ATMA Annual Meeting

Jan. 31, 2005

Longtime member Okey ready to step up

Editor’s note: Following is an interview with Joe Okey Jr., vice chairman of the American Textile Machinery Association (ATMA), who is expected to be elected chairman during the group’s annual meeting Feb. 2-5 in Puerta Vallarta, Mexico. Okey, president and owner of American Monforts LLC, Charlotte, NC, answered questions to him posed in documented form by Editor Devin Steele.

OKEY-DOKEY: Joe Okey Jr., president and owner of American Monforts LLC, Charlotte, NC, is expected to be elected chairman of the American Textile Machinery Association (ATMA) during the group’s annual meeting Feb. 2-6 in Puerta Vallarta, Mexico. He will succeed Fred Moorhead Jr., sales manager of Marshall & Williams Products, Greenville, SC.
Photo by Devin Steele

STN: I understand you agreed to be considered for the ATMA chairmanship for a two-year term beginning this year after Vice Chairman Jay White of Morrison Textile Machinery Co. asked to forego his expected ascension to chairman another two years. With this being such a major responsibility, was the decision difficult?

Okey: The succession plan was for Jay White to assume the responsibility of chairmanship first and for me to follow in two years. Therefore the decision for me to serve was made some time ago, just a matter of timing. It was not a difficult decision, it was just a matter of involvement in other parts of our industry and who could be more involved on pursuit of certain functions at this time.

A key was timing of certain ATMA projects consistent with our respective interests. So, we “flip-flopped.” This will better serve our particular interests on behalf of ATMA.

STN: You have been so closely allied with ATMA for many years that many members may have considered you a “board member for life.” Please describe your longtime relationship with this association and staff and what it means to be affiliated with the group and to lead it.

Okey: I have been involved with ATMA since the mid-1970s, so I guess I am considered one of the dinosaurs by now! I have been most active for the past 10 years or so when I assumed a board position.

ATMA has always been the organization for those of us in the textile machinery business. Through the organization, we have been able to maintain a small part in exhibitions, but most importantly, an active role with our customers. As you know, given the conditions in our industry, we are now assuming an even more active role in both situations.

STN: As anticipated forthcoming chairman, what are your goals for ATMA for the upcoming year?

Okey: My goals for the next two years are unity and growth. Let me explain.

We need unity within our industry — No. 1 within the ranks of the machinery manufacturers, and No. 2 within our entire industry. During the American Revolutionary War, Ben Franklin said “We must all hang together, or assuredly, we will hang separately.” I believe that statement is abundantly appropriate today!

For that reason, I have become extremely active with our new industry group, the National Council of Textile Organizations (NCTO). As a board member of NCTO, I can work with textile executives and my machinery colleagues to strengthen our industry and “speak with one voice.” There has been too much separation in the past.

The institutionalization of MEGATEX plays a keystone role in that unity and growth, domestic and global.

Having said that, surely as we work more closely together our industry and association will grow. Furthermore, we have aligned ATMA with other associations outside the textile business to grow and give us strength and creativity as manufacturers and distributors.

STN: Would you rather take over the chairman’s reigns during tough times or during good times? Why?

Okey: For obvious reasons, the good times are always better to be in a leadership position; however, what’s the old saying ... “if it was easy, anybody could do it.” Our industry is currently facing some challenges which it has never faced before. It is up to us to work together and pull ourselves through these hard times. I absolutely think that we can survive and prosper if we “pull together.” I’m squarely supportive of the need for individual associations and for the alliances such as American Textile Alliance.

STN: How has the textile machinery business changed over the years and how has ATMA changed with those times?

Okey: The textile machinery has changed drastically over the years. It has been a pleasure to see how the machinery has advanced, improvements have been made and the industry thrived.

As for ATMA, I must commend ATMA’s staff, particularly Buzz (Buzzerd), who has creatively and adeptly positioned us for change in a global context. For sure, our predecessors led us in so many great ways. While there has been continuity and consistency, it surely is a different textile world. It is now up to us to carry on.

ATMA certainly thrived, as did the industry. Even during the time that I have been involved there have been many entrepreneurs and so many intelligent people. We still have that today but perhaps in a different way. The textile industry was so large in the past, one could pretty much do as they wish, but now each aspect of our business must be carefully evaluated. There is less available in the margin of error context.

STN: What are the biggest challenges facing the textile machinery business in the coming years?

Okey: In a word, survival! We must work and spend smarter. We must look “outside the box” to keep ourselves on the leading edge of technology and alert to market shifts and needs. There is no way that U.S. industry — textile or otherwise — can be the cheapest from a labor point of view, but we can develop our products and introduce efficiencies so that the overall cost and service will be competitive.

STN: Please describe your leadership style.

Okey: I believe in open management. Hire good people and give them the latitude to succeed. No one person has all the answers; you may think you do, but it never works out that way. To sum up, my philosophy for my business and the association: be flexible, but be determined to achieve clear outcomes.

Getting to know ... Joe Okey Jr., Chairman, ATMA

Position: President, owner, American Monforts LLC, Charlotte, NC

Hometown: Graham, NC

Joe Okey Jr. just completed his term as president of the Myers Park Country Club in Charlote, NC — just in time to take office as chairman of the American Textile Machinery Association.
Photo by Devin Steele

Education: B.S., agricultural engineering, North Carolina State University, 1967 (“I guess you could say I learned the business from the ground up!”)

On getting into textile industry: “I was born in the heart of the textile industry, so having grown up in the industry, I decided that was for me. My father was a textile chemical jobber. As soon as I was old enough, I delivered chemicals to about every plant in North Carolina, and many in Virginia and South Carolina as well. That’s a great way to learn the industry, even though I did not think so at the time.”

Biggest personal success: “I must say my family. I was blessed to have had a wonderful father, who unfortunately died too early in life, a great mother, who is still active at the tender young age of 95, and three siblings with whom I speak quite frequently. Also, I have three wonderful children — one daughter and two sons, as well as a wonderful wife. Being in a second marriage, I am able to enjoy my stepson and his wife. And they have given Ann and me an absolutely terrific grandson.”

Biggest professional success: “Professionally, I feel very fortunate. I have said many times ‘I would rather be lucky than good’ and that certainly applies in my case. Certainly, owning my own business is very satisfying, although a bit scary as well. However, I have so many great friends in the industry who have given me many opportunities to succeed and. fortunately, the successes outweigh the mishaps.”

Hobbies, interests: “I love to play golf and hope some day to be truly successful at it.”

Motivated by: “Would it be safe to say fear? I think fear of failure drives us all.”

Last book: Seven Habits of Highly Effective People. “And I am looking for the Eighth Habit.”

On wife: “My wife Ann has kept me ‘under control.’ She has always been very supportive and will not let me give simple answers — I better be prepared to fully explain myself. This certainly makes me think things through.”

Organizations, activities: Member, past president, Myers Park Country Club; member, St. John’s Baptist Church, the Wolfpack Club; board member, the National Council of Textile Organizations; past board member, American Textile Machinery Exhibition-International; past member, Carolinas Textile Club


Machinery association keeps long-term perspective

Editor’s note: Following is an interview with Fred Moorhead Jr., chairman of the American Textile Machinery Association (ATMA) for the past two years and sales manager of Marshall & Williams Products, Greenville, SC. His answers come in response to questions posed to him in documented form by Editor Devin Steele. The group gathers Feb. 2-5 in Puerta Vallarta, Mexico, for its annual meeting.

Fred Moorhead Jr., who has served a two-year term as chairman of the American Textile Machinery Association, said the organization has expanded its capabilities through partnerships.
Photo by Devin Steele

STN: Another busy year awaits ATMA, with your annual meeting fast approaching. Let’s start with the annual meeting. What do you have in store for members?

Moorhead: We will focus on long-range programming during the business sessions. We’re moving back to more emphasis on personalized member benefits and keeping in touch on localized basis.

STN: You return under a confederated format with the Process Equipment Manufacturers Association. This arrangement seems to be working, obviously. Please describe how pooling your resources in such a fashion benefits members of both groups?

Moorhead: Both groups save money on fixed costs, enhance their networking universes and still have enough financial ability to retain high quality speakers.

STN: What are some of the common challenges the groups will be addressing?

Moorhead: Everything from future leadership techniques to working with offshore sales teams. The structured but flexible topical roundtables really generate a lot of give and take resulting in “take home” practical business techniques or tools, if you will. The topics of course, are more to the needs of manufacturers than to specific textile matters.

STN: Let’s do a brief postmortem on ATME-I 2004 trade show, which you co-sponsored in September. How do you measure success? What kind of post-show feedback have you heard from exhibitors?

Moorhead: Clearly, it should have been a mid-week, three-day show. Some business was conducted marking the beginning of a modest “uptick,” I believe. Since then we have received some statistical data confirming some upturn.

STN: ATME-I moves to Atlanta — under the confederated MEGATEX arrangement — in 2006. What’s the latest on the planning and other details of this first-of-its kind textile trade show? Do you have indications that any other groups besides the IFAI are considering co-locating their events there?

Moorhead: There is no question the MEGATEX umbrella is accepted as logical. AATCC (the American Association of Textile Chemists & Colorists) has committed to a show section and large conference. The customer associations, National Textile Association (NTA) and National Council of Textile Organizations (NCTO), are committed with discussions necessary to determine degree of commitment. We are hopeful they will go all the way with some manner of product displays, conferences and technical sessions, and maybe even some events for domestic and offshore buyers of their products.

STN: A wait-and-see mentality has prevailed among many textile machinery suppliers recently. What is your sales pitch for those considering exhibiting at MEGATEX in 2006?

Moorhead: There is no better method than trade shows and events surrounding them to “comparative shop” for products, services and ideas, at one point in time.
All signs are for upward economic and manufacturing expansion for countries south of U.S. borders. We believe potential exhibitors should now reserve at least a small space so that they will have some seniority on record later to expand space and a preference to select floor position. Trade shows definitely tend to reveal trends of parties on “both sides of the show aisle.”

This MEGATEX concept is adding attractiveness, mass and interest to all elements — that is, organizations, that are identifying with it. Individual identities are maintained within a compelling and creative, branded concept. We believe that our multiple textile industries truly need periodically one huge, unifying event to attract world attention and retain world-class standing.

Additional benefits to the supporting industries are that MEGATEX can be a political lever as well as a commercial asset, again, to the industries and to the individual company participants.

STN: Do you still hear rumblings from those who resisted the move from Greenville to Atlanta? What would you say to try to appease those critics?

Moorhead: We all have to adjust. Greenville is my wonderful hometown. And now, it is time to broaden the potential of trade shows with other alliances, to better serve the U.S. textile interests upstream and downstream as well as provide a marketplace for offshore interests, buying and selling. Sales of space are on track on track for 2006.

STN: Let’s turn our attention to your membership and sector. How is ATMA helping its members plumb opportunities?

Moorhead: Research and trade potentials reports are provided on a periodic basis. Offshore show pavilions are organized for direct member participation or representation in print. Many resources are being dedicated to ATME-I ’06 success. Our Marketing Memo is issued at least six times per year and provides many means to help members conduct business.

STN: What are the biggest factors negatively affecting textile machinery manufacturers?

Moorhead: Condition of U.S. mills; probably, the used machinery glut, the size of which we simply cannot determine; and, China, good and bad impacts.

STN: What are current market/export conditions these days and what have made them such?

Moorhead: Improving. The lowered dollar value has helped us to compete here and offshore. New markets are developing and developed ones are coming out of the recession.
The realignment of the U.S. textile industry is providing new companies and new leaders to meet and discuss objectives.

STN: What role has ATMA played this past year in effecting trade legislation?

Moorhead: We have supported our customer alliances. As much as I would like to see more resources dedicated to “localized” ATMA activity and service, we do have limited resources and a portion of those must be directed to activity in Washington and offshore.

Washington is a huge source of alliance activity and resources to assist ATMA members and textile machinery as an industry, such as: customer associations; government (trade and finance programs); legislators and regulators; other allied business associations and more, such as commercial offices of embassies of nations that are developing their industries.

Obviously, as we consider trade legislation and regulations, we must consider offshore and domestic implications.

STN: Clay Tyeryar, ATMA president, recently announced his resignation to pursue a career that allows him to spend more time with his family. Please comment on Clay’s long service to the organization and your plans for trying to fill his shoes?

Moorhead: Well, the “transition” is seamless because Buzz (Buzzerd) has served ATMA since 1977, EVP Sue Denston has served ATMA since 1983 and Carlos Moore has been close to the membership and staff since the early ‘80s. We will be comfortable for some time with those resources and other folks at ATMA headquarters in Washington who back them up. Our staff is drawn from a nice-sized association management company at headquarters and there is a variety of professional resources available through Association and Society Management International, Inc.

Clay has agreed to continue service for some special projects for an indefinite time.

STN: Fred, how would you assess your chairmanship as it relates to the goals you established for the association?

Moorhead: Well, we survived while others did not. We have acquired new alliances and we are cultivating more, all of which long term will be useful to ATMA and its members. I think you must keep a long-term perspective concerning all of this and resist the temptations of “quick-fixes” with personnel and programs.

Having a long-term involvement and perspective on the association, I can see a lot of utility and practicality in the association’s manner of “evolving” its makeup and output as opposed to stops-and-starts with radically changed programs. By the methods we’ve used, in fact, we have redesigned or recreated or reformatted — however you want to label it — the organization several times in the last 30 years.

STN: Any additional comments about ATMA, the annual meeting and the state of your sector?

Moorhead: Not many of us will convene in Mexico, but we will inform the others of our work and recommendations that will be formulated while we are there. Two years ago when we made the commitment the venue seemed to be well-timed. We do want to continue the relationship and benefits of meeting with similar manufacturer associations and thus, we are honoring our commitment to them.

Next year is ATMA’s choice of venue and we think we have a good idea to combine annual meeting site with a trade mission to promote exchanges with potential customers and to promote customer commitment to ATME-I ’06.

Textile News Index


QUOTA CONFAB

Jan. 31, 2005

GAFTT summit attracts officials from 25 nations

WASHINGTON, DC — Representatives from the Global Alliance for Fair Trade in Textiles (GAFTT) and government officials from 25 countries met here Jan. 26 to discuss a coordinated international response to the crisis associated with the worldwide expiration of quotas on textiles and clothing. Private briefings for U.S. government officials and the U.S. Congress also took place that afternoon and the next morning.

GAFTT represents 96 trade groups from 54 countries that exported more than $170 billion in textile and apparel products in 2003.

“By allowing worldwide quotas on textiles and clothing to expire without adequate measures in place to prevent the rapid monopolization of the market by a small number of countries through the use of unfair trade practices, the World Trade Organization (WTO) has allowed global trade in textiles and clothing to become severely disrupted,” the group issued in a communiqué. “Absent immediate and responsible action by individual governments, up to 30 million jobs around the world will be lost to China and the continued development of a fair and beneficial trading system for this vital sector will be strangled.”

Because of the extraordinary threat that world trade in textiles and apparel faces today, the GAFTT called for the following actions:

• Governments, especially those of the United States, European Union and Canada, should immediately and effectively implement the WTO special China textile safeguards to prevent China from monopolizing worldwide textile and apparel trade;

• The WTO must undertake an urgent review of the impact of the quota phaseout and of how market distorting trade practices threaten to monopolize trade in this vital sector in the hands of one or two countries;

• The WTO must develop new permanent instruments as part of the Doha Round to prevent the textile and clothing sector from being monopolized in the future;

• As a part of the development of new permanent WTO instruments to prevent a small number of countries from monopolizing global trade in textiles and clothing, GAFTT urges other governments to support WTO paper 496 submitted by several developing countries that calls for the WTO to actively monitor and address the economic impact of the quota phaseout and to support WTO paper 497 submitted by the Republic of Turkey that calls for a permanent, global safeguard mechanism. GAFTT believes that it is critical that the WTO Council on Trade in Goods give fair and extensive consideration to these papers during formal meetings in 2005;

• Governments whose textile and clothing industrial sectors export to the United States, European Union, Canada and other countries must let those countries know that they support immediate and effective use of the China textile safeguard. This means that safeguards should be invoked on threat of market disruption rather than waiting for actual market disruption to occur;

• Governments must move aggressively at the WTO and within their own trade regimes to attack unfair trade practices employed by countries that seek to dominate world trade in textiles and apparel. These practices, which are illegal under the WTO, include currency manipulation, industrial subsidization of state-owned companies, the extension of “free” capital by central banks and illegal export tax rebates; and

• GAFTT recognizes the importance of an active policy of access to markets, especially on the part of countries that are the major beneficiaries of the quota phaseout, such as India, by achieving acceptable levels tariffs together with the elimination of non-tariff barriers.

GAFTT also noted that Vietnam has applied to become a WTO member and that as a non-market economy, it has been able and willing to mirror many of unfair practices used by China to monopolize key sectors of the global textile and clothing market.

Consequently, GAFTT called for the WTO to include safeguards or other specific provisions that would prevent Vietnam from using unfair trade practices to monopolize segments of global trade in textiles and clothing, such as the $82 billion U.S. import market, as a part of any accession agreement allowing Vietnam to become a member of the WTO.

GAFTT announced that its efforts over the next 12 months would be focused on ensuring that safeguard actions are implemented in key markets and that unfair monopolistic trade practices are attacked. GAFTT said it will also focus on persuading the WTO to introduce new permanent safeguards for textile and apparel products into the current round of worldwide trade talks.

GAFTT review

The now expired worldwide quota system for textiles and clothing was arguably one of the most successful economic aid packages for developing countries in history, GAFTT said. The system allowed virtually every developing country access to key global markets by preventing any single country from monopolizing the market, the group said.

In 2003, 41 countries exported more than $1 billion in textile and clothing products annually, creating desperately needed jobs and generating invaluable foreign earnings for some of the poorest countries on earth.

However, since China joined the WTO at the end of 2001, it has engaged in a highly damaging and systematic effort to monopolize world trade in textiles and clothing by undercutting free market prices through a complex scheme of industrial subsidization and currency manipulation, according to the GAFTT.

In the clothing categories removed from quota in 2002, China dropped its prices by an average of 53 percent in a successful effort to dominate world trade in the U.S. market in these product areas, the group said.

Not a single competitor was able to match China’s artificially low prices. By
November 2004, the next largest supplier of these products to the U.S. market was Thailand, with 3 percent. Also, GAFTT noted that China’s average export prices for trousers, underwear and woven and knit shirts are 58 percent below the average prices charged by other countries.

Moreover, China already controls a combined 40 percent share of world exports for cotton and manmade fiber trousers, men’s woven shirts, cotton and manmade fiber knit shirts and underwear.

When U.S. and E.U. exports are excluded in these categories, China’s world export market share rises to 57 percent, GAFTT said.

Finally, in these same categories, China already controls an 88 percent market share of the lucrative Japanese and Australian markets.

China has used and continues to use the following unfair trade practices to artificially undercut the prices every other country in the world, according to GAFTT:

• currency manipulation (as much as a 40 percent advantage);

• export subsidies (rebate of export taxes: 13 percent);

• free capital (U.S. government reports that up to 50 percent of government loans to Chinese business are never repaid);

• direct state subsidies to textile industry (50 percent is still owned by the Chinese government); and

• many others, including tax holidays, land giveaways, power and freight subsidization.

These trade practices undeniably have severely disrupted world trade in textile and clothing, GAFTT said.

In the critical $82 billion U.S. import market, China’s market share in the clothing and home textile products categories removed from quota in 2002 surged from less than 10 percent in 2001 to more than 73 percent as of November 2004.

Every player in the world trading community lost market share to China, even countries with geographic proximity and preferential trade agreements, the coalition said.

China saw substantial growth in its market share in Europe as well, capturing anywhere from 30 percent to more than 50 percent market share in several key categories.

Textile News Index


REVIEW & FORECAST

Jan. 31, 2005

Business improved for some suppliers in ’04

By Devin Steele

As part of our annual Review & Forecast edition, Southern Textile News sent questionnaires to targeted textile suppliers regarding the health of their companies and their expectations for the new year and beyond.

Following are reports based on the answers of those who responded.

American Dornier

Year-over-year conditions improved in 2004 at weaving machine supplier American Dornier, Charlotte, NC, the U.S. arm of Dornier GmbH of Germany, according to Peter Brust, executive vice president.

Among a number of factors that led to the increase, Brust said, was “luck.” Also, the fact that the company expanded into new markets. specifically South America, and entering the used machinery business played a large role in the company’s success, he added, leading the company to expand staff last year.

Given the uncertainty of the government’s handling of the China safeguard petition, Brust said he doesn’t expect an improvement this year. But “being able to offer a flexible and reliable product as well as a functioning service” gives American Dornier hope for a bright future, he said. Just don’t ask him to foresee the future five or 10 years down the road, as we did:

“Five to 10 years? I would be glad to foresee the next five to 10 months,” he said.

Louis P. Batson Co.

Louis P. Batson Co. and its affiliates, Greenville, SC-based suppliers and representatives for industrial operations in the Western hemisphere, saw improved conditions for doing business last year, according to Dreugh Batson, group manager.

The company added several new products and gained new business, he noted.

Some improvement is expected this year, he added with this caveat: “Goods from China will continue to be difficult to our progress.”

For the company, hope lies in expanding its customer base outside of textiles and in textile niche markets, Batson said.

PAF Sales

After breaking even in 2003, sales increased 18 percent in 2004 for North Carolina-based PAF Sales LLC, the exclusive distributor of textile monitoring equipment producer BTSR Products. Which makes for a promising 2005, according to Scott Yates, general manager:

“By lowering our fixed costs, praying for a more equal euro/dollar exchange and working smarter, I think our bottom line will be the best in five years,” he said. “As for sales, we will focus on anything but commodity textile products, other than those who have bought from us in the past. Technical, industrial and carpets are our future.”

The company increased sales through a number of initiatives last year, Yates said.

“We have consolidated our sales efforts in the form of sales agency networking,” he said. “We have asked for greater discounts and support from our suppliers. And, we have added new product lines to our sales portfolio.”

Asked if he thought the bottom had been reached for the domestic textile and apparel industry, Yates clarified the question before answering.

“First of all, be careful with mixing the above two markets,” he said. “Textiles is broad market involving technical, industrial, medical, automotive and home furnishings. This industry is not sinking. The apparel industry — including shirts, denim, socks, caps, etc. — has not finished sinking. This industry however, is very close to the bottom. The domestic market will end up with niche markets only.”

Anonymous

Business was flat in 2004 compared to 2003, according to an anonymous company that serves as an agent for machinery in weaving and knitting and finishing. He is holding out hope for some improvement this year, if the customer base doesn’t shrink more than it did last year, he said, adding that global textile quota removal will hurt some vulnerable manufacturers.

He waxed philosophic about predicting the future of the domestic textile manufacturing industry. Hope, he said, lies in “effort, service and innovation and God’s grace.”

Another anonymous supplier said that business conditions improved in 2004, but profitability still remained out of reach. As such, management is planning layoffs, consolidations and/or other cost-cutting measures his year.

The respondent added, however, that he/she is confident that the bottom has been reached for the company, but probably not the industry.

“There are growth possibilities for our company due to special alliances and products,” the person said, “but I’m afraid we will continue to see a loss of peers.”

A company that represents a number of foreign suppliers in this hemisphere, who asked not to be named, said that due to belt-tightening, his firm was able to turn a profit in 2004, despite negative factors and lower business volume last year.

“We continued to lose customers to closure and bankruptcy in 2004,” he said. “Customers who remained were reluctant to invest. Many deferred projects that were needed and had been anticipated. This continues into 2005.”

Cost-cutting initiatives included a reduction in staff, he said, meaning that remaining employees were given added responsibilities. “The work to support the equipment in place in the market remained, although with the plant closings at a reduced level. The view become more near term than it had been in the past. Decisions regarding personnel and investment were made under this premise.”

He took a big-picture approach when asked to assess factors contributing to business conditions last year.

“There was and continues to be so much uncertainty for the future of the industry,” he said. “In addition, if the customer is inclined to invest in a capital project, obtaining outside financing is a problem. Banks are not inclined to favor a textile investment.

“Used machinery also had an impact,” he added. “With mills being closed, machinery was available for resale, which was low cost yet fairly modern. We repeatedly receive offers for textile machinery from plants located in Europe and the U.S. When there was an opportunity the low value of the dollar in 2004 did not help the machinery import situation.”

As market shrinks, it is imperative for manufacturers to find cost-effective ways to continue to sell their goods and services, including the combining of sales and service staffs, he pointed out.

He isn’t among those predicting death for the U.S. textile industry, but it won’t resemble its former self, he said.

“This smaller and somewhat different market will require machines, parts and services,” he said. “Our company is positioned to serve these needs and will adapt as required to remain a viable organization. We will continue to be one of the wagons in the circle defending our industry.

“There are many other companies, in and serving this textile industry, which also will not give up. This is the way with America. Some of our best work comes with our back against the wall.”

Textile News Index

NTCO economic report:
Safeguards helped in 2004

Jan. 31, 2005

WASHINGTON, D.C. — In a year-end textile trade and economic report, the National Council of Textile Organizations (NCTO) reported that while job losses and mill closings continued in 2004, the outcome was moderated because the U.S. government imposed the China textile safeguard just prior to the start of the year on certain products already removed from quota.

In 2004, U.S. textile and apparel employment fell to 676,500, which represents a loss of 32,100 industry jobs from year-end 2003. Domestic textile plant closings also continued during 2004, with at least 30 U.S. textile facilities shutting their doors.

More ...

Association reports (click on headline):

AMTAC: Bracing for storm

ATMA: Why should we let China win?

NCTO: Challenges, opportunities await

NTA: Group stays busy on trade front

GTMA: Georgia group makes strides

Manufacture Alabama: Alliances stressed

AATCC: Changes ensure relevancy

Cotton Inc.: Forum highlights activities

NCC: Farm, trade policy inseparably linked

THA: Hosiery group celebrates a century

Supima: Association strengthens in ’04


PICKIN' COTTON

Jan. 31, 2005

Texas High Plains expects a record ‘monster crop’

By Odyll Santos

West Texas, which produces a major portion of the state’s and the country’s cotton crop each year, sees a huge total harvest for the 2004-05 marketing season, according to a report dated January 19 from the Texas Cooperative Extension.

In the High Plains, expectations for record cotton production continue, with observers in the region referring to a “monster crop” this year. The High Plains is expected to produce a record 4.6 million bales of cotton this year, up from the previous record of 3.5 million bales, according to Randy Boman, an agronomist with the Texas Cooperative Extension.

The Extension attributed the large crop to abundant rainfall and a healthy dryland crop. However, the rain did cause some problems for many producers. Wet fields made it difficult for their strippers to enter fields to harvest cotton. In Briscoe County, for example, the harvest of several thousand acres of cotton was delayed due to the wetness in the fields, and the conditions lowered the grade of the crop.

Producers also were concerned about micronaire, a measure of the maturity of cotton. Boman said micronaire is not as high as producers would like it to be because of a cool growing season.

Despite the substantial rainfall and wet conditions, there are producers who were surprised by the quality of their crop. In Howard County, the 120,000 bales of cotton harvested by farmers received higher, not lower, grades, as they had expected, said Michael Brooks, extension agent in Howard County. With better grades, cotton should have a higher value. Cotton is graded by color and by the amount of leaf tissue, or trash, it contains.

Meanwhile, other cotton-producing areas in Texas will be contributing to the overall large state crop as well. Moving from mid- to late January, these areas continued to harvest cotton, though many farmers’ efforts were hindered by cold temperatures.

In the South Plains, observers reported warm and mild temperatures early during the week of January 17, but an arctic blast caused temperatures to drop below freezing. Observers said some progress was made in harvesting cotton, and most farmers have reported that yields are better than average, the extension said.

Farmers in the Rolling Plains of Texas had to deal with wet conditions that prevented them from returning to their fields to harvest their crops. The cotton harvest in the region was about 70 percent complete as of January 19.

In West Central Texas, the cotton harvest “wound down,” as crop observers reported unseasonably warm temperatures around mid-January. But a cold front passed through the region, bringing freezing temperatures.

In its January 12 crop report, USDA projected overall Texas cotton production at 7.5 million bales in 2004-05, roughly a third of the total U.S. crop. The current season’s crop in Texas is up significantly from 4.4 million bales in the previous season. USDA projected the Texas cotton yield at 674 pounds per acre this season, up from 480 pounds in the previous marketing year.

The U.S. is expected to produce 23 million bales of cotton in 2004-05, up from 18.3 million bales in 2003-04. Nationwide, the cotton yield is projected at 846 pounds per acres, up from 730 pounds in the previous year.

Textile News Index


Editorial

January 31, 2005

2-Oh-Oh-4: the year that was

Top stories:

Quota quashing. No story dominated the textile industry headlines more than the abolition of global trade quotas, which of course occurred on Jan. 1 for members of the World Trade Organization (WTO). The import quota system that has governed trade in the sector dates back 40 years to the multi-fiber arrangement. The commitment to lifting textile quotas came in 1994 with the close of the “Uruguay Round” talks that created the WTO.

A number of subplots related to the end of quotas emerged during the year. Of note: the continued unification of textile interests to respond to quota elimination and the pending threat from a number of countries, particularly China. In the U.S., various textile interests came together to build consensus and issue positions through press conferences and communiqués and take action through the filing of textile safeguards with the U.S. government. U.S. industry leaders also joined association partners in Turkey to form the Global Alliance for Fair Textile Trade (GAFTT), which provided a platform for textile and apparel businesses around the world to express their concerns about the end of quotas and to demand that the WTO take action to address these concerns. The group’s first action step was to sign a joint set of principles, known as the Istanbul Declaration, that called for an emergency meeting of the WTO to postpone the expiration of textile and apparel quotas.

Continued contraction. Meanwhile, the domestic textile and apparel industry took more blows to the gut in 2004. About 32,100 industry jobs were lost in 2004 and at least 30 facilities were closed. Those numbers could have been worse had the U.S. government not stepped in to approve China textile safeguard petitions on certain products already removed from quota. With the Pillowtex Corp. demise now off the front pages, home textile producer WestPoint Stevens was the dominant purveyor of bad news in ’04. The textile titan, operating under Chapter 11 bankruptcy protection, announced the elimination of more than 1,100 jobs last year. Yarn supplier Unifi Inc. and textile makers Dan River, Sara Lee Branded Apparel, Avondale Mills, Culp, Flint River Textiles, Delta Woodside and Charles Craft were among others brandishing the job-cutting ax.

Major merger. New York financier Wilbur Ross made it official in March by announcing that he was combining newly purchased Burlington Industries and Cone Mills into one company called International Textile Group.

Association amalgamation. Industry consolidation had a similar effect on longtime big-hitters in the trade association realm, as the American Textile Manufacturers Institute (ATMI) and the American Yarn Spinners Association (AYSA) merged in March to form the National Council of Textile Organizations (NCTO).

Noteworthy events:

Greenville good-bye. The American Textile Machinery Exhibition-International (ATME-I) trade show sang its swan song in Greenville, SC, Sept. 13-17, drawing favorable reviews, despite lower attendance and a reduced number of exhibitors. The show, of course, will move to Atlanta in 2006.

Four of Fame: Four industry leaders were inducted into the American Textile Hall of Fame at the American Textile History Museum in Lowell, MA, in September. The Class of 2004 included W. Duke Kimbrell, chairman of Parkdale Mills, Inc., textile designer and technical innovator Jack Lenor Larson, the National Cotton Council of America and American Viscose Corporation.

Milestone meeting. The National Textile Association (NTA) celebrated a landmark anniversary at its 150th annual meeting at Cooperstown, NY, in September.

Ambitious aim. A coalition of cotton, mill village historians, history groups, museums and others announced during a press conference in Kannapolis, NC, in July the launch of a grassroots movement called the Southwide Textile Heritage Initiative. The purpose of the initiative is to preserve memories and mementos of the U.S. textile industry.

Best speeches:

Ross responds. Addressing the Southern Textile Association (STA) during its Winter Conference, Wilbur Ross responded to critics by laying out his case for breaking with much of the industry to support the Central American Free Trade Agreement (CAFTA). “What I don’t understand is how people think they’re going to overcome the problem of elimination of quotas by sticking their head in the sand and saying, ‘well, the sky’s not really falling.’ ”

Retailer retort. Also speaking during STA’s conference, Mark Neuman, counselor for International Trade & Global Strategies for the Limited Brands, Champagne, IL, brought the perspective of a retailer to industry representatives. “If we don’t help people in this room figure out how to compete and win, we won’t have (a viable U.S. textile manufacturing base). After all, we’re selling in your communities and if people aren’t making good wages and their communities aren’t strong because they don’t have employment, then we won’t sell things.”

Chesnutt chats. Jim Chesnutt, president and CEO of National Spinning Co., Washington, NC, and vice chairman of the National Council of Textile Organizations, gave several shoot-from-the-hip talks to various groups during the year. One of the memorable ones came during the annual meeting of the North Carolina Manufacturers Association in October in Greensboro, NC, where he started with this bon mot: “I’ve been described as an old, angry white man … and that’s true.”

Memorable quotes:

• “I don’t want to say I almost cried, but I did this morning. It is truly a momentous occasion to see this industry come together and it does my heart a great deal of good.”
Allen Gant Jr., CEO of Glen Raven, Inc., Glen Raven, NC, addressing delegates at the first annual meeting of the National Council of Textile Organizations (NCTO) in Washington, DC, in July.

• “We think it’s outrageous that people are looking for socks when they should be looking for weapons of mass destruction.”
Laura Jones, executive director of the U.S. Association of Importers of Textile and Apparel, commenting on the fact that the Dept. of Homeland Security’s U.S. Bureau of Customs and Border Protection division began detaining all imported socks, as quoted in an article in The New York Sun.

• “I had always been taught that the globe was round, but many textile people believe that it is flat and that you will fall off if you go outside the U.S.”
Wilbur Ross, chairman of International Textile Group, speaking to the U.S. Association of Importers of Textiles and Apparel, as quoted by Bloomberg. He is expanding manufacturing and joint ventures abroad.

• “You can’t work with Andy Warlick and not be comfortable with change.”
Lee Thomas, executive vice president of the Parkdale America division of Parkdale Mills, Gastonia, NC, and then president of the Southern Textile Association … when asked if he is comfortable with change, speaking about the Parkdale CEO.

• “As soon as I said we have to protect our standard of living they came around like Pavlovian jackasses jumping up and down and saying, ‘protectionist, protectionist.’ ”
— Retiring Senator Ernest “Fritz” Hollings (D-SC), as quoted in an article about his career and his ideas of trade, as quoted by The New York Times.

• “I never thought about the connection between low-cost imports and American jobs until I started drawing a three-day paycheck. Then it really hit home when there was no paycheck at home.”
Nicole Wall, who was laid off from her forklift job at Hanes Dye & Finishing, as quoted in a Winston-Salem (NC) Journal article on the impact of the 10-year-old North American Free Trade Agreement (NAFTA).

• “This breaks my heart. I’ve seen a lot of (our former employees) who took their last paycheck here and bought a lawnmower, and they tow it around in their pickup truck cutting grass, doing yard work.”
J.C. “Jay” Self III, an executive with Greenwood Mills, Greenwood, SC, commenting on the fact his company has had to shut plants and lay off employees due to trade deals, as quoted by The Los Angeles Times.

Gone but not forgotten:

• Well-known and respected textile industry leader James Lemons, the longtime president of the North Carolina Center for Applied Textile Technology, left the industry in November. The embattled president departed after 20 years at the school, which has fallen under close scrutiny by the state and others in the past couple of years. Much of the review had become personal in nature, Lemons said, so he decided to “remove myself from the equation,” so the focus would be on the school only.

Welsford Bishopric, former longtime president of Spray Cotton Mills, Eden, NC, and past president of the American Yarn Spinners Association (AYSA), died Jan. 11 at age 75.

William H. “Bill” Burn, chairman of the board of Dycho Company, Inc. and Crescent Hosiery Mills, Inc. and past president of the National Association of Hosiery Manufacturers (NAHM), died July 23 in Athens, TN.

Walter Ray Shockley, who served as executive vice president of the American Textile Manufacturers Institute from 1976-85, died Nov. 3.

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