Here we discuss the history of ceiling fans and why they are no longer made in America and what can be done about it. Given that the United States 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 primarily by General Electric, Westinghouse, and Emerson Electric. These companies were the largest of the electrical device companies at the time and were at the forefront of new electrical product development. In the beginning, fans were very expensive for the time and were used almost exclusively in commercial applications such as bars, restaurants, hotel lobbies, and meeting rooms. They were very heavy and made of solid metal casting with bears that had to be filled with oil on a regular basis. But they worked well and worked almost forever. Many are still operating today in restored condition. Fans are generally very simple and straightforward by today’s standards, but they were considered a utility device that could be felt and not heard or seen. At the time there was no air conditioning, so the ceilings were quite high and the fans kept the air moving. Fans continued in this way essentially unchanged, but gradually fell in price to become more affordable (and lighter) in the 1960s. At this point, they became less popular as central air conditioning and heating became standard and ceiling heights dropped to standard 8 ‘tall. In the late 1970s, there was a resurgence in fan popularity with the “energy crisis” and renewed interest in saving electricity, though that again faded in the 1980s when energy became cheap again. There was a major change in the evolution of fans in the 1980s and 1990s when cheaper production factories were put into operation in Taiwan. But first a little information on the manufacture of ceiling fans.
Ceiling fans are fairly simple devices, a motor, a hanging rod, and 3-5 blade arms that support the generally wooden blades. The engines were generally made by a handful of large companies and were used in a variety of brands, keeping costs low. You may have a choice of two engine sizes, but they were quite similar otherwise. The decorative outer shell and blade arms were the most expensive part to develop. They needed very expensive dies and other castings and often took years to recoup development costs. Therefore, few companies wanted to take risks in developing and paying for new shapes, styles and designs when a need was not perceived. So, the style of the fans was kept quite simple and boring. Remember when the update for fans were uppers with woven reed inserts? All of that changed with Taiwan initially than with China in the late 1990s. Its much lower tool and labor costs did two things; 1. It enabled existing hobby companies to create completely new models more profitably and 2. It created an opportunity for startups without their own factories to suddenly become hobby companies. Examples of the latter are Craftmade, Minka Aire, Concord, Fanimation, Quorum, Regency, Copper Canyon, Ellington, Hunter, and many more. In fact, only Emerson remains of the original companies that made fans. GE went out of business and Westinghouse went bankrupt and sold the name to a start-up company.
This was the first big explosion in fan variety and popularity. As more and more options became available, consumers discovered that fans were no longer just for moving air, but were now decorative items that brightened up the room. Then the housing boom hit in the 1980s further boosting sales and the options became almost unbelievable. The downside to all of this was that companies making ceiling fans in the US had to close down or move overseas to keep up with radical style changes and demand from an increasingly fussy consumer. After about 10 years, all American companies were out of commission or now only importers. Once this happened, all the support industries that used to manufacture the fan parts, either moved to different areas or also closed. For a time some companies like Emerson assembled fans here with parts made overseas or in Mexico, but they eventually gave up and now strictly import all of their fans. This scenario worked very well for many years, as the housing boom continued into 2007, and then disaster struck.
One of the “devil’s bargains” that fan companies had to sign with large foreign factories was to buy large quantities of these fans, usually 500 to 1000 at a time of each model. That was great as long as there was a lot of market. What has happened now is that these companies suddenly had warehouses full of fans that were no longer being sold and could no longer afford to create new models or even order an inventory of models that were selling well until the old inventory was sold, which it wasn’t happening very quickly. The next major issue was that prices began to rise dramatically as the cost of crude metals and petroleum products soared in 2007-10 due to massive demand in Asia. As the lighting and fan business took a dramatic turn, many companies had to merge or were bought out and this trend is expected to continue for a while. So the question now is how do companies survive in a shrinking market with rising costs and consumers still waiting for new and different styles? That is a very difficult order that will require a drastic decrease from fan companies and therefore capacity, or companies will need to be much more agile and able to produce smaller quantities and remain profitable. Both are actually happening and in 2011 the market is starting to stabilize, although there are still acquisitions underway like one anticipated between Ellington and Craftmade.
An additional complication in all of this is the change in retail distribution due to the Internet and “Big Box” stores. Traditionally, fans were sold through local lighting showrooms with hardware stores that offered some very basic models at best. With the advent of the internet and the growth of mega hardware stores across the county, that has completely changed the retail landscape for fans. You cannot buy and check the price of thousands of models from any computer connected to the Internet. Big Box stores are now importing fans directly from China and can sell them for less than what lighting showrooms can often buy. The normal margin of 2 times or more that the showroom previously enjoyed has also eroded due to the internet, so the lighting showroom business, which was the traditional mainstay of these fan companies, is failing. Traditional fan companies have been forced to adopt Internet companies and try to sell in Box stores with mixed success. Large stores are famous for allowing smaller fan (and other product) companies to take all the risk of developing new designs, then take advantage of proven successes and manufacture them in their own factories in China for less.
There is another option that only a company specializing in lighting and ceiling fans has adopted; back to fan assembly and finishing in the USA Copper Canyon is known for its artistic rustic and western style ceiling fans. Even in this very limited and low volume market, they have grown dramatically in the last 5 years by keeping inventory low and offering more variety even when other companies are cutting back. They bring in partially finished ceiling fans from overseas, then add their own decorative panels and accessories made in the USA and hand finish the fans as ordered. This way, the cost per fan is higher, but allows for less inventory, provides jobs in the US, and more options for customers.
As more and more companies grapple with rising manufacturing and business costs in China, this trend is likely to continue, benefiting everyone. Ceiling fans will likely never be made at the consumer level again here in the US, but just like auto companies, why not assemble and finish fans here with 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 begin to assess the real cost of losing so many jobs to foreign suppliers.