Nov. 30, 2001 -- John Cavanagh, a 31-year veteran of the U.S. textile industry, might start doing something he never thought he'd do — sell foreign textiles.
Cavanagh, 55, will lose his job as head of sales and marketing for CMI Industries at the end of the month. CMI, a Columbia, S.C.-based textile producer, declared Chapter 11 bankruptcy earlier this week.
Now one of the jobs the staunch supporter of the U.S. textile industry is considering is selling textiles for mills based in Pakistan and India. While that option is not his first choice, he admits that he's probably better off than the tens of thousands of textile workers who have lost their jobs in the past year.
"What's really devastating is for entry and middle-level positions," says Cavanagh. "There is no replacement for those jobs. There's nowhere for them to go."
Indeed, the textile industry has been hurting for the past few years from intense foreign competition, but the current economic downturn is making the situation even worse for U.S. textile makers and workers.
For the year ending October, around 63,200 U.S. textile workers have lost their jobs and around 100 textile mills have closed, says David Link, chief economist for the American Textile Manufacturers Institute, an industry trade group based in Washington, D.C., commonly known as the ATMI.
Textile Communities in Trouble
Though the 457,000 workers currently employed in the textile industry might seem like a drop in the bucket of the total 17 million U.S. manufacturing jobs in October, the layoffs have been devastating in states and communities that have high numbers of people employed in the industry.
North Carolina, which employed the largest number of textile workers in 2000, saw its unemployment rate rise to 5.5 percent in October — dramatically higher from the state's 3.9 percent in October of last year.
Amid a slumping demand for apparel, many companies have been forced to lay off workers or declare Chapter 11 bankruptcy protection in order to deal with the difficult environment. Burlington Industries, once the largest textile maker in the world, filed for Chapter 11 earlier this month, while Lawrence, Mass.-based Malden Mills followed suit yesterday. Burlington, a Greensboro, N.C.-based company that has undergone a series of restructuring efforts in the past few years, has not said whether or not it will cut its work force.
"For these towns, [textile mills] are often single-source employers. It can be very devastating," says Fred Abernathy, professor of engineering at the Harvard Center for Textile & Apparel Research.
What's more, many workers will be hard pressed to find jobs that offer the pay and benefits that they received while working in the mills, says Joseph Gorga, president of CMI.
"We pay $12, $14 an hour with full benefits. That's a good wage in this part of the country," says Gorga. "What are people going to replace that with? It's something you definitely lose sleep over."
Foreign Competition Heats Up
The ATMI says problems in the U.S. textile industry really heated up with the Asian crisis in 1997, when devalued Asian currencies made prices of the region's exports drop by an average of 40 percent. The U.S. textile industry now employs about 25 percent fewer workers than before the Asian crisis began, according to the ATMI.
But the present U.S. economic downturn has further exacerbated the industry's woes. Apparel sales in October were around $14.3 billion, practically unchanged from October of last year. While that figure is around 7 percent higher from September's apparel sales, analysts say it is due mainly to heavy discounts in retailers.
"Other than growing children, all of us can defer the purchase of clothing," says Abernathy. "No one is going to have to appear threadbare if you don't buy something in the next three months."
And the industry sees no signs of foreign competition slowing. The Bush administration has proposed eliminating tariffs on textile imports from Pakistan, in an effort to help out Pakistan in return for aiding the United States in its war in Afghanistan.
The United States is Pakistan's single largest customer, importing $1.9 billion of clothing and textiles last year, according to the Pakistan Textile and Apparel Group. But the trade group says many American buyers have stopped doing business with Pakistan for fear of problems with shipments.
ATMI President Charles Hayes has said that easing tariffs on Pakistani imports could not come at a worse time for the U.S. industry and could cost more U.S. textile workers their jobs. As an alternative, the ATMI is encouraging U.S. importers to continue to order goods from Pakistan as a show of support for the country's economy.