"This should embarrass the heck out of any executive who thinks he has to outsource in order to find cheap labor. Or at least call into question his fundamental competence as a leader. If American Apparel can manufacture low margin clothing efficiently enough to beat the sweatshops (in California no less), then anyone should be able to. If they try hard enough."
I think he's misunderstanding why their business model works. Sending your commodity product to China to be make extra-cheaply is one strategy. Building a high quality product that proudly displays it's Made-In-America-ness and tugs at our patriotic heartstrings while charging 2x the price as the Chinese-outsourced competition is another. There is room, in almost every industry, for both a Kia and Lexus.
And you do have to outsource to find cheap labor. $12-$15/hr with full benefits is not cheap for a factory. I'm guessing he just misphrased what he meant on that one.