Trying to make due: despite job losses, manufacturers survive by supplying the right product at the right place at the right time.

• Position: MANUFACTURING

North Carolina has lost more than a third of its manufacturing jobs since the end of 1999, and the exodus accelerated last year when the state shed about 6% of its factory jobs through November. The apparel industry has been hit particularly hard. Since the end of the '90s, employment has dropped 68% to 15,000. Many apparel makers have gone out of business. One that has thrived is VF Corp. Between 1998, when it moved its headquarters to Greensboro from Pennsylvania, and 2007, it increased annual net sales 30% to $7.1 billion. Mackey McDonald stepped down a year ago as CEO but remained chairman until retiring in August.

BNC: Aside from technology and foreign competition, what caused the loss of factory jobs?

McDonald: There has been a redefinition of manufacturing. For much of VF's history, it was very dependent on its manufacturing expertise to drive success and add value. As the world has gotten smaller and competition more global, the entire supply chain has become much more important. So it's critical for a company to understand consumers and have the capability to supply the right product at the right place at the right time.

Haven't successful companies always done that?

Yes, but they have done a lot of it through their ability to manufacture core products in bulk. In this global marketplace, it's much more challenging to compete on commodities.

Why?

Consumers can choose products that are manufactured anywhere in the world. The ability to create value these days comes from being able to differentiate your products. People are only willing to pay more if the product has unique qualities. We compete a lot more on consumer knowledge--and the ability to translate that into a complex and differentiated product offering--than we do on just the manufacturing capabilities.

VF succeeded partly through offshoring.

Yes, it was important to have some of the core products manufactured in locations where they can be cost-competitive. But it created more highly skilled jobs here in the U.S. to manage this operation.

Would those jobs have been generated anyway? You still need people to manage the company.

But because we were able to supply products that were competitive around the globe--150 countries--we were selling a much higher quantity of products. We were able to acquire a lot of brands that addressed different consumer segments. We were able to create a lot of jobs that would not have been created here were we dependent on a much smaller...