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