Politics

How a tiny flatware manufacturer in upstate New York could win big from $738 billion defense bill

Key Points
  • Buried deep inside the sprawling federal bill to fund the nation's military is a special gift for the smallest city in the Empire State.
  • It's attached to a provision that requires the Defense Department to purchase certain products from U.S. manufacturers, including textiles, shoes and hand tools. Section 854(a)(1)(3) adds three words to that list: stainless steel flatware.
  • There is only one company in the country that still produces those utensils. Sherrill Manufacturing has been stamping forks, spoons and knives in the old red brick factories here for more than a decade, even as competition fled overseas.
L to R: Greg Owens, Sherrill Manufacturing CEO, Rep. Anthony Brindisi and Matthew Roberts, Sherrill Manufacturing president, at a press conference, in Sherrill, NY on Monday, December 16, 2019.
Karen James Sloan | CNBC

SHERRILL, N.Y. — Buried deep inside the sprawling federal bill to fund the nation's military is a special gift for a company headquartered in the smallest city in the Empire State.

That gift is attached to a provision that requires the Defense Department to purchase certain products from U.S. manufacturers, including textiles, shoes and hand tools. Section 854(a)(1)(3) adds three words to that list: stainless steel flatware.

There is only one company in the country that still produces those utensils. Sherrill Manufacturing has been stamping forks, spoons and knives in the old red brick factories here for more than a decade, even as competition fled overseas.

"There's no reason our taxpayer dollars should not be going to support an American company," said Rep. Anthony Brindisi, who represents the region and fought for the change.

If the bill becomes law, the company estimates its sales could skyrocket by 50%, resulting in dozens of new jobs. The legislation passed the House last week, and the Senate is expected to vote on it Tuesday. President Donald Trump has indicated he will sign it.

VIDEO1:5601:56
New York flatware company scoops up a big win in a federal bill

"We've had a lot of friends and family that helped us through the tough times," said Matthew Roberts, the company's co-founder. "And I think when you go through very difficult times, you really appreciate when things go well."

The story of how Sherrill was able to shoehorn its way into the $738 billion defense bill involves a stubborn executive, an embattled lawmaker and the topsy-turvy politics of the Trump era. It's a lesson in how business gets done in Washington — and what Washington can do for business.

Hatching a plan

Roberts used to feel like he was screaming into the darkness.

He had spent 13 years working at the flatware factory here when it was owned by Oneida Limited, eventually overseeing human resources. That meant when production moved to Asia and the plant shut down in 2004, it was his job to show the remaining 1,200 employees out the door.

But even as Roberts mothballed the factory, he was hatching a plan to keep it alive. He bought the plant with another former Oneida employee, Greg Owens, and together they strung the business along through the Great Recession, roughly a dozen workers stamping away in a factory built for more than 2,000.

During those years, Roberts realized that the conventional business model of using low-cost labor overseas would become unsustainable. Factories were just chasing cheap workers across the globe. Over his career, he watched production move to Japan, then South Korea, now China.

Flatware from Sherrill Manufacturing in upstate New York.
Karen James Sloan | CNBC

For his business to stand out, he knew it would have to be different. So he decided to go all in on America.

"Now you're starting to see Chinese wages increasing. They're starting to build a consumer economy. Their prices are eventually going to start going up," Roberts said. "That's why I thought 'Made in the USA' was going to have a comeback."

That philosophy doesn't just apply to the utensils. All the supplies and equipment at the factory are domestically sourced, from the steel to the buffing compounds and wheels. The packaging is American as well. The name of the company's direct-to-consumer brand is Liberty Tabletop, its logo red, white and blue.

"From our hands to your hands" is one of the company's mottos.

The concept worked. Sherrill now makes roughly 10,000 forks, spoons and knives on average each day. The company books about $6 million in annual sales and employs 56 people.

But the capacity of the facility is many multiples of those numbers. At its peak, Oneida was the largest employer in town. Payroll alone was roughly $75 million, Roberts recalled. He always knew there was room to grow.

That's when he turned to Uncle Sam.

Trouble with utensils

In fact, it was the government that reached out first. The General Services Administration is the purchasing arm of the federal government, equipping agencies with everything from office supplies to vehicles.

GSA was having trouble with the utensils that were coming in from China, Roberts recalled. The products weren't to specification, the materials weren't right and sometimes the delivery didn't show up at all. So Sherrill was called to fill in the gap.

About 20% of Sherrill's business now comes from government sales. But Roberts remembered that Oneida's old contracts with the federal government were much larger than that. He found the culprit involved a little-known law called the Berry Amendment that requires the military to purchase certain items from domestic manufacturers.

Flatware used to be one of those items, but it was removed in 2007. So Roberts embarked on a campaign to bring it back.

"Manufacturing in general is a strategic asset for our country," Roberts said. "If you can't make things, you rely on other countries who may or may not be your friends in the future. You don't have control over your destiny."

A worker at Sherrill Manufacturing plant in upstate New York.
Karen James Sloan | CNBC

Roberts' efforts coincided with the growing backlash against global trade that helped propel Trump into the White House. Sherrill is located in Oneida County, which voted for Trump by an overwhelming 21-point margin. The message from the new administration — and the voters — was clear: America First.

Still, Roberts said his motivations are apolitical. He persuaded Democratic Sen. Chuck Schumer of New York to push for a federal investigation into products falsely labeled as American goods in the GSA marketplace. Then he worked with GOP Rep. Claudia Tenney to add stainless steel flatware back into the Berry Amendment. She tried twice with no luck.

Tenney lost her seat to Brindisi in last year's midterm elections. After he won, Brindisi came out to tour Sherrill, and Roberts launched into his pitch.

"He and his staff grabbed the ball, and they were able to get it done," Roberts said. "The politics of it I really don't understand too much of it."

Freshman with clout

Freshman members of Congress typically don't wield much clout. But Brindisi was one of the "majority makers," as House Speaker Nancy Pelosi often calls them — centrist Democrats in Trump districts that were crucial to winning control of the House.

"It's very obvious that the speaker has spent a lot of time assuaging those moderates up for re-election that she's going to be able to provide wins for them," said Jim Manley, a longtime Democratic strategist.

For Brindisi, securing a new lifeline for Sherrill was a key priority. This summer, he took on Rep. Mac Thornberry, the ranking Republican on the House Armed Services committee, on the House floor.

"Where does it stop? What about the napkins? What about the soap to wash your hands?" Thornberry said. "I don't think we want to go down this road without a clear national security reason to limit the suppliers available to DOD."

"I would argue that it is in our national security interest because supporting American manufacturing and supporting American jobs helps grow our economy," Brindisi shot back. "I would much rather support American manufacturers than support manufacturers in China."

The amendment passed 243-187 on July 11.

Over in the Senate, Schumer ensured that parallel language was included in the Senate's version of the bill — and stayed in during the final negotiations.

"Not only will this law ensure that our military have the highest quality silverware available, made by hardworking Americans, but will also provide a valuable shot in the arm to the Mohawk Valley economy," he said in a statement.

Politics of impeachment

But as the months went by, the defense bill languished on Capitol Hill. Meanwhile, the spotlight on Brindisi grew hotter, and the politics became more perilous.

About a week after the House launched the impeachment inquiry, Tenney declared a rematch against Brindisi and began campaigning to win back her seat. Brindisi was one of the last House Democrats to support the investigation. Afterward, Tenney joined protesters outside his district office. News photos of the rally show signs reading "Stop the Madness."

Brindisi has also drawn the ire of the Trump campaign. Brad Parscale, who is managing the White House re-election effort, tweeted that Brindisi was "in big trouble because of impeachment," citing poll numbers that show Democrats trailing in the district.

"I'm going to take some time to decompress," Brindisi said. He plans to "go back through all the evidence, take a look at the articles of impeachment, and then make a decision."

He's spending the final days before the historic vote meeting with constituents in his district. He plans to stop at the factory on Monday and meet with Roberts about the investments the company is making, the jobs they'll be creating, the opportunities for growth — a hometown victory that he hopes will drown out the drama over impeachment.

"I don't care if it's good for the party," Brindisi said of the win for Sherrill. "It's good for the American people. And that's what I care about."