Nike’s failed automation push reveals why US manufacturing reshoring remains elusive

Nike’s failed automation push

US President Donald Trump’s new wave of tariffs targeting Vietnam, Indonesia and China aims to pressure US companies like Nike to bring manufacturing—and jobs—back home. But Nike’s yearslong attempt to shift some sneaker production closer to the US shows why many American firms remain tethered to low-cost countries: automation is expensive, complex, and often not ready for prime time, the Wall Street Journal reported.

High US labour costs mean companies need machines to replace workers, but for labour-intensive industries like footwear, automating production has proven far more challenging than in fields like electronics.

Nike’s ambitious bet on automation

In 2015, Nike launched a bold plan to automate sneaker production. It partnered with US electronics manufacturer Flex—known for helping Apple build Mac Pros in Texas—to create a high-tech sneaker factory in Guadalajara, Mexico. The goal: produce tens of millions of shoes by 2023 with far fewer workers than required in Asian factories.

Nike’s competitors joined the automation rush. Adidas built “speedfactories” in Atlanta and Germany, while Under Armour announced “Project Glory” to make shoes in Baltimore. But Nike’s push was the most ambitious—attempting to reengineer the complex art of shoemaking into something machines could handle.

Shoemaking proves hard to automate

Unlike electronics, which use hard, standardised parts, shoemaking involves flexible, irregular materials. The automated machinery—borrowed from electronics manufacturing—struggled with soft fabrics, temperature-sensitive materials, and the variability of soles.

“You’re trying to do something very precise and then it gets a little colder or warmer, and the material changes on you,” said Tom Fletcher, who led the project for Flex. Machines couldn’t consistently glue soles or adapt to minute shifts in material tension, and errors led to visibly flawed shoes that failed quality tests.

Production ended up requiring far more human workers than planned—5,000 instead of 2,500—at a cost higher than staffing a similar factory in Vietnam.

Automation vs. design complexity

Another hurdle was Nike’s product philosophy. The company regularly churns out new shoe models with complex materials and design changes. While automation thrives on repetition and uniformity, Nike’s designers were unwilling to compromise. Machines took eight months to perfect one technique—applying the Nike swoosh—only for the company to pivot to a new design.

“You have to make sacrifices from how to design to the complexity of the materials and models you’ll work with,” said Michael Newton, Nike’s former automation lead. “That goes against what the consumer wants. They want incredible diversity of product.”

Flex’s investors grew sceptical, questioning why a tech firm was making shoes. The partnership ended quietly in 2019. Under Armour abandoned its project, and Adidas shut down its speedfactories in Atlanta and Germany, moving the technology to suppliers in Asia.

Pandemic lessons and persistent offshore reliance

Even after pandemic-era disruptions exposed the risks of relying on Asia-centric supply chains, Nike, Adidas, and Under Armour returned to their traditional manufacturing hubs in China, Vietnam, and Indonesia. All three declined to comment on past reshoring efforts but confirmed they’re reassessing strategies in light of new tariffs.

Trump’s administration raised tariffs on Chinese goods to 145% and threatened new hikes on Vietnam and Indonesia before reducing the rates to 10% with a 90-day reprieve. Commerce Secretary Howard Lutnick declared that labour-intensive production should return to the US, envisioning “millions and millions of people screwing in little, little screws to make iPhones.”

But as Nike’s experience shows, even with deep investment and innovation, automation couldn’t compete with the flexibility and cost advantages of Asian factories.

A future still possible—but not imminent

Industry veterans like Newton and Fletcher still believe reshoring could work—eventually. But the road is long and costly.

“You need to have some deep pockets and some patience because it’s not going to happen fast,” said Fletcher. “The previous experience was humbling, for sure.”

For now, America’s sneaker factories remain an aspirational goal, caught between economic realities and political ambition.