Governors ask Pres. to help U.S. textiles
August 3, 2001,
New York — The decline of the textiles industry's U.S. manufacturing base has prompted several governors to beseech the federal government for help.
On behalf of the textiles industry, the governors of Alabama, Georgia, North Carolina and South Carolina wrote a letter to President George Bush on July 25 asking him for protection against Asian imports. The four governors asked for the protection at the behest of the manufacturing associations of their states, the four largest textile producing states in the country, as well as the American Textile Manufacturers Institute (ATMI).
"We urge you to recognize the deepening crisis in the American textile industry and to make maximum use of the various powers at your disposal to address this situation," the letter stated.
The four governors, Don Siegelman, Alabama; Roy Barnes, Georgia; Michael Easley, North Carolina; and Jim Hodges, South Carolina, are all hoping President Bush will ask the U.S. International Trade Commission to investigate whether textiles imports are hurting U.S. companies. An investigation is considered to be the first step toward imposing import controls. The president had earlier requested that a study be done investigating the same issues for the U.S. steel industry.
According to Charles Bremer, director of International Trade for the ATMI, the import of textiles, excluding clothing, has risen roughly 65 percent from 1996 to 2000, from $9.5 billion worth of goods to $14.5 billion. In 2000, the influx of foreign goods, Bremer said, cost U.S. manufacturers approximately $25 billion worth of domestic production and sales. That amount, Bremer said, was in addition to the huge amount of illegal smuggling being done on a daily basis. Goods from China, India and Pakistan, as well as other textile producing countries, cross the U.S. border every day, he said.
"We are being subjected to unfair competition and we're suffering," Bremer told HTT. "This is the worst thing since the Depression."
He added that the outlook was bleak for American textiles manufacturers unless some sort of action was taken. Bremer cited the closing of Spartan Mills and Thomaston Mills as two large casualties of the growth of imports and the shrinking of domestic production.
More recently, the Easley, NC-based Alice Manufacturing Co., the Spartanburg, NC-based Mayfair Mills Co. and the Charlotte, NC-based Dyersburg Corp. have attributed all of their respective declines to the economic picture that prompted the four governors to write to the president. The latest to join the list of troubled plants is the Greenwood, SC-based Greenwood Mills, which closed three plants in South Carolina, Georgia and Tennessee on July 30.
Bureau of Labor Statistics numbers paint a grim picture for domestic employment in the industry. From May to June, 5,400 textile workers lost their jobs. In the past year, from June 2000 to June 2001, 60,500 have lost their jobs. In 1995, there were 671,300 textile employees. Six years later 474,400 jobs remain, a drop of 29 percent.
Bremer also noted that the textiles industry recorded a loss of $349 million for the third and fourth quarters of 2000. It was the first time in more than 50 years the industry had gone into the red, he said.
Among the remedies the ATMI and state textiles organizations seek are to have the dollar revalued since the ATMI believes its value is artificially high, enforcement of the trade agreements currently in place and to have foreign markets opened up to them.
"Accordingly, we urge you to recognize that the U.S. textile industry, like the steel industry, is facing a crisis of survival that is not of its own making, and to use every tool at your disposal to combat this crisis," the letter continued.
In his remarks to the Congressional Textile Caucus on June 6, Chuck Hayes, president of the ATMI and chairman of Guilford Mills, characterized the state of the U.S. textile and fiber industry as a "crisis situation" and asked the caucus to enforce its agreements, laws and regulations "so that fair trade is achieved. Fair trade — you can not have free trade without fair trade."
Hayes added that in his 50 years in the textile industry, he had never seen the situation as desperate.
"We're getting killed by everything."
However, given the far-reaching impact import sanctions would have on retailers and consumers and the current political environment, what is being asked for by the governors and hoped for by manufacturers is probably unrealistic, said Sharon Johnson, cotton analyst for the Atlanta-based Frank Schneider and Co. Inc.
"What the letter does is bring to the attention of the president the problem the domestic mills are facing," Johnson said. "It does highlight their problems. But the solution they sought in the letter is probably not going to happen."
She added that the strength of the dollar, which is at a 15-year high, has hurt the entire U.S. manufacturing sector.