A US hat maker's quest to support middle-class jobs

Inside the nearly 150-year-old Bollman Hat Co.

Inside America's oldest hat maker
Inside America's oldest hat maker   

Tucked in Lancaster County, Pennsylvania, among Amish families and dairy farms, 200 American workers are keeping a unique tradition alive—hat making.

The Bollman Hat Co. has been manufacturing hats for nearly 150 years, and is America's oldest hat maker. Launched before the invention of electricity and the automobile, company founders used water wheels to generate power. Workers loaded hats onto horse and buggies for transport to the train station.

Since Bollman's founding in 1868, U.S. hat and apparel making have largely moved overseas. But a diverse product mix and tough choices have helped Bollman anchor production in America, as other U.S. manufacturing work has disappeared. The company even sources most its wool in southwest Texas. It's the entire supply chain—wool shaved off a sheep's back to finished goods—which is extremely rare.

Bollman brings the cleaned wool to Adamstown, Pennsylvania, where the fluffy stuff is combed into a gauzy-thin fiber. The material is tamped down into the distinctive, tight texture found in wool felt hats.

Bollman Hat Co. President and CEO Don Rongione shows cone molds used to make hats’ distinctive shapes.
Heesun Wee | CNBC
Bollman Hat Co. President and CEO Don Rongione shows cone molds used to make hats’ distinctive shapes.
"We've got to rebuild domestic manufacturing to recreate the middle class." -Rongione, Bollman CEO

Helming the business is Don Rongione—a Philadelphia native and fan of handcrafted American products—something nurtured by his father. Nick Rongione, who left high school to fight in World War II, returned and became an overcoat maker. Nick often pointed out American-made goods. "He was very proud of what we made here," Don Rongione said.

Years later in the 1980s, the Bollman company was looking for a controller. Don Rongione came on board and climbed the ranks. In the 2000s, he would help the factory endure U.S.-China trade policy shifts that flooded American store shelves with foreign-made hats.

Rongione would also become friends with factory staff—some 30-, 40- and even 50-year employee veterans. He'd become familiar with the 500,000-square-foot factory, how giant tubs of wool have to be stored in a high-humidity space, so the $5 a pound stuff doesn't fly "all over creation."

He looked around and saw a chance to keep good-paying jobs for men and women who have that knack for agile, precise handwork. Rongione seized the moment, thinking, "We've got to rebuild domestic manufacturing to recreate the middle class."

A flag on the shop floor of the Bollman Hat Co. in Adamstown, Pa.
David A. Grogan | CNBC
A flag on the shop floor of the Bollman Hat Co. in Adamstown, Pa.
"[Buying] 5 percent more made in the United States, we can create a million jobs." -Rongione

It's easy to romanticize recent gains in U.S. manufacturing jobs. Labor costs are rising in China, and U.S. energy costs to produce goods are declining. Marketers, meanwhile, are only beginning to grasp the power of iconic "Made in USA" labeling, as more consumers connect the dots between baskets full of foreign-made cheap stuff and laid-off family and friends.

Read MoreWhy 'Made in USA' labeling is so complicated

But the U.S. manufacturing industry, emerging from the Great Recession, still hasn't recovered to 2007 output or employment levels. In a January 2015 report on American manufacturing, researchers at the Information Technology and Innovation Foundation, a nonpartisan organization, described the renaissance as more myth.

Any which way you slice manufacturing, American makers like Rongione and his global staff of 280 workers have been swimming upstream for years. When a decades-old machine breaks, they fix it. There's no parts company to call. "You really can't buy these machines anywhere."

Hat making steps can include using carding machines to transform rugby ball-sized spools of wool into cone shapes. Hats in progress are further compressed, stretched, dyed, cut and trimmed. All total, it can take some 90 steps to make a men's wool felt hat from start to finish.

Rongione and his workers want to keep making hats and raise production. Then in the 2000s, things really got bad.

'I cried'

The U.S. had granted China most-favored nation status. The relationship was sealed for China to make lots of cheap goods, which would benefit U.S. consumers, even if it meant less low-end manufacturing work.

Low-cost hats, primarily from China, poured into America. Chinese exports broadly accounted for between 750,000 and 3.5 million lost manufacturing jobs in the 2000s, according to a Federal Reserve study.

Bollman orders shrank. "We lost $3 million in profits from the factory in one year."

Job cuts came in 2007 and 2008. "We had to lay off 100 employees on one day," Rongione recalled. "I cried."

All told in the last decade, U.S. manufacturing lost about 5.8 million jobs or about one-third of the workforce, according to labor data. American manufacturing output collapsed to its knees.

Read More'Made in China' becoming increasingly 'Made in USA'

In recent years, some manufacturing jobs from overseas have returned or reshored to the U.S. But some economists argue the recent recovery is being driven by cyclical forces after years of pent-up demand. The Information Technology and Innovation Foundation says recent manufacturing growth is less about renewed international competitiveness.

Still Bollman keeps pushing. The company wanted to raise production and avoid more layoffs. So it did something about it.

What are you wearing?

Kay Crockett hardens the wool felt for Bollman hats.
Source: CNBC
Kay Crockett hardens the wool felt for Bollman hats.

The end of the week dress code at Bollman is "American Made Fridays." You're encouraged to wear "Made in USA" clothing, but Rongione probably has you beat. He usually sports American-made gear from head to toe—boxers included, though you'll have to trust him.

That's the idea behind American Made Matters, launched on July Fourth six years ago. About 350 member U.S. companies—makers of luggage, bathtubs, machinery components and more—educate consumers about buying American-made goods. Shopping online is easiest as you can search for "Made in USA" items.

Of course it's unrealistic to think consumers can buy and live on 100 percent "Made in USA" goods. And it's tough to resist cheap when you're on a budget. But for items you hope to use for years, factor in quality, long wear and where it was made.

"If we all just bought 5 percent more made in the United States, we can create a million jobs," Rongione said.

Don't see anything U.S.-made? "Ask retailers," he said, "because by speaking out and asking, it'll encourage retailers."

Olympics to Jennifer Lawrence

Collapsible molds used to size top hats. This decades-old, labor-intensive blocking technique is still used today.
Heesun Wee | CNBC
Collapsible molds used to size top hats. This decades-old, labor-intensive blocking technique is still used today.

Bollman has survived trade shifts, partly through a diversified portfolio. It makes pricey and midtier hats for men, women and children, from all kinds of fibers and textiles, sourced globally.

It owns and licenses a dozen hat brands including Bailey, Helen Kaminski, Karen Kane and Kangol—including its iconic golf caps worn by stars including Samuel L. Jackson. Bollman also makes hats for retailer Rag & Bone, worn by Jennifer Lawrence. The company has manufactured hats for the U.S. Olympic team for eight games.

Bollman also offers workers an incentive program. While many other apparel and accessory makers moved to Asia—where labor can be anywhere from six to 10 times cheaper than U.S. wages—Bollman in 1985 adopted an employee stock ownership plan. Also known as an ESOP, it provides workers with retirement income. All U.S.-based workers become part company owners. Bollman's average factory wage is around $15 an hour, and the company has no union.

One of Rongione's happiest days was in 2004, when he doled out profit-sharing checks. He wants to hand out more. And growing interest in hats and American-made goods is helping. Bollman production in 2014 was up 26 percent compared to 2013, with 2015 production on track to be higher.

Decades ago, most men and women regularly wore hats. Then in the 1950s, more people bought cars to drive to work, forgoing buses and trains. Then a strange thing happened to newer car models—specifically car roofs, which began to drop.

"The cars got lower," said David Trumbull, a consultant and expert in textiles and U.S. manufacturing, "And it wasn't as comfortable to wear a hat."

Bollman employee Orville Wagner
Source: CNBC
Bollman employee Orville Wagner
"Support the American worker" -Wagner, Bollman worker

These days, wearing hats has become fashionable again. Men and women sport fedoras, Panama hats and narrow-rimmed trilbys.

But while younger shoppers may be buying hats, Rongione noticed many of his employees were in their 50s. "How are we going to continue this craft?" During the past few months, he has hired about 30 new workers.

Orville Wagner, who has been with Bollman for 24 years, helps with training. It takes dexterity and months of practice to get the rhythm of the machines and shop floors. Watch an experienced pro. Every hand gesture and step are efficient, exacting.

Wagner wants to support the tradition of making something with your hands. And he acknowledges buying American-made products can be tricky.

"But just take that extra little effort to see which one is American made," Wagner said. "Support the American worker."

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