US textile firms insist they have a future
Some things, it seems, just don't change much. Ellison McKissick Jr., president of the Alice Manufacturing Company, a small family-owned textile firm here, has in his office a framed copy of the program for a dinner meeting of the Southern Manufacturers Club held in Charlotte, N.C., in 1901.Skip to next paragraph
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The speaker at the meeting was Mr. McKissick's great-grandfather, Ellison A. Smythe, likewise a textile executive. His address was entitled ``The Question of the Hour: On the need of an Early & Peaceful Settlement of the Oriental Question, from the Standpoint of a Southern Manufacturer.''
The ``Oriental Question'' of the day, McKissick says, was how United States (specifically, Southern) farmers could be protected against the Chinese dumping of raw cotton on the US market. There's no clue from the program how the issue was decided, but presumably Mr. Smythe exercised diplomacy in his address: The program lists Wu Ting Fang, identified as ``the Chinese minister,'' as in attendance.
Eighty-four years later, imports from Asia still weigh heavy on the minds of US textile manufacturers.
The industry's prime concern right now is that the federal government is not enforcing the provisions of the multifiber arrangement (MFA). Executives are pushing for passage of the Textile and Apparel Trade Enforcement Act of 1985. Critics decry the bill as protectionist, but the industry defends it as merely requiring enforcement of an international agreement that is already in place.
``The US government hasn't enforced it,'' says McKissick, president of the American Textile Manufacturers Institute. The MFA is supposed to keep textile imports from growing faster than the market as a whole, he says.
According to recent congressional testimony, textile and apparel imports have grown 19 percent a year, while the market has grown 1 or 1.5 percent annually. In 1984, imports increased 32 percent over the year before.
Virtually unanimously, US textile executives deny being ``protectionist.'' But equally unanimously they feel that complete free trade (`a la the 19th-century ``comparative advantage'' argument of economist David Ricardo) will destroy them.
As the manager of one North Carolina textile plant puts it, ``We want fair competition.'' Free trade may be the ideal, but as it is now, he says, ``The US is the only guy playing the game.''
``You can't compete with a state economy,'' says McKissick. Foreign governments, the US textile industry complains, own factories, subsidize textile exports, and shut US goods out of their domestic markets.
David A. Wyss, senior vice-president of Data Resources Inc., a consulting firm in Lexington, Mass., sees a too-strong dollar as the source of much of the textile producers' woes. ``If the dollar were reasonable, they'd still be exporting. . . . The dollar is just at a level where little US manufacturing can compete.''
He concedes that the MFA is being ``widely violated'' but says it is the nature of such agreements to be circumvented, somehow or other. ``Almost anybody can do it cheaper than we can, particularly in the area of apparel. It's so easy -- all you need is a sewing machine.''
The US apparel industry argues for quotas in part on the grounds that consumers don't benefit from lower production costs overseas. Mr. Wyss is in partial agreement with them -- but he blames quotas for the problem. ``In general, savings tend to get passed on to the consumer. Profit margins tend to be higher on imports -- because of the quotas. . . . If the level of imports is restricted, the producer has no incentive to keep down costs.''