The Ailing Ceiling Fan Industry in America and Why Almost All Ceiling Fans Come From China
Here we discuss the history of ceiling fans and why they are no longer made in America and what can be done about. Since America was one of the first countries in the world to make and use them, it is a sad legacy that we have lost that capability but there is hope. Read on for more information.
Electric ceiling fans were first manufactured in the 1890s chiefly by General electric, Westinghouse and Emerson Electric. These companies were the largest of the electrical device companies at the time and on the fore front of new electrical product development. In the beginning, the fans were very expensive for the era and used almost exclusively in commercial applications such as bars, restaurants, hotel lobbies and meeting rooms. They were very heavy and made of substantial metal castings with produces that needed to be filled with oil on a regular basis. But they worked well and ran almost forever. Many are nevertheless running today in restored condition. The fans generally very simple and plain by today’s standards, but were very much considered a utility appliance to be felt and not heard or seen. There was no air-conditioning at that time so the ceilings were fairly high and the fans kept the air moving. The fans continued on this way essentially unchanged but little by little dropped in price to become more affordable (and lighter duty) by the 1960’s. At this point they became less popular as central air-conditioning and heating became the norm and ceiling heights fell to the standard 8′ tall. In the late 1970’s there was a resurgence in fan popularity with the “energy crisis” and renewed interest in saving electricity, though that again faded into the 1980s as energy became cheap again. There was a major change in the evolution of fans in the 1980 and 1990’s as cheaper production factories in Taiwan came on line. But first a little background into ceiling fan manufacturing.
Ceiling fans are fairly simple devices, a motor, hanging rod and 3-5 blade arms that keep up the usually wood blades. The motors were generally made by a handful of large companies and used in a variety of brands, keeping costs down. You might have a choice of two motor sizes, but otherwise they were pretty similar. The decorative outer housing and blade arms were the expensive part to develop. They required very expensive dies and other castings and often took years to pay back the development costs. So, few companies wanted to take risks on developing and paying for new shapes, styles and designs when there was no perceived need. So, fan styling stayed pretty simple and boring. Remember when the upgrade for fans were blades with woven cane inserts? That all changed with Taiwan initially than China in the late 1990’s. Their much lower labor and tooling costs did two things; 1. It allowed existing fan companies to more cost effectively create thoroughly new models and 2. It produced an opportunity for new companies without any factories of their own, to suddenly become fan companies. Examples of the latter are Craftmade, Minka Aire, Concord, Fanimation, Quorum, Regency, Copper Canyon, Ellington, Hunter and many more. In fact only Emerson is left of the original companies making fans. GE got out of the business and Westinghouse went bankrupt and sold the name to a start up company.
This was the first major explosion in fan variety and popularity. As more and more choices because obtainable, consumers discovered that fans were not longer just for moving air, they were now decorator items that jazzed up the room. Then the housing expansion hit in the 1980s further increasing sales and the choices became almost unbelievable. The downside to all this was that the companies manufacturing ceiling fans in the US either had to shut down or move overseas to keep up with the drastic style changes and need from an ever more finicky consumer. After about 10 years, all the US companies were either out of business or now just importers. Once this happened, all the sustain industries that used to make the fan parts, likewise moved into different areas or also went out of business. For a while a few companies like Emerson assembled fans here from parts made overseas or in Mexico, but they ultimately gave up and now strictly import all their fans. This scenario worked great for many years as the housing expansion continued into 2007, than disaster hit.
One of the “devil’s bargains” the fan companies had to sign with the large foreign factories was to buy large quantities of these fans, usually 500 to 1000 at a time of each form. That was great so long as there was plenty of market. What has happened now is that these companies suddenly had warehouses complete of fans that were no longer selling and they could no longer provide to create new models or already order inventory of good selling models until back inventory was sold, which was not happening very quickly. The next major issued was that prices started to rise dramatically as the cost of raw metals and petroleum products spiked in 2007-10 due to enormous need in Asia. As the lighting and fan business went into a emotional tail spin, many companies had to merge or got bought out and this trend is expected to continue for a while to come. So the question now is how do companies survive in a shrinking market with costs rising and consumers nevertheless expecting new and different styles? That is a very difficult order that will require either a emotional decline in fan companies and consequently capacity, or the companies have to be much nimbler and able to produce smaller quantities and nevertheless be profitable. In reality, both are happening and in 2011 the market is starting to stabilize, though there are nevertheless buyouts going on such as an expected one between Ellington and Craftmade.
An additional complication in all this is the change in retail dispensing due to the internet and “Big Box” stores. Traditionally, fans were sold by local lighting showrooms with hardware stores carrying some very basic models at best. With the arrival of the internet and growth of mega hardware stores across the county, that has changed the fan retail scenery completely. You can no shop and price check thousands of models from any internet connected computer. The Big Box stores are now importing fans directly from China and can sell them for less than lighting showrooms can often buy them. The normal 2 times and more markup the showroom before enjoyed have also deteriorated due to the internet, so lighting showroom business that was the traditional mainstay of these fan companies is faltering. The traditional fan companies have been forced to embrace internet companies and try to sell to the Box stores with mixed success. Big box stores are notorious for letting the smaller fan ( and other product) companies take all the risk in developing new designs, then take proven successes and have them made in their own factories in China for less.
There is another option that only one specialty lighting and ceiling fan company has embraced; go back to assembling and finishing fans in the US. Copper Canyon is known for their artistic western and rustic style ceiling fans. already in this very limited, low quantity market, they have grown dramatically in the last 5 years by keeping inventory low and offering more variety already as other companies are cutting back. They bring in slightly completed ceiling fans from overseas, then add their own US made decorative panels and accessories and hand finish the fans as ordered. The cost is higher per fan this way, but it allows for less inventory, provides US jobs and more choices for customers.
As more and more companies grapple with the rising costs of manufacturing and doing business in China, this trend will likely continue, benefiting everyone. Making consumer level ceiling fans completely here in the US will probably never happen again, but just like car companies, why not assemble and finish fans here from imported and domestic parts? The tremendous profits of the past may never be the same, but that is the price of staying in business and we have to start evaluating the real cost of losing so many jobs to overseas suppliers.