. Uh, people actually do what they say they're gonna do here. Uh, whereas if you were sourcing that from China, you can better believe Amazon would have had a uh a product 50% less uh overnight.

SPEAKER_01 5:15

Because they're gonna take your mold and make the products and trim off some of the profit and be able to sell it at the kind of price that'll attract the customers. So, what do we need to do additionally to protect intellectual property when it comes to moving companies back to America? What do we need to do?

SPEAKER_00 5:34

I think it's pretty straightforward. I think if you can use American partners uh in your supply chain in order to really strengthen the trust and control uh over your product, you're gonna get a lot of tailwind there. The other thing is quite frankly, you know, what we're doing from a strategic tariff point of view, when people are cheating, we need to keep the playing field level.

SPEAKER_01 5:56

So, how do you do that? I mean, do you does the DOJ have to bring in jar uh indictments and charges against them or what?

SPEAKER_00 6:04

So that can be part of it, but I think the more important thing is for American manufacturers themselves to bring those molds back to the United States, to put them in hands of American companies who aren't going to be cheating in that way.

SPEAKER_01 6:18

You know what I wish we do, Khan? Because I know that in China, an American can't own an American company. And they may say, well, we own this factory, but they own what's inside of the factory and anything they can carry away. They also, you can't buy land to a large extent, even though we'll allow Chinese nationals to buy land on our soil. Do you think it's time for us to tell China if Americans can't own companies in your country and can't own land in your country, then turnabouts fair play. You can't own things here.

SPEAKER_00 6:52

At the end of the day, I I'd love for anyone to be able to invest in the United States and the United States, uh, you know, the innovation system that we have here. But I think we have to have a full suite of responses uh to how we look at this. So I don't think anything is off the table when you talk about how do we respond and protect American manufacturing.

SPEAKER_01 7:13

I mean, I guess I I understand what you're saying. I'd like people to be able to invest in America as well. I mean, there was a time when people were all wound up about Japan investing here and they forgot the British have been invested in North America and not just in Canada and other places, but in America, in the United States as well. And you say, well, are you worried about them? And some of it was a bit of jingoism. But uh, if you say to a country, we can't buy things in your country, but you can buy things in our country, I think the equity issue there is easy enough for China to address. They could say, fine, we'll let Americans own land and companies inside our country. And if they decide to say no, then maybe our response should be, then you can quickly divest of everything you own in America, because if our people can't own things in your country, then you can't own things in our country. That is Conn Davis. Khan is Berna's chief executive officer. He took over for Brian Gans in March of this year, and we're glad to have him on. You know what Berna is? Berna is the non-lethal self-defense mechanism. And no, do I own one or do I, you know, have a dog in the fight? No, I don't. But do I think it's a great product? I absolutely do, and I'm glad they're manufacturing right here in the great U.S. of A. You're listening to the Lars Larson show.