As China sews, few US mills left

With a bedrock US industry on the ropes, quotas on imports could follow.

The town of Erwin once proudly proclaimed itself the "Denim Capital of the World."

Workers stamped "Hong Kong" and "Tel Aviv" on bolts of high-grade denim as two mills supplied the world with overalls, bell-bottoms, and hip-huggers.

Times certainly change with the fashion.

Today, the looms have fallen silent. Textile jobs here have fallen from a peak of 2,500 to zero. And as this North Carolina town struggles to define its future, its plight suggests a harsh reality: One of America's bedrock industries appears increasingly near extinction, threatening a way of life that has allowed blue-collar communities to stitch together a patchwork of prosperity.

The decline of textile jobs, while familiar, is generating fresh concern this year thanks to a flood of newly legalized imports from China. The Bush administration, responding to industry complaints and a tripling in the rate of mill closures, said this week that it will investigate whether Chinese imports are disrupting the US market. The move could result in reimposed quotas.

But as that process moves forward, the case of Erwin is a reminder of the nearly inexorable nature of the challenge. The last mill here closed five years ago, long before China's competitive potential was unleashed on world apparel markets. The threat from Shanghai and Souzhou now adds to worries that many of America's remaining 677,000 textile and apparel jobs - down from 1.6 million in 1994 - could face a similar fate.

"Ten years ago when NAFTA and GATT [free-trade agreements] were implemented, there was a feeling of, 'We're going to fight it,' " says Mike Walden, an economist at North Carolina State University in Raleigh. "Now there's a changed view, a mixture of resignation and reality. Young people know they don't have a future going into the textile mills, and the big question is what will those towns morph into and what will those people be doing 10 years from now?"

Indeed, the end of global textile quotas in January has already prompted apparel imports from China to more than double - in both volume and value - from last year's pace. Americans bought some $1.4 billion in Chinese apparel in January and February. Cotton shirt imports alone are up more than 1,200 percent - a number that reflects China's small but fast-rising share of the market. The Asian nation accounts for 2 percent of cotton-shirt imports, versus 23 percent for Honduras and 13 percent Mexico.

With the US importing some 400 million garments in 60 days, which on average sell 78 percent cheaper than what a Piedmont loomshop can manage - Erwin's plight takes on a new resonance.

The orderly and tight-knit "mill hills" that defined the South's densely populated rural areas became some of America's first planned communities.

In essence, this is where the Southern middle class began, as modern towns with theaters, newspapers, and conveniences cropped up around the mills, and where residents mortgaged cows to buy sewing machines.

E.M. Barefoot, now a trucking supervisor, was the last employee to walk out of a 100-year-old mill when it closed.

As he brushes his dog, Dusty, the a third-generation mill worker explains that his paycheck has fallen by $20,000 a year at his new job. "Nine out of 10 people would go back to work at the mill in a heartbeat," he says.

To be sure, ever since manufacturing employment began waning after World War II, workers have been assured that new jobs and industries would replace the looms and dye rooms. Hiring by government, tourism, and biotech firms has picked up much of the slack of some 176,000 lost textile jobs in North Carolina.

But as telecommunications and tech jobs collapsed in 2001, the promise of the new jobs faded, economists say.

"Wherever you have a mill community relatively intact, the promise is there of reknitting it back together," says Lynn Rumley, the director of Textile Heritage Center in Cooloomee, N.C. "But the question is what's going to be the anchor - or will there even be an anchor?"

In embattled North Carolina towns like Kannapolis, Cliffside, and Erwin, the only thing growing in the textile business appears to be historical reckoning of a trade that defined the rural South for nearly a century. The daily rites of mills were defined both by the crows of roosters and dependable bursts of factory whistles.

"There are misconceptions in Washington and nationally that these are yesterday's jobs, that better jobs are on the way," says Cass Johnson, president of the National Council of Textile Organizations in Washington. "But there's been a realization in the last five years that if someone loses one of these jobs, they get a worse job, lower wages, and less-satisfying work. It's no longer a good bargain."

Yet the larger picture is not so simple, say economists pushing free trade. Unlike Japan in the 1980s, China is importing nearly as much as it's exporting today - which means many American textile firms have been able to flourish as middle men even as they close mills. And lower prices on imported goods are helping millions of American consumers.

What's more, the seeping of mill jobs is part of a global commoditization of labor that began in the mid-1800s when New England began undercutting European mills, and turning tissue de Nimes - fabric from Nimes - into American "denim."

China's rising role as a clothier is disrupting jobs in many developing nations, not just the US. "These industries are inherently mobile over a long period of time," says Will Martin, lead economist at the World Bank. "China's done wonderfully as it's moved to a market economy and has managed to lift 400 million people out of poverty."

A US interagency panel on textile trade voted Monday to launch investigations regarding China in three clothing categories: cotton knit shirts and blouses; cotton trousers; and underwear made of cotton and man-made fibers. At the same time, Congress will soon start debating a new Central American Free Trade Agreement, or CAFTA. While some say this deal will help American firms compete with the Chinese, critics say it won't level a playing field tilted steeply against American workers, both internationally and the homefront.

In the US, despite state offers to retrain laid-off "lintheads" for new jobs - finding good matches isn't easy, especially for older workers. One of Mr. Barefoot's colleagues from the mill went back to school to become a machinist but never found work. Barefoot hired him last month to work in the trucking department he now manages. "He hadn't had a job since the mill closed."

Some mill towns have been bulldozed, others are slums. But in Cooleemee, drug stores still "carry" customers who are short on cash.

Some who left for other jobs when mills closed are starting to return home. Many older residents never left, even though they lack jobs. "The last thing you could persuade them to do is to move," says Reno Bailey, a former millworker in Cliffside, N.C. "It's a dilemma."

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