A manufacturer is a person or company that makes something, or IndustryWeek’s more specific definition: a physical product representing value-added activity. That sounds simple enough, but dozens of U.S. companies long considered to be part of the manufacturing economy fail that basic test.
Apple iPhones, Nike shoes, Hasbro toys, Scholastic Harry Potter books, Funko bobbleheads—all products made by suppliers, not the companies whose names appear on the packaging.
Since 2002, our editors have assembled the IW U.S. 500 list of the largest publicly traded manufacturing companies in the country, recognizing pillars of the industrial world. Outsourcing production to specialty companies picked up steam in the years that followed. So, to get our list back to measuring the strength and impact of U.S.-based manufacturing companies, we changed our criteria and methodology for 2023.
2023 IW U.S. 500 Coverage
- 2023 IW U.S. 500: Oil & Gas Production Dominate Manufacturing
- The 2023 IW U.S. 500: A Radically Changed List that Asks Which Top Companies Really Manufacture Anything
- PDF Download of the IW U.S. 500 List
- IW U.S. 500 Rejects: Apple, Nike, Hasbro and 68 Other Companies that Don't Make Their Own Products Removed from Manufacturers List
- IW U.S. 500 Rejects List: Companies Pulled from the List Because They Don't Manufacture Products
Starting with a list of companies that used manufacturing-related Standard Industrialization Codes (SICs), we examined more than 650 annual Securities and Exchange Commission filings, looking for what companies said about their manufacturing activities.
Nike, for example, says, “Virtually all of our footwear and apparel products are manufactured outside the United States by independent manufacturers with whom we contract and refer to as ‘contract manufacturers.’”
Toy giant Hasbro notes that it uses two facilities, one in the U.S. and one in Ireland, that it previously owned but are now managed by Cartamundi, a Belgian games manufacturer. Hasbro adds, “We have diversified our global sourcing mix and decreased our dependence on Chinese manufacturing in recent years by increasing production of our products in other countries, including Vietnam and India.”
Following that painstaking process, we eliminated 71 companies with a combined $887 billion in sales from our rankings.
Apple’s Financial Might
Had we only eliminated Apple from our list and left the other 70 companies on, the 2023 IW U.S. 500 list would still have been radically different because of Apple’s incredible financial performance. Its $394 billion in 2022 revenue represents 44.5% of the money brought in by all 71 rejects. Its $99.8 billion in 2022 earnings represents 58.1% of the reject list’s net income.
Apple was No. 1 on the IW U.S. 500 list in 2022 and 2021. It was No. 2, behind this year’s No. 1, ExxonMobil, from 2016 through 2020 and No. 3 in 2015. Throughout all those years, its primary revenues came from supplier-provided products, not Apple factories.
That wasn’t always the case. Apple’s journey from manufacturer to designer/retailer/distributor of manufactured products happened gradually. In 2002, Apple’s revenues came almost entirely from iMac, iBook, Power Mac G4 and PowerBook computers—all products that the company made at its own facilities in California, Ireland and Singapore. The iPod was only a few months old and didn’t even earn a spot in the company’s annual earnings release.
By last year, that had shifted to, in Apple’s words, “Substantially all of the company’s manufacturing is performed in whole or in part by outsourcing partners located primarily in Asia, including China mainland, India, Japan, South Korea, Taiwan and Vietnam.”
By Industry
Apple wasn’t the only high-tech firm to cease manufacturing. Of the 71 companies rejected, nearly one-third (32%) were computer, semiconductor or other high-tech companies.
In the semiconductor world, “fabless” was the key term to consider. Nvidia, Advanced Micro Devices and other chip producers have no fabrication plants, unlike Micron, Intel and Broadcom, companies that in many cases are doubling down on U.S. manufacturing.
Several companies that sell finished computer systems, such as Cisco, Palo Alto Networks and Pure Storage Inc., all rely on contract manufacturers such as Flex, Jabil, Foxconn and a long list of others.
A close No. 2 to the tech world, with 17 companies that outsource production (23.9% of the rejects list), were apparel or footwear makers. The apparel industry was one of the first major industrial sectors to leave the U.S.
In 2001, U.S. apparel makers had about $5.1 billion in inventory or on store shelves across the country, according to the Federal Reserve Bank of St. Louis. By late 2019, that figure was down 84% to $800 million. Domestic apparel production has improved slightly to $1.3 billion in inventory in March of this year, but it’s still a far cry from when IndustryWeek began tracking performance.
Of the 21 apparel and footwear companies that made our initial search list for 2023, only four have any in-house production remaining—Hanesbrands Inc., Levi Strauss & Co., Columbia Sportswear Co. and Kontoor Brands Inc. (makers of Lee and Wrangler jeans).
Outsourcing, Not Offshoring
It’s important to note that not all of the companies rejected from the manufacturers’ list have fled to Asia for production. A growing sector on the IW U.S. 500 is electronic manufacturing services, manufacturers who produced outsourced goods for Cisco, Sonos, Vizio and other companies leaving our rankings.
Taiwan’s Foxconn and Singapore’s Flex are dominant players in that space, and both have large facilities in the U.S. (Flex’s massive Austin, Texas, plant, for example, was once a Texas Instruments computer assembly facility).
U.S.-based Jabil Inc. landed at No. 40 in the IW U.S. 500 list, one of eight large contract manufacturers. Combined, they had $54.5 billion in revenue and $1.8 billion in earnings in 2022.
