Posted on 07/31/2003 1:18:23 PM PDT by Willie Green
For education and discussion only. Not for commercial use.
Our region's hearts go out to the thousands of Pillowtex employees who became the latest victims of an international economic shift that they and their employers are powerless to control.
Here's how Pillowtex CEO Michael Gannaway explained his company's decision to declare bankruptcy in a letter sent to employees Wednesday:
"The textile industry is facing unprecedented increases in global manufacturing capacity combined with softening demand in a tough retail environment. For well over two decades the U.S. textile industry has been under constant pressure to reorganize while facing fierce competition from overseas manufacturers.
"Cheap imports are flooding the U.S. market and driving down prices, while global sourcing has created a new business model for textile companies that we are unable to replicate without substantial investments. These trends are being seen nationwide and have created a marketplace where we can no longer offer our customers the merchandise they need at prices that are profitable for this company. ..."
The result is the largest permanent layoff in N.C. history -- more than 4,800 employees in the Carolinas, some 7,650 overall.
Pillowtex, once known as Cannon Mills, dates back to 1887, when North Carolina was supplanting New England as the center of the U.S. textile industry. Now competition from low-cost producers overseas is stripping jobs from N.C. workers.
Gov. Mike Easley said, "We are used to dealing with natural disasters like hurricanes, floods and ice storms, but now we are dealing with a storm created by Washington." He has called on the Bush administration to rescind trade agreements and enact protections for U.S. manufacturing.
It's not just textiles. U.S. manufacturing jobs in general are in free fall. The United States, with a population of 289 million, has only 14.7 million manufacturing jobs left, and the number keeps dropping. Between January 2001 and May 2003, according to economics writer Paul Craig Roberts, manufacturing jobs declined by 13.3 percent. By June the loss was 14.1 percent, on a seasonally adjusted basis.
North Carolina has felt those losses. Gov. Easley told The Observer's Jack Betts, "From 1994 to now, we have lost 138,000 jobs in North Carolina -- 52 percent of our textile and apparel jobs. Of that, 50,000 jobs have been lost since 2001 because of the China trade policy and others that came right behind that."
The pain is felt in Kannapolis and hundreds of communities that have lost a major source of jobs. But the remedy lies in Washington. This isn't President Bush's fault, but it is his problem. He surely knows it, for he's on track to become the first president since Herbert Hoover to have a net job loss during his term in office.
Today, the focus must be on the immediate needs of newly unemployed workers. But soon our political leaders must explain -- if they can -- what benefits Americans get that are worth such a steep, steady decline in manufacturing employment, and what they think will replace those jobs.
Yes. And that didn't occur until after widespread development of electricly powered mechanization. Up until then New England's textile mills were largley mechanicly driven by waterwheels.
Yes, as a matter of fact, I'm a staunch advocate of clean-coal and nuclear power generation in addition to my advocacy of electricly powered infrastructure construction such as desalination systems and light-rail, high-speed rail and Maglev mass-transit systems.
If you spent a little more time engaged in intelligent discussion on this forum rather than adolescently floating around flinging personal attacks, you'd be well aware of that!
My, how elitist of you. FYI, "jobs like these" provided a path into the middle class for thousands of your fellow citizens. You should be mourning their loss.
New England and the South
"The southward migration of industry from New England has too frequently taken place for causes other than normal competition and natural advantages"
by John F. Kennedy
In his first year as the Junior Senator from Massachusetts, JOHN F. KENNEDY in three incisive speeches hit hard at the unfair competitive practices that have led industry to migrate from New England to the South. He argued that substandard wages and tax subsidies are no foundation on which to build a stable economy, and then presented his program for a fairer competition—a program which he has graphically illustrated in the article which follows. Born in Brookline, educated at the London School of Economics and at Harvard, he made a heroic record as a PT boat commander in the war; then on his return to civilian life he was elected to the House of Representatives and served in the 80th, 81st, and 82nd Congresses. In 1952 he was elected to the Senate.
EARLY 14,000 employees working for the John Doe Company, a New England textile concern, lost their jobs in the period following World War II because of the liquidation of thirteen of their mills. During the same period, the same company opened a large number of new plants in the South. It had "migrated." Why? To what extent was it influenced by natural advantages, by unfair practices, or by the policies of the Federal government?
For one southern operation, the John Doe Company bought a surplus naval factory at a low price; and for another, it obtained an accelerated tax amortization certificate from the Federal government, authorizing it to depreciate its plant within five years rather than the normal period of twenty to twenty-five years. It also utilized a Federally tax-exempt charitable trust in order to avoid taxes on several of its new southern operations, and negotiated with three southern communities for the building and equipping of more new plants through the issuance of municipal revenue bonds that are exempt from Federal taxation.
Not a single one of the John Doe Company's southern plants has been organized by a labor union, although attempts at unionization have been made for more than ten years. Injunctions, employer propaganda, and procedural delays under the Taft-Hartley Act have prevented the union from keeping any foothold gained through representation elections. Partly as a result of these maneuvers, the wage scales at the southern plants are all considerably lower than the prevailing union wage scale in the liquidated New England mills. The Bureau of Labor Statistics states that 86 per cent of the woolen textile workers in the southeastern part of the United States operate under contracts calling for minimum entrance rates of $1.05 or less, whereas only 6 per cent of the New England workers have a minimum as low as this. At four plants in South Carolina and Georgia the John Doe Company obtained "learner permits" allowing it to pay many workers, over a period of time, less than the outmoded Federal minimum wage of 75 cents an hour.
The Board Chairman of John Doe testified before a Senate subcommittee comparing the cost of his southern and New England operations. Power cost per kilowatt-hour was 7.4 mills at his Alabama plant as compared with 17 mills at his Rhode Island plant. Transportation rates were one third lower for equal distances, unemployment compensation taxes were half as great, and employee pension and vacation plans in operation at northern plants were not customary in southern plants.
One may think that this hypothetical case which is actually a combination of two true cases is an extreme example. But it is by no means untypical in revealing the pattern of industrial migration from New England to the South. Since 1946, in Massachusetts alone, seventy textile mills have been liquidated, generally for migration or disposition of their assets to plants in the South or other sections of the country. Besides textiles, there have been moves in the machinery, hosiery, apparel, electrical, paper, chemical, and other important industries. Every month of the year some New England manufacturer is approached by public or private southern interests offering various inducements for migration southward. Other manufacturers warn their employees that they must take pay cuts to meet southern competition or face plant liquidations.
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