Tuesday, November 11, 2008

Oct. 5 2008 North Carolina lost more jobs in the textile industry than any other state in the Southeast in this year's second quarter!

Industries cope with cheap overseas labor

(Things have not changed much from then to now). Jan. 18, 2004
Kinston Free Press
By Jason Spencer
© Copyright 2004

Veterans of the textile trade here blame most of their woes on cheap labor overseas.

Many in the business say that textiles had begun to wane before the North American Free Trade Agreement went into effect Jan. 1, 1999. They also say that China's admittance into the World Trade Organization in 2001 has caused more damage in North Carolina.

"I didn't lose my job because of NAFTA. I left my job because of NAFTA, among other reasons," said Gil Respess, a former employee of Domestic Manufacturing in Kinston. "The industry had taken a turn for the worst. I just kind of got tired of twiddling my thumbs."

Respess, who worked in the textile business for about 12 years, now teaches. His former employer, Domestic, is one of the few remaining textile producers in Eastern North Carolina.

To stay alive, Domestic's owner, Fred Hunneke, chose the only option many in the industry see available: re-invention. Domestic manufactures specialty fabrics for niche markets to give the company an edge over foreign competition.

"People say, 'If you go to Mexico, you can make it for less,' " Hunneke said. "Well, I'm not in that business. Wouldn't it be nice to create a few jobs locally so we can keep the textile business alive? There are people like that."

Over at Invista - formerly the giant local employer, DuPont - manager Robert Amos says NAFTA has been "neutral to slightly negative on this plant." Only one of the company's competitors has moved to Mexico since NAFTA's inception, Amos said. About 20 have moved to China or elsewhere in Asia.

"Stuff that's made in Mexico is not what's being sold at Wal-Mart," Amos said. "It's coming out of China. The perception is out there that if we hadn't had NAFTA, all these textiles companies would be doing wonderfully. I'm not one who shares that view.

"It's a direct frontal attack from Asia," Amos said. "They can pay $100 a month for what the textile manufacturer here is paying $50 to $100 a day."

Other factors giving China an edge include lack of labor and environmental laws and the absence of a social security system, said Bruce Parson, Kinston-Lenoir County Chamber of Commerce president.

Job losses, too, are credited to the same productivity boom agriculture faced a century ago. New equipment means fewer workers are required to do the same job. Layoffs due to technology improvements are beginning to crop up in China, too, said Michael Walden, an N.C. State University economist.

Walden speculated that China entering the global economy has been more damaging to North Carolina than NAFTA.

"NAFTA did not hurt my end of the textile business as much as China did," said Respess, the textile worker-turned-teacher. "Americans, they want their goods cheaper than anybody else. You have labor unions, and that kind of stuff, that keep beating everybody up to get their wages up. Something had to give."

Meanwhile, Hunneke says major retailers who buy from low-wage countries are to blame. Hunneke and Domestic have been involved for three years in a patent infringement lawsuit against Sears Roebuck Co.

Hunneke has been in the business before. He says he's "flunked retirement twice."

"If your only aim in life is to find the lowest-wage country, right now, you're probably heading to Africa," he said. "There's a lot of hand labor involved, and that's what (companies) are gravitating toward.

"But if the goal is to do nothing but make a couple of bucks, and not contribute to where you live, I have a problem with that," he said.

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