Talk about endangered species: to the list that includes various flora and fauna we need to add the U.S. textile mill.
At the rate things are going, textile manufacturers — which have been, year-in and year-out, the best customer for American cotton — will be only a memory in communities where, for decades, they were pillars of the economy.
Hardly a week goes by that the financial press doesn't record the demise of yet another textile operation. In many cases, the operations are just kaput, out of business; in others, they've relocated to Mexico or other countries where labor's cheap and the regulatory climate is less strict. Some operations have filed for bankruptcy protection in order to try and keep the economic wolf from the door; others resort to “temporary” layoffs that can often stretch on and on.
Over the past several years, beset by an increasing flood of textile/apparel imports, a strong dollar, and a sharp decline in demand as a result of the tanking U.S. economy, American mill operations have been on the ropes. Hundreds of thousands of jobs have been lost.
Like a rock tossed in a pond, the ripples from all the plant closings and lost jobs have had a major impact on the economy. When the Federal Reserve gives its reports on the economy, the sectors cited as being in the doldrums have consistently included textiles.
Just a week or so ago, after months of rumors, the Dyersburg Corporation, located at Dyersburg, Tenn., announced it will shut its doors no later than the end of August, putting some 900 people out of work. In May, the company had effected a reorganization and restructuring, citing the poor economy.
In announcing the closing of the 72-year old textile company, CEO Eugene McBride expressed “a deep sense of regret and disappointment” at the necessity for beginning “an orderly liquidation of Dyersburg Corporation.” For the past several months, he said, “We have worked diligently to reorganize and to find new funding for our business. We have been unsuccessful.”
Three years or so ago, the company was on a roll, its stock trading in around $15 It's quoted today at 11 cents and on its way to becoming so much wallpaper.
The landscape is littered with similar victims. James Echols, chairman of the National Cotton Council, told members of the Southern Cotton Ginners Association at their summer meeting at Biloxi, Miss., that the strong dollar has “significantly lowered the price of foreign-produced textiles and apparel in the U.S. market, resulting in more and more textile mill bankruptcies.”
This level of competition “will only intensify” as textile quotas are phased out under international agreement, he said. “During the first half of 2001 alone, we have seen 45 textile mills close — 46, counting Dyersburg — and more than 15,000 textile jobs lost.”
In 1997, Echols noted, U.S. mills used 11.4 million bales of American cotton; in June of this year, that figure dropped to just over 8 million bales. Cotton textile imports reached 15.7 million bale-equivalents last year, almost double the 8 million bale-equivalents in the 1993-96 period.
“In my more than 50 years in the textile industry, I've never seen the situation so desperate,” Chuck Hayes, president of the American Textile Manufacturers Institute (ATMI), said in a recent session of the Congressional Textile Caucus. “Nearly 100 textile mills have closed over the past 18 months…and in 2000 the U.S. textile industry lost $369 million — the first annual loss since data have been collected.”
What remains of the textile industry and related sectors represents combined annual sales of more than $100 billion, with more than 600,000 U.S. jobs.
But, Hayes said, continued devaluation of Asian currencies as a result of the financial crisis that began in 1997 is having a devastating effect on the textile trade.