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Reebok deal blow to New England’s shoe legacy

Last week’s $3.8 billion sale of Canton-based Reebok International Ltd. to German-based Adidas-Salomon AG continues the erosion of what was once one of the region’s signature industries.
/ Source: The Associated Press

A century ago, New England was the world’s shoemaker. Factories in towns the likes of Brockton, Haverhill, Marlboro and Peabody churned out millions of pairs of shoes that were shipped to Europe and beyond.

Most of those plants have long since gone quiet, but last week’s $3.8 billion sale of Canton-based Reebok International Ltd. to German-based Adidas-Salomon AG continues the erosion of what was once one of the region’s signature industries.

The Reebok sale was the latest in a series of industry mergers that has also swept up two other Massachusetts shoemakers in recent years — Saucony and Converse — and threatens more jobs.

The symbols of New England’s shoemaking legacy are still easy to see in Lynn, population 80,000, where three of every five workers was once employed by shoe factories. But Lynn’s last shoe plant shut down five years ago, and the few remaining brick factories are either vacant or being converted to loft apartments.

“It’s a factory town, and we’re embracing what we once were,” said Diane Shepard, archivist librarian at the Lynn Museum and Historical Society.

The industry emerged alongside textile mills in the early 19th century. With easy access to ports and waterways, entrepreneurs employed new manufacturing techniques and relied on low-cost raw materials from the South to mechanize and expand the industry. Shoemaking equipment was produced by United Shoe Machinery Corp., whose rebuilt headquarters are a local landmark in Beverly.

The industry eventually spread to neighboring New Hampshire and into Maine, home to brands such as Bass, Rockport and Eastland.

Regional links among shoe and leather makers and machinery suppliers kept the industry healthy through much of the 20th century.

“As long as those historical links stayed intact, the regional industry did well,” said Bob Forrant, a historian at the University of Massachusetts-Lowell who has studied New England’s industrial past.

But the industry was challenged by the emergence of Midwestern meatpacking plants, which produced leather that could be transported on an expanding rail network to shoemakers nationwide. New England’s high labor costs also drove jobs to the South and eventually to East Asia.

“The companies began to see the potential for making more money by moving the work, at first to other places in the United States, and then to the global economy,” Forrant said.

Reebok in the 1980s became one of the first major sneaker makers to move production jobs to east Asian countries with low labor costs.

Reebok still employs about 1,600 workers in Massachusetts, including 1,200 at its headquarters south of Boston. And while Adidas says Reebok will remain a separate brand, the two firms have not said how many jobs will be cut.

Forrant said deals like Adidas-Reebok intensify pressure to shift shoe marketing and design jobs from high-wage areas such as New England to countries with increasingly skilled workers such as India.

“Historically, as companies have moved production overseas, eventually the design and innovation and high-end work have followed,” he said. “Neither the United States, nor Massachusetts, has the corner on smart, innovative people that they once had.”

While Reebok’s new owners will be on another continent, another Massachusetts athletics shoe and apparel maker is being bought by a company in its home state. Earlier this year, Peabody-based Saucony was bought by Lexington-based Stride Rite.

North Andover-based Converse, was snapped up by Nike in 2003.

Those deals leave New Balance Athletic Shoe Inc., headquartered in Boston’s Brighton section, as the region’s biggest independently owned sneaker maker. New Balance prides itself on remaining privately held, resisting promotional deals with athletes and keeping some of its manufacturing jobs in the United States.

The head of the 2,700-employee company, Jim Davis, said the Adidas-Reebok deal means “consolidation will continue to take place at both the retailer and supplier level. But for New Balance, it will be business as usual.”