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Cutco Cutlery Keeps Manufacturing In U.S.

March 17, 2006
Jim Stitt, CEO, sees the U.S. as having quality and flexibility advantages.

A once-thriving cutlery industry, whose roots go back to English craftsmen who came to America in the 1700s, has pretty much disappeared from the landscape. But Cutco Corp., a $184 million company founded in 1949 in the small town of Olean, N.Y., survives and thrives making knives because of management's commitment to manufacture in the United States. Jim Stitt is the president and CEO of ALCAS Corp., Cutco's parent firm.

IW: Why does Cutco manufacture in the U.S.?

Stitt: We purchased this company from the Aluminum Co. of America in 1982 and made the decision to continue the course of where we had been. The company was founded on the [principle] of making a very high-quality household cutlery product that was sold in the home . . . and the best strategy [for us] was to continue the course of high quality and not try to get down and compete on price. We have really said quality is most important . . . and we feel we can best do that right here where we have been manufacturing from the very first day in Olean, N.Y., about 70 miles due south of Buffalo. We have the ability to maintain and control our manufacturing process [because it's] close at hand. I can walk out of my office and be on the factory floor in five minutes. We can very easily flex ourselves up and flex ourselves down because we're made right here, and we're delivered right from here. We have the ability to get a good workforce, an energetic workforce that wants to work here in Olean in the U.S.A. We have a principled, strong commitment to being U.S. made. We think it does add value.

IW: Did the 2000-2001 recession and its aftermath result in reviewing your commitment to manufacture in the U.S.?

Jim Stitt, president and CEO, ALCAS Corp.

Stitt: We're not burying our heads in the sand. You have to look at what makes sense, and clearly knives -- things with cutting edges -- are what we do best. There could be some things in our lines down the road [about which] we could say that [producing in the U.S.] doesn't really make sense. But for our knives, we have the equipment here. We have the people who are knowledgeable here. Certainly we could increase our margins by buying some things offshore. But we think we would give something on the quality. We know we would give something on the ability to service [the product] the way we do. We still come back to the point of saying this is the right decision. We sell in the customer's home. We sell on cash. And you got to deliver. And to say, "We miscalculated, and we'll have a boatload in here in about two months" doesn't cut it.

IW: What else can you say about your workforce?

Stitt: We have 25 people who work full time in our service center. With 14 million customers or more, there are a lot of knives out there. At the end of 2005, we had in the factory 335 hourly production employees -- and they are unionized; we have the United Steelworkers. Total employment, including our management and with Vector Marketing Corp., which is our sales and marketing arm and has its administration here, is over 650 here in Olean. We are constantly working with our people here on how we do it better, how we do it smarter and other things we have to continue to do to maintain the quality and support our sales team that is going into people's homes and selling the highest quality cutlery in the world.

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