Back in 1980, when John Stollenwerk bought the 58-year-old footwear manufacturer Allen-Edmonds from its founders, U.S. companies produced 48% of the shoes sold in the American market. Today, that percentage has dwindled to 1.5%, according to the American Apparel and Footwear Association. So what gives Stollenwerk's $90 million company its staying power? It helps that Allen-Edmonds occupies a niche near the top of the footwear food chain; its hand-sewn shoes typically sell for $200 to $300 a pair, so its customers are less price sensitive than the people who buy, say, Florsheims. Still, plenty of other high-end shoe companies, such as Cole Haan, have sent manufacturing to China. But Stollenwerk's exacting quality standards and his pledge to deliver, within 24 hours, the largest selection of sizes and widths of any shoe company in the world made an overseas move out of the question.

Labor is perhaps the most challenging issue. Allen-Edmonds is situated in Port Washington, Wis., 25 miles north of Milwaukee, and Stollenwerk found it difficult to find qualified shoemakers there. He knew, though, that in Milwaukee proper, a lot of people--mostly Hispanic immigrants--had the skills the company was looking for. So in 1997 he opened a cut-and-sew plant right in Milwaukee's inner city. It now employs 75 people. For those willing to make the commute, he bought a bus that makes two roundtrips daily from Milwaukee to Port Washington. "I'd see people driving older cars to work in snowstorms, and that really led me to believe that this was a better way to get them to work safely," Stollenwerk says. Employees pay just $10 a week for the bus.

For years, Stollenwerk's commitment to U.S. manufacturing went largely unnoticed. Sure, every President since Ronald Reagan has worn (and paid for) at least one pair of Allen-Edmonds shoes. But to the average consumer, says Stollenwerk, the shoes' "Made in America" pedigree didn't seem to matter much. "People see manufacturing jobs go overseas and this is upsetting," he says. "But those same people are shopping at Wal-Mart and buying goods made in China." Within the past four to six months, however, something has changed. Increasingly, customers' ears perk up when Allen-Edmonds' sales team begins talking up the company's commitment to American manufacturing. "Today," says Stollenwerk, "it really makes a difference. 'Made in America' gives us an edge."--Donna Fenn

Donna Fenn is a contributing editor.