Milliken at center of trade battle

In the 19th century, miners faced potentially deadly gases that were odorless and tasteless.

To protect themselves, they would first lower canaries in the shaft. If the birds survived, all was well. If not, the miners waited until the shaft could be ventilated.

For more than two decades, Milliken has been an active and vocal leader for the textile industry, decrying what he says are unfair foreign trade practices and poorly designed trade agreements.

While the textile industry was reeling, Milliken predicted other industries would soon fall ill. In the 20 years since Milliken stepped out of the back office of his multibillion-dollar company to spread the word, other domestic manufacturing has declined, especially that of furniture and steel. And professional and high-tech jobs are following suit, many argue, including those of X-ray technicians and software designers.

"Canary in the mine," said Jock Nash, a Washington-based lobbyist for Milliken & Co. since 1985. "(Milliken) has proven true on that."

Free trade proponents such as Republican Congressman Jim DeMint say the trade deficit -- the value of

goods the United States exports versus the amount imported -- is overblown. It's not a loan that Americans will ever have to repay, DeMint and other free-traders say.

They think allowing for open and free trade forces each country to find its own strengths. Consumers can buy many products for less because of trade. While the U.S. may lose textile and apparel jobs to other countries, one view is that Americans will gain jobs in other industries and be forced to innovate.

Meanwhile, removing trade barriers allows for U.S. companies to ship more goods into emerging markets such as China and allows for foreign companies to invest more in the United States.

Others think cheap labor elsewhere and unfair trade practices by U.S. trading partners means manufacturing jobs are heading elsewhere and the American way of life is in jeopardy.

Frederick Mayer, an associate professor of public policy studies at Duke University, said the truth isn't as black-and-white as either side suggests.

"In trade, you've got one guy saying it's an absolute disaster, pointing to job losses, saying it's killing the economy," Mayer said. "And then the other side's saying it creates jobs.

"The truth of the matter, of course, is in the middle. It's good for some, and bad for others."

There have been more than 2.5 million manufacturing jobs lost in the United States since the start of 2001, according to the U.S. Bureau of Labor Statistics.

Each job lost, Milliken argues, takes away a piece of our combined strength and buying power. It puts more pressure on everyone, even those not involved in the manufacturing industry, to pick up the slack.

While the United States and South Carolina have added jobs over the past 3½ years, unemployment in the Upstate has risen.

According to the BLS, there are 1.9 million more employed nationwide than there were 42 months ago. Nearly 1.5 million of those have been added since December. In South Carolina, employment is up by more than 38,000 since President Bush took office.

But the Greenville-Spartanburg-Anderson metropolitan area, which remains dominated by manufacturing, has lost nearly 18,000 jobs since January 2001.

Mayer said the manufacturing job losses have been so drastic not because of free trade, but because of how quickly the world has changed.

"In some ways, the real issue to me with trade, is really the pace of change," he said. "People have a very difficult time adjusting quickly. When free trade creates very rapid change, it's really hard for communities and for people to change who have been working forever."

Depending on labor-intensive industries that hinge on cheap non-union labor, tax breaks and inexpensive energy is not a smart economic development strategy, he said, because it's not sustainable. The South depended on that strategy for too long, Mayer said, resulting in an under-investment in education.

While southern states work to retool their strategy – a group of S.C. business leaders in 2002 formed the think tank Palmetto Institute and launched the Competitiveness Initiative – many workers who have known nothing but textile manufacturing are left in the dark.

"The world is divided into those who gain and those who lose. And so, not surprising, people have startlingly different perspectives," Mayer said.

"If you're a textile worker, or a furniture worker, and that's what you know and you're not prepared to work in biotech, it (free trade) doesn't help you a whole lot."

Milliken believes history explains the importance of the domestic textile industry and of protecting the 750,000 people still employed in textiles and apparel in the United States.

"It's the history of the world, and the industrial world, that textiles have always played a key role," Milliken said. "Clothing and housing and food are the three essentials of anybody's life. So it's very, very basic."

The United States was the great emerging market in the late 1800s and early 1900s – much as China is today. Products that were brought in from foreign markets were subject to high tariffs, and the federal government enjoyed the benefits.

Behind these protections, Milliken says, the country was able to build a strong manufacturing base, especially in textiles and apparel.

Spain, Holland and England were all major world players once upon a time, Milliken reasons, until they lost their manufacturing might.

"No country in the history of the world has ever stayed a great country when they lost their manufacturing base," he said. "And now, we're losing it."

While Mayer is not too worried a ballooning trade deficit will put national security at risk, he said there are some concerns.

The trade deficit, expected to top $500 billion this year, means the U.S. is consuming goods at a very high rate, Mayer said. While many people benefit from the sale of goods – Wal-Mart alone employs 1.5 million people – the increased spending combined with lower national savings rates are alarming, he said.

After decades of staunch privacy, Milliken began to take a more public role in the industry and share some of his company's practices starting in the mid-1980s.

Many say it was after a near-fatal helicopter crash at the Milliken Research Center on May 5, 1984. On board were Milliken and a Who's Who of local business leaders: Walter Montgomery Jr., then-president of Spartan Mills; John Hamrick, then-president of Hamrick Mills in Gaffney; Richard H. Pennell, then-president of Metromont Materials; and George Dean Johnson Jr., a developer and future founder of Spartanburg-based Advance America and Extended Stay America.

The men were returning from a meeting of the Palmetto Business Forum in Columbia when the helicopter crashed into trees at the research center about 9:30 p.m.

While the two pilots were sent to the hospital, the passengers suffered just bruises after they bounced through the trees and had fuel spray on them after they landed. Several said they feared for their lives.

Later that year, Milliken began taking a much more vocal role in the textile and manufacturing industries.

Concerned by the rising tide of imports, he launched efforts to focus attention on products that were "Made in the U.S.A." He helped found the Crafted With Pride in the U.S.A. Council, which rolled out nationally in 1984, and has served as the group's only chairman.

Crafted With Pride spent millions on a media blitz, and used celebrities including Bob Hope to stress the importance of buying American. The Maryland-based group no longer runs expensive advertising campaigns, instead focusing on disseminating information about the domestic manufacturing industry, especially trade legislation and the voting records of elected officials.

Milliken also put his company's money where his mouth was, rewarding companies that manufactured products on U.S. soil.

Years ago, Milliken had Xerox copiers pulled from all company offices because Xerox had sponsored a civil rights program that Milliken thought bordered on communist-propaganda, according to unnamed sources.

But company officials bought more than 60 state-of-the-art Xerox copiers in 1988 after Xerox moved some of its production from Holland to New York. The next years, both Milliken & Co. and Xerox were honored with Malcolm Baldrige Awards, the nation's top quality prize.

The "Buy American" effort grew into a law forcing all textile and apparel products to be labeled with their country of origin. Tags on clothing still bear tribute to Milliken's efforts today.

Auggie Tantillo, executive director of the American Manufacturing Trade Action Coalition, worked with Milliken and U.S. Sen. Strom Thurmond, R-S.C., to draft and pass the legislation.

"Even then, 20 years ago," Tantillo said, "there were groups that opposed that kind of information being made available to the consumer because they didn't want people to know they were buying or selling goods that were made in China or Indonesia or someplace else."

At the time, even large retailers such as Wal-Mart were on board. Wal-Mart founder Sam Walton was beside Milliken pushing the effort.

Since the late 1980s, however, Wal-Mart continued to push its prices lower by importing goods from low-cost countries all over the world. Every major U.S. retailer today is in favor of free trade with textile and apparel makers overseas.

And Wal-Mart is now the largest private trading partner with China, bringing in more than $12 billion in goods this past year.

"Obviously, they want more and more access to low-wage-producing suppliers," Tantillo said. "As a result, there are often times that we do not agree on things like trade policy."

Manufacturing officials are fighting what they call "unabashed consumerism" that is focused on getting customers the cheapest prices.

The millions of manufacturing job losses in recent years are forcing taxes to go up, college tuitions to be raised and wages and benefits at U.S. companies to be cut, Tantillo said.

Those jobs are often replaced with the lower-paying, lower-benefits retail and service jobs – which means there is less money to be spent by families on such things as health care and vacations.

The loss of industrial properties is forcing many towns and cities to consider cutting resources or raising taxes. Schools are looking for new sources of income.

"I might be paying a few cents less for my underwear down at Wal-Mart," Tantillo said. "But I'm paying a much bigger cost that I don't really understand."

Even though officials within and those familiar with Milliken & Co. say it has reinvested much of its profits into research, development and innovation, the company is still closing plants and dealing with declining revenues.

According to Forbes, Milliken & Co. revenues fell 15 percent from $4.0 billion to $3.4 billion between 2000 and 2003. This year, the company closed S.C. plants in Union and Saluda, affecting 260 employees.

"He's doing exactly what all the experts say has to be done to compete in this global marketplace," Tantillo said. "Here you have one of the most efficient manufacturers in the world under tremendous pressure."

Domestic textile and apparel manufacturers say that pressure will grow at the end of this year, when import limits disappear on textile products made in China.

With a population of 1.3 billion people, China has plentiful labor and can buy natural resources such as cotton in bulk, taking price advantages that can be matched by no overseas company.

Manufacturing officials accuse the Chinese of manipulating the value of their currency to build in competitive price advantages. The government also provides loans to many industries that never have to be repaid.

The U.S. is on pace to set a record for trade imbalance of more than $500 billion this year – or more than $1.5 billion every day. The U.S. trade deficit with China, which jumped 15 percent in April alone to $12 billion, is expected to top last year's record $124 billion.

"It is a totally unfair relationship that we now have in the world, and it's destroying manufacturing," Milliken said.

Milliken's zeal to protect American jobs and the manufacturing industry has been criticized by many as backward thinking.

He's fought for tougher laws to prevent other countries from flooding the U.S. market. He's fought to keep limits on the amount of imports that can be brought in from certain countries and he's fought to strengthen laws that require materials be made on American soil that are needed for the armed services and homeland security.

Free-trade supporters say it is time for the entire world to be open to trade. The prices of many products will drop, as countries that can make it cheaper export the goods across the world. And U.S. industries will be able to make high-tech products here and ship them to other continents.

When the economy was booming throughout the 1990s, Milliken's protectionist views did not get much attention. While 2.5 million manufacturing jobs have been lost since 2000, the nation has added nearly 1.5 million jobs this year, according to the federal government. Even manufacturing employment grew between February and May, according to the BLS.

And the ability to make things cheaper and ship them has changed textiles before. The U.S. textile industry started in the Northeast before moving south to take advantage of lower wages, cheaper energy and the absence of labor unions.

"Yes, we've lost a lot of jobs. But we've gained a lot of jobs. The economy's changed," said Bill Barnet, a former textile executive and now the mayor of Spartanburg. "This is the economic reality of the world. I do not think putting up a bunch of (economic) barriers is going to change the strong economic push of a true economic reality."

"He's painted as a protectionist who is steering his company using the rear-view mirror and is afraid to compete," Nash said. "They called him stupid. But he has the intellectual courage to go against the free-trade consensus.

"He knows that's not going to bring back the textile industry. He knows that the textile industry, as we know it, it's not coming back."

"I'm a tremendous believer in competition. Our antitrust laws are one of the finest things that ever happened to America. But they're only wonderful when everyone's playing by the same rules," he said. "Competition is fabulous, if the rules are the same for everybody. And that's what we don't have today. And that's wrong."

Though Milliken is a staunch believer in domestic manufacturing, he's not opposed to foreign investment in this country, as he has been accused.

He believes in what BMW and Michelin and other foreign companies have done in the U.S., coming here to employ local people to make products in part for the U.S. market. In 2003, 45 percent of automobiles made at the Spartanburg County plant remained in the United States while the remaining 55 percent was shipped overseas.

In fact, Milliken & Co. has plants all over the world where the company makes materials for the automotive and home furnishings industries. Those plants are located in Australia, Belgium, Brazil, Denmark, France, Germany, Japan, Spain and the United Kingdom.

"We're taking American technology all over the world and selling it over there," he said. "We make a lot of product for the tire industry. We make carpet around the world. And we do not import back into the country.

"We don't have plants anywhere that we own and operate where we take advantage of low labor cost and bring it back.

"It is a totally unfair relationship that we now have in the world, and it's destroying manufacturing,"

And not ONE WORD about how taxation and regulation and unemployment insurance and workman's comp and litigation and OSHA etc. are driving up costs here.

The reason China is super-competitive is not just cheap labor. You can get tooled up cheaply in China too, and that is not tied to labor costs. It is cheaper (in taxes regulations, and other non-wage costs) to do business in a supposedly Communist nation than in a supposedly Capitalist nation. Who is to blame for that?

And not ONE WORD about how taxation and regulation and unemployment insurance and workman's comp and litigation and OSHA etc. are driving up costs here.

Chinese labor is even better than slave labor! There aren't any upfront costs, as there are with purchasing slaves!

Say, there's an idea. Why not advocate bringing slavery back?

Thanks for the ping, Sarcasm!

From the article: There have been more than 2.5 million manufacturing jobs lost in the United States since the start of 2001, according to the U.S. Bureau of Labor Statistics.

And what have we replaced those jobs with? Part time, poorly paid jobs at such places as Wal-Mart. Free traitin' is ripping the heart out of America and will ultimately devastate the entire wage structure of this country.

And ask yourself - what will China do when they control most of the manufacturing capability in the world? What then?

If you want on or off my offshoring ping list, please FReepmail me!

Roger Milliken is old school. One of a dying breed of honorable capitalists (businessmen) who are 100% pro American and work to keep jobs here. A more cynical and mindlessly greedy breed is taking their place. They will do business anywhere with anyone and screw America and American workers to make a fast buck.

Wages are not the issue, or the most important problem. The problem is that we impose huge costs on business in the U.S. that mean that even if you built an automated factory with so few workers that there was no wage advantage to doing it in China, it would STILL be much cheaper in China.

Doesn't it make you ashamed of our supposed capitalism that supposed Communists have a better business environment?

I cant speak for all manufacturing but I really get tired of this textile argument.
I worked in textile as a young fellow. My parents worked in textile until one died and the other lost her health.
Textile may be great to those who exploited cheap labor in the South but very few people including slaves worked under any worse conditions.
This is from upfront and on the line I was there!

This is from upfront and on the line I was there!

I worked in textiles for 15 years. I saw no "exploitation" of the hired labor in all my time in the industry and I spent time in yarn plants so far back in the Carolina pines that they had to pump the sunshine in.

People who work in the mills do it for the money and they are glad to have the jobs. You do a disservice to them all.

it would STILL be much cheaper in China.

There are things more important than "cheaper".

Doesn't it make you ashamed of our supposed capitalism that supposed Communists have a better business environment?

It makes me ashamed that Americans are so eager to save a penny that they knife their fellow Americans in the back. Is saving cents all we're about? Is that the totality of America? Is that meager little coin what General Washington and the patriots at Valley Forge fought and died for?

I am about as anti-union as one can be but what you posted about sums it up. The purist free traders who think that losing most of our basic manufacturing is a non issue live in a dream world. The vast majority of Americans will never work in biotech, nanotech, or any kind of technology. Not everyone is going to be able to make a living banking or selling life insurance. We are in an economic trade war that some are oblivious to. On the other hand, we all know that if we lived in a totally protectionist society, a Ford Taurus would cost $100k per car. The real hidden costs to society of business shutdown from industry to industry is not being fully recognized. I got a Timex watch for Father's Day, watch made in the Philippines and the band in China. I think what is really dangerous is that the conservative free trades do not recognize how many families are being pushed into the DEM camp with these policies. How else is a guy like Kerry even pulling the poll numbers that he is getting? Certainly not on personality.

At the time, did you feel at all guilty about the economic devastation and ruin wreaked on Northeastern cities such as Lowell, Mass. when one by one the mills closed and the stable, high-paying jobs that used to support hundreds of thousands of families in the Northeast went down South because of the low wages and land prices there? So many in the South who complain about the ravages of 'free trade' were singing a completely different tune when that freedom was destroying the Northeast, because it was putting bread on their own tables.

Ask this question: Who was on the Wal-Mart Board of Directors when the decision in 1989 was made to buy more from the ChiComs?

Hillary.

The Clintons are so pro-ChiCom they forced the change to a Communism over Capitalism philsophy.

I'm all for a little economic chauvanism at the margins, but we have not earned it, nor would it do us any good in the face of greedy corrupt unions, fat leeching bureucrats, graft-ridden officials, and a government that consumes more of the GDP than the Red Freakin' Communist Yellow Peril Chinese.

We need to take the great plank out of our own eye.

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