Revere Copper is the kind of American, middle-of-the-road company from Anytown USA that is indispensable to the supply chains of all the big corporate brands we hear about every day: Ford, GE, John Deere — the big original equipment makers (OEMs). The Mohawk River Valley-based company started out in the days of the American Revolution. Paul Revere started it. It’s that old.
Times have changed from warnings of British imperialism. Now it’s Chinese mercantilism, helped along by those same large OEMs for whom penny-pinching saves tens of millions of dollars. It comes with another kind of price, usually one that is paid by small to mid-sized American companies, like Revere Copper.
Speaking in the Grand Ballroom of the Waldorf Astoria in New York in 2006, Revere CEO (he was CEO at the time, his son Mike took over in 2007) Brian O’Shaughnessy said that the company he works for was born out of a national security need. Founded with a loan from the U.S. Navy, Revere Copper supplied copper sheets for shipbuilders. At the time, the U.S. was dependent on British imports.
Fun fact: the USS Constitution, best known as Old Iron Sides in Boston, was recently refurbished with copper sheets from Revere.
“If Paul Revere, who founded this company, rode into this room today, what would his warning be?” O’Shaughnessy told the room at the hotel (now owned by a Chinese life insurance company, by the way). “China is coming!” he said.
Amy O’Shaughnessy married into the “Revere family” (though not the guy whose statue stands in the Boston Common). She’s been at Revere for 22 years. She’s seen the impacts of global supply chains on companies like hers.
“I became super interested in trade once I took on the responsibility of marketing at Revere in 2013. That’s when I saw how things were changing. I didn’t quite understand it before,” she said.
Her job was to pitch Revere products and review contracts for the big OEMs who sourced worldwide. In your typical request for pricing, she would see all the items the big players were looking for and she would give them a quote on each. She could see the average price being bid. She would go to electronic bidding, put in their best price in a blind auction against copper companies from around the country, hoping for the best.
“I hoped that when the auction was over, I could see who won the bid, but I couldn’t,” she said. “I remember seeing year after year that there were fewer American plants participating, and fewer parts to quote on because manufacturing was moving offshore. Forget even trying to bid for an Asian or European contract, you’d be laughed out of the bidding room,” she said.
The available volume began shrinking faster in the mid-2000s. There were only a handful of copper mills in the U.S. left, and they were competing for less volume.
Over the years, some of those companies were sold to foreign firms. American Brass in Buffalo is now owned by Aurubis out of Hamburg, Germany.
Germany was particularly notorious for dumping products into the U.S. That process continues today. CPA often likens Germany to the “China of Europe” due to their export-driven model; a model that squeezes out their local demand in favor of big corporations who sell to the world instead.
Revere is the last privately held American-owned copper rolling mill active in the U.S.
They attribute their survival to four factors: lean manufacturing techniques applied in force in the early 2000’s; a focus on the reliability and maintenance of equipment; dedicated employees and some loyal customers. Loyal customers can never be over-rated, especially in a global economy where almost anyone can make anything anywhere.
“We saw the most significant changes in our business between 2009 and 2018,” said Amy. German mills were offering low fabrication prices to Revere’s own customer base. “They had consignment programs and payment terms that reached out over 90 days,” she said. “No way we could compete with that. We lost volume and revenue and saw this scenario play out consistently in that time period. I saw all the import data for the things we could make. I’d see more and more imported copper. China and Mexico were taking a lot of our customers,” she said.
But this is no sob story.
Things turned around for Revere in the Trump era thanks to tariffs and a realization that supply chains were not subject to more geopolitical risks in Asia than they were pre-2016 when the Obama administration was talking about an “Asia Pivot” that companies interpreted as a realization that Asia was both our biggest, future sales market, and our best source of supply of everything from electronics to health supplements.
The pandemic put all that on notice.
Commodity Bull Runs & Supply Chain Shifts
Better yet for Revere, a commodity boom and some lockdown pressures on Germany is a nice, strong tailwind.
Amy says she has seen a “slow shift” in demand that is more favorable to American manufacturing. Was reshoring really happening?
“We saw business coming back in July, then we saw it to an even larger extent in August and now it has gotten bigger month over month,” she said.
March’s demand for copper was at levels she says she hadn’t seen in almost two decades. World dmand is expected to rise by more than 3% next year. Revere hopes that the demand includes domestic sources, otherwise it’s potentially a meaningless uptick. For now, they say they are seeing demand come in over 40% higher than 2020.
“I don’t know why all these customers are shifting more business our way,” she said. “How much of this is demand and how much of it is a shift in supply from foreign copper to American copper? I don’t know. I think it’s both.”
Amy thinks there is a chance that companies, having gone through the uncertainties of the trade war and pandemic risks to supply chains and shipping, might rethink their risk profile. If they do, the hope is that some of those purchase orders go to American manufacturers.
“All of a sudden, people are discovering Revere,” she said. “Years ago, we lost some business to Germany. It’s come back to us 10-fold as they lockdown again. We are benefiting from that and I would venture to say that other U.S. based manufacturers are seeing similar benefits from the port bottlenecks to lockdowns in competing markets.”
Revere is located in Rome, New York, a town of roughly 35,000 people. Around 300 of them work for Revere. Many of them have family members that work at Revere and grew up in Rome. Amy is a Rome “townie”.
“I’m the fourth generation in my family to work here. My dad worked here in the summer while attending college. His dad retired from Revere as an electrician. His grandfather worked here as an operator,” she said. “I feel so motivated to be involved to help keep this company going.”
Big corporate giants can talk a good talk about small-town life. Most of us remember Ford Motor Company’s recent Superbowl commercial depicting small-town life, and all walks of life that come from places outside of the big urban centers. Ford was there for them. This was the company’s messaging.
Yet, it is really the domestically-focused companies like Revere that keep those communities intact. To them, offshoring business sometimes means going out of business. To larger OEMs, offshoring business is just part of remapping portions of a huge supply chain that helps the bottom line.
Rever Copper are members of the CPA.
“I love what CPA stands for and the work they are doing,” she said. “I feel it, personally. We have just one location,” she pointed out, as if somewhat amazed this company has survived this long. “We literally managed to stay alive since the days of Paul Revere.”
That’s pretty cool.
Some 12 years ago now, Brian O’Shaughnessy predicted that China would start wooing their clients away from Revere. The recent uptick in business may be a fluke, a post-pandemic economic binge. Then what?
You can buy small copper sheets directly from China, right on Walmart’s website. Though Walmart won’t be forthcoming about where this is coming from. We need country origin labels on all e-commerce and hopefully we will have laws on the books that make that happen.
“We need to double our efforts,” Brian said in thinking about the work required to convince Washington about supply chain resiliency, and strategic competition with China.
“We need the CPA to succeed in general, but especially where China is involved,” he said.
Returning to his earlier speech at the Waldorf, Brian reminds CPA members that “the leaders of our nation in 1800 were our founding fathers who fought the British in the Revolutionary War. They were concerned about the possibility of another war with the British so sought to build a domestic supply chain for copper sheets. The copper sheets prevented barnacles from growing on the hulls of our wooden Navy ships because barnacles weighed ships down, and scraping them off took them out of service. So when the War of 1812 came, the hull of the USS Constitution, sheaved with Revere Copper, was in fighting shape.”
(See Brian in his “acting days” here. A short video called “Legend of the Midnight Rider” about copper and the environment.)