Does The Textile and Apparel Industry Offer Sympathy to U.S. Automakers
Textile Industry News Article Posted November 22, 2008

Textile Industry News





"...with over 150,000 textile jobs lost between 1996 and 2006. Over 48,027 apparel jobs were also lost in the same period..."

As of November 2008, the Big Three U.S. manufacturers, (General Motors, Ford and Chrysler) indicated to the United States government that unless additional funding could be obtained over the short to medium term, there would be a potential danger of the automakers moving into bankruptcy.  As of this moment, they are collectively asking for the amount of $25 Billion (with a capital "B").

If you are looking for an industry that has gone down a similar road as the "Big Three United States automakers", look no further then the U.S Textile & Apparel Industry.  Although this industry may not have made catastrophic errors in judgment as many would say the automakers have done, both industries mirror one another in many regards.  One very big difference is that the government did not consider for a moment giving the Apparel Industry $25 Billion...

If any industry feels the pain of the U.S Automakers it is certainly the U.S Textile and Apparel Industries.  Over the years, much of the domestic apparel manufacturing industry has been stripped away for obvious reasons.  In this article, I will refrain from explaining why consumers prefer to purchase a $5.00 t-shirt in opposition of a $10.00 t-shirt.  But I will share with you some of the bottom line effects.

For an understanding of textile and apparel job reduction, below is some helpful data found at a Duke University website.  Please keep in mind that below is in reference to only "one" state.  The numbers would be amplified if we calculated the effects across the entire country (Granted, not all states were big on Apparel Manufacturing).  Below is an example of the negative effect caused by factory closings in the single state of North Carolina.


"North Carolina's economy continues to restructure away from traditional manufacturing industries like textiles and apparel.   Since 1992, when textile production represented 16 percent of total manufacturing output in North Carolina and apparel production represented just over 4 percent, both sectors have seen a steady decline down to about 9 percent and just over 5 percent respectively in 2001.1 Over 871 textile and apparel mills have closed down since 1996. Between 1977 and 1997, nearly 82,000 jobs were eliminated in the NC textile industry.2 This downward trend has accelerated since 1996, with over 150,000 textile jobs lost between 1996 and 2006. Over 48,027 apparel jobs were also lost in the same period (1996-2006)3 Not surprisingly, North Carolina recorded a high unemployment rate at 6.5% in 2003, ranking 41st in the nation. The state's annual unemployment rate has consistently been higher than the national average since 2001. In January 2006, 15 North Carolina counties had unemployment rates more than 2% above the national average of 4.8%, all of them rural.4 In particular, Hyde County had the highest unemployment rate in January 2006, at 8.9%.5

The consequences of layoffs have been devastating to workers, who mostly reside in rural areas. Many textile workers have spent over 30 years in these industries, and have found readjustment difficult. A study by the NC Employment Security Commission has shown that of the people laid off in 2001, only 59% found work one year later, and just 62% found work two years later. Of those who did find work, over 60% earned less than 90% of their pre-layoff wages.6 This finding is consistent with previous studies conducted in the late 1990s that only 74% of laid-off workers were reemployed after two years, with the median wage of these workers being only 88% of their pre-layoff median wage. This trend is exacerbated for older workers (over 55 years old), with findings in two studies in 1995-96 and 1997-98 that 50-60% of displaced workers found work after two years, with those who did find jobs earning only 78% of their pre-layoff wages.7 This has meant that many people have exhausted their state unemployment benefits without finding a new job. In 2003, this figure reached 142,000 people.8"

     About Source: Duke University website - Textile & Apparel Workers & Jobs

In regard to GM, Chrysler, and Ford, manufacturing is not necessarily moving "internationally" at the same significant rate as it did for textiles and apparel.  In the case of the big three automakers, it appears that manufacturing "affordability" has moved to alternate locations within the United States (not only internationally as was the case with apparel).  If Toyota and Honda are truly producing vehicles in the United States at a lower cost of manufacturing then the big three, is it feasible for the "big three" to follow suit?  

Unfortunately it is not simply an issue of factory location.  Possibly, GM, Chrysler, and Ford should move to North Carolina, but at the same time tell the union that they actually moved to Alaska... Or possibly stay in their current locations, but tell the union that they moved to Florida.  Hiding from that particular union may be an industry saving move...  Certainly, there would be some pain involved, but possibly this would start the healing process.

Before globalization built its tumbleweed machine, the textile and apparel industry was thriving in the United States.  When the domestic manufacturing environment took a harsh turn for the worse, I do not remember textile companies requesting "BILLIONS" of dollars.

If General Motors, Chrysler and Ford merged, maybe they could go by the name of GMCF which could stand for Get More Cheap Financing.  After all, that appears to be the primary goal of these companies.  Rather then manufacturing and selling cars, they are forced into a position of chasing down funding.   The problem is that receiving "free money" now does not guarantee that a company will "make money" later.

If someone asked you if they could borrow $100. but you knew that they already owed $500. to someone else, would you be comfortable lending the $100.?  At some point the well does in fact go dry.

At what point does one suck up the pain and learn that if a business "does not make money", it is not actually a viable business.

Please do not get me wrong.  I absolutely believe that if the big three go bankrupt, it would be devastating to the economy.  More specifically, it would put way too many people out of work.  The unfortunate issue is that the $25 Billion that they are currently asking from the government, is "only a portion" of what they would truly need.  Therefore, are we actually helping the business model or simply spending more money on a car that has already been dropped off at the dump...

By the way, when people lose there jobs, they will work for less money.  If they work for less money, manufacturers can produce items at a lower cost right here in the United States.  If we produce product in the United States and at lower cost, people that actually have some  money will eventually begin to buy more products.  As we buy more products, the economy grows.  As the economy grows, employees ask for higher wages.  As wages go higher, we will move product off shore again... The cycle continues...  At this point, it may be time to clean the slate in the Auto industry.

The Apparel Industry did not receive a bailout.  However, the world still wears clothing.  I have a funny feeling that if three automakers do not get bailed out, we may continue driving cars.  Which means someone has to make them.   Is it so horrible if the people at that currently work for GM today actually work for Toyota tomorrow.  Possibly, that is bad... Anyway, I hope all works out well in the end.

It is truly depressing seeing our country in such pain.  In addition, I am far too lazy for riding a bicycle to work.  Hopefully the auto industry learns to heal its wounds.

The above article is simply my own opinion.  I am certainly not an expert on the economy nor the auto industry.  These are simply my own observations.  If you disagree, sorry.. If you agree, great...

  1. Patrick Conway, Robert Connolly, Alfred Field and Douglas Longman, "The North Carolina Textiles Project: An Initial Report," Journal of Textile and Apparel, Technology and Management, Vol. 3, Issue 3, Fall 2003. p. 2. Last accessed August 13, 2007. []

  2. Patrick Conway, "Charting Employment Loss in North Carolina Textiles," Unpublished paper, January 14, 2004. Last accessed August 15, 2007. []

  3. Ibid.

  4.  North Carolina Employment Security Commission, Employment and Wages by Industry. Last accessed August 14, 2007. []

  5. Ibid.

  6. North Carolina Rural Economic Development Center (NCREDC), " Manufacturing Jobs Continue to Decline," North Carolina Rural Economy (Raleigh) , Vol. 3, No. 3, Summer 2004. Last accessed August 15, 2007. []

  7. NCREDC, "Manufacturing Layoffs: Hard Times for Rural Factories, Workers and Communities," No. 11, April 2002. Last accessed August 15, 2007. []

  8. NCREDC, "Manufacturing Jobs...".(fn. 6).

Note: I do not know for certain that Toyota or Honda produce at a lower expense as I stated in the article.  I heard that recently on the news, but do not remember the exact source of that quote.

If you are an unemployed autoworker or an unemployed member of the fashion industry or textile industry, you can look for apparel and textile jobs in the employment section here on Apparel Search.

Written by Apparel 1 - Where was the Apparel Industry Bailout?

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