Trützschler inks JDH deal

September 29, 2003

GREENVILLE, SC - The business entities of John D. Hollingsworth on Wheels, Inc., which had been transferred to a charitable foundation after the death of John D. Hollingsworth in 2001, will be restructured and certain of them have been acquired by the Trützschler Group of Monchengladbach, Germany.

Both companies - Trützschler and Hollingsworth - mutually announced that all operative units of Hollingsworth outside the United States and Canada have been acquired by the Trützschler Group as of Sept. 18. Hollingsworth's operations in the U.S. and Canada will remain the property of the Hollingsworth Foundation.

John D. Hollingsworth is one of the leading manufacturers of steel and flexible wire clothings for cards and other machines for spinning preparation, long staple cards and machines for the nonwovens industry. The Hollingsworth Company here, which has been the main facility, supplies the U.S. market.

The shrinking of the U.S. textile industry and the worldwide move of the textile industries to Asia have led to less favorable prospects for growth in the U.S., the companies said. These circumstances have been the reason for the Hollingsworth Foundation to restructure.

By selling the manufacturing units in Brazil, Mexico and Germany and the European Service Stations, all activities outside the U.S. and Canada have been transferred to Trützschler.

The unit headquartered here still will be owned by the Hollingsworth Foundation and will be directed by existing management. This assures preservation of the main unit here and ensures that long-term clients in the spinning and nonwovens industries still can be supplied by Hollingsworth Greenville in the future.

The Trützschler Group is a worldwide leading manufacturer of cards for the spinning industry. With the acquisition of wire clothing manufacturing capabilities, Trützschler is enlarging its product line with steel and flexible wire clothings for short and long staple cards.

Having enjoyed close cooperation with wire clothing manufacturers in the past, Trützschler's development and production of its own wire clothing is a natural step for it to benefit from further cooperative effects, Trützschler said.

With this acquisition, Trützschler, under the new moniker "Trützschler-Hollingsworth Card Clothing and Service," said it is planning to achieve a higher presence in the spinning and nonwovens sectors so that increased service can be offered to all its clients.

Cone files Ch. 11; accepts Ross offer

September 29, 2003

Shareholders group rejects buyout bid

GREENSBORO, NC - Denim producer Cone Mills Corp. filed for Chapter 11 bankruptcy protection Wednesday and announced that it has accepted a buyout offer from Wilbur Ross - a proposal rejected by a shareholders group.

The Cone Mills Shareholders' Committee said Thursday that it won an "overwhelming victory" for its slate of board nominees in the company during Cone's annual meeting, which could pressure Cone to abandon the deal to be sold.

Founded in 1891, the company, said Wednesday that it has accepted a letter of intent from Ross's company, WL Ross & Co. LLC, to buy substantially all of its assets. The $90 million transaction, including cash and assumed loans and liabilities, has been approved by the company's board, Cone announced at the time.

On Thursday, however, the shareholder committee issued a release indicating that it had received votes for its nominees representing more than 50 percent of Cone's outstanding shares.

"This is a clear message to the Cone board: Cone shareholders want to see the company reorganized, not sold to WL Ross," said Marc Kozberg, committee member and Cone director. "We are confident that superior alternatives are available and intend to explore them fully."

Cone Mills' new directors are Charles Barry, a Minneapolis businessman; Randall Kominsky, president of Alliance for Financial Growth Inc.; and Jess Ravich, president and chief executive of Libra Securities LLC.

In announcing its bankruptcy filing, Cone said it expects to maintain a significant U.S. employee base, including a substantial number of manufacturing jobs if a buyout by Ross is completed. The company added that its headquarters will remain here.

Cone Mills has arranged for $35 million in post-petition financing from GE Capital, which will be used to fund operations prior to the completion of the transaction, the company said. Throughout this period, Cone said it will conduct business as usual, with no interruptions in its operations or delays in meeting commitments to its customers.

Cone also intends to meet its post-petition obligations to vendors, employees and others in the normal course of business, it added.

"This transaction is the best available option for the company's customers, employees and communities," John L. Bakane, Cone CEO, said in the release. "WL Ross is a well-financed strategic buyer with the means and incentive to strengthen our business. By joining forces with WL Ross & Co., we will be much better positioned to meet the enormous challenge of low-cost imports while remaining an important employer in the textile industry."

Bakane added that the U.S. textile industry remains under intense pressure from a flood of Asian imports.

"Unfortunately, the size and scope of this challenge shows no sign of diminishing, since appeals to Washington from textile industry leaders seem to have fallen on deaf ears, with U.S. trade policies continuing to unfairly favor these overseas competitors."

Ross, who also has agreed to buy bankrupt Greensboro-based Burlington Industries, bought large stakes in both Burlington and Cone last year in efforts to gain control of the companies through the bankruptcy courts. Ross told Reuters that he now holds 9 percent, or some $85 million in Cone bonds at face value.

Levi Strauss & Co., which has been Cone's largest customer for nearly 90 years, Thursday announced the closing of its four remaining manufacturing and finishing plants in North America as part of its shift away from owned-and-operated manufacturing.

McMichael, Draper inducted into Hall

September 29, 2003

LOWELL, MA - Industry leaders, friends and families attended a luncheon on September 8 at the American Textile History Museum here to celebrate the induction of the Class of 2003 to the American Textile Hall of Fame (ATHF).

The program, now in its third year, honors dedication and commitment to the nation's textile industry. The ATHF is permanently housed at the American Textile History Museum here.

Honorees were: Dalton McMichael Sr. (1914 - 2001) of Madison, NC, the visionary who transformed the manmade yarn preparation industry to become its worldwide leader during his 60-year career; and The Draper Corporation of Hopedale, MA, a family-owned manufacturer of innovative textile machinery components for more than 150 years.

The ceremony included remarks by Arthur M. Spiro, a member of the ATFH board of governors who presented an award plaque to McMichael's son, Dalton McMichael Jr., members of his family and business associate William J. Armfield IV.

Accepting the award for the Draper Corporation were J. Craig Huff Jr., ATHM board member and former Draper officer; and William B. Gannett of the Hopedale Foundation and a former Draper executive.

The luncheon, hosted by the ATHF board of governors and museum board of trustees, also included an official dedication of the American Textile Hall of Fame on the program. A dedicatory plaque was unveiled with special remarks by Michael J. Smith, president and CEO of the ATHM.

"As Americans, we are a people who revel in the use of our minds and our hands," Smith said. "We need look no further than the people and companies inducted into the American Textile Hall of Fame in its first three years to prove the truth of that statement.

"As we stand here today to offer this dedication, let us pause to remember but let us also pause to commit ourselves to continuing the gifts that come to us via the field of American textiles," he added. "Those include creativity, problem solving, the learned skill of one's hands, the quickness of the inventive mind, the joy of true teamwork and the pleasure of love and friendship."

ATHF chairman James M. Fitzgibbons of Chestnut Hill, MA, and retired

chairman of Fieldcrest Cannon, said, "We are pleased to welcome these two distinguished leaders who embody the American Textile Hall of fame's theme of 'Enterprise and the American Spirit.' They have made an important difference in the textile industry, and now have a place in the American Textile Hall of Fame to tell their story to future generations."

The Class of 2003 was selected by the ATHF board of governors, which includes Fitzgibbons; Robert E. Coleman, former chairman and CEO, Riegel Textile Corp. and Textile Hall Corp., Greenville, SC; Robert Dalton Jr., Tech-Tex, Inc., Charlotte, NC; Walter Y. Elisha, former chairman and CEO, Springs Industries Inc., Fort Mill, SC; W. Duke Kimbrell, chairman and CEO, Parkdale Inc., Gastonia, NC; Joseph L. Lanier Jr., chairman and CEO, Dan River Inc., Danville, VA; Spiro, AMS Tex Enterprises Inc., Great Neck, NY.

Edward B. Stevens, chairman, Ames Textile Corp., Lowell, MA, and ATHM board of trustees chairman emeritus, serves as ex officio member.

The American Textile Hall of Fame, established in 2001 with a board of governors appointed by the museum's board of trustees, honors past and present individuals, corporations and institutions that have made significant contributions to the textile industry in America as well as those who have advanced the role and appreciation of textiles in American life.

Members of the inaugural class were industry leader Roger Milliken, chairman and CEO of Milliken & Co.; textile pioneer Samuel Slater (1768-1835); and Duke Power, energy supplier to the Carolinas.

The Class of 2002 included E. I. Du Pont de Nemours and Company, Frederick B. Dent, James Spencer Love and Whitin Machine Works.

The American Textile History Museum focuses on the art, science and history of U.S. textiles, and is the nation's largest and most comprehensive textile museum.

Milliken's Nash covers
trade matters from all angles

September 29, 2003

Jock Nash

Editor's note: Following is a "Trade 101" keynote speech (with some omissions) by Jock Nash, Washington counsel for textile producer Milliken & Co., delivered extemporaneously to members of the Textured Yarn Association of America (TYAA) during their Summer Conference at Myrtle Beach on July 25.

We talk about globalization ... and globalization is a phenomenon that we've all been experiencing in one form or another for the last 10, 15, 20 years. And the notion of this globalization is that it's some inexorable force, some immutable law of nature that's just happening. And what it's up for us to do is to try to see where this globalization is going and position ourselves in a way that would result in the success of your business or your family or whatever.

But that's not really how it's happening. It's not happening like the tide rolls in or the sun comes up. Globalization is kind of being done to us. Globalization is occurring because, shortly after the Arab oil embargo and we started doing these GATT rounds and lowering our tariffs unilaterally compared to the rest of the world, we started this .... we were the engine of the world. We were the market of choice. ....

... Some of the things that you learn about trade issues is that our Founding Fathers had a scheme that was different than all other countries. And their scheme under our Constitution is that we have an executive branch, a legislative branch and a judicial branch, all co-equal branches of government.

But for the first time in history, the Founding Fathers left the regulation of international commerce to that branch of government closest to the people, the legislative branch, because the Founding Fathers said, "you know, the effects of international trade weigh most heavily on the people. So we have to have the representatives of the people be the ones who decide whether we do that or not" ... because the Founding Fathers in the mid-1700s, when they were looking at how they were going to lead this great country, they decided that their recent experience, of course it was with kings, who would trade away the riches of the realm for any number of reasons.

So the Founding Fathers took that regulation of international commerce away from the king, the executive branch, and gave it to the legislative branch.

Some of you have heard about trade promotion authority, fast track, and all fast track is is the legislative branch gives to the executive branch permission to go out and negotiation international trade agreements. The unfortunate part is that when those international trade agreements come back to the Congress, they could only have two choices – vote it up or vote it down. They can't change a word.

Effectively, what the Congress has done under our scheme, envisioned by our Founding Fathers, is it's given back the regulation of international commerce back the king. And you can see what the king does with it. The king, President Bush, will say, "Pakistan is our loyal ally in the war against terrorism and their largest industry is the textile industry. They want more access for our market." And they ask for more access. But at that point, at the time of the Afghan war, our textile industry was right up to here with trading us away. And so the industry was able to put sufficient pressure, so the only thing they gave the Pakistanis was about $100 million of new concessions.

But you can see the trend, you can see what they're doing. You can see in the comments of our Secretary of Commerce, our Secretary of Treasury, our U.S. Trade Representative. They're always talking about how we've got to raise up the Third World, how important it is that the rest of the world benefit from opening free trade. I love the fact that they care. The problem is, are they paying attention to what's happening at home? Because a direct result of their actions is that we are hurting.

We've lost three-quarters of a million jobs ( a job loss of biblical proportions ) since 1994. Now if you take an $8-1/2 dollar an hour job in the United States and that job goes to Cambodia, depending on whether it's a Cambodian-owned apparel company or whether it's a private sector apparel company where the wages for that woman or man making that apparel is $40 a month or $30 a month ... so that $8-1/2 dollar job an hour in American all of a sudden becomes a $40 or $30 a month job in Cambodia.

Same with the higher-paid textile jobs. When they go, they don't stay $10-1/2 dollar an hour job when they leave here. The race is to the bottom.

At the same time, our government, is saying, "my god, we don't need this industry. We should give it to Mexico, the Central American countries, to Africa." And what we're finding out is that after having given away these jobs ( and they have in fact been given away, they're not taken ) the question is whether we markedly improve the lives of the other 6 million people in the world as a consequence of our losing 3/4 of a million jobs, just in textiles and apparel. My view is that no, we have not.

A lot of the jobs, for instance, have gone to the Dominican Republic, a powerhouse in the Caribbean as far as making apparel and textiles and sending them to the United States. But a year ago, in order to stay competitive, the Dominican Republic lowered its wage of $150 a month to $100 a month. So what you see is that these people who our policy people in Washington are trying to help, it's not really giving them the so-called industrial take-off that the economists say is going to happen.

We have a free trade agreement with Mexico, we move a certain amount of manufacturing down there, they start earning more money, they have money to buy our stuff. Well, that's not exactly how our free trade agreements are working, because our free trade agreements are not really trade agreements but in fact are investment agreements.

If we take all goods and services ( manufactured goods and licensing agreements and patents and copyrights ) our overall imbalance of trade is now $500-odd billion a year. Do the math: $1 million a minute that we are under-producing. It's better to say under-producing rather than over-consuming. And I have no problem with consumption, but the problem is we're not consuming what we make. In fact, we don't make enough for us to consume today – just to take care of the demands in our market, which is the greatest economic asset that we have. It worked for us to have cars that we demand and we need. We have to import $120 billion worth of cars to meet our demands. Our domestic people couldn't do it. So we have to bring in $120 billion worth of cars in.

The same kind of numbers occur in computers and in every area. So it used to be that while we import a lot of oil and apparel and toys ( who cares about those things, right? ) and then we found out that countries elsewhere could make things, if they could be more sophisticated ( and they do ) the same way we all experienced, those of us who are middle age ... if I'm middle aged, I'll live to be 112 ... anyway, remember the cheap Japanese things that came in and now they probably lead the world in some of these advanced technologies?

I remember a time I talking with a Congressman about a trade deal. And he said, "you know your problem, Jock, is you don't have faith in America. Let me tell you something, son. Americans can outproduce anybody in the world. All we have to do is unleash the entrepreneurial spirit of the American entrepreneur and their workers and relieve them of the burden of regulations and burdensome taxes and we can outproduce anybody in the world."

And it's a trend of hubris, a kind of American triumphilism that's all over the country today: "We're No. 1! The soul remaining super power. We are the best." And it's that notion that the American working men and women can outproduce anybody in the world.

And I said, "you know, that's kind of a master race notion ... that somehow we're genetically predisposed to being the best. That's kind of a master-race notion that died with the German Nazi Party."

But at Milliken, we know that if you take another human being and you give him the proper education and training ( whether he be a Mexican or a Chinese or and American ) they can produce up to your levels of your leadership. There's nothing unique about us. But this notion that we're the best and, but for this, that and the other thing, we can be the best in the world and will continue to be forever is a false notion. We're where we are because we as a nation and as a people made sacrifices. Today is seems like some of us don't want to make those sacrifices.

They talk about today, the consumer would love to buy American but they just can't. But it's the whole notion of the consumer. That's the one who benefits from free trade. If they're completely honest with you, the people who are pushing it, free trade does not create jobs. They've been saying that. It was a horrible mistake and we've been dinging them with it every day. We know free trade doesn't create jobs. It creates efficiencies. Efficiencies.

(A Japanese leader) and Roger Milliken had a discussion when I first went to work for Roger Milliken back in the '80s. And (the Japanese man) said, "you know, you Americans are too obsessed with efficiencies and you're not obsessed enough with quality of life. We have a distribution system in Japan that has 12 different people from the producer to the consumer. But there's a lot of mom and pop stores and there's a lot of jobs in between there." And they were saying that was sufficient for them. Now everybody is seeing that Japan's economy is collapsed and everybody's saying that Japan's bad, yet it's larger than the entire economy in China. All of those things are true.

But to think that somehow Japan is down and out, forget it ... because those of you who know, Japan leads the world in almost every major technology. I can't imagine what would happen to our economy if our Dow were 16 percent of where it was, which is where the Nikkei is. But Japan is still doing well, still running trade surpluses and they'll ultimately work their way out of their bad debt problem. And it's OK to be in debt if you're rich. And Japan has a wonderful thing about saving. They save their money. Japan is still the leader of the world and a major, major threat to the United States. They still run massive surpluses with us in cars and auto parts, electronics. They completely destroyed our consumer electronics industry. We used to be the leaders. We invented the TV, the VCR, etc. We don't make these things anymore. So the last remaining superpower is out of the third largest internationally traded industrial sector in the world.

And that can happen to others. It's happening to textiles, to electronics and components. We talk about the textile industry losing jobs, but if you look over the last year, the people who lost the most jobs was the electronics industry – a quarter of a million jobs. Last year, we lost 7 percent of the architects jobs. Now they can outsource all of the drafting and everything. We're losing engineering jobs. We're losing all kinds of jobs. And why?

It was explained to me by a professor at Cornell University one time. He said, "you know I'm re-reading Das Kapital by Karl Marx. Karl Marx talked about the revolution of the proletarian, that ultimately, the workers of the world ( because of the exploitive nature of capitalism ) rise up and dance on their grave ... because of the way the corporate capitalists were treating them. And we saw that as inevitable."

But it didn't happen. It didn't happen. What happened was Karl Marx was unable to project the moderating influence of Western Democratic political institutions on the exploitive nature of capitalism. In other words, in Europe and in the United States, we look at capitalism and created our own hybrid. We said, "OK, no more child labor laws. Give them workman's comp. We're going to have a social welfare state for people who are thrown out of work. We're going to have a safe workplace, we're going to create OSHA. We're going to have an EPA, because we want to breathe the air. We're going to have a Clean Water Act because we want to drink the water.

So we created an entire network of things, all of which have the effect of moderating the exploitive nature of capitalism and we created our own form of capitalism. It's not a totally free market, not a totally free capitalism. It is our version. And this made this nation a great place to work, to breathe the air, drink the water, raise our families. Those same things that made this a great country and a great place to work now make us uncompetitive with our new competitors because what happened in the '80s and the '90s is the global labor force expanded and it expanded by a huge amount.

Now, a billion people ( 1.3 billion people ) in China who had not been competitors of ours are now competitors of ours. The former Soviet Union, with all of their people who had not been competitors of ours are now competitors of ours. So we've got over 6 billion people in the world that we now have to compete with. But it's not all of us who have to compete with them. It's just our skilled and unskilled labor that has to compete with them.

Our unskilled labor is about two-thirds of our work force. That means that if you have a high school education and below, you are a unskilled worker by definition. Another way of looking at it: If you're non-technical, non-professional or non-supervisory, you're also an unskilled worker. It's not just the guy digging a ditch. But it's also the apparel worker who puts this sleeve on this neck. The most sophisticated person you have in your textile company is running your sophisticated machinery. But still, unskilled labor.

So what a free trade agreement effectively does is it puts our unskilled labor in direct competition with unskilled labor elsewhere. And our people can't compete. They can't compete and still have a mortgage. They can't compete and still have a car. They can't compete and still own a home and send their kids to college, because they need a certain standard of living to have that. But if the average manufacturing worker in the U.S. gets $26 an hour and the average one in China gets $1, who's going to win that?

And the only way we can protect that is that if you want to come into our market, then you need to pay a price of admission. That price of admission pass has always been a tariff. But as you all probably know, our average trade tariff now in the U.S. is 3 percent or less, while the tariffs in India are 30, 40, 50 percent. We have a billion people in India, but a quarter of a million of them are middle class. But I double-dog dare any one of you to try to compete in that market, because you have to manufacture it here, package it, insure it, ship it, pay their tariff and then get into their market and you have access to 200 million so-called middle class people in India.

We're now in the midst of another trade negotiating round, where they hope to make India bring down its tariffs. But why should they? What do they get in return? We've already given ours away. So we're coming to the negotiating table with a 3 percent tariff and they're coming at it with a 45 to 50 percent tariff and it's not going to work. Our government has come up with a proposal to have zero tariffs globally. Of course, it was dead on arrival in Geneva, but they're still going to work on that.

But you know, tariffs are kind of funny. For most people, they're not even a speed bump. Ours are so low, they're not bothersome to anybody really. But it's non-tariff barriers that really kind of run the show in international trade debate.

In 1999, when I was in Switzerland at the World Economic Forum meeting ... someone told me that Europe has quotas on Chinese shoes. The Europeans have quotas on virtually everything China makes. As a consequence, you go back and look at the trade relationship between the EU and China over the last 10 years, you'll find out there's relatively balanced trade. Recently they ran a $50 billion deficit with China, the EU 15, which I think is almost 400 million people, just like us. Big market. But they only have a $50 billion deficit with China. ...

Well, there's no economic theory in the world that would allow that to happen unless something is in play. And that is the so-called NTB ( non-tariff barriers ). All of you who ship to Europe are familiar with ISO-2000, ISO-9000. That if you want to get into the European market, you have to be certified and so on. That's a trade barrier of a sort. And they use these non-tariff barriers. They've elevated it to an art form. And they do it all the time. In fact, their quotas on China aren't even going to expire for a number of years. We're about the same size market as all of Europe, but Europe has been sheltered from Chinese competition over the last 10 or 15 years. And we have not been. And we've been devastated as a consequence.

That's called trade diversion. If a market over there closes their market to Chinese goods, Chinese goods will come here as market of last resort or first resort. And we've allowed that to happen because we honestly, truly believe in free trade.

It's become a secular religion for our policymakers. Notwithstanding all the evidence, they believe in free trade. And then they see the other side of this equation, people like me, as protectionists. Free trade: good. Protectionism: bad. Everything is in the binary. Something's black, something's white. The free traders are seen as Renaissance men and women – afraid of nothing, going courageously into the future knowing that their will to compete will, at the end of the day, make them winners. And then protectionists are seen as unable to compete, afraid of competition, driving into the future looking into the rear-view mirror, wanting to build walls around this country, hurting the consumer and taxing the consumer.

And so, the whole debate has been on this binary thing. Not Roger Milliken, surely not me, has ever said that we should stop trade. No one has ever said that we should build barriers to stop anything from coming into this market. What we have said is that we should trade to the extent that it benefits us. And to the extent that it doesn't benefit us, we should not.

Clearly we have an end game, because it's the only solution for our great nation. And that is, if you want to sell it here, make it here. If you're a foreign corporation and you want into this market, then we urge you to become a corporate citizen of the United States. Bring your technology, bring your capital, come to America, invest in greenfields, build your plant, hire Americans at American wages and compete on the only level playing field that exists ( the same environmental laws, the same OSHA, the same income tax, the same exchange rate ) all of those things, they're all even. So come here and compete.

Some people say, "well, that violates free trade." Well, yes it does. But that's exactly what China's doing. If you want to sell into China, you're going to have to make it there sooner or later – sooner rather than later. And that's the reality.

It's an absolute economic and political imperative for China to create at least 10 million new jobs a year. With their 1.3 billion people, they have to create 10 million new jobs a year to stay even. Now, we have 14.7 manufacturing jobs in America. Were we to sacrifice every one of those jobs just to China ( nobody else ) well, you can do the math. It's not going to take very long for them to take virtually all of our manufacturing jobs. And, at the end of 14 or 15 months, still in the next 12-month cycle, they have to create 10 million new jobs. And we would be without anything. They would have our jobs. And they still have this imperative of creating more.

It's kind of like the old J.D. Rockerfeller walking along the street during the Depression. And this street urchin comes up to him and says, "you've got more than your share of wealth. I think you should spread it around." And J.D. Rockerfeller reached in his pocket and gave him a dime and said, "here's your share."

We have in this nation the richest nation in the world, created by at the end result, 280 million Americans over time. And we can give it all away, all of the wealth that we have, every job that we have and if you spread it around 6 billion people, you're not going to markedly change anything. We must do what's in our national self interest. We must not, absolutely must not, get in the situation where we're driven by secular theology in a way, a secular religion.

The purpose, what we're all here for, at least in my opinion, is that our economy serves us. We don't serve the economy. The purpose of the economy is to enrich us and our people and to give stability to our society. I mean, a town doesn't have to shut down and it's hospital doesn't have to shut down because the only manufacturing facilities have gone and now there are no people with medical insurance who can afford to support the hospital. Part of what's happening all over the Carolinas is that a lot of people in our dyeing, printing and finishing and textile operations ... when they close, all of a sudden the sewer system or the water system doesn't have any money. They passed big bond measures so that Textile Company X or Y can get their million gallons a day or whatever they needed. And they depended on that. And now, of course, that plant has shut down. They don't need those millions of gallons. Now the residential users have to pay for it if they can.

So the only way we ever can become competitive with a country like China is if our wages go down to theirs and theirs come up. And we need some sort of balance in there. ...

But in fact we're not going to be able to ( not without a revolution ) keep lowering our wages. And the wages are stagnating and they have been stagnating for a long time, especially for the unskilled labor.

It's kind of common sense. For example, take NAFTA. Mexico has 100 million people. We have 280 million. As a result of NAFTA, their labor force is basically our labor force, as well. They have the need to create 1 million jobs a year in Mexico. Now, they haven't been under Vincente Fox, unfortunately. They've lost jobs since he took office because now China is taking their jobs, as well.

But as long as there's an infinite supply of labor, the price of that labor can't go up, just by the operation of basic economic theory. And that's kind of what happens when you have 6 billion people in the world. 2-1/2 billion of them live on less than $2 a day. So there's plenty of people out there to work for us. The problem is, we need those jobs here. We need more $65,000-a-year auto workers in this country, auto workers who can afford to buy a house or cars or send their kids to college and pay for it.

And we've got to worry about that, because obviously we have to educate our people. But that's not the answer to our problem. Our government is telling us that we have to have a more educated work force. And the other thing they say we have to do is increase our exports.

Now, at Milliken, we look at things and try to analyze them in a way that takes into account that there's something that's been happening like this for 10, 20 or 30 years. That's a clue that it's probably not going to change tomorrow. After WWII and the creation of the GI Bill, there was a blip of people, men, who all of a sudden took advantage of the GI Bill and went to college. But except for that blip, the number of our fellow Americans who have gone on to advanced degrees has stayed the same. So it's the same in 2003 as it was in 2000, the same it was in 1970. That leads me to believe that it's not going to change tomorrow ... where instead of one-third of our people getting an education, two-thirds would get a higher education. But that's probably not in the cards because we're all different kinds of people. You folks know that some people who work in a lot of your plants are non-verbal. They're different than you and me in some respects. They may be different, but they're not less intelligent. ...

They're our middle class. The middle class is important because they're a buffer between the poor and the rich. And we're so fortunate in America to have that middle class, so we don't, until recently, have bars on our windows. We don't live in gated communities. The fastest-growing employment sector is not security guards. And that's what you do when you start getting rid of the middle class is you have to find ways to protect yourselves. Third World countries, to the extent that I've traveled through them ( and I've been seemingly everywhere ) that's the way they are. They're the rich and the poor. And the rich live very, very well – but at some cost, because they have to have chauffeurs and army vehicles and gates around their schools, their clubs, their communities, everything. And that's what's happening to the United States. We are creating an underclass of a majority of our people. I mentioned that our unskilled labor is over 60 percent. That's creating an underclass in a constitutional republic, a democracy. And that can't work for long.

So everybody knows and have felt personally what has been happening to our country recently. They talk about the 2 million manufacturing jobs that have been lost in two years. Well, that's 2 million families that just dropped out of the middle class. And we find that these people who lose these jobs, under economic theory, what happens under creative destruction that was theorized by Joseph Schumpeter is that with this "creative destruction," you constantly see that industry is being destroyed and out of the ashes of them comes a new industry, that people start applying their resources and their money and their capital to other pursuits. And it's a constant movement up, there's progress. And, so the buggy whip manufacturer goes out of business but the automobile manufacturer goes into business. So you see this constant creative destruction that goes on.

But what's happening today is not creative ... it's a horrible situation because industries that we're losing are not buggy whip manufacturers. They're steel industries, textile industries, electronics industries, auto industries. The great auto industry is one of the most important industries to our economy because of all of the suppliers and technologies that go into making a car – the same way that aircraft is important to us because all of the technologies and things that go into making a Boeing. But Boeing is one labor-intensive item. By the time they finish making it, that's all labor. Boeing sees that. Thirty percent of their assembly is now done in China.

But we see things happening today. Ford Motor Company now outsources $1 billion worth of parts to China. They said in a press release the other day they hope to bring that up to $10 billion in three years. $10 billion of auto parts in China that no longer will be made here. So we are in a race to the bottom. We have to do something about it.

Our textile industry, for the first time in a long, long time, are united. We were all united between 1985 and 1991, when we all fought for the three textile bills. And if you recall, they were global quota bills. They were saying, "we are establishing a quota for imports of textiles and apparel into our market. That quota, that global quota, can only grow as fast as the growth of the market." And the executive branch ( the king ) can give that all to China, if they want to. They can give it to Jamaica, if they want to. They can give it Mexico. But they've only got so much to give. And we made a compelling case that that should be the way it is. We shouldn't be giving away more than we've got to give, which is what they're doing today. All three of those bills passed. All three of them were vetoed and we couldn't override the veto. We were only 12 votes short of overriding the veto.

But the textile industry that was not very familiar with Washington said, "we just wasted X millions of dollars fighting for three textile bills and we got nothing. We are seen as these protectionists and an industry that can only say Œno.' We don't want to be seen that way. We want to be seen as competitive." They said, "we want to be at the table. We want to be there with you and talk about these things and the whole industry." In 1991 through just recently, the industry was very aggressive trying to be "at the table."

But when you get into bed with the government, you get more than a good night's sleep. And our industry has found that out, because while we were at the table, we lost three-quarters of a million jobs.

If you go back and check the data, if you look at what happened during that period, from 1985 to 1991, you'll see that for the first time in the history of the textile program, that the growth of imports stopped. It just stayed level – at a very high level, mind you. At that same time, market capitalization of our publicly held textile and apparel companies went up. During that same time, employment stabilized in textiles during that six-year period ... I've got the numbers, but I didn't want to dazzle or confuse you with numbers. But basically I think we lost, like, 15,000 jobs during that six-year period. Apparel lost like 30,000 jobs during that period. But that was during a period when they had 1 million apparel workers.

So our industry was convinced that it had failed after working very, very hard in Washington, when in fact, by spending millions of dollars on their legislative efforts, they got billions of dollars and they just didn't know it. For them, things were getting better. And then they got at the table and the hemorrhage continued.

The reason that imports stabilized, by the way, is that that first time we tried to override the president's veto ( and it takes two-thirds vote in the House of Representatives ) we lost by 12 votes. And they said, "that's too close." So they dispatched our top negotiator from the U.S. Trade Representative's office and said, "you go and get Taiwan and you get Korea and you get Hong Kong and tell them to meet you in Hawaii and I want you to renegotiate our bilateral textile agreements with them," even though those agreements were only one-year old and had a number of years to run. Our president said, "you go there and renegotiate those agreements."

And Michael Smith, who was the negotiator then, went over the Hawaii and told the Koreans, told the Taiwanese, told Hong Kong that their bilateral was going to be renegotiated and they objected. They said, "object if you want, but the first country that agrees gets the best deal. The second one that agrees gets the second-best deal, third one ..." so on and so forth. Take your time, make your decision. Boom! We limited them to 1 percent growth and that stabilized the import growth. Once you stabilize the import growth, what happens is, it stops ... we couldn't get political critical mass to override the veto because imports stabilized. And they knew that that would be the effect.

We lost some of our passion. We lost some of our energy. And so, it was very, very effective and they did it.

That gets back to the issue now of the squeaky wheel. We were as an industry very, very squeaky back then. We got them to limit imports for that short period of time. Today, after losing 750,000 jobs, some of the leaders in our industry got together and they were in Washington yesterday ... every major textile association in this country has now agreed to three things:

1) we want the negotiated safeguard with China to be invoked;

2) we want no so-called TPLs in future agreements; and

3) we wan something done about the Chinese currency that's pegged to the dollar.

Back in 1997 when I was in Peking, we negotiated a U.S.-China textile bilateral. In that agreement ( and not known to us ) was a safeguard provision that didn't surface for years. But it basically told China that if you join the WTO during the life of this agreement, you will join in lockstep with the other countries in the WTO. In other words, if you were a WTO charter member in 1994 ( like India was, like Japan was, like we were ) you had to agree to get rid of the quota system –then called the MFA, the Multi-Fiber Arrangement. You had to get rid of this over a 10-year period all of the quotas that you have.

Our government said, "OK, we'll do that." And we kind of back-loaded the pain. Most of the pain is going to occur on Day 1, 2005, when 52 percent of our outstanding quotas will be eliminated.

Between 1994 and 2005, there have been three traunches of liberalization, a lot of products that were of no consequence to most of us ( cordage, things like that ) but in the last traunch, Jan. 2001, the third traunch, there got to be a lot of things that a lot of us make. And we found out that of the product categories that have now gone quota-free, China sends us 70 percent of everything we import in a category that's now quota-free.

When I was in Ambassador Zoellick's office with the National Textile Association board members and officers, I asked Ambassador Zoellick what did he think was going to happen on Day 1, 2005 when the quota system came off. And he said, "well, you know, we have a market that consumer ... that's not unlike the Australian consumer, not unlike the Japanese consumer ..." And neither Japan or Australia has any quotas at all on China today and China has 75 percent of those markets. He said, "we're having the International Trade Commission study this, but I expect the same thing to happen here." If that happens here, then we'll probably, according to an ATMI study, lose over 600,000 people.

And at the same time, our government at least believes themselves that China is going to take 75 percent of our textile and apparel market and that's just going to happen. But while they believe that themselves, what are they doing? Couple of years ago they went to Africa and told 44 African nations, "you've got to get into the textile and apparel business. That will give you the experience to give you an industrial take-off so maybe you can be just like us." We're offering them our market. We gave them a preference to our market. We did the same thing to the Caribbean Basin. We said, "we will give you a preference into our market so you can sell apparel so that your people will be better off." They're saying the same thing to Central America, South America and so on.

In other words, Ambassador Zoellick is going around the world selling the same dead mule to one country and region after another when he knows there won't be a market for them. ...

I was so shocked by how disingenuous our government was being, because I'm one of those people who believes when our country goes and says something, we should believe it and it should be the truth. If we tell Africa we're here to help them because they should get into the textile and apparel business, that should be the truth. We shouldn't in the back of our minds know that they only have until Day 1, 2005, when that will be all China's.

I was so happy that Roger Milliken and his company were given 150 years to be in the industry before they started telling us we have to get out and do something else. They've given Africa only three years.

It's now coming back to haunt them. I've said it many, many times: There's nothing made in America that can't be made cheaper somewhere else. And that surely should not mean that we should not make anything here anymore. We have people who believe ( and Ambassador Zoellick is one of them ) that the trade deficit is not a bad thing. And I told you our trade deficit is running $1 million a minute, our manufacturing trade deficit over $400 million a year ... because countries that are prosperous run big deficits ... and they can.

I had a guy from the Cato Institute, a Libertarian think-tank, tell me the other day, he said, "nations are like families. A family runs a trade deficit with their grocer. A family runs a trade deficit with their oil company. That's not bad. I mean, we might run a trade deficit with China but that's not bad because we get the surplus capital that we save by buying cheaper goods, that we can use for other purposes." So he's drawing this analogy with family. But show me a family that's running a half a million deficit with their banker. That's what we're doing.

Now, that money comes back here. And during the 1990s, it came back here in the form of investments in our stock market, because a dollar is a very important thing. It's a convertible currency. It's a hard currency. Most countries, their currency isn't good for anything but landfills outside their own borders. So everybody wants to have hard currency. If they want to buy a turbine from Germany, they can't do it with renminbi. They've got to do it with euros or a yen or a dollar.

So, you see, throughout the world there's this thirst for dollars. Some Third World countries have a thirst for dollars because they owe money to banks. Those banks loan you money in dollars, you've got to pay it back with dollars. Whereas in the early 1970s, when the banks and financial institutions were facilitating international trade and growth in international commerce by providing the financing to do it ... that was a wonderful experience. The synergies, the dynamics were great. But what happened was they made so many ill-advised loans to Third World countries that had no way of paying it back unless they sold us something. They had to get a dollar. So what the banking industry did was urge us to start lowering our tariffs so that these debtors could sell into our market and take that to banks. So instead of facilitating international commerce, the banking industry became the tail that was wagging the dog. They were driving the process. And that's the problem.

Now, financial services, there's been this unending fight to see who gets the value added when something is made. Is it the producer or is it the investor? And unfortunately, it's been kind of pegged over on the investor/financial services side for some time and it hasn't gone back to the worker and the company he works for.

Corporations can only do what they can do. If I make a widget and you make a widget and we're equal on everything that we do ( on quality, time of delivery, price, etc. ) and you go to Mexico and I don't, you win. But the rules say, because of NAFTA, there will be no tariff barrier between Mexico and the United States. There's no difference between making it in California and making it in Mexico, as far as ease into our market. And that's the effect of that agreement.

But at the end of the day, we lose. We lose because, when General Motors became the largest domestic employer in America before NAFTA and now is the largest domestic employer in Mexico – Delphi and General Motors . They would not be the largest domestic employer in Mexico if they couldn't get their stuff back in here.

So when you look at globalization, you have to look at it in a way that it's not just happening to you, it's being done to you. As I mentioned earlier, there's only one group in this whole country that can lower our tariffs and that's the Congress. And Congress has done so. In fact, they passed in the House the Chilean and Singapore agreements ... and they've got that momentum. There's never been an agreement negotiated under fast track that's ever been defeated. That's by the electorate. Now, that is changing. So there economic theory and what their end game is not matching our real-live experiences, because we know we're losing our companies. We know we're losing our manufacturing employment. And we know that we're not getting newer and better jobs for our people.

So we're going to have to do something else. So when you see that all of sudden, the U.S. textile industry is putting pressure on the administration on China, it is a huge deal. And we should all support the leaders over in Washington yesterday who made that announcement. And we should, every chance we get, let our government and our representatives know that we're drawing the line on China.

ATMI has reinvented itself in many, many ways in the last six or 12 months. They're a terrific organization. They're doing really good things now. They're doing hard-hitting studies. They're asking the hard questions and they're being very, very aggressive. (Chairman) Billy Moore (of Unifi) is one of the people responsible for that.

I'm going to end here because I've said what I was going to say, but I probably didn't say what you wanted me to say.

NCMA has turned
corner, chairman says

September 29, 2003


Editor's note: Following is a Q&A with James R. Cowan, chairman of the North Carolina Manufacturers Association (NCMA) and chairman of Stonecutter Mills Corp., Spindale, NC. Cowan and his group meet in Charlotte, NC, at the Ballentyne Resort this week. Cowan's responses come in questions posed to him in written form by Devin Steele, STN editor.

STN: What a year to be a leader in the manufacturing sector, especially in North Carolina. Given the circumstances of continued job losses in manufacturing, how would you generally describe the past year?

Cowan: NCMA has been in a transition for the last few years. This past year we believe that we have turned the corner and are on a growth path again.

Let me reflect on manufacturing in North Carolina a moment. We pay too much attention to the obituary column and not enough to what is positive. Manufacturing is still a vital part of our state's economy. We have lost manufacturing jobs, but we still have a much higher percentage of our work force in good-paying manufacturing jobs than most states.

Yes, we are in transition. Yes, we must change, be creative and take risks; but we have a strong base to build on. Maybe we're a little like Michael Jordan; we are older, slower and cannot jump as high as before, but not many states can play one-on-one with us.

STN: Reflecting NCMA's move from a textile organization to a manufacturing group, you made this statement about recent NCMA chairmen when introduced as the group's chair last year: "I watched Jim Chesnutt raise the baby, change the diapers, do all the paperwork and organize this new association. I watched James Harry hold it steady in its formative years and stabilize it. And then I watched Milt Gold come up and handle the teenage years, the tough years, when decisions had to be made and when there were some challenges to our organization." How would you characterize your term as the caretaker of this job?

Cowan: Jim Bell has done all the heavy lifting this year in the NCMA, and he has done it well. He has made our positions clear in Raleigh and promoted our organization. Honestly, it has been an easy year for me; the others on our board have done all the work.

STN: This is the second go-round for you with this group, having served as president when the association was a textiles-exclusive organization. What was different from a leadership perspective this time?

Cowan: The last time I was president of the association, Jim Chesnutt was our first vice president and we sat down together and decided that we needed to make the change from a textile organization to a manufacturing association. That was a big change organizationally and culturally and it wasn't an easy decision for the organization to make.

This year we know what we are about, where we're headed and how we're going to get there. Having the plan in place makes life easier for everyone.

STN: North Carolina continued to take the brunt of the decline in manufacturing jobs, whose numbers have fallen nationally for 37 straight months. The state's three-legged economic manufacturing stool - textiles, furniture and tobacco - endured even more job losses and plant closings in 2002-03, and other production sectors also fell. The Pillowtex shutdown was the biggest headline-maker of the year, and R.J. Reynolds this month said it was slashing 40 percent of its work force, but those bad-news items were really only the tip of the iceberg. How is NCMA working to help displaced members and improving the economic landscape for manufacturing?

Cowan: Yes, we have taken some major hits this year, but a lot of us are still here and working for the future. NCMA is telling our story in Raleigh and our board members are working in Washington. There is a rapidly growing understanding in the press that this is not a textile problem; it is a manufacturing problem, and that government bears much of the blame for our difficulties.

Specifically, NCMA has been directly involved in lobbying at the state level to ensure that the North Carolina unemployment insurance fund remains intact, but not at the expense of manufacturers who have been forced to downsize. Also at the state level, NCMA has historically, through its committee system, reviewed tax issues, environmental issues and workplace issues to make sure that laws and policies in each of those areas is favorable to North Carolina manufacturers as well as to ensure that state policy enhances and promotes the creation and expansion of manufacturing operations.

For example, during the 2003 General Assembly Session, NCMA garnered the support of 28 House members to introduce legislation which would exempt manufacturing income from the state corporate income tax. NCMA also succeeded in having legislation passed which will make air permitting easier for manufacturing operations in North Carolina.

STN: In a recent survey by The Charlotte Observer and WCNC-TV in Charlotte, 40 percent of North and South Carolina residents said they believe a family member will be laid off due to cheap foreign labor. What is NCMA doing to try to allay these fears?

Cowan: I am not sure that our job is to give false hope. If trade policies do not change, then our citizens in the Carolinas have a better understanding of the situation than our Congressmen do. NCMA is spreading the word on how to be more politically active and prevent this job drain.

STN: How has manufacturing contraction affected NCMA's membership numbers? How do those figures compare to last year's at this time?

Cowan: Obviously, with the Pillowtex closure and other bankruptcies, our numbers have been affected, but because we have managed to add new corporate members even during this dire economic period, we have only two fewer corporate members than last year and we have added 10 new associate members.

STN: Since the association opened its ranks to non-textile firms, what is the breakdown percentage-wise of various sectors of manufacturing within your ranks?

Cowan: Currently, one-third of our non-textile manufacturers are members of our Boat Builders Division. Overall, 44 percent of our members are non-textile manufacturers.

STN: How was the organization "sold" to potential members during the past years?

Cowan: NCMA makes the following points in talks with prospective members:

NCMA provides enhanced political strength through numbers, coalitions and a united voice. Group action adds strength and prevents any single company from coming under government scrutiny.

We're your eyes and ears in the General Assembly and in state government. Our Raleigh-based staff provides an "alert" system to identify legislative and regulatory issues directly affecting manufacturers.

NCMA's president, Jim Bell, provides professional legal and lobbying experience to effectively handle the technical and governmental issues involving manufacturers.

NCMA members have access to educational meetings, NCMA committees and state-level meetings and conferences. These provide technical and cost-savings advice, as well as open doors to state officials and regulators.

NCMA coordinates media advocacy and relations for North Carolina's manufacturers. One central source for media communications ensures that the correct facts are conveyed and gives manufacturing's side of issues.

STN: How have the state's financial troubles affected the association's goals?

Cowan: Ironically, the state's financial troubles have made NCMA's work all the more important to our manufacturers because many state policy makers are looking for additional tax revenue, which could be very harmful to NCMA's members. For example, the caps on the boat sales tax and manufacturing machinery have been targets during the last two General Assembly sessions. NCMA has addressed these issues with our political leaders on behalf of our member and will continue to do so.

STN: What are some of the legislative/regulatory issues or concerns NCMA dealt with this year?

Cowan: Let's start with tax legislation and policy. NCMA pushed a bill that will delay a surcharge on the unemployment insurance tax scheduled to start in January; had NCMA Tax Committee amendments to Revenue Department legislation adopted to prevent burdensome tax reporting; defeated recommendations to increase manufacturers' corporate income tax; and helped Senator David Hoyle craft a SUTA (State Unemployment Tax Avoidance) bill that will not disallow legitimate tax planning to reduce manufacturers' unemployment insurance tax exposure.

Related to environmental legislation and policy, following a two-year lobbying effort, legislation was enacted to make the air permitting process easier for manufacturers; the rule-making process was improved to ensure that state agencies don't circumvent previous NCMA-backed legislation by adopting "temporary" or "emergency" rules; NCMA continues to lobby for passage of legislation that will keep state rules from being more stringent than corresponding federal rules; and finally, increased environmental penalties were held in check except for the most egregious and intentional offenses.

On workplace legislation, NCMA worked against various trial lawyer proposals to unduly expand the Workers Compensation system and defeated duplicative "little EEOC" bills and unreasonable amendments to North Carolina's OSHA law. NCMA also fought off all attempts to mandate additional health benefits in company health care policies.

STN: What are the bright spots in manufacturing in North Carolina?

Cowan: North Carolina's boat-building sector, which includes a good number of NCMA's Boat Builders Division members, is the only one of the "heritage" industries (tobacco, textiles, furniture and marine) that has not been negatively affected by economic conditions and trade policies in the past 10 years. Our boat builders are an important part of the North Carolina economy, flourishing and gaining momentum over the past three decades.

In addition, medical and industrial applications of textile products, nonwovens and biotechnology continue to perform well for North Carolina. Finally, those companies using technology and a well-trained work force to set their products apart from foreign imports will continue to succeed.

According to Roland Stephen, a political economist at the Institute for Emerging Issues at N.C. State University who was quoted in a recent Raleigh News & Observer article, "If you're just competing on cost only, it's going to be impossibly hard to compete against rivals in China or other places where cost is the most important consideration. What you need to do is compete based on innovative products aimed at new markets. It's harder, it's high-risk, but in the long run, it presents more opportunities."

NCMA's members have proved themselves to be innovative and resilient over the years in adapting to different economic situations, including the recent woes caused by the United States' unfair trade policies. I have no doubt North Carolina's manufacturers will rise to the occasion again.

STN: What "exciting" is going on within the organization?

Cowan: NCMA continues to provide educational opportunities for its members through its committees and various one-day seminars held throughout the year. Also, the plight of North Carolina's manufacturers finally seems to be getting the attention of both political leaders and the general public in the wake of recent publicity about the demise of Pillowtex, Cone Mills and other manufacturers.

NCMA has seen the positive impact this attention has had on our legislators in our everyday lobbying efforts. In addition, NCMA's 2003 Annual Meeting provides an excellent opportunity to discuss manufacturing issues; share information and meet with political leaders.

NCMA's Executive Committee has also formed a long-range planning committee. Among their tasks is to look at partnerships with other trade groups in North Carolina, including the many regional groups throughout the state. They will also evaluate how the "leaner, meaner" NCMA is working, and make suggestions on improving member services and cost efficiency.

STN: NCMA was part of the coalition of textile/fiber/manufacturing groups to come together this summer with the mission of trying to effect change in Washington related to trade policies, particularly as they relate to China. Why is your involvement important to your membership? Do you think the alliance has made strides?

Cowan: Our involvement in the coalition is important because it must be remembered that vital trade legislation, such as TPA ("fast track") was enacted by a single vote. Thus, we cannot take our North Carolina delegation for granted and we must continue to put pressure on them to work for trade legislation that will benefit our membership.

This alliance, for the first time in memory, has brought together all of the diverse segments of the textile/fiber/labor/agriculture communities with a single goal in mind. The recent involvement of Wilbur Ross in the North Carolina textile industry through his purchase of Burlington Industries adds yet one more strong set of allies to the political war that will ultimately decide whether the U.S. government will pursue an industrial trade policy beneficial to its citizens.

STN: Why is serving in a leadership role such as this important to you?

Cowan: The NCMA is my business community and just as we all serve our local communities in some way, it was my privilege to be able to contribute a little of my time to the group effort. When (my wife) Myra and I look at the past leaders of this organization, it is very special to be allowed to add our efforts to theirs.

STN: Please describe the working relationship you have with your officers and board, the NCMA staff and your expected successor, Tom McCall of WestPoint Stevens.

Cowan: We are extremely fortunate to have a group of officers and board members who are more than willing to give of their time and effort to advance the cause of manufacturing in North Carolina. Our officers and Executive Committee members meet in Raleigh with the NCMA staff several times a year to review programs and policies.

I find it encouraging that while many of these executives such as Tom McCall have been going through difficult times in their own businesses, they still find time to advance the mission of the association.

The veteran NCMA staff has been available throughout the year and continues to be responsive to our concerns and ideas. I feel completely confident in Tom McCall's ability to lead NCMA through the next chapter of its long history.

STN: How has NCMA helped you grow professionally?

Cowan: I get an opportunity to be around some people in this industry that I admire greatly. Buster Humphries, George Waldrep, Jim Chesnutt and others taught our Stonecutter group a lot of things over the years. They helped us reach our potential and weather the tough times. The NCMA is a wonderful place to meet new people and learn new things. Anyone who has an opportunity to be involved should jump at the chance.

STN: What do you hope members will take away from this year's annual meeting?

Cowan: Two things. First, that although we may be a little beat up, we are not dead. We are strong and even stronger united. We must voice our opinions to Congress; we cannot wait for someone else to do it for us; we must be agitators. It's not our traditional role, but these are not normal times.

Second, we must promote the value of education in our local communities. New ideas will come from fertile minds that will create new businesses and new jobs. We must accelerate our people's creativity by pushing the value of education every chance we get.

I also hope our members will use this meeting to talk with the various political leaders who will be here, including the Co-Speakers of the N.C. House of Representatives; Commissioner of Labor Cherie Berry; U.S. Representative Sue Myrick; the U.S. Commerce Department Chairman of the inter-governmental Committee for the Implementation of Textile Agreements (CITA); and the North Carolina Commerce Department official in charge of assisting manufacturers currently operating in our state.


September 29, 2003

Fall in, Mr. October


We humbly await your arrival this week. We know you will breeze in like a sylph, shake us from our lingering summertime stupor and leave us only with a yardful of leaves to rake. As always. But not before sending a shiver up our spines with a "BOO!" or two on your last day of breath this year. Already, we have sensed your footsteps. Pumpkins are appearing. Sunshine is becoming scarcer. Football is kicking into high gear. Crisp air is nipping at our noses. Be sure to wipe your feet before entering, Octo (can we call you Octo?) and please be sure not to wear out your welcome, you 31-day "behe-month."

For many of us in the textile and affiliate industries, you represent another season of change (as if we haven't been through enough changes already in recent years). In fact, we've probably been asked (no, forced) to change more than any other business entity in this country lately. The powers that be have determined that textile products will be among the most globally produced, and it seems they've all been headed our way of late. Many of these imports have been produced with the aid of government subsidies and under much different circumstances, have eased into our market through foreign-friendly U.S. trade laws and have illegally entered our borders through intentionally illicit tactics. We've been pressured to compete on a worldwide scale, which in some respects has been a positive (provided that scale is a little more balanced than it has been recently).

NOT THAT change is a bad thing, Mr. October. We welcome change (thrive on it, actually). We've tried to change with the times, though the pace of change has been mind-numbing over the past decade or so. As global trade talks have increased and the world has shrunk, we have adapted. Ours is one of the most high-tech, sophisticated, efficient industries in the world, thanks in part to good ol' American leadership, entrepreneurism and ingenuity. And, for more than two centuries, it has been one of the most competitive.

But the tide has turned, through no fault of our own. The odds have been stacked against us, with politics ruling our fate more than anything. Our own government, hands firmly in the coffers of retailers, importers and the like, has made us the whipping boy in trade matters for oh-so many years. Now, the rest of U.S. manufacturing is beginning to be singled out, too.

Yet, we're still kicking.

WHEN YOU GET here wearing your orange and black robe, Tenth Month, don't expect to see this industry sitting around wearing its black and blue funeral clothes, though. Yeah, we're beat up and battered, but we ain't whipped. We've ditched the temptation to adopt a woe-is-me attitude, and we've put up our dukes. You'll notice that we'll be as active as before (but probably angrier than ever). Your appearance will signal a busy week for us, with trade shows scheduled for Las Vegas (IFAI Expo) and Miami (Material World) and a textile-rooted group (the North Carolina Manufacturing Association) gathering in Charlotte. Before you depart, we'll congregate in England for the world's largest textile trade show in our quest for staying among the most technologically advanced industry around.

Oh, and you'll probably notice that since your last appearance, we've mended a lot of fences in our industry and are actually speaking to one another again. We've united (finally) and are trying to save ourselves from our government and the rest of the world. There aren't as many of us this year, as closings, consolidations and continued layoffs have taken an even bigger toll on our ranks. You no doubt will even witness our ire, which no longer bubbles under the surface and could actually cause your cauldron to runneth over.

When you leave, we'll be one month closer to 2005, when worldwide quotas on textile goods are dropped among WTO trading partners. So, you can understand what you represent to us (the passage of time and an ominous sign that things will change for us). Again.

But, hey, at least you'll bring us Octoberfest, too.

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