Snap-On‘s localized production has helped insulate the company against supply chain snarls and inflationary pressures, CEO Nick Pinchuk told CNBC on Tuesday.
“One of the advantages Snap-On has always had is we tend to make in the markets where we sell. So 80% of what we sell off the trucks here in America is made right here in America. So our supply chains are shorter,” Pinchuk said on “Squawk on the Street.”
“So while we’re challenged, and we’re on our game … we haven’t been impacted as others,” he added, referring to supply chain and inflation woes currently hindering corporations globally.
Having a short supply chain helped Snap-On’s fourth quarter earnings, Pinchuk said, pointing to the company’s sales and margins. Sales in the fourth quarter of 2021 were up 16% from pre-Covid pandemic levels in 2019, while operating margins increased across three out of four segments. The tools and equipment manufacturer’s stock was up around 2% on Tuesday in a largely lower broader market.
Pinchuk advocated for stronger domestic supply chains, echoing President Joe Biden‘s call during his State of the Union Address earlier this month to “make it in America.” Biden’s statement was met with rousing chants of U-S-A.
Pinchuk said, “If you want to bring manufacturing onshore, immunize us against this supply chain and make it easier, that is easier said than done.” The reason, he added, there are current manufacturing jobs here in the U.S. that still need to be filled.
Jay Timmons, chief executive of the National Association of Manufacturing, told CNBC later in the day that his organization is focusing on bolstering American supply chains. “I do believe that the trend is to bring more manufacturing back to the shores of the United States, to invest that next dollar here in the country.”
Timmons — who spoke before Biden announced a U.S. ban on Russian oil imports in response to Moscow’s invasion of Ukraine — said American manufacturers can fill the supply gap if given the support.
“We need to make sure that we’re increasing production domestically of our energy sources. We also need to make sure the regulatory agenda is not cost-prohibitive for manufacturers,” he said. “Manufacturers can rise to the solution. We always do.”
