Maine's shoe industry struggles to survive. Determined to stay in business, firms look to Washington for some help in competing against imports
Freeport, Maine — Huge machines bite into leather hides like giant cookie cutters. Workers fashion the pieces into a supple jigsaw puzzle, sewing and gluing where needed. And the pieces are passed on to the next station for more work. The activity seems unrelenting. Until the evening whistle blows, hundreds of busy hands turn out shoe after shoe. At day's end, 6,000 new pairs of shoes are boxed, ready to go out the door.
In the stitching room at Eastland Shoe Corporation it is not apparent that the Maine shoe industry is in trouble. Yet it is not just the evening whistle that idles workers in this state. The influx of imported shoes has caused dozens of shoe factories to close, throwing thousands out of work.
The problem is not limited to Maine. But as the largest shoe-producing state, Maine feels the foreign competition most. In the past year, 94 domestic shoe manufacturers have shut down. Thirty-two of them were in Maine.
The future of the shoe industry here, and across the United States, is not alone tied up in leather and laces. It also includes a fair bit of politics.
American shoemakers want import quotas established to guarantee them a fixed portion of the domestic shoe market. Yet such quotas are imposed only upon the recommendation of the the International Trade Commission (ITC) and the approval of President Reagan.
Ken Crerar, spokesman for the trade group, Footwear Industries of America Inc., says since 1981, when shoe import quotas fell, foreign shoe sales have captured 71 percent of the American shoe market. Before that, imports accounted for 50 percent.
Yet last June, the ITC chose not to recommend that import sanctions be reimposed. The commission ruled that the nation's shoe manufacturing industry was not being ``injured'' by imports.
Gail Burns, an ITC researcher, says the commissioners consider many economic factors in arriving at such a decision. Among other things, they look at the number of imports, production levels in factories, and the unemployment rate.
What hurt the American shoe industry in the commissioners' eyes, she says, was its profitability.
``Even with other factors, such as plant closings and unemployment,'' she says, ``the majority of the industry looked fairly profitable in comparison to other sectors of the manufacturing economy.''
Congress asked the commissioners to reconsider their decision, and in January the ITC embarked upon a new, six-month investigation of the American shoe industry.
In March two ITC commissioners visited several shoe factories here at the invitation of the Maine congressional delegation. Fawn Evenson, vice-president of National Affairs for Footwear Industries of America, said the visit was intended to give the commissioners a firsthand view of the shoe industry in Maine. It was to show them how factories are run, and ``what it's like to work in a shoe factory.''
Two factories the commissioners visited were Eastland Shoe Company in Freeport and Falcon Shoe Manufacturing Company in Lewiston. On the surface, the two factories look very different.
Eastland is located in a low, sprawling building just blocks from the L. L. Bean store. The company makes mostly loafers, and all the shoes are hand sewn.
Falcon is located on two upper floors of an enormous mill complex in Lewiston. Much of the work is done by computerized machines. The company has also made enormous investments in machines that make soles.
But the companies face similar problems.
Ted Johanson, president of Falcon Shoes, says that until 1981 his company was producing 7,000 pairs of shoes a day. At the end of that year, he says, he was forced to cut production to 4,000 pairs. Last September, production was further cut to 2,500 pairs. The number of employees has fallen from 550 to less than 200, he says.
You can cut back on production, he says. But you ``reach a certain level at which you can't reduce your overhead. We're just about at it.''
Mr. Johanson says he is ``proud to say we're operating at a decent profit.'' But, he adds, ``managing a decline'' is difficult.
Johanson says he is confident that his firm will not join those that have closed. ``We're going to make it, whether the government helps or not,'' he declares. He bases some of his optimism on a new sole-manufacturing procedure Falcon is instituting. The soles it produces will be more durable on the outside, but more comfortable on the inside.
Johanson says the company has been working on the project for three years and has invested more than $750,000 into developing the process. New orders for the product will allow the company to ``restart a defunct assembly line,'' he explains.
Over the years, he says, he's always had such projects in the works. Lately though, Johanson admits, he has been ``just scrambling to get orders'' and no longer has the time or resources to commit his company to such major projects.
But these relatively intangible circumstances ``can't be put in a case for the trade commissioners,'' Johanson explains.
Eastland Shoe president Jonas Klein says that until last June ``we never missed a day [of production] in 30 years.'' But in the months since then the factory has been idle for several short periods.
The company closed its stitching rooms in Lewiston and Freyburg last year, and production has fallen from 8,000 to 6,000 pairs. The number of employees has fallen from 600 six months ago to 325, Mr. Klein says.
But he, too, is optimistic. ``We're going to survive,'' he declares, explaining that the company has ``made a lot of investments, upgraded its computer system, and is constantly trying to upgrade.''
Klein adds, ``If we ever got a break, we could do a lot more.''
He says he thought the ITC commissioners who visited the factories recently were sensitive to the shoemakers' plight. He says he thinks the ITC may reverse its original decision and recommend some help for the troubled industry.
But Klein is not as optimistic that President Reagan would go along with a recommendation to impose quotas or trade restrictions.
``We're going to survive,'' Klein asserts. ``You can't convince me that there will not be a shoe industry in this country.'' But he adds emphatically, ``Something ought to be done for the shoe industry.''
Fawn Evenson, who helped coordinate the factory visits for the ITC members, says she also ``felt the commissioners were responsive.'' But, she says, they are ``like judges and must be neutral.''
Ms. Evenson says there is a strong case for relief. ``We've lost factories all over this country.'' Ninety-four factories and eight stitching rooms closed in 1984, she says, double the number in 1983. Those closings put 10 percent of the shoe manufacturing work force in the US out of work, she adds.
She says her organization is ``looking for global quotas.'' The American shoe industry needs a predictable market, she points out, and imposing tariffs would not guarantee this market. Imports would continue to have a foothold on the market, even if their prices were raised somewhat by imposition of higher US tariffs.
On April 16, the ITC will hold a public hearing in Washington. Based on that hearing, and the commission's investigations, the ``report of injury'' will be issued in May, says Ms. Evenson. The commission will present its report to the President in July.
It will be up to Mr. Reagan to provide import relief, she says. ``But if you don't get past the ITC, you don't get to the White House.''
Steve Bolduc, director of business attraction in the State Development Office, says, although ``the shoe industry is being hurt,'' not everything is wholly grim in the state of Maine. While 30 shoe factories have closed, four shoe or ``shoe-related'' industries have started. One Texas shoe company bought a building in Maine and moved up from the Lone Star state.
Also, Mr. Bolduc says, Maine has been successful in attracting other businesses. Since 1983, more than 200 new or expanding companies have moved to the state. For the third year in a row, the state unemployment rate has been below the national average.
In some cases, these new businesses have not located in areas where shoe companies have failed, he says, so there are ``some pockets of high unemployment.''
The state and federal governments have made additional help available to unemployed shoe workers. Many of them may receive aid such as training for new jobs, job-search help, money for relocation, and additional weeks of unemployment compensation.
So far, unemployed workers from 15 companies have been declared eligible for this increased assistance. Another 13 closed companies are being reviewed to see if employees qualify for such assistance.