HOUSTON — Farouk Shami, a Palestinian-born hairdresser who built a $1 billion manufacturing company around a popular line of hair irons, is moving all of his production of hand-held appliances from China to a sprawling new factory here.
The move flies in the face of conventional wisdom, which says gadgets like this are best made in a low-cost country. But, he says, outsourcing has led to a loss of control over manufacturing and distribution.
Mr. Shami says the Houston-made hair irons will cost about $2.50 more to produce than the China-made irons; he plans to absorb the cost without raising the retail price.
He says some costs will fall as large-scale p
roduction gets under way. One Texas Appliances Suppliers of plastic parts initially charged four times the cost of the Chinese supplier, but cut the price to near parity once it became clear that orders would be large and steady, he says.
The move is creating jobs in Houston at a time when factory jobs are evaporating in most places. On a recent afternoon, job applicants sat in the lobby of a cavernous new factory, hoping to be one of 30 people hired daily. The company expects to have 1,200 workers when the factory is at full speed in December.
