The U.S. Textile and Apparel Industry: A

Revolution in Progress

April 1987

NTIS order #PB87-196762
Recommended Citation:

U.S. Congress, Office of Technology Assessment, The U.S. Textile and Apparel Industry: A Revolution in Progress–Special Report, OTA-TET-332 (Washington, DC: U.S. Government Printing

Office, April 1987).

Library of Congress Catalog Card Number 87-619815

For sale by the Superintendent of Documents

U.S. Government Printing Office, Washington, DC 20402-9325

(order form on p. 119)
Foreword

America’s textile and apparel industries are investing in new technology at an unprecedented rate. Productivity growth in textile manufacturing has been double the average growth

of manufacturing as a whole for over a decade, and apparel production may be on the brink

of a revolutionary increase. New information technologies have the potential to unify disparate elements of the industry, from fiber production and weaving to product assembly

and retailing—linkages that can reduce costs and tailor products to changing patterns of

consumer taste and preference. Such new technologies are rapidly changing the face of one

of the Nation’s oldest industries. The manufacture of textiles and apparel has the potential

to remain a significant part of the U.S. economy.

Despite the optimism made possible by technical progress, U.S. textile and apparel firms

are in danger. Little of the technology that allowed for increased productivity was developed

by U.S.-based enterprises. The same advanced technology is available to firms throughout

the world, including those in nations that pay workers a small fraction of the U.S. minimum

wage. Sophisticated networks of U.S. and foreign companies use these factors to undercut

U.S. supplier prices; apparel imports have grown from 25 to 50 percent of the U.S. market

during the past 10 years. Technology alone may not be able to salvage major parts of the

industry.

increases in U.S. labor productivity and U.S. imports have led to significant job losses

within the domestic textile and apparel industry. And while economic growth creates new

job opportunities throughout the economy, plant closings and industrial reorganization can

cause severe hardships for communities dependent on local textile and apparel firms. It also

appears that the skills likely to be needed by future textile and apparel enterprises may require extensive training programs even for workers remaining in the industry.

The present state of the U.S. textile and apparel industry presents Congress with difficult choices on trade policy and on government support for research and development. We

trust that this special report will provide a framework for making such decisions.

This special report supports a larger OTA project that analyzes the effects of technological change and international trade on the structure of the domestic economy and options

for public policy. The textile and apparel industries were selected for special attention because they provide key insights into the problems of changing manufacturing enterprises.

JOHN H. GIBBONS

Director
List of Reviewers

Gorden A. Berkstresser

Professor

School of Textiles

North Carolina State University

Raleigh, NC

Peter Butenhoff

Manager

International Trade Affairs

E.I. du Pent de Nemours & Co.

Wilmington, DE

Michael J. Copps

Director of Government Affairs

Collins & Aikman Corp.

Washington, DC

Henrietta Dabney

Director

Research Department

Amalgamated Clothing and Textile Workers’

Union

New York, NY

Maria Fernandez-Kelly

Professor

Department of Geography and Environmental

Engineering

The Johns Hopkins University

Baltimore, MD

James A. Parrott

Economist

International Ladies’ Garment Workers’ Union

New York, NY

James Plouffe

Manager

Textile Fibers Division

E.I. du Pent de Nemours & Co.

Wilmington, DE

Nicholas C. Williamson

Professor

Management Department

University of North Carolina at Greensboro

Greensboro, NC

George Wine*

Chief Economist

American Textile Manufacturers Institute

Washington, DC

*Material supplied by the American Textile Manufacturers Institute included comments from several reviewers under George Wine’s auspices.

iv
The U.S. Textile and Apparel Industry: A Revolution in Progress

OTA Project Staff

Lionel S. Johns, Assistant Director, OTA

Energy, Materials, and International Security Division

Henry Kelly, Project Director

Technology and the American Economic Transition

Ruth Ruttenberg, Contractor

Gordon A. Berkstresser, Contractor

Daniel Chenok, Research Assistant

Andrew Wyckoff, Analyst

Phyllis Brumfield, Administrative Secretary

Contributors

N.C. Williamson

L. Michael

A.R. Barrier
Contents

Chapter Page

I. Overview . . . . . . . . . . . . . . . . . . . . . . . . ... ... ... ... ... O . . . . . . . . . . . . . . . 3

An Industry in Transition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

The Challenge From Abroad . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Linkages to the Rest of the U.S. Economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

The Impact on the U.S. Labor Force . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

The Impact on the U.S. Consumer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Looking to the Future: Alternatives for Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

A Guide to This Report. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

2. The U.S. Textile and Apparel Industry: Technology

and Structural Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

U.S. Markets for Textiles and Apparel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Characteristics of the Domestic Marketplace . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Trends in Consumer Purchasing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

A Technological Revolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

New Production Technologies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Consistency, Standardization, and Quality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Coordination and ’’Quick Response” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Industrial Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

Structural Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

Trends in investment and Disinvestment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

Into the Future . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

3. The Major Industry Sectors: Fiber, Fabric, Finished Products, and

Machinery Manufacturing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

The Production of Fiber . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

Technological Innovations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

Industrial Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

Textile Mill Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 Technological Innovations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

Industrial Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59

End Uses of Textiles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61

Industrial Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62

Pending Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67

Textile Machinery Manufacture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74

Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74

Industrial Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75

4. Areas for Decision: Trade, Technology, and Employment . . . . . . . . . . . . . . . 79

Declining Trade Balances Shake Textile and Apparel Markets . . . . . . . . . . . . . . . . . . . . . 79

The Emergence of a Global Textile Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81

U.S. Response . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87

Trade and the U.S. Consumer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92

The Adequacy of Domestic Innovation and Capital Investment . . . . . . . . . . . . . . . . . . . . 94

Research and Development. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94

Capital Investment Uneconomic Necessity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95

Implications for the Textile and Apparel Labor Force . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96

Employment Changes Within the Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96

v i
Contents–continued Page

Impact on Individuals and Families . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98

Impact on Communities and Regions of the Country. . . . . . . . . . . . . . . . . . . . . . . . . . . 98

5. Policy and Survival. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .................103

Employment Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103

Assistance for Textile and Apparel Workers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103

State and Local Responsibilities for Employment Training and Transition . . . . . . . . . 105

Trade Adjustment Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105

Trade Alternatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106

Export Promotion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107

Import Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108

Other Trade Policy Areas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109

Research and Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110

Public/Private Ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110

Investment Incentives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111

Other Strategies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111

Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...................115

Boxes

Box Page

A. The Evolution of the Multi-Fiber Arrangement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86

B. Trade Regulations That Affect

C. Current Federal Programs for

Figure No,

1.

2.

3.

4.

5.

6.

7.

8.

9.

10

11.

12

13

14

15

16.

Constant Dollar Value-Added

Apparel, and Textiles . . . . . .

Textiles and Apparel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89

Job Transition . . . . . . . . . . . . . . . . . . . . . ..............106

Figures

Page

per Full-Time Equivalent Employee: Manufacturing,

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

U.S. Textile and Apparel Trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Textiles and Apparel Compensation per Full-Time Equivalent Employees a Percent

of Compensation per Full-Time Equivalent Employee in All Manufacturing . . . . . . . . . 7

Change in Full-Time Equivalent Employment Resulting From Changes in Trade and

Productivity Levels, 1972 and 1984, for Textiles and Apparel . . . . . . . . . . . . . . . . . . . . . 7

Price index for Apparel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Personal Expenditure on Clothing and Accessories. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Personal Expenditure on Textiles (Home Furnishings) . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

U.S. Market in Textiles and Apparel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Apparel As Percent of Total Consumption by Income Cohort, 1982 . . . . . . . . . . . . . . . . 18

New Capital Expenditures and Productivity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

The Apparel Pipeline at a Glance: Present System v. Quick-Response Strategies . . . . . 24

Retailers’ Sourcing Cost Comparison: United States v. Far East . . . . . . . . . . . . . . . . . . . . 25

Breakdown of Original Retail Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

(TC) 2 Automated Sewing System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72

Price indices for Clothing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93

The Geographic Distribution of Textile Employment by State . . . . . . . . . . . . . . . . . . . . . 99

Tables

Table No. Page

l. Full-Time Equivalent Jobs Created by $1 Million of Output in Textile and Apparel

Enterprises in 1984 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

vii
Contents—continued

Table No. Page

2. New Capital Expenditures and Productivity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

3. SIC Codes for Textiles and Apparel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

4. Permanent Plant Closings in the U.S. Textile Industry, 1983-June 1985. . . . . . . . . . . . . 32

5. Number of Establishments and Production Workers, by Type of Establishment,

Women’s Outerwear Industries, 1963-82 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63

6. Branches of the Apparel (Knit and Woven) Industry, by Standard Industrial

Classification Code Number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64

7. Number of Establishments Per Company, Apparel (Knit and Woven) Industries,

United States, 1982 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65

8. Apparel Industry in the United States, Production Measures, 1967-84 . . . . . . . . . . . . . . 66

9. U.S. Textile and Apparel Trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80

10. The U.S. Textile Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80

11. U.S. Apparel and Apparel Fabric Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80

12. U.S. Industrial and Home furnishings Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81

13. U.S. and EEC Imports From Developing Countries Dollars Per Capita, 1980-84 . . . . . . 87

14. Percent Share of Exports of Textiles and Clothing From Developing Countries by

Major Developed Country Markets, 1980-84 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
Chapter 1

Overview
Chapter 1

Overview

Providing nearly 2 million jobs, America’s textile

and apparel enterprises remain a critical part of the

national economy—but technology and international

competition are forcing the industry through its most

profound transformation since the industrial revolution. 1 While forces leading to change have been

gathering strength for a generation, the pace increased sharply in the early 1970s. These changes

are affecting the nature of products produced; how

they are produced; how they are marketed; the structure, scale, and scope of the enterprises producing

them; and the nature of jobs created directly and

indirectly by the industry. Although much of this

change may be beyond the control of public policy,

] U n less spec]f]cal IYI c]ted I n a note I n this sect] on. data described i n

tbi~ s[]mmaq are d~~cumented in later section~ of the report and are

not separate]}’ referenced.

the policy decisions of the next few years could have

a critical effect on the industry’s future,

The United States is one of the few nations that

has left its markets largely open to foreign sales of

textiles and apparel, and one of the few that has paid

little attention to the research needs of its domestic

industry. As a result, imports have flooded domestic markets. Unless policy action is taken in the next

few years, there is reason to be concerned about the

very existence of many parts of the industry. While

it is reasonable to debate whether the Federal Government should act to preserve U.S. textile and apparel enterprises, it is becoming increasingly unlikely

that the industry will be able to maintain its present

position in the U.S. economy without action to counter

the rising tide of imports.

AN INDUSTRY IN TRANSITION

The U.S. textile and apparel industry is acting

quickly to regain its ability to serve previously secure markets. The industry that produces chemical

fibers for textiles, which represents a growing fraction of U.S. products, is a world leader in new product ideas. Measured in terms of output per personhour, the U.S. textile industry is among the most

productive in the world—and it continues to modernize, investing about $1.5 billion per year in new

plant and equipment. Personal spending for textile

and apparel products has grown sharply since the

early 1960s, although net profits from the sale of textiles have not changed significantly during the past

two decades2

.

Significant new technologies include water- and

air-jets, which have replaced shuttles; robots that deliver materials and splice broken yarn; computers

that design fabric and lay patterns on material; and

advanced spinning methods. More uniformity in the

quality of natural materials, along with increased use

2U S. Congress, Congressional Budget Office, Has Trade Pro[ec(/on

Retital)zed Domestic /ndu.strie.s7 (Washington, DC U S Government

f’r]nt]ng Off Ice, !io~ernber 1986), p 34 Profits measured ]n terms of

constant do]lar~.

of synthetics, has facilitated greater automation

throughout the fabric formation process. There has

been a sharp increase in “nonwoven” fabrics assembled without weaving. Moreover, while labor productivity in textiles is half the average of that in all

manufacturing industries, textile productivity has increased at twice the average manufacturing rate for

over a decade (see figure 1). There is no sign that

the pace is diminishing.

Productivity in apparel assembly, which still utilizes mostly hand-work and sewing machines, also

advanced faster than the manufacturing average between 1975 and 1985. Computer-assisted cutting

machines, robotic substitutes for labor-intensive materials handling, and stitching operations promise

dramatic gains in the near future. A fundamental

breakthrough seems to have been achieved in the

vexing problem of handling a single ply of limp material. For years, mechanical equipment has easily

handled and positioned rigid metal and paper; until

recently, however, machines lacked the dexterity to

handle cloth. A robotic sewing technology that will

soon be ready for commercial use promises to bring

substantial increases in sewing productivity.

3
4

Figure 1 .—Constant Dollar Value-Added per FullTime Equivalent Employee: Manufacturing, Apparel,

and Textiles

45

40

35

30

25

20

15

10

5

1950 1955 1960 1965 1970 1975 1980 1985

Year

— All manufacturin g ---- Textiles -.-.- Appare l

SOURCE: U.S. Department of Commerce, Bureau of Economic Analysis, “National Income and Product Accounts, ” Survey of Current Business, July

1966, tables 6.2 and 6.7B.

Actual sewing accounts for less than a quarter of

the time required in apparel assembly. The remaining time involves a series of materials handling steps

that could be streamlined through automation and

improved management. New, “quick response” information technologies have the potential to unite

the entire fiber-to-textile-to-apparel-to-retail network

in ways that could make the system operate more

efficiently as a whole, with greater responsiveness

to rapidly changing consumer tastes and preferences.

Already, forced markdowns and stock-outs—responsible for estimated losses of $14.6 billion and $8 billion in 1985 retail sales, respectively—have been reduced, by both improved management practices and

new equipment that allows for low-cost, small-scale

batch runs and rapid reorders. And Wal-Mart has

successfully tested a prototype, automated retail system now being investigated actively by major retailers; the system is likely to be improved through

greater use of computer-readable tags on retail products and sophisticated communication systems.

The Challenge From Abroad

In spite of these remarkable advances, the industry is gravely threatened. Tariffs, the Multi-Fiber

Arrangement—a set of guidelines that allows developed countries to regulate most textile and apparel

imports—and other complex attempts at protection

have not stemmed the flood of imported textile and

apparel products. Measured in square yards, 33 percent of the U.S. textile market and 48 percent of the

U.S. apparel market was imported in 1985, shares

that have more than doubled since 1975, This rate

of erosion of domestic market shares shows no sign

of diminishing. In fact, if penetration of U.S. apparel

markets were to continue at the pace of the past decade (measured in terms of volume), domestic sales

of U.S. apparel firms would approach zero by the

year 2000, while two-thirds of the U.S. textile market would be served by imports. Moreover, much

of the technology that has made the U.S. textile industry among the most productive in the world has

been purchased overseas. Such problems have been

compounded by America’s comparatively insignificant textile and apparel exports—when apparel exports reached an all-time high in 1980, for example, they amounted to roughly 3 percent of domestic

apparel production.

Because of the relatively low cost of imported products, the trade imbalance is somewhat less when

measured in dollars instead of volume. In dollar

terms, textile imports represent roughly 6 percent

of domestic textile consumption, and apparel imports

about 20 percent of domestic apparel consumption;

much of the difference between dollar and volume

measurements can be attributed to the continued

ability of U.S. firms to compete in markets for highquality, high-price products. Still, if apparel imports

are taken in terms of garment purchases at the retail level, their domestic market share rises to approximately one-third. Overall, the 1986 U.S. trade

deficit in textiles and apparel exceeded $21 billion—a

fourfold increase since 1980 (see figure 2).

The factors behind this dramatic rise in U.S. purchases of foreign textile and apparel products are

complex. The strength of the dollar between 1980

and 1985 made imports far less expensive, relative

to domestically produced items. The recent fall in

the dollar’s value with respect to the currencies of

industrial nations will tend to provide only modest

relief; much of the growth in U.S. imports has come

from nations like Korea, Hong Kong, and Taiwain,

whose currencies are either tied to the dollar or have

not changed significantly with respect to the dollar.

And changes in the value of currencies may have

a greater effect on the profitability of foreign manu-
5

Figure 2.— U.S. Textile and Apparel Trade

24,000

Calendar year totals

22,000

20,000

18,000

16,000

14,000

12,000

10,000

8,000

6,000

4,000

Imports

2,000 —

o —

60 62 64 66 68 70 72 74 76 78 80 82 8486

Year

SOURCE U S Department of Commerce, FT.135, FT-140, SITC Classification

65 and 84

facturers or U.S. retail operations than on consumer

prices.

At the same time, as other countries began to close

their borders to textile and apparel imports, the

United States maintained its support for open markets, opting to push for movement toward free trade

rather than toward protection and government intervention. Several European economists have commented that:

. the United States government . persistently

opposed the concept off direct government intervention of the types undertaken by its counterparts in

Europe and in the Asia Pacific Region.3

Indeed, in addition to the obvious economic stimulus that the textile industry gives to developing economies, many developed nations view the industry

as critical to their economic vitality. Since 1983, the

European Economic Community (EEC) has strengthened import restrictions significantly, pursuant to

bilateral agreements negotiated under the Multi-Fiber

Arrangement (MFA). Japan restricts imports more

informally—by placing pressure on the distribution

network, and by concluding a variety of non-MFA

bilateral restraint agreements. Available evidence

‘B T-oine et ii] , The Global Textile industry (London George Allen

& Unw”ln, 1981), p 68

suggests that the EEC’s adoption of a more restrictive regime under the MFA as of 1983, coupled with

Japan’s continuing restrictions, has had the effect

of channeling developing nation textile and apparel

exports into the U.S. market.

In particular, the U.S. manmade fiber industry depends on international developments throughout the

domestic textile and apparel industry complex. Technology for producing a variety of fibers is available

worldwide. A number of nations are rapidly expanding production, substituting their own products for

U.S. fibers. The world market share of U.S. production of “noncellulosic” fiber—including nylon, acrylic,

and polyester—fell from 33 to 23 percent between

1979 and 1985. During the same period, China increased noncellulosic production by 361 percent, India by 203 percent, and Indonesia by 102 percent;

China expects to be self-sufficient in the near future.

The fact that China and Australia are the world’s

leading producers of two important natural fibers—

cotton and wool, respectively—accentuates this growing competition. Moreover, many developing nations,

which hope to stimulate their domestic economies

by retaining more of the value added during textile

and apparel production, are investing heavily in production facilities for manmade fibers. U.S. imports

of synthetic textiles and apparel grew from about 3

billion to 5.5 billion square yards between 1979 and

1984.

New textile and apparel production equipment

moves into world markets rapidly. Many of the productivity gains enjoyed by the U.S. textile industry

have resulted from equipment purchases from West

Germany, Switzerland, Japan, and even Czechoslovakia. U.S. textile and apparel producers will almost

certainly continue to benefit from new devices under development abroad. In addition, many developing nations have access to the same sophisticated

machinery that is available to U.S. firms.

On the other hand, U.S. producers of textile machinery have fallen far behind the international stateof-the-art. Their overall share of the domestic market has fallen from 93 percent in 1963 to 55 percent today; the United States produces none of the

advanced shuttleless looms that are revolutionizing

weaving. What remains of the industry is not particularly encouraging. Over 92 percent of the export

sales of domestic textile machinery firms went to supply replacement parts.
6

Linkages to the Rest of the

U.S. Economy

While employment in domestic wholesale and retail textile and apparel firms—which add over half

the value of industry products that are sold to consumers—is not likely to change significantly as the

result of trade, the fates of a number of other important U.S. industries are linked closely to that of

textiles and apparel. Failure on the part of textile

and apparel enterprises can have dramatic effects

on the local communities where they operate, especially in the many small towns of the southeastern

United States where a textile plant represents the

main source of industrial employment. On a larger

scale, such effects can propagate throughout the U.S.

economy, since only about one-quarter of the value

added by production and sales of textile goods and

fabricated textile products goes to textile and apparel

firms, while only about 40 percent of the value added from production and sales of fabrics and apparel

remains within the industry.

The rest of the value from these sales is distributed quite broadly throughout the U.S. economy. A

significant portion ends up in the “service” industries, particularly transportation and trade and the

highly paid “transactional” services like finance, insurance, and business services. To a large degree,

the fate of America’s textile and apparel industry—

like that of other manufacturing sectors—affects the

health of U.S. service industries.

Table 1 reviews some of these linkages in greater

detail. The table suggests the number of jobs lost

in the U.S. economy from $1 million of imports in

the industries shown, or the number of jobs gained

from $1 million of exports.4 It indicates that $1 million of production in the U.S. fabrics sector creates

approximately 28 U.S. jobs; this number accounts

for the negative effects of trade. Of the jobs created,

approximately 60 percent are in the textile and apparel industry. The apparel sector is less linked with

businesses outside textiles and apparel, as 70 percent of the jobs created by output from apparel production remain within the industry.

These calculations do not account for purchases

needed to modernize plants or replace depreciated

equipment. Adjusting for purchases of capital equipment is a difficult undertaking, given the poor qualSince the details of the products exported and imported In m}’ industrial category differ, the number of jobs created and lost from $1

million of trade are necessarily different. But because the data a\ailable cannot be disaggregate beyond the categories sho~’n the effect

of differences in the composition of exports and imports w]thin the ]nput/output categories exhibited cannot be shown

Table 1 .—Full-Time Equivalent Jobs Created by $1 Million of Output in Textile and Apparel Enterprises in 1984

(including trade effects outside textiles and apparel)

Classification a

Fabrics Textile goods Apparel Fabricated textiles

Natural Resource Intensiveb . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.4 1.2 0.7 0.9

Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.4 0.4 0.3 0.3

Manufacturing c. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.1 18.4 24.1 22.6

Low wage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (16.8) (14.0) (22.3) (20.0)

Medium wage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.6) (0.8) (0.5) (0.7)

High wage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2.7) (3.6) (1.3) (1 .9)

Trade & transportation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.0 3.2 3.8

Transactional servicesd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.7 1.5 1.6 1.6

Personal servicese. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.4 0.4 0.4 0.5

Social servicesf . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.5 0.5 0.5 0.5

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28.2 26.4 30.8 30.2

NOTE: Read the table as follows: $1 million dollars in output in the U.S. fabric industry generates a total of 28.2 jobs, of which 1.4 were in natural resource intensive

industries, 0.4 were in construction, etc.

alndustv classifications accord to Iwo input-output tables provided by the U.S. Department of Commerce

bMostly agriculture and minin9

cManufacturing is divided into Low Wage (mostly te~tile~, apparel, and wood products), Medium wage (rTIOStly ‘ ‘high tech” machinery), and High Wage (mostly “heavy”

manufacturing)

dMedia, finance, real estate, and business Sef’ViCeS

eHotels, auto repair, household industries, and amusements

flncludes government and private sector

SOURCE: Office of Technology Assessment, 1987. Compiled from 1980 Input/Output relationships provided by the Bureau of Economic Analysis, U.S. Department of

Commerce; 1984 productivity levels and estimated trade statistics provided by the Bureau of Labor Statistics, U.S. Department of Labor.
ity of available data. Still, 1977 purchasing patterns

suggest that $1 million of output in fabric and textile goods production—adjusted for 1984 trade patterns—would generate another five jobs in enterprises supplying production equipment, mostly in

medium- and high-wage industries and transportation. Since apparel production is not heavily capitalized, including the effects of capital equipment

purchases for these industries would create few additional jobs.

The Impact on the U.S. Labor Force

Growth in domestic demand has partially offset

employment loss resulting from increases in imports

and productivity. But between 1980 and 1985, employment in the apparel industry fell 11 percent, and

textile employment fell 15 percent. A total of 142,000

jobs were lost. It is important to note, though, that

many of the jobs eliminated by automation were dangerous and unpleasant. The threat of “brown lung”

that haunted the industry for years has been reduced

significantly through the use of machines for tasks

that would pose health and safety threats to human

operators.

The combined effects of new technology and pressure from imports have also had a sharp effect on

industry wages. As a percentage of wages for all manufacturing industries, wages and other forms of compensation for textile workers (measured in current

dollars) have fallen steadily since the late 1960s (see

figure 3)—despite the rapid growth of labor productivity in textiles.

Undoubtedly, pressure from imports was at least

partly responsible for the inability of U.S. workers

to enjoy greater benefits from productivity growth.

And U.S. apparel workers have been the victims of

that industry’s intensive struggle to maintain its competitive position—they have seen a significant decline in average real wages. Relatively stable during the 1960s, average apparel compensation fell

from 62 percent of the U.S. manufacturing average

in 1970 to 52 percent in 1985 (again see figure 3).

Some have charged that this problem has been accentuated by the recent rise in the use of “subminimum” wages, as well as growing complaints about

employer violations of overtime regulations. j

‘International Ladles’ Cmrment Workers’ Union, Research Department,

“The [; S Apparel Industry, 1960-1985, With Special Emphasis on

Women’s and Children’s Apparel, ” Oct 18, 1985, p 1(1

7

Figure 3.—Textiles and Apparel Compensation per

Full-Time Equivalent Employee As a Percent of

Compensation per Full-Time Equivalent Employee

in All Manufacturinga

Textiles

62 -

. ● .*

58 “

54 -

I 1 I I I

. 

50 .

-i-950 1955 1960 1965 1970 1975 1980 1985

Year

alncludes wages and other forms of Cofn Pen SatlOn

SOURCE: U S. Department of Commerce, Bureau of Economic Analysis, “NatIon.

al Income and Product Accounts, ” Survey of Current Bus/rress, July

1986, tables 67 and 68

Job losses resulting from imports cannot be easily disentangled from those resulting from rising domestic productivity. While trade clearly stimulated

technological change in the domestic industry, for

example, both trade and technology stimulated price

reductions that increased domestic demand. Figure

4 compares trade and productivity effects; clearly,

the data provide only a crude approximation of how

Figure 4.—Change in Full-Time Equivalent

Employment Resulting From Changes in Trade and

Productivity Levels, 1972 and 1984, for

and Apparel

IJ2.6

2.4

2.2

2

1.8

1.6

1,4

1.2

1

0.8

0.6

0.4

0.2

n

Textiles

’72 ’72 ’72 trade 1984

trade and productivity employment

’72 (actual)

productivity

SOURCE Off Ice of Technology Assessment, based on data provided by the

U S Department of Commerce and U S Department of Labor 1987
8

these factors have affected job losses among U.S. textile and apparel enterprises.

All four bars in the figure assume that domestic

demand for textiles and apparel remained as it was

in 1984. The bar on the far right assumes that trade

and productivity levels also matched those of 1984,

while the bar on the far left suggests what might have

occurred if 1972 patterns of trade and productivity

had existed in 1984—a hypothetical gain of approximately 700,000 jobs. The intermediate bars suggest

that more jobs have been lost due to investment in

automation than to the effects of trade.

Tomorrow’s textile and apparel jobs are unlikely

to provide as many low-paid, entry-level positions

for immigrants and minorities as they have in the

past. Increasingly, technicians and highly trained

operators may substitute for people with more traditional skills, who—without appropriate retraining—

could see traditional employment opportunities move

into overseas, low-wage production facilities. In this

sense, U.S. textile and apparel enterprises that continue to operate as they have for generations might

not survive except through the most draconian of

public intervention. Firms that do remain may have

to transform their operations in fundamental ways.

The Impact on the U.S. Consumer

little doubt that American consumers have benefited

enormously from the changes taking place in the

industry. The price index of apparel, or the rate at

which apparel prices change, has dropped sharply

as a percentage of the overall rate of inflation since

1970 (see figure 5). Although the real impact of import quotas and tariffs on the price paid by consumers is difficult to estimate, one analysis suggests

that even during periods of strong demand, trade

quotas increase domestic clothing prices by 10 percent at most.6

6D, Kessing and M. Wolf, “Textile Quotas Against Developing Countries” (London Trade Policy Research Center, 1980).

Figure 6.— Personal Expenditure on Clothing and

Accessories

480 -

-

-

—

240 —

While there is reason to doubt that consumers

have been given full advantage of the comparatively

low price of imported textiles and apparel, there is

Figure 5.— Price Index for Apparel (fraction of price

index for all personal consumer expenditures)

1.7 

1.5 -

1.4 -

1.3 -

1.2 -

1.1 -

1.0 -

0.0 I I I I

-

1-960 1965 1970 1975 1980 1985

Year

SOURCE U.S. Department of Commerce, Bureau of Economtc Analysis, “NatIon.

al Income and Product Account s,” Survey of Current Bus/riess, July

1986, tables 24 and 25 (1982 = 1 00).

1950 1955 1960 1965 1970 1975 1980 1985

Year

SOURCE: US. Department of Commerce. Bureau of Economic Analvsis, “Nation.

al Income and Product Account s,” Survey of Current BusIrress, July

1986, table 2.5

Figure 7.— Personal Expenditure on Textiles

(Home Furnishings)

80

75 “

-

-

1

-

45 -

40

1950 1955 1960 1965 1970 1975 1980 1985

Year

SOURCE: US, Department of Commerce, Bureau of Economic Analysis, “NatIon.

al Income and Product Account s,” Survey of Current Busirress, July

19@6, table 2.5,
9

—

Measured in dollars of purchases, personal spending on apparel and other textile products has increased rapidly (see figures 6 and 7), even though

per-capita volume purchases have remained relatively stable in terms of raw volume (see figure 8).

This means that many purchasers have turned to

more expensive products. However, such a devel1973

❑ Apparel

opment must be viewed with caution. Many highpriced American goods are sold by U.S.-owned firms

that do much of their production overseas. This “offshoring” of production allows U.S. companies to benefit from lower wages abroad, since firms may use

lower labor input costs to increase profits while retail prices are held steady.

Figure 8.— U.S. Market in Textiles and Apparel

—

1975

—

—

1977 1979

Year

1983 1985

SOURCE Office of Technology Assessment, based on data provided by the American Textile Manufacturers Institute, 1987

LOOKING TO THE FUTURE: ALTERNATIVES FOR POLICY

Whatever the future may bring, the next generation of U.S. textile and apparel enterprises is likely

to be almost unrecognizable, measured by both the

nature of the jobs that will be created and the nature of the firms that will prosper:

1. Jobs: Productivity growth is likely to continue

to outstrip growth in domestic demand. As a

result, domestic jobs will continue to be lost

even if trade penetration levels return to those

of the early 1970s.

2. Business structure: Midsize U.S. companies

are being squeezed, in part by the versatility

and low capital needs of many small firms and

in part by the power and scale of increasingly

large integrated corporations. Indeed, horizontal and vertical integration are changing the very

structure of the industry.

In the face of these developments, Congress must

grapple with a series of uncomfortable dilemmas.

Should the United States intervene in domestic and

international markets in order to save an industry

with comparatively low wages and productivity?

Given that a number of developing nations, including China, are attempting to use exports of textiles

and apparel to stimulate domestic economic develop-
10

ment—and are willing to go to extreme lengths to

protect domestic industries and promote exports—

can the U.S. industry ever compete successfully? In

Pakistan, for example, more than half of all industrial employment is associated with textiles and apparel. Can the United States suggest alternative methods for promoting economic development in these

nations? If short-term protection is provided, can the

U.S. industry reshape itself so that it could survive

without long-term import restrictions? If such protection is provided, can the industry be given adequate incentives to make needed investments? None

of these issues have unambiguous answers.

It is possible, however, that given creative industry management and appropriate public policy, U.S.

textile and apparel enterprises can continue to be

a significant part of the U.S. economy without strong

protection over the long term. While the burden of

responsibility for building a competitive industry

rests primarily with industry management—its willingness to innovate, take risks, and rethink old patterns of industrial organization—appropriate government actions could facilitate the process, or could

buy time for the textile and apparel industry to make

needed changes. Options have been suggested in

the following areas.

1. Programs to protect the domestic industry from

imports in the near term could include:

—tougher enforcement of bilateral trade agreements and the Multi-Fiber Arrangement;

—expansion of Multi-Fiber Arrangement coverage to fibers not presently controlled;

—an import licensing system to help prevent

overshipments, which might also limit the

growth of textile and apparel imports to the

growth of the U.S. market;

—mandatory retaliation, in the form of quotas

or other measures, against nations judged to

be “dumping” in the United States, or engaging in unfair trade practices;

–defining “unfair trade practices” to include

denial of basic labor rights and standards; or

—negotiated increases in tariffs.

The wisdom of such measures should be

weighed in the context of overall U.S. strategy

in international trade, Foreign retaliation against

protection for textile and apparel enterprises

could affect America’s ability to reduce trade

barriers in other industries.

2. Encouraging a strong industry commitment to

3

retrain people displaced from traditional textile

and apparel jobs could help these workers find

new jobs, some of which might be in a rebuilt

and more sophisticated textile and apparel industry.

An ambitious program for research and development in areas related to textile and apparel

production could be implemented, in order to

rebuild U.S. technical capabilities in the manufacture of textile machinery equipment and to

ensure that U.S. production leads the world in

state-of-the-art technologies. Programs might include designating several “centers of excellence”

for research and development, in areas like apparel assembly technology, sensors and handling systems for limp fabrics, and computerassisted design of apparel and fabrics. The Textile/Clothing Technology Corp. ’s [(TC)2

] remarkable success in combining government, industry, and union support in the development of

advanced sewing equipment provides an instructive example on which to build; Japan and several European nations are investing large sums

to develop new machinery.

4. Programs could be established to facilitate industrywide cooperation and standard-setting,

leading to a “quick response” system capable

of tying apparel and textile product retailing

operations with apparel and textile production

facilities. “Quick response” could provide flexibility to respond to shifting domestic markets

that are best understood by producing close to

consumers.

5. A macroeconomic policy could be designed to

encourage industrial research and private sector investment in innovative technology.

These options would take time to implement, and

some may require increases in Federal funding for

research and training. They depend on flexibility and

imagination in private management. Above all, they

require confidence in the future of the industry. The

analysis presented in this report suggests that appropriate public policy can help to justify such confidence.

Indeed, an array of new production and control

technologies—coordinated through a “quick response”

network that can reduce the distance between producers and retailers—may greatly expand the range
11

of product areas in which U.S. producers are competitive. Given implementation of this integrated U.S.

system, foreign low-cost producers could lose market share in all but the most labor-intensive products and specialties. A “quick response” system, of

course, could add significantly to domestic communications and transportation costs, and could increase

demand for sophisticated local management. As a

whole, however, “quick response” technologies may

Any of these programs will be moot if the industry is eliminated by a flood of imported products.

Even measures designed to eliminate obviously unfair trade practices may be inadequate to protect large

parts of the U.S. industry against imports from nations that pay workers as little as one-fifth of average U.S. wages. It is clear that without serious action

in the near future, long-term strategies for making

the U.S. apparel and textile industries competitive

significantly reduce, and in some cases eliminate, may

the price advantages of low wage competitors—even

under current conditions.

A GUIDE TO THIS

become largely academic.

REPORT

The first part of this special report examines the

textile and apparel industries as they exist today,

their structure (ch. 2), and the forces of change already at work (ch. 3). Major areas where policy decisions will be needed are examined in the second

half of the document. Trade, technology, employment, and marketing are addressed in chapter 4, followed by a review of policy options and the barriers

that need to be addressed in order to achieve effective change (ch. 5).

Throughout this study, the term “textile” is often

used to represent the entire industry complex: from

fiber, to fabric, through the end uses of apparel,

home furnishings, and industrial products. “Fiber”

refers to the initial production phase, be it woven,

nonwoven, natural, or synthetic material. “Fabric”

and textile mill products are used interchangeably,

and sometimes the term “textile” is specifically focused on this phase of production. “End uses” refers

to all textile products ready for application, be they

apparel, home furnishings, industrial goods, or some

new and innovative function like chemical reagents.

The terms “synthetic” and “manmade” are used interchangeably, and include both cellulosic and noncellulosic fibers.

One methodological problem in studying the textile industry complex deserves special note. Production and consumption statistics are available in many

different units, ranging from dollar value, to yards,

to square yard equivalents, to pounds. Clearly, for

any given analytical issue the measure chosen can

affect the statistical outcome—sometimes significantly.

If all data were available in square yard equivalents,

that would probably be the measure of choice. But

this is not the case, and this special report uses a

variety of measures, of which the reader should be

aware while forming his/her own conclusions.
Chapter 2

The U.S. Textile and Apparel

Industry: Technology and

Structural Change
Chapter 2

The U.S. Textile and Apparel Industry:

Technology and Structural Change

Chemicals and robots make our clothing, rather

than cotton and the sewing machine. Manual labor

has been virtually eliminated in the production of

textiles and apparel, except in design and equipment

maintenance. Few communities are known as “textile towns. ”

Fiber companies, textile producers, apparel manufacturers, and retailers are tied together through sophisticated communication networks, and react almost instantaneously to market trends. Customers

enjoy more products tailored to their specific tastes,

and find a greater range of styles and sizes in stock,

However, demand for blouses and slacks may not

be as great as demand for the textiles and fabrics used

in road construction and rocket ships.

A proliferation of export incentives and import protections among nations of the world has made public policy nearly as important as traditional economic

forces. “Made in the U.S.A., ” when it appears on a

label, may not ensure that all stages of production

occurred within U.S. borders. The domestic industry is comprised of large multinational corporations

and small contract shops. Mid-size firms, the backbone of the industry for two centuries, have all but

vanished.

Could this be part of the future of the U.S. textile

and apparel industry? While there are certainly exceptions to such a vision of the U.S. industry in the

21st century, most experts predict a vastly altered

industrial landscape for the future—one in which the

economic, technological, and public policy influences

on production are radically changing the industry,

much as the forces of the industrial revolution did

200 years ago. The industry is being reshaped by

technology, the growth of international trade, changing patterns of demand, and a shifting regulatory

environment. These forces affect what is being produced, how it is produced, and who is doing the

work. They are changing the structure of both individual businesses and whole business sectors.

The network of industries that deliver apparel,

home furnishings, and other woven and knitted products to final markets is extraordinarily complex. The

diversity of this system is both an asset and a liability. The system has enjoyed enormous flexibility, and

has matched products to markets despite constant

changes in styles, tastes, and production technologies.

The industry begins with the production of fiber

from either natural or “manmade” (synthetic) materials; typically, manmade fiber companies are large

and sophisticated chemical firms. Raw fiber is spun,

woven, knitted or otherwise converted into fabric

by another set of enterprises–primarily textile mills,

which can be very small or very large enterprises.

This fabric must be converted into an apparel product or a product for industrial use; the apparel industry is highly fragmented, and typically operates

through a complex series of contracts with “jobbers.”

Finally, the product must be transported, warehoused,

transported again, and made available to consumers

through retail channels.

Each of these industry segments has a unique business structure and management style, each has a

unique history, and each is supported by different

kinds of technology. Each is affected by trade in

different ways. Perhaps most importantly, each is

a virtually independent culture. Taken together, however, the industry segments share a common problem: finding the means to prosper in an increasingly

competitive international environment by improving

the way that U.S. and world markets can be served

by domestic production.

The fragmented structure of the industry presents

a barrier to technologies that require standardization

and integration. This standardization involves agreed

improvements in quality and reliability; sophisticated

weaving, for example, requires high-quality yarns.

Agreed protocols are needed as well, in order to

shorten delivery times and reduce inventories. There

is no reason why a diverse group of enterprises could

not develop a set of standards and communication

protocols that would allow the industry as a whole

to benefit from new technology, even without largescale vertical or horizontal integration—indeed, the

industry segments are now developing just such

standards. There may also be areas where economies

15
16

of scale can be enjoyed from greater integration, and gether to improve the net productivity of the entire

a number of mergers have taken place in recent system; details on the equipment used in fiber, texyears. tiles, and apparel will be provided in chapter 3.

This chapter first examines the nature of the mar- This chapter concludes with an examination of the

kets served by the combined network of fiber/tex- changes in the structure of each industry component

tile/apparel/retail businesses. Changes in the tech- made possible—and in some cases made necessary

–by new technology and the new challenges of the nology of each industry segment are then described,

emphasizing those technologies that must work to- global marketplace.

U.S. MARKETS FOR TEXTILES AND APPAREL

Increasing domestic and international competition,

coupled with relatively slow growth in U.S. markets,

have forced U.S. apparel producers and retailers to

pay close attention to changes in the market. Even

textile firms, which have traditionally not tied sales

success to market trends, have been forced to account for changing consumer preferences and the

growth of specialty market niches. Such developments have evolved from changes in the structure

of demand, which result from increased female employment, greater interest in leisure and sports activities, rising education levels, and aging of the population.

The search for a competitive edge has led to

greater concern about the growth of forced markdowns and the impact of “stockouts” on lost sales.

In response, a growing number of firms are adopting sophisticated market research activities, including test market programs. New technologies can

satisfy rapidly changing consumer needs and tastes,

allowing U.S. firms to provide a “quick response”

to shifting patterns of expenditure.

Characteristics of the Domestic

Marketplace

Domestic markets for apparel can be divided

roughly into three categories, each of which present

different problems in production and sales:

1. “fashion” products, with a 10-week product

life—approximately 35 percent of the market;

2. “seasonal” products, with a 20-week product

life—approximately 45 percent of the market;

and

3. “basic” products, sold throughout the year—

approximately 20 percent of the market.1

] Estimates based on interviews with industry marketing specialists.

Generally, markets for men’s and children’s clothing are less subject to change from year to year, and

are therefore more suited to large-scale production.

Women’s garments tend to dominate seasonal sales,

which are much more difficult to predict.

While the bulk of the following discussion will concentrate on apparel, it must be recognized that textile markets for products other than apparel are growing rapidly. The home furnishings market—draperies,

rugs, sheets, blankets, towels, tablecloths, window

shades, wall coverings, and upholstery-is essentially

a “basic” market, in that it is both large and relatively predictable; the assembly process is straightforward and highly automated. Many textile companies sell these products directly to retailers.

Textiles are also used for an expanding range of

other products, including filters, parachutes, book

bindings, fire hoses, adhesive tape, typewriter ribbons, automobile tires, mailbags, electrical insulation conveyor belts, and storage tanks. The safety

harness and couch coverings of space crafts are made

of textiles. Textiles are used in surgery to replace

worn-out body parts, such as blood vessels, and were

even part of the first artificial heart. Textiles are instrumental in controlling air and water pollution, in

soil conservation, and in flood prevention in the form

of inflatable dams. Geotextiles may even be used to

help solve the pothole problem.

U.S. producers have remained competitive at the

extremes of the domestic market for textiles and apparel. Import penetration is relatively low for basic

items like home furnishings, which have an extremely low labor content, and for items like basic

men’s wear, where styles change slowly and domestic production is highly automated. U.S. producers

are also doing well in such industrial products as
17

bile upholstery, where the cost of textiles is a small

fraction of the total selling costs and where the risks

of dealing with low-cost producers are often not

worth the small direct savings. Import penetration

is also low in certain “fashion” areas-those in which

an extremely short selling life complicates dealings

with foreign contractors who may need several

months to deliver products, and those in which purchasers are comparatively insensitive to price.

In contrast, foreign penetration is highest in seasonal products, particularly private label products;

imports of this type may now constitute over 80 percent of the market. Market uncertainty, and virtually no tradition of concern with production technology, mean that domestic labor productivity in the

seasonal product sectors is relatively low. This, of

course, has resulted in high labor costs, giving low

wage foreign producers a competitive advantage

against U.S. firms in selling labor-intensive product

lines. It is in precisely these seasonal products that

new production systems, mostly in the form of “quick

response” technologies and strategies, can have their

greatest impact.

Trends in Consumer Purchasing

Overall, textile and apparel demand in the United

States in the next decade will likely reflect a stabilization or even a reduction in per-capita consumption growth rates. America’s per-capita volume fiber consumption has leveled off, and is now in a

slow decline. According to trend estimates by the

American Apparel Manufacturers Association (AAMA),

apparel consumption is expected to increase in value,

but not in unit volume. Consumers are expected to

demand more quality in apparel, tending to raise

prices while increasing the useful life of the garment.

Market analysts portray today’s apparel consumer

as a comparatively independent shopper with a sophisticated taste level, a high income level, and a

high education level. Textile and apparel markets

also face the challenging opportunity of the coming

of age of the “baby-boomers.” With the oldest of the

baby-boomers now approaching 40 and the youngest just leaving college, this generation is entering

its prime years of earning and spending.

Men and women alike have become more sensitive to the communicative quality of their clothing,

and its ability to influence image, career advancement, and self-esteem. By wearing specific clothing,

consumers are seeking to convey an image of confidence and attractiveness. Opportunities for individual firms to find successful market niches thus become more significant. There are also indications

that mills are learning how to sell—instead of continuing to churn out cloth for a mass market, they

are targeting niches not filled by imports.2

With consumers placing increasing emphasis on

the style and status of clothes, retailers can direct

promotion around an image that is “in vogue. ” Major retailers see the need not only to increase the

number of basic textile and apparel lines offered at

any given time, but to offer greater variety in color

and style within each line; one of the major areas

of retail growth has been the smaller specialized

stores, which concentrate on a particular line, design, or brand. This trend has forced major retailers

to establish a number of smaller boutique areas,

offering products to specific customer groups. At the

same time, however, department and specialty stores

have lost market share to chain outlets and discounters, as well as to nonapparel stores that sell items

such as hosiery.

AAMA identifies six trends, both demographic and

qualitative, that are likely to influence future trends

in apparel purchasing:

1. a major shift to an older population; largest

growth in the 35 to 54 age group, who have

the most money to spend on apparel—need for

greater variety in apparel;

2. more white collar workers—need for more dress

apparel;

3. more single people with more money for apparel;

4. shift to more casual and informal wear;

5. shift to better quality and longer life garments;

and

6. sportswear and active wear still important—

need for more style, higher cost, and more durable items, but not for as many units.3

The baby-boom generation is having an enormous

influence on markets as it passes through its peak

buying years. The number of households with heads

$cdt Kilman and Linda Williams, “The New Mill: While Textile

Makers Bemoan Imports, They Are Modernizing, Too,” Wall Street .lourna/, Sept 14, 1984, p. 1,

7L’The U.S. Apparel Market,” Apparel Manufacturing Strategies 19841

report compiled by American Apparel Manufacturers Association,
18

aged 35 to 44 is expected to increase 44 percent by

2000, and the household age group 45 to 54 is expected to grow by 71 percent;4 the U.S. Census Bureau has indicated that households headed by individuals between the ages of 35 and 54 have, on

average, the highest household income, and spend

more on textiles and apparel as a percentage of total expenditures than either younger or older households. Indeed, OTA analyses show that as household income rises, the portion of household spending

that goes to apparel also increases-dramatically, in

the highest income groups (see figure 9).5

—— —-.

4U.S. Bureau of the Census, Current Population Reports, Series P-25,

No. 986, Projedons of the Number of Households and Families: 1986

to 2000 (Washington, DC: U.S. Government Printing Office, 1986), table

2, Series B.

5

0TA, collected from US. Department of Labor, Bureau of Labor Statistics, “Consumer Expenditure Survey, 1982/83,” unpublished data,

1986.

Figure 9.—Apparel As Percent of Total

Consumption by Income Cohort, 1982

1 2 3 4 5 6 7

Income cohort

NOTE” Income cohorts divided according to average pre-tax income per person

for a “consuming unit,” roughly defined as a “household.” The figure was

calculated, ranked into ascending order, and then split into seven groups

with equal numbers of “households” in each group.

SOURCE U S Department of Labor, Bureau of Labor Statistics, “Consumer Expenditure Survey, 1982/83,” unpublished data, 1986

In addition, consumers aged 25 to 44 spend up

to 45 percent more than other age groups on furniture and home furnishings, and it will be 20 years

before the last baby-boomers leave that high spending category. As the baby-boomers age, they will

account for an estimated 4-percent increase in furniture sales in the coming years, and will be particularly attracted to high-priced, high-quality furniture.

Clearly, significant opportunities exist for individual

firms to find successful market niches–another of

which could be in children’s apparel, since the growing number of baby-boom families has already translated into a larger share of household spending for

infant clothing.6

On the other hand, the group which has the largest

propensity to spend disposable income for apparel

(not including textiles)--generally classified as young

adults, under 25 years of age—will decline over the

same period, According to the Census Bureau, there

will be approximately 1 million fewer household

heads in this age group by the year 2000, a loss of

22 percent.7 And all demographic groups—whether

they are based on income, age, marital status, or family age structure—spent less on apparel as a percentage of their total consumption in 1983 than in 1973.8

‘Ibid.

71bid.

WITA, col]ected from “Consumer Expenditure Survey, 1972/73 and

1982/83,” op. cit.

A TECHNOLOGICAL REVOLUTION

“For American manufacturers, the choice is clear:

modernize or die. ”9

Automation of virtually all textile production processes is underway. The entire manufacturing procgE]lison .$. McKissick, Jr., president, American Textile Manufacturing Institute, and head of Alice Manufacturing Co. of Easley, SC, cited

in Phillip W. Wilson, “Living in a Material World,” World, March-April

1986, p. 10,

ess is utilizing sophisticated microprocessor-controlled

monitoring technology. And all manufacturing technologies are being integrated into flexible units with

fewer overall steps. Speed and product quality are

improving. New technology is increasing productivity

while reducing labor content. Future technologies

are expected to be more expensive, which will increase demand for new capital expenditures.
19

Many experts believe that the U.S. textile and apparel industry must have a technological edge in

order to remain competitive in world markets. Maintaining such an edge, however, is increasingly difficult, as technology transfer becomes easier and developing nations make substantial investments in

new plant and equipment.

New Production Technologies

Most changes in the technology in place are designed to address three major production issues:

1. reduction of the labor content in the manufacturing process,

2. increase in the quality of products, and

3. flexibility in production.

Since the mid-1960s, process improvements have

included the automation of opening rooms, the installation of chute-feeds and high production cards,

the partial automation of drawing, the introduction

of open-end spinning, the increasing use of shuttleless looms, the use of automatic systems for handling waste, and the nearly universal use of microprocessor-controlled monitoring and reporting of

production variables.10

In each of the four major processes of cotton textile manufacturing there have been major technological innovations that have substantially increased

productivity. The installation of automatic equipment

in cotton opening rooms is replacing manual feeding. The use of chute-fed cards eliminates the necessity for manual carding and for most manual

cleaning. Open-end spinning is replacing ring spinning for some yarns. In weaving, firms are shifting

from shuttle looms to a variety of high-speed shuttleless looms. There have also been major innovations in texturing, new knitting machines, computerized finishing, cutting, and sewing.

Productivity Improvements

Consolidation and modernization have resulted in

productivity increases by generating increased output from fewer plants and fewer employees. Productivity growth in the textile mill industry is the highest of all industries in U.S. manufacturing. Between

I(JD R Bu~hanan, Dl[ec[/~[? of Technolog) Change in the Fiber, Texf//e, and Appare/ /rrdus/r/e.s (Ralelgh, NC North Carolina State LJni\’ersitv, 1974).

1975 and 1985, productivity levels in the textile mill

industry increased substantially—more than twice

that of total manufacturing, or 5.6 percent per year

v. 2.4 percent. Even the apparel industry as a whole

had higher productivity growth than total manufacturing, at 2.7 percent for the decade (see table 2 and

figure 10).

U.S. textile industry productivity also surpasses

productivity per employee among the textile industries of the major industrialized nations of the world,

according to a 1985 European Economic Community study. The study found that:

. . . some Western industries—especially the United

States’ —have achieved considerable gains in productivity thanks to the modernization and automation

of their production. In 1980, the U.S. textile industry recorded the highest productivity per employee

amongst the major industrialized manufacturing

countries, thereby enabling it to achieve the lowest

unit production costs amongst the same industrialized countries . . . The labor cost per unit produced

in the United States is therefore closer to that of Portugal than that of the major European manufacturers,

and closer to the unit cost in Pakistan than to the

unit cost in Belgium or Germany. As a result, U.S.

producers have been able to achieve price levels approaching those of some “low cost” Asiatic or Mediterranean countries.l 1

Productivity improvements have largely been the

result of significantly increased machine speeds and

versatility, and improved product quality, energy efficiency, and production efficiency, through both economic and technological consolidation. 12 The major

innovations which have increased productivity are

high-speed cards, continuous spinning frames, and

shuttleless looms. Large- and even some mediumsize U.S. companies are well on their way to modernization. On the other hand, many smaller companies may have difficulty making the transition

from a highly labor-intensive to a highly capitalintensive production process. Today’s U.S. firms face

an increasing threat posed by potential acquisitions

and mergers. In addition, the number of plant closings has grown in recent years.

I IJ F Be]aud,“Textiles, EEc policies and international Competition, ”

European News Agenc\’, 1985, p, 37,

12The next Severa] paragraphs are based largely on Ruth Ruttenberg,

‘(Compliance With the OSHA Cotton Dust Rule The Role of Productivity Improving Technology,” contract report for the Office of Technology Assessment, March 1983, pp 92-97.
2 0

Table 2.—New Capital Expenditures and Productivity

New capital expenditures Productivity Indexes (1977 = 100)

Manufacturing

Period industries

1974

1975

1976

1977

1978

1979

1980

1981

1982

1983

1984: . . . . .

1st . . . . . . . 

2nd Q

3rd Q

4th Q

1985:

1 St Q

2nd Q

3rd Q

4th Q

1986:a

1st Q

2nd Q

3rd Q.... .

4th Q

52,480

53,660

58,530

67,480

78,580

95,920

112,330

126,540

120,680

116,200

138,820

129,910

135,960

142,440

146,960

153,150

145,650

154,330

154,040

158,570

149,170

143,060

148,010

148,470

157,160

Nondurable

goods

(millions of dollars)

25,710

28,280

31,030

34,710

39,130

47,420

56,960

66,730

65,330

63,120

72,580

68,680

71,930

74,180

75,530

80,010

75,780

80,360

81,190

82,700

77,090

75,320

75,800

77,040

80,190

Textile mill

products

1,060

860

980

1,180

1,310

1,420

1,540

1,660

1,460

1,550

1,920

1,870

1,990

2,020

1,810

1,780

2,010

1,860

1,740

1,500

1,700

1,520

1,770

1,770

1,760

Chemical & allied

products

Total

manufacturing

6,180

7,120

7,370

7,350

7,760

9,810

11,630

13,110

12,660

12,960

15,320

14,950

14,850

15,360

16,120

16,450

16,430

16,900

16,280

16,190

17,160

16,020

16,820

17,270

18,520

92.9

97.1

100,1

101,5

101,4

101,4

103,6

105,9

112,9

118.5

Textile mill

products

72.6

82.1

100.0

99.4

104.9

110.2

113,0

122.8

129,5

129.5

Apparel

products

96.0

95.8

100,0

103,7

1069

112,6

114,4

117.9

118,0

121 4

1218 129.1 121.0

Growth rates

per year (%)

1975–1 985 2.4 5.6 2.7

aEs[lmates based on planned expendlfures reported by business In late April and May 1986 ~Uarlf?rly data are Seasonally ad]usted annual rates

SOURCE Amer[can Textile Manufacturers Instltule (ATMI) collected from U S Department of Commerce Bureau of Economic Analysls Index for Manufacturing. U S Department of Labor Bureau of

Labor Statlsttcs Index for others ATMI I Real GNP per payroll hour) Growth Rates ATM I (least squares of natural logarithms of Indexes), Washington OC 1986

The means of modernization vary widely, and are

the product of a broad range of new technologies.

Older, slower cards, for example, are being replaced

by high-speed cards. Chute-feed systems eliminate

doffing, racking, manual transport to the card room,

and hanging the lap. Open-end spinning eliminates

drawing and roving. Conventional shuttle looms are

being replaced by high-speed shuttleless looms, some

of them 10 times more productive than the equipment they replace. Slower manual cleaning of equipment is being replaced by faster automated cleaning equipment. The production process is becoming

more efficient.

Energy savings have also been a benefit of new

textile machinery. From 1972 to 1980 alone, the textile industry improved its per unit energy efficiency

by over 17 percent through the use of known technology and energy management programs.13 The airIsAmerican Textile Machinery Association, “Assessment of Energy

Conservation Potential at ATME-I 80 Textile Machinery Show in Greenville, SC, Phase l,” report for the US. Department of Energy, December 1980, p. 7.

jet loom is especially energy efficient. Reduced air

consumption can be achieved by a new heat and

water recovery process. And in addition to saving

energy and water, there is also a reduction in the

quantity of polluted effluent—thus assisting companies with their EPA compliance efforts. Sizing equipment, weaving machines, and new carding technology also improve energy efficiency.

Another productivity improvement has been the

reduction in needed floor space, as the production

process has been consolidated and some steps have

been eliminated. In addition, some new machines

are more compact. Such space saving translates into

reduced costs when building new facilities, as well

as less costly expansion in older mills, The chutefeeding system saves floor space by eliminating both

the picker floor area and the lap storage and lap conveyer systems. The Platt-Saco-Lowell sizing system

is designed to use less floor space. Sulzer claims that

the compact design of its PS weaving machine, particularly with the warp beam as far inside the ma-
21

Figure 10.— New Capital Expenditures and Productivity

All manufacturing industries aQuarterly

175

150

125

100

75

50

Nondurable products

80

80

4 0

Textile mill products

2.25

2.00

1.75

1.50

1.25

1.00

7 8 7 9 8 0 81 8 2 8 3 8 4 8 5 8 8

Year

aSeasonally adjusted.

SOURCE American Textile Manufacturers Institute, collected from U.S. Department of Commerce, Bureau of Economic Analysis, Index for Manufacturing, U S Department of Labor, Bureau of Labor Statistics, Washington, DC, 1986

chine as possible, not only saves space but reduces

vibration as well.

Productivity in the textile industry is the dominant

factor in competition among U.S. producers; however, this may not be the case for global competition, since exchange rates, labor costs, and noneconomic barriers are so significant. Domestically,

even small productivity advantages can mean a competitive edge, because most of the industry competes

on a cost basis. Productivity advantages over competitors can only be achieved through constant upgrading of machinery, and capital cycles are short;

for example, 5 years for spinning machinery. As a

result, only the financially strong will be able to upgrade their production technologies without assistance. But excellent productivity does not always result in excellent financial operating results.

Improvements in Product Quality

New textile machinery has the potential to increase

production speeds while also improving product

quality. In most cases, yarns are stronger, cleaner,
22

and more uniform. Cloth is of higher overall quality. New looms are faster and can produce wider

cloth, giving the manufacturer improved options on

sales, further processing, and the increased amount

of fabric produced at one time.

Quality improvements begin with new equipment

for opening and picking. Because of carousels and

automatic feeders, picking can be from a larger number of bales, thus achieving a better blend of cotton. The Bale-O-Matic of the U.S.-owned Automatic

Handling Co. claims improved yarn quality due to

“consistent hopper feedings [and] controlled cotton

mix. ”

New carding technology also adds to quality. Settings on new and rebuilt cards can be improved, and

roller bearings on cylinder supports allow closer settings. Also, because the clothing is more even and

metallic clothing allows tighter settings, one can

achieve a better integration of fibers. This produces

a more uniform and stronger piece of yarn. There

are also fewer broken threads. The U.S. Department

of Commerce, in studying the chute-feeding system,

found that quality improvements came from eliminating thick lap joints and also from less reliance

on judgment and more on automation.14 Martha Mills

in Thomaston, Georgia, claims that its chute system

—“Levelfeed, CMC’’—improves yarn quality by contributing to reduced weight variation.15

New spinning technology improves yarn quality.

New self-cleaning mechanisms in open-end spinning

keep small rollers from becoming dirty quickly,

which increases yarn quality, Springs Industries

claims that “modernization of yarn manufacturing

machinery resulted in better quality yarn . . . and a

higher percentage of first quality cloth.”16 An Italian fiber manufacturer that uses robots in its spinning systems claims increased yarn quality due to

less handling.17

New weaving technology also improves product

quality. In 1982, Textile Industries published an anal141Js, Department of commerce, “Opportunities and Strategies for

U.S. Textile Machinery Manufacturers To Improve Their Competitive

Positions in Domestic and Foreign Textile Markets, 1980- 1985,” September 1980, p. II-57,

‘

s

’’ Chutes: An Integral Part of a Totally New Program,” Textile Wor/d,

September 1981, p. 81

l~springs ]ndustries, Annual Report, 1981.

‘T(’ltalian Robot Proves Its Cost Advantage in Doffing, Donning Heavy

POY Bobbins,” Textile Week, May 3, 1982, p. 5,

ysis of shuttleless looms, with findings of substantial quality improvements over conventional shuttle looms:

A comparison of quality with similar fabrics woven

on fly-shuttle looms shows shuttleless weaving to be

superior in all categories. Improved quality results

in dramatic increase in first-quality, woven cut lengths,

generally providing lengths which are more than

double those obtained from fly-shuttle weaving.18

Draper’s air-jet conversion loom claims higher

quality cloth, due to a mechanism that removes bad

picks and thus minimizes the defects in the cloth.

Dornier’s rapier weaving machine, as well as other

shuttleless weaving systems, has special motions to

ensure perfectly woven closed selvedges. This machine also has reverse motion capability, which allows it to repair broken picks at any phase without

starting marks. Sulzer boasts of the high-quality selvedges of its PS and PU weaving machines. Because

of repair of broken threads, the proportion of firstquality cloth is increased; uniform weft tension adds

to quality as well.

Consistency, Standardization,

and Quality

The Production System

The network that converts fiber into a retail product involves a number of independent enterprises

tied together by contract. The consumer sees only

the price and the quality of the final product, factors that depend on the combined performance of

the entire system. While the performance of each

enterprise within this network is clearly important,

the efficiency of how the pieces work together is also

critical. Recent evidence suggests that the performance of the fiber-to-end use system is far from optimal, in part because of poor communication between fiber, textile, apparel, and retail enterprises.

Better information flows can improve the integrated

performance of the system in three ways:

1. they can ensure that cost-reducing techniques

used at one stage of production—such as those

that produce fiber or yarns of uneven quality—

do not block the use of cost-reducing techniques

later in the production chain—such as the use

l~LeOn scldel “Projectile weaving Machines: A Post-Transitional View, ”

Textile lndustnes, May 1982, p 59
23

of high efficiency looms that require quality and

consistency in fibers;

2. agreed standards and communication protocols

can help eliminate redundant counting and sorting of deliveries, and can simplify paperwork

for billing, invoicing, and inventory control; and

3. improved communication links, coupled with

new batch production strategies, can allow retailers to keep a wide range of styles and sizes

in stock, while reducing inventories throughout the textile and apparel network.

Quality Standards

In addition to inherent limits that exist in the operating speed of equipment, rapid production throughout the fiber-to-end use chain is limited by defects

and poor quality in the materials used. Maximum

speeds are limited by the weakest part of the chain—

typically the quality of fiber or yarn. As suggested

above, the challenge for the industry is to optimize

the manner in which the system works as an integrated whole. Costs may be reduced by increasing

the speed of winding machines, for example, but the

resulting increase in the number of broken ends

limits the productivity of equipment that converts

the yarn into fabric.

Contrastingly, the high capital costs required to

produce clean, high-quality, long-staple cotton fiber

may reduce net costs by allowing greater productivity throughout the system. Fiber cleaning may be

more efficient; intermediate steps in yarn production may be reduced; fewer broken ends in yarns

may improve the efficiency of such follow-on steps

as weaving and knitting; and better yarn may result

in fewer end-breaks and less machinery downtime.

The key to improving the net performance of the

system is to ensure that information about material

requirements passes rapidly and accurately between

the contributing industries. The lack of materials

standards presents special problems. The characteristics required of yarn used in knitting differ from

those required of yarn used in weaving; weaving itself can require a variety of yarn types, It seems certain that significant improvements in system-wide

productivity can be made simply by improving the

language with which these different needs are communicated throughout the system.

Coordination and “Quick Response”

New Technologies

Growing uncertainty about the nature of future

markets, and competition from foreign producers,

have placed increased pressure on the domestic apparel industry to find ways of reducing costs. Effective management techniques, however, combined

with new communication and information processing technology and new production technology, can

give domestic producers a significant advantage in

many market areas now dominated by foreign production. While foreign producers will always be able

to capture certain niches, such as silk blouses or

other products requiring an extremely large amount

of hand labor, the family of “Quick Response” technologies described below could make domestic production profitable in a wide range of seasonal

products.

The key to Quick Response is holding inventories low and avoiding overstocking, while still ensuring that retailers stock what customers want to

buy. Accomplishing this will require revolutionary

changes in how information flows between the different components of the fiber-textile-apparel-retail

chain, and an associated revolution in the style of

production. In many ways, the institutional difficulties that must be confronted in implementing such

a system pose a greater barrier than the technical

problems involved. A basic change in the structure

of industry suppliers will be required:

The reorganization of the system that will result

from the adoption of Quick Response systems will

therefore lead to further consolidation of the textile

and apparel industries as retailers and apparel manufacturers will both seek to develop stronger relationships with a smaller number of suppliers, each offering the capability to produce a wider range of products

than is ususally the case today.)’

]

Kurt Salmon Associates points to a similar trend in

the automobile industry, where the Big Three automakers are reducing the number of their suppliers,

and are selecting their suppliers based on quality,

service, flexibility, technological expertise, and product development skills as much as on price.

l~peter w. Hardjng, hfan~er of Textile lndustrw Services, Ku!I salmon

Associates Inc , “Quick Response in the Soft Goods Pipeline,” synopsis

of speech to the Knitted Textile Association Retail Relations Workshop,

Dec 6, 1985, p. 12
24

There are major “hard” and “soft” technological

requirements of Quick Response, for textile mill manufacturers, apparel manufacturers, and retailers (see

figure 1 1):

For textile mill manufacturers, hard technology includes flexibility for shortrun weaving, shortrun dyeing and finishing, computerized defect mapping with

shading information, computerized fabric design, and

faster samples. Soft technology includes putups for

faster handling by cutter, rolls pre-sorted by width,

shipping information by computer, and sequential

truck loading.

For apparel manufacturers, hard technology includes computer assisted design, automatic marking

and cutting, flexible sewing with microprocessor, robotic handling, and unit production systems. Soft

technology includes shop floor controls, logistics,

supplier-cutter linkage, retailer-cutter linkage with

merchandise control, and implementation.

For retailers, hard technology includes electronic

data interchange from point-of-sale to vendor, pointof-sale data capture with bar coding, and sortation

systems in distribution center. Soft technology includes merchandise planning and control systems,

automatic markdown information, pre-marking by

vendors, and pre-distribution by vendor.20

Efficient transportation also plays a key role. Textile suppliers are now able to communicate with large

apparel companies with such precision that apparel

firms have reliable information about the time and

size of delivery, as well as the color and location of

fabric within a truck. This permits apparel producers to closely integrate deliveries into their plans,

and allows them to avoid costly and lengthy inventories of materials delivered. The Levi Co. estimates

that their new communication system, by itself, saves

as much as 10 cents per square yard of material.

——

~Opeter N. Butenhoff and R,E. Cotton, Du Pent, “U.S. Apparel cOmpetitiveness,” May 28, 1986.

Figure 11 .—The Apparel Pipeline at a Glance: Present System v. Quick-Response Strategies

Textile mill Apparel manufacturer Retailer

Present

inefficient

practices

● High markdowns

• High Inventory

● Stockouts

Quick

Response

solutions

Quick

Response

benefits

Quick Response potential Total system

(savings. in $billions) Textile mill Apparel manufacturer Retailer savings

Forced Markdowns 0 3 2 0 5.0 7.3

Stockouts — 0 2 1.7

Inventory

1.9

0 5 13 1.5 3.3

Total 0 8 3 5 8.2 12.5

SOURCE: Peter N. Butenhoff, “U.S. Apparel Competitiveness, ” paper presented to OTA by El. du Pent de Nemours, & Co., June 1988,
25

Photo credit Copyright ( - ) 1986, 1987 by Bobbin International, Inc

All rights reserved

The Philadelphia College of Textiles and Science has

a computer-assisted design (CAD) laboratory equipped

with 10 design stations. Above, a student works on

a fashion illustration.

Efficient transportation networks are also required

between apparel producers and retail outlets. As one

observer puts it:

[f you can process a style in four hours, but it then

waits three days for the next truck to your distribution center, and then it takes another couple of weeks

to go through your distribution center to get on to

the retail shelf for presentation to the customer, you

cannot capitalize on the potential for quick response. z]

It can take up to 2 months for a product to get from

an apparel plant to the sales floor. The initial experiments with Quick Response have shortened this

time span considerably, using United Parcel Service for rapid deliveries.

A Quick Response pilot program, organized by the

Crafted with Pride in U.S.A. Council, Inc.; Wal-Mart

Stores of Bentonville, Arkansas; Seminole Manufacturing Co. of Columbus, Mississippi; and Milliken &

Company of Spartanburg, South Carolina, has shown

substantial success.22 Basic improvements, which

were clear after only 3 months, include:

• increasing the frequency of replenishment orders

from monthly to biweekly, thus enabling stock-

~lRobert N1 Frazier, “Quick Response, ” presentation made at

DLPAATCH, Sept 13, 198,5

~~Kurt Salmon Associates, lnc , “Crafted Writh Pride In U S A CounCII, Inc , Quick Response Program Report, ” June 11, 1986.

●

●

●

outs to be avoided or detected earlier and reducing the size of reorder shipments;

cutting reorder cycle time, from counting inventory on the selling floor to receipt of the replenishment order, by 33 percent;

shortening the cut authorization-to-finished

goods availability by 30 percent through changing from monthly to weekly planning; and

reducing the color assortment-to-shipment time

by 50 percent.

Quick Response and U.S. Competitiveness

Figure 12 indicates the large gap that now exists

between the wholesale price of garments imported

from the Far East and garments available from domestic producers; the size of the gap depends on the

type of fabric used and the percent of the wholesale

cost due to labor. Overseas producers have a comparative advantage in products using relatively laborintensive fabric, or “topweights,” because foreign topweight fabrics may cost 35 percent less than equivalent domestic fabrics, while fabric costs may only

be 15 percent lower for the less labor-intensive, “bottomweight” fabrics. Most U.S. apparel producers,

however, clearly must find a way to shave between

10 and 35 percent off their costs in order to compete directly with many foreign suppliers.

Figure 12.— Retailers’ Sourcing Cost Comparison:

United States v. Far East

> Labor content sensitivity analysis

w

w

— Topweight Far East

60 —

average

20 25 30 35 40 45 50

Percent labor (U.S. average cost)

● Jean s . Shirts ● Bra s

● Skirts ● Blouse s ● Products wit h

● Products with ● Slack s extra pockets,

expensive fabric flaps, collars,

gathers, etc.

SOURCE: Peter N Butenhoff, “Quick Response Technlogy —Needs and Justification, ” E I du Pent de Nemours & Co , January 1987
26

Photo credit: Copyright (©) 1986, 1987 by Bobbin International, Inc.

All rights reserved

Computers used to track the flow of finished goods

into the warehouse can help to improve communication

between apparel manufacturers and retailers. In addition

to reducing overhead costs, computer-based monitoring

can facilitate inventory control, and thus can increase

the efficiency of the system that brings a product

to the consumer.

Quick Response systems can close this cost gap

in several ways. First, the enormous inventories carried by textile mills, apparel manufacturers, and

retailers can be reduced. On average, it takes roughly

65 weeks for fiber to move from a manufacturing

plant to the customer’s hand. The material is in processing for only 15 out of these 65 weeks; the remaining 50 weeks are spent sitting in inventory .23 The

cost of this inventory alone represents 6.4 percent

of retail sales. With good management, it should be

possible to reduce this by 25 to 50 percent.24 Proper

Zsslg ~heier ‘(QR to Consumer Demand Vital, Hinerfeld Warns, ” ~a;@

/Vews Record, Oct. 9, 1985, p. 11.

24 Frazier, op. cit.

inventory control can increase sales per square foot,

ensuring that the assortment on the selling floor

matches proven market demand for styles, colors,

and sizes.

Second, it should be possible to reduce incidence

of forced markdowns that result from orders of goods

that fail to sell as expected, Forced markdowns have

grown by 50 percent during the past decade, and

the National Mass Retail Institute estimates that total losses may be as high as 15 percent of retail

sales. 25 Forecasting failures are due in large part to

the long planning cycle that is now typical in the

industry-most initial orders for seasonal products

must be placed more than a year before the products are sold. With Quick Response, it may be possible to reduce initial order times to 2 or 3 months,

and reorder cycle times to a few weeks. Accordingly,

the need for long range, imprecise forecasting is

greatly reduced:

If the manufacturing cycle can be reduced through

the use of more flexible manufacturing technology,

then the time horizons for forecasting may also be

reduced with resulting improvements in accuracy.

Better collection of data from point of sale terminals,

better systems to analyze this data and electronic

communications will ensure that better and more

timely information will be available on which to base

forecasts. This will also encourage the use of better

forecasting tools, which are often not used today because the quality and quantity of data available does

not justify their use.

Computers and electronic data interchange provide

us with the tools we need to both process and to communicate the information that our partners in the system require.26

The third area where Quick Response can result

in cost savings involves “stock outs, ” or situations

where business is lost because a customer cannot

find apparel in the desired style or size because it

is out of stock. Quick Response systems permit

smaller initial orders, allowing stores to reorder more

of a product that proves to be popular. The product

can then be in stock at full price during the selling

season.

Estimating the magnitude of “stock out” losses is

a difficult task, since many consumers who don’t find

what they want simply leave a retail store without

‘

s

Ibid.

26 Harding, op. Cit., Pp 11-12.
registering their disappointment. Industry estimates

suggest that losses from stockouts are about 8 percent of apparel sales.27 Field experiments with Quick

Response systems suggest that this may bean underestimate. The Wal-Mart experiment, cited earlier,

found that using Quick Response reordering systems

for sales of basic men’s slacks increased inventory

turnover at the astonishing rate of 30 percent, with

a comparable increase on gross margins on inventory.28 A stock count indicated that while 29 percent

of items checked were out of stock before the program, only 17 percent were out of stock after the

Quick Reponse system was initiated. Retail stores

can offer a greater variety of products without a significant increase in inventory through the ability to

replenish stocks quickly. Overall, the Wal-Mart experiment claims to have yielded year-to-date sales

increases of 47 percent, and 31 percent on a same

store basis. 29

Quick Response systems can also reduce costs and

paperwork associated with such overhead operations

as billing, invoicing, and inventory controls. Improved information flows and standardized reporting systems can greatly reduce handling and processing costs, like quality control audits, hanging and

premarking of merchandise, and time spent handling

and counting deliveries. Perhaps most importantly,

four networks that link different parts of the fiberto-finished product chain more effectively have been

created within the last year:

• The Fabric and Supplier Linkage Council (FASLINC): Having commenced operations

only in January of 1987, FASLINC is designed

to improve and facilitate communication between fabric producers and their suppliers.

● The Textile and Apparel Linkage Council (TALC): Begun in the spring of 1986, TALC

works between textile mill firms and apparel

manufacturers.

• The Sundries and Apparel Findings Council (SAFLINC): This network, established in

March of 1987, ties apparel manufacturers with

a diverse group of suppliers, ranging from button makers and lacers to packagers and labelers.

● The Voluntary Interindustry Communications Standards (WCS): This final link in the

chain connects the apparel manufacturer with

the retailer.

Increased communication and standardization between different sectors within the textile and apparel

industry complex will quicken the process by which

the final product is brought to the consumer, leading to further reductions in overhead costs and bringing production even closer to the marketplace.

Finally, productivity gains can be realized within

the apparel production facility through the use of

off-the-shelf equipment, and better management

practices can facilitate integration with the overall

Quick Response system. Many of these techniques

have been discussed in earlier sections of this report. Moving away from the “progressive bundle”

system—a process driven by repetition of standardized tasks, which may have been cost-effective in

an environment where response time and inventory

control was not critical—to a modern unit production system can reduce processing times of 4 to 6

weeks to 1 or 2 days.30 Computer-controlled cutting

techniques can reduce material losses by 2 to 3 percent and can take 1 to 2 weeks out of planning, while

reducing the number of parts that are cut simultaneously by 30 to 50 percent.31 Taken together, these

innovations could reduce average apparel assembly

costs by at least 7 percent; the new generation of

(TC) 2 technologies could, of course, lead to even

greater time savings.

A conservative estimate of the savings that can

be realized from a relatively’ straightforward implementation of Quick Response technologies indicates

that the industry could have saved $12.5 billion in

1984 (again see figure 11). These savings are realized by the entire system acting as a whole, and may

not be recognizable in a study that focuses on only

a single part of the system. Indeed, the use of small

batches can actually increase the cost of material,

while the most efficient “progressive bundle” apparel

assembly system may cost 7 percent less than the

most efficient Quick Response system. Also, small

batch shipping requirements may increase freight

‘

(

’R. E Cotton “QR’J Bottom Line, ” ,4ppare/ /rIdLJsfn ,I!agazjnei .Iu I!

1986, pp 2[3-:31

] i Frdzier, 01) [ it
28

Photo credits: Copyright (©) 1986, 1987 by Bobbin International, Inc.

All rights reserved

The Gerbermover GM-100 “unit production” system

(above), installed in Mary Fashions in late 1986, reduces

manufacturing time significantly from the “progressive

bundle” system (bottom). Note that in unit production,

the fabric moves between sewing stations by automation

rather than by hand. In the progressive bundle system,

hand transfer means time spent not only in the actual

movement of fabric, but in tying and untying bundles

and pressing wrinkles out of folded pieces.

charges. Such cost penalties, however, appear to be

more than offset by the system-wide gains that Quick

Response will bring.

Quick Response systems could reduce overall costs

to the point where purchases from domestic suppliers

will be competitive with imports. Figure 13 indicates

Figure 13.—Breakdown of Original Retail Price

(Mass Merchant . Private Label Seasonal Product)

100

90

80

70

30

(37%)

(47%)

(290/o)

20 —

10 — /.

0-

U.S. average Us. Direct import

quick made from

response topweight fabric

potential

Other store ■

Operating

cost profit

SOURCE: E.I du Pent de Nemours & Co , “Quick Response Technology, ”

paper presented at North Carolina State University, January 1987

the breakdown of costs for retail sale of a “private

label” seasonal product made from topweight fabric; conservative assumptions about the gains from

“stock outs” are used. The figure includes the cost

savings that are potentially achievable from Quick

Response systems, as well as the “hidden costs” of

imports—increased communication and travel expenses, and inefficiencies due to uncertainties and

delays. Accordingly, retailer profit margins using

Quick Response can be as high as those achievable

from sales imports. Competition with foreign suppliers, of course, still depends on the 10 to 30 percent advantage realized from tariffs paid by importers, and on higher shipping costs.

One obvious question brought by the implementation of Quick Response is whether other exporting nations can participate in such a system. Benetton, the Italian apparel manufacturer and retailer,

has established a production facility in North Carolina, as part of an overall strategy to move closer

to U.S. demand; Benetton’s flexible production capacity has already allowed this firm to successfully

target U.S. market niches. The more sophisticated

Asia producers, like those in Korea, Taiwan, and

Hong Kong, could certainly enter into a Quick Response network by using air freight for delivery, although the additional costs of the freight could reduce the range of products in which they are

competitive.
On the other hand, because they have reached

their quota limits, these nations do not represent a

majority of U.S. imports. Many of the nations that

have increased exports to the United States in the

past few years will face great difficulties in building

the communication and transportation infrastructure

needed to participate in a Quick Response network.

Quick Response, by attempting to change some

of the dynamics of competition between domestic

and imported goods, and by fostering cooperation

between U.S. manufacturers and retailers, is clearly

a critical part of efforts to increase domestic production. Because the United States probably has enough

retail square footage to serve almost twice as many

consumers as are now in its market, and because

there is much sameness in merchandise and service,

price has been considered the best way to attract

and keep a customer. But according to Kurt Salmon

Associates, Inc., it may be possible to revise this assumption through Quick Response:

The great majority of retailers have accepted it

[price] as the only competitive weapon left to them.

This induced an acceleration of private label import

programs as stores moved to protect their margins

and market shares while offering something unique

to their customers.

In the process, of course, direct importing by retailers created havoc among domestic apparel makers

29

and their textile suppliers. Faced with under-utilization of their assets, squeezed margins, and uncertain

sales outlooks, manufacturers widened their distribution. Nationally advertised brands and designer

labels, tightly controlled only a decade ago, were now

available at varying prices in almost everr type of

retail outlet .

As markdowns increase on both domestic branded

merchandise and off-shore private label purchases,

the retailer has become increasingly demanding of

his resources. The latter fight back by widening their

distribution and developing their own sources overseas . . In the meantime, the consumer is being

ignored .

A more integrated and efficient soft goods chain,

dedicated to responding to consumer wants quickly,

will benefit everyone.32

Of course, in order for Quick Response to become

a reality, a serious commitment from industry to reorganize production facilities will be needed—a move

that many U.S. apparel firms are reluctant to make.

As one expert on industry productivity and organization writes, “to move into Quick Response means

a willingness to take some risks and to make changes

in the way you do business.’’33

~JK~lrl s~l~[)[) ,A~SOclateS lnc,, “~ulck Response for Retail ing, ” ~~e

KS4 Perspect;ie} .lanuan 1 !%6, p. 3

~~Emanue] \\’elntraLlb, “~~l~zw,I)r& Writtl IN() Deeds Don’t Ifake it. ”

Bobbin ,Afagazlne, September 1986, p SO

INDUSTRIAL STRUCTURE

Background

Changes in the technology of each step in the fiberto-end use production chain, and how these steps

are integrated by strategies like Quick Response, bear

a direct relationship to changes in the business structure of textile and apparel enterprises. Textiles and

apparel are, of course, distinct industries, and each

faces unique problems.34 Both are relatively fragmented by modern standards, but textile manufacturers have generally been larger and more capitalintensive than smaller, more labor-intensive apparel

firms.

The entire textile and apparel industry includes

enterprises in at least 66 four-digit standard indus-

~!~r(lc~ st{jk~s, ‘‘(;~tt) ng ~ompetltike, ’ ,Vat)ona/ .)ourr]~l June 7.1986,

p 1 :362

trial classification (SIC) codes. Because of the growing technological diversity of the industry, some textile production may be included in other SIC codes

as well (see table 3). In addition, there are several

nonmanufacturing sectors totally dependent on textile manufacturing—most notably retail trade for textile products.

The various sectors of the industry complex compete in a variety of markets, ranging from the trade

of cotton on exchange markets to the retail distribution of apparel goods. All of these markets have

become global in nature. Some, such as textile mill

products, are being increasingly integrated. Others,

primarily apparel, are still fundamentally a sector

of small employers with limited production variety.

Traditionally, the industry has been horizontally

structured, with the manufacture of cloth and the
30

Table 3.—SIC Codes for Textiles and Apparel

SIC 22 Textile Mill Products

1.2211

2.2221

3.2231

4.2241

5.2251

6.2252

7.2253

8.2254

9.2257

10.2258

11.2259

12.2261

13.2262

14.2269

15.2271

16.2272

17.2279

18.2281

19.2282

20.2283

21.2284

22.2291

23.2292

24.2293

25.2294

26.2295

27.2296

28.2297

29.2298

30.2299

Broad woven fabric mills, cotton

Broad woven fabric mills, man-made fiber & silk

Broad woven fabric mills (including dyeing &

finishing)

Narrow fabrics & other smallwares mills: cotton,

wool, silk, and man-made fiber

Women’s full length & knee length hosiery

Hosiery, except women’s full length & knee

length hosiery

Knit outerwear mills

Knit underwear mills

Circular knit fabric mills

Warp knit fabric mills

Knitting mills, not elsewhere classified

Finishers of broad woven fabrics of cotton

Finishers of broad woven fabrics of man-made

fiber & silk

Finishers of textiles, not elsewhere classified

Woven carpets & rugs

Tufted carpets & rugs

Carpets & rugs, not elsewhere classified

Yarn spinning mills: cotton, man-made fibers &

silk

Yarn texturizing, throwing, twisting & winding

mills: cotton, man-made fibers & silk

Yarn mills, wool, including carpet & rug yarn

Thread mills

Felt goods, except woven felts & hats

Lace goods

Paddings & upholstery filling

Processed waste & recovered fibers & flock

Coated fabrics, not rubberized

Tire cord & fabric

Nonwoven fabrics

Cordage & twine

Textile goods, not elsewhere classified

SIC 23 Apparel& Other Finished Products Made From Fabrics

& Similar Materials

31.2311 Men’s, youths’, & boys’ suits, coats, & overcoats

32.2321 Men’s, youths’, & boys’ shirts (except work

shirts) & nightwear

33.2322 Men’s, youths’, & boys’ underwear

34.2323 Men’s, youths’, & boys’ neckwear

35.2327

36.2328

37.2329

38.2331

39.2335

40.2337

41.2339

42.2341

43.2342

44.2351

45.2352

46.2361

47.2363

48.2369

49.2371

50.2381

51.2384

52.2385

53.2386

54.2387

55.2389

56.2391

57.2392

58.2393

59.2394

60.2395

61.2396

62.2397

63.2399

Others

64.2823

65.2824

66.3552

Men’s, youths’, & boys’ separate trousers

Men’s, youths’, & boys’ work clothing

Men’s, youths’, & boys’ clothing, not elsewhere

classified

Women’s, misses’, & juniors’ blouses, waists &

shirts

Women’s, misses’, & juniors’ dresses

Women’s, misses’, & juniors’ suits, skirts, &

coats

Women’s, misses’, & juniors’ outerwear, not

elsewhere classified

Women’s, misses, children’s, & infants’ underwear & nightwear

Brassieres, girdles, & allied garments

Millinery

Hats & caps, except millinery

Girls’, children’s, & infants’ dresses, blouses,

waists, & shirts

Girls’, children’s, & infants’ coats & suits

Girls’, children’s, & infants’ outerwear, not elsewhere classified

Fur goods

Dress & work gloves, except knit & all-leather

Robes & dressing gowns

Raincoats & other waterproof outer garments

Leather & sheep lined clothing

Apparel belts

Apparel & accessories, not elsewhere classified

Curtains & draperies

Housefurnishings, except curtains & draperies

Textile bags

Canvas & related products

Pleating, decorative & novelty stitching, & tucking for the trade

Automotive trimmings, apparel findings, &

related products

Schiffli machine embroideries

Fabricated textile products, not elsewhere classified

Synthetic fibers

Organic fibers, noncellulosic

Textile machinery

SOURCE U S Executive Off Ice of the President, Office of Management and Budget, Standard Industrial C/ass/f /cation Manual, 1972

manufacture of clothing fairly separate. Fiber pro- dling the product has made quality control a parducers supplied raw material to yarn manufactur- ticular problem, increasing the levels of product

ing plants, which in turn sold yarn to weaving or waste.

knitting facilities. Manufactured fabric was sold or

commissioned to a fabric finisher, and then sold to

the garment manufacturer. Textile converters and

jobbers helped oversee the movement of products

from one processor to another, supplying a finished

product to cutters or retailers and maintaining product supplies for spot markets. Clearly, a great deal

More emphasis on continuous flow and vertical

integration, spurred on by growing interest in Quick

Response, is changing the industry’s structure. While

much of the apparel industry is still quite decentralized, especially the contractor portion, there is

more integration than disintegration.

of time is involved with this flow sequence, making In the early 1950s the leaders of the textile induscreative and rapid response to market needs very try, particularly Burlington Industries and Milliken,

difficult. Having many intermediate companies han- responded to the need for restructuring of material
31

flow. More vertical and market-oriented organizations were established to handle the textile product

from fiber to finishing. Research and development

became a part of many of the larger, more diversified companies, where previously it was mostly in

the domain of fiber producers. Vertically structured

companies seemed better able to respond to some

market requirements and to supply versatility in their

products. In addition, staff functions such as financial planning, product development, industrial engineering, marketing, and cost accounting could often

be more fully supported by vertically structured companies. However, there is controversy in some textile sectors over trade-offs between economies of

scale from integration and the loss of flexibility that

producers of small lots can provide, especially to

fashion-oriented parts of the apparel industry.

Textile companies are restructuring far more than

material flows. Mergers and takeovers are abundant.

Most of these moves have increased horizontal integration; some have increased vertical integration.

Stevens recently bought Burlington’s sheet and towel

division, and is trying to sell its clothing businesses

while enlarging its household and industrial textiles

divisions. Springs bought Lowenstein, becoming the

second largest U.S. cloth producer. Fieldcrest acquired Cannon. These three actions alone consolidated the sheeting market significantly, with the

three firms together holding half of that market. In

other moves, West Point-Pepperell, enhancing its

vertical integration, has bought Cluett Peabody, a

shirtmaker best known for its Arrow brand. United

Merchants & Manufacturing Inc. bought Jonathan

Logan. Cone Mills, Dan River, Levi Strauss, and Blue

Bell have reverted to private ownership to protect

themselves against takeover bidders.35

At the same time that companies are consolidating, there is movement afoot to expand the importance of small contract shops in apparel. While the

number of contractors in the United States has diminished by more than 50 percent in the last 15

years,

36 today’s emphasis on proximity to the marketplace, on speed of response to retailers’ private

label programs with local retail stores, and on direct dealing with retailers that eliminates the “mid-

‘

f

’’Amerlca’s Textile Industry Hold]ng Its Salvatmn in Its Own Hands,”

The Economj.sf, Apr 5, 1986, p 80

‘cJoyce Santora, “’Contractor\ Mo\re to Bring Productwn Back, ” Bot)-

bin h!a+izlne, April 1986, p. 52

dleman” manufacturer, may open new opportunities

for those contractors who remain. Reliance on contractors, however, could draw resources away from

needed investment in other areas, such as technologies that can help apparel manufacturers to adapt

directly to changes in consumer preferences—and

over the long term, the willingness to innovate may

determine whether U.S. apparel firms will be able

to compete in world markets.

Structural Changes

In this analysis, “industry structure” refers to the

number and sizes of firms in a given industry and

the type of competition that exists among them. In

the past, the textile industry complex has consisted

of a very large number of small- and medium-sized

firms, and a high degree of competition. The future

industry may be characterized differently. As many

firms integrate and as they become part of large and

diversified corporate entities, the traditional buyers

and sellers and the links among them may change.

Traditionally, the textile and apparel industry

structure consisted of an agricultural producer of cotton or wool fiber selling to a fabric manufacturer,

who in turn would sell to a producer of apparel; finally, apparel would be sold to retail stores for sale

to the consumer. The majority of textile shipments

proceeded along this chain. This is no longer the

case. Agricultural producers are being replaced by

chemical companies who manufacture synthetic

fibers. The apparel segment, while still the largest

of the end uses, is no longer the largest purchaser

of fabric. Home furnishings and industrial uses are,

together, larger. In some cases the fabric process represents an end product, as in the tufting of carpets

or the weaving of towels and bedding. As a result,

new relationships and new alliances become a necessity. The pressure for vertical integration means

that traditional links in the chain are more susceptible to either backward or forward integration efforts. While some markets, such as those for cotton

blouses, may remain quite similar to their traditional

structure, the structure will be new in a growing

number of product lines.

With the exception of apparel, the era of a textile

industry dominated by small, family-owned and

-operated companies is a thing of the past. As the

fiber-fabric-apparel-retail set of links has weakened,
32

so too has the industry structure which supported

small companies providing limited numbers and

types of products for limited geographical markets.

Concentration varies from segment to segment, but

vertical integration and the growth of multinationals

is a reality, especially in fibers and fabrics. With the

exception of apparel, where concentration ratios are

mostly quite low, the most heavily concentrated segments are also the largest employers. The two segments which represented the largest share of capital expenditures and of gross fixed assets—cotton

weaving and manmade fiber weaving—had respective concentration ratios of 42 and 39 percent in

1977, in contrast to ratios of 39 and 31 percent 5

years earlier.

Concentration ratios by market segment measure

horizontal integration. Vertical integration, on the

other hand, by which one segment acquires capacity in other industry segments, represents another

form of concentration. This is usually accomplished

by integrating either backwards or forwards to merge

production processes that occur in sequence. For example, fabric producers might integrate backwards

to acquire a yarn manufacturing firm. Or an apparel

segment, such as knitting outerwear, might integrate

forward into the retail area. As more and more multinational firms with diversified production capacities enter the market, vertical integration can be expected to increase.

Trends in Investment and

Disinvestment

Many observers bemoan the plant closings and

disinvestment that are occurring throughout the textile industry. Between 1977 and 1982 alone, the

number of textile plants and firms declined 10 percent.37 From 1983 through mid-1985, nearly 1 million spindles and 15,500 looms were eliminated. The

geographic impact of these disinvestments was dramatic—more than 85 percent of the spindles were

eliminated in the three States of South Carolina,

North Carolina, and Georgia. More than 95 percent

of all looms were shut down in these States; 63 percent of the impact was in South Carolina alone (see

“Centaur Associates, Inc., “Technical and Economic Analysis of Regulating occupational Exposure to Cotton Dust, ” vol. 1, prepared for the

occupational Safet] and Health Administration (OSHA), January 1983,

p, I-2

Table 4.—Permanent Plant Closings in the

U.S. Textile Industry, 1983-June 1985

Number of spindles Number of looms

Location eliminated shut down

Georgia . . . . . . . . . 175,012 2,602

North Carolina . . . 266,956 2,188

South Carolina . . . 390,564 9,750

Alabama . . . . . . . . 56,816 —

Virginia . . . . . . . . . 77,060 499

Connecticut . . . . . 2,100 —

Texas . . . . . . . . . . . — —

California . . . . . . . 5,280 —

Massachusetts. . . 3,120 —

Total . . . . . . . . . 976,908 15,489

SOURCE” American Textile Manufacturers Institute, Washington, DC, 1986 –

table 4). A February 1985 survey by the American

Textile Manufacturers Institute of its own membership estimated that 44 plants had closed in 1981,

100 in 1982, 49 in 1983, and 38 in 1984. The impact on individuals who lose their jobs and the communities that lose a critical economic base has been

severe, especially since so many of the affected plants

have been in small communities with few other employers.

Nonetheless, disinvestment has not been the only

trend. Substantial new investments have been made

by many companies, and even by some of the very

companies that are also disinfesting. Stevens Corp.,

for example, in the early 1980s made plans to close

three or four plants, in addition to four closings or

phase-outs that had already been announced .38 But

at the same time, Stevens was planning for $500 million in new plant and machinery investments over

the next several years, including 450 new air-jet

looms.39 Dan River, while committed to an aggressive

modernization-through-investment program, sold off

a plant in Simpsonville, South Carolina, and closed

its texturing operation in Mebane, North Carolina.

Burlington closed its Madison, North Carolina, yarn

plant during 1986, but is spending several million

dollars through 1987 to improve technology at its

Twintex and Mayodan texturing plants.40

Basic elements of supply and demand for textiles

have changed in the last decade, and promise to

change still more in the decades ahead. The market

for textiles is increasingly a global market, demand-
33

ing specialization and identification of competitive

market niches. An industry of many small firms is

giving way to oligopolistic markets, or at least to

monopolistic competition. A large number of firms

engaging in price competition with similar if not identical markets is a fading economic possibility for the

U.S.-based industry. Fewer corporate entities are supplying textile products for sale. More and more corporate entities within the fiber-fabric-apparel-end useretail chain are “selling” products to themselves, or

transferring products from one division or subsidiary of the company to another to eliminate price

competition altogether. The products being demanded

are thus often purchased by internal corporate entities. And the products being demanded are more

often for end uses other than apparel, such as home

furnishings or industrial purposes.

Not only must the industry adapt to changes in

basic supply and demand. It must meet intense challenges to traditional ways of making decisions about

trade, research and development, capital investment,

employment, and marketing.

Into the Future

The textile industry of the 21st century will be

more capital-intensive, more horizontally and vertically integrated, and more internationally linked

than ever before. Within the United States, there will

be both plant closings and company expansions;

markets will increasingly be more carefully identified and targeted; production will be geared to identified market niches. Synthetic rather than natural

fibers will represent growth in fiber markets. Nonwoven rather than woven fabrics will represent

growth in textile markets. Industrial and home furnishings, as well as apparel, will have some promising product areas in which to identify market

niches for end uses. The traditional segmentation

of markets—into individual production processes,

separate geographic regions, and/or single technologies—will not be the predominant organizing feature of most industry sectors. Instead, there is likely

to be increased horizontal and vertical integration,

greater participation by chemical and paper producers and by multinational corporations, more capital

intensity, and a continuing shift to a global market.

The major exception is likely to be apparel, but

this sector could integrate by way of major technological breakthroughs. It is more likely, however, at

least in the short to medium term, that apparel will

continue to be an industry structure of small firms.

Of the more than 200 apparel companies in the

United States, less than 1 percent have sales over

$100 million per year.41 Without stricter enforcement

of wage and hour regulations, there may be further

growth in “underground assembly,” through employment of illegal aliens at subminimum wages. The

critical problem to overcome is the current high level

of import penetration.

I lwlls~n, 0~ Clt , p ~~
Chapter 3

The Major Industry Sectors:

Fiber, Fabric, Finished Products,

and Machinery Manufacturing
Chapter 3

The Major Industry Sectors:

Fiber, Fabric, Finished Products,

and Machinery Manufacturing

The previous chapter outlined broad themes affecting the industry complex that converts fiber into apparel and other end uses. This chapter will examine the major segments of the industry in greater

detail, addressing changes in both production technology and patterns of business organization. The

industry will be subdivided as follow’s:

1. Fiber Production: The process of manufacturing fiber varies greatly, depending primarily on whether the fiber is made of natural or

synthetic materials. Synthetic fiber production

is closely allied with the capital- and researchintensive chemical industry; the standard industrial classifications (SIC) for synthetic fiber

manufacturing are part of the chemical and allied products series, and are not grouped with

textile mill products,

2. Textile Mill Products: Fabric production is

still primarily accomplished with weaving, though

knitting and tufting are examples of nonwoven

fabrics. The industry is being revolutionized by

the shift from shuttle to shuttleless looms, a

technology that has been developed primarily

by foreign producers.

3. Apparel (and other end uses): Manufactured finished products made from textiles are

dominated by apparel. In recent years, however, the largest growth in finished products has

been in home furnishings and industrial applications. Textiles are being used for a variety

of industrial purposes, going far beyond the

traditional uses in automobiles. Textiles are now

used in high technology medicine, space exploration, erosion control, and highway building. The industries that make finished products

are diverse, and include many small firms.

4. Textile Machinery Manufacturing: In previous generations, the textile machinery manufacturing sector was the “mover and shaker”

behind productivity growth throughout the industry. In recent years, however, few major

technologies have been introduced by U.S.

firms.

THE PRODUCTION OF FIBER

The fiber sector of the textile industry complex

has undergone substantial change in recent years.

Synthetic fibers have supplanted natural fibers at a

rapid rate. Representing less than 10 percent of the

market in 1940, synthetics captured nearly 75 percent by the mid-1980s. Cotton, which made up over

80 percent of U.S. mill fiber consumption in 1940,

fell to just over 25 percent by the mid- 1980s.l While

rayon and acetate represented the only two manmade fibers 50 years ago, today there are thousands

of individual products in 10 major classes that can

be processed into an almost infinite variety of fabric constructs and styles. z

Besides the obvious adjustments in the fabric and

apparel industries, the entire structure of the fiber

industry has been altered. As synthetics have come

to dominate the market, so too have the large multinational chemical companies that are among the

major producers of synthetic fiber. With new processes has come a new level of technology and capital intensity as well.

‘American Textile ~fanufactu rers Institute, Textile Highlights, September 1986, p 1

‘Richard E. Emmert, “The Long V~ew, presented at the 50th Annual Research and Technology Conference, Textile Research Institute,

Washington DC, Apr. 3, 1980, p, 1

37
38 —

Background

The fiber industry is composed of the agricultural

sector, which supports the production of natural fibers—primarily cotton, but also wool, silk, linen, and

jute—and the chemical industry sector, which produces manmade fibers. Most fibers are highly substitutable; not only do manmade fibers compete

among each other, but they can substitute for natural fibers.

In 1980, approximately 17 percent of all fibers

produced in the world were consumed in the United

States; this share fell from close to 20 percent in 1960.

Experts believe that the share will continue to fall,

reaching 16 percent by 1990. The two major factors

responsible for the decline are a marked slow-down

in U.S. population growth, along with the substantial industrial progress demonstrated by developing

countries.

On the other hand, per-capita fiber consumption

is much higher in the United States than in other

countries of the world, with a level of 58 pounds per

person versus an average world consumption in

1983 of 15.5 pounds per person. But U.S. consumption may have peaked, falling to under 56 pounds

per person by 1985;3 at the same time, world consumption grew sharply. World growth in fiber consumption is a critical factor for U.S. firms to consider

as they develop marketing strategies. Of the total

growth in world fiber consumption, two-thirds is due

to increases in per-capita consumption and one-third

from population increase.

Cotton represented a much higher market share

of 1983 world fiber production, 48 percent, than of

1983 U.S. fiber production, 25 percent. And yet world

production of manmade fibers has shown a growth

parallel to U.S. production since the 1940s, and is

only today growing faster than U.S. production. The

United States is currently the leading world producer

of manmade fibers. China is the largest producer of

cotton, with the United States being second. Australia is the world’s leading wool producer; wool production in the United States is insignificant in the

world market, at 1.5 percent of total production.

Natural Fibers

The major market for natural fibers in the United

States is for cotton. It is by far the dominant sector

among natural fibers, with over 90 percent of natural fiber consumption and 25 percent of the overall

fiber market. Wool and silk are negligible in their

overall importance.

Cotton.—Besides the dominant trends of nongrowth in production and a declining share of the

fiber market, the market for cotton is unstable from

year to year. Major production swings occur due to

differences in weather and growing conditions, export demand for fibers, and U.S. economic conditions. Commodity boards of trade provide a market

for risk diversification by farmers and cotton purchasers who are unsure of future cotton supply and

demand. But weather and changing trade have still

kept cotton prices unstable, causing variations in

price of up to 50 percent from one growing season

to another. For example, large crop yields in the 1979

and 1981 seasons, combined with a slowing of overseas demand for cotton fiber, led to sharply reduced

cotton prices in 1982. And U.S. plantings of cotton

for harvest in the 1983-84 season were down almost

35 percent, in response to low prices and new government acreage management policies.4 Nonetheless, the United States remains a major world exporter of cotton; although exports fell off substantially

in 1985-86, most forecasts predict a significant recovery for this marketing year. Japan, South Korea,

and other Pacific Rim nations are the major purchasers of U.S. cotton, accounting for approximately

60 percent of U.S. exports.

Within the United States, nearly all of the cotton

fiber grown and produced comes from the south and

west. The top five cotton producing States are responsible for 75 percent of U.S. cotton production.

Texas leads with 30 percent of the U.S. total, followed

by California with 28 percent, Arizona with 13 percent, Mississippi with 10 percent, and Louisiana with

4 percent. Over 99 percent of U.S. cotton is the Upland variety; the remaining share is American Pima.5

3Te.wde Organon, Textile Economics Bureau, vol. 57, No. 5, May 1986.

*’iCotton Monthly Re\’lew of the World Situation, ” ]nternatlonal Cotton Advisor~ Committee, vol. 36, No, 11, June 1983.

5Textile Organon, vol. 52, No. 1, January 1981, pp. 1-16.
39

Wool.-Wool production amounts to only 1.5 percent of U.S. mill fiber consumption, most of which

is imported. While consumption has been rising in

recent years, a growing share of that consumption

was made up of imports.

Synthetic Fibers

Without question, the major development in the

fiber industry is the growth of the synthetic fibers

sector. The first half of the 20th century was marked

by the introduction of a large number of synthetic

fibers, and the second half of the century by their

rapid adoption by consumers. Rayon was the first

major synthetic to be produced, starting in 1910. Acetate production began in the 1920s, followed by the

production of synthetic nylon and vinyon, as well

as rubber and glass, in the 1930s. During the 1940s,

production of saran, metallic fibers, modacrylic, and

olefin began. During the 1950s, acrylic, polyester,

triacetate, and spandex came onto the market. In

1961, production of aramid fibers became commercial; by the mid-1970s, polyester had clearly emerged

as the major synthetic fiber in the United States. By

the end of the 1970s, polyester led all fibers—including cotton.6

In the apparel sector, manmade fibers account for

nearly 60 percent of content. Blouses, ski wear, and

hosiery are all examples of products that tend to have

at least 60 percent synthetic content. For home furnishings, manmade fibers account for nearly 80 percent of content. For industrial textile products, the

synthetic share is nearly 90 percent. Production of

manmade fibers contributes 30 percent of its output to apparel, 34 percent to home furnishings, and

36 percent to industrial textile uses.

Growth of manmade fiber production and consumption in the mid-1980s is focused on the Third

World. The number of manmade fiber-producing

plants in the world is increasing, approaching 800

by 1984. The most recent increases have occurred

primarily in India, with polyester plants up to 17 in

1984 from 11 in 1983 and nylon plants up to 10 from

8; Pakistan, with polyester plants up to 9 from 5;

and Indonesia, with nylon plants up by 4. New fiberproducing facilities that have opened in developed

countries since the late 1970s have been more than

6Manmade Fiber Fact Book, Manmade Fiber Producers’ Association,

Inc , 1980

offset by closings of facilities in these countries. Most

fiber industry analysts expect little change in these

trends in the future.

The U.S. synthetic fiber industry consists of approximately one dozen large multinational corporations, which are horizontally integrated. Du Pent,

Celanese, 7 Monsanto, and Allied are entirely American-owned companies, and rank among the 10 largest

world firms. The top 10 producers in the United

States account for almost 90 percent of U.S. production. Du Pent, the largest, has far more fiber sales

value than its closest competitor, Celanese. Du Pent

and Celanese are followed by Allied, Monsanto, Eastman, Akzona, Badische, Hercules, and Avtex. Of the

top five fiber companies in 1982, Celanese had the

highest fiber sales as a percent of all corporate sales,

at nearly 40 percent. If measuring size by corporate

sales rather than fiber sales alone, Du Pent remains

the leader, followed by Eastman and Monsanto.s

These companies compete in the markets for six distinct fibers: polyester, nylon, acrylic, polyethylene,

polypropylene, and acetate. Because production is

mainly performed by the chemical industry—with

the exception of Celanese—yarn production is not

always counted in the textile industry.

There are two main types of synthetic fibers: cellulosic, which are dominated by rayon and acetate,

and noncellulosic, which are dominated by nylon,

acrylic, and polyester. Cellulosic fibers are increasingly giving up their market share to noncellulosic

fibers.

Cellulosic Fibers. -In 1983, cellulosics represented 7.7 percent of the total quantity of shipments

in the manmade fiber market, measured in pounds,

and 11.6 percent of the value. These shares marked

a major decline from the levels of the early 1970s.

In, 1972, for example, the volume share of cellulosic

fibers in the manmade fiber arena stood at 20.6 percent; the actual quantity of cellulosics shipped between 1972 and 1983 fell from nearly 1.4 billion

pounds to less than 630 million. The real value of

shipments during the period also declined, as the

112-percent increase in the current dollar value of

shipments was surpassed by an inflation rate of 138

7Celanesehas recentl}merged w’lth Hoechst, which ma}’ ha~e [-hangt+

some of these comparisons

‘Fa;rchl)d Texti/e and Appdrel FInaIJ(I,i/ L)/rec(or, 9th and 1 ottl tJdtions, 1982 and 1983
40

percent over the same time period.9 These trends

have continued since that time, although preliminary estimates from the U.S. Department of Commerce suggest a rebound in 1986 shipments.10

The major cellulosic fiber is rayon, which accounts

for approximately 60 percent of cellulosic shipments.

Rayon, a regenerated cellulose product, was the first

manmade fiber patented. It was discovered in 1855

by Audemars, a Swiss chemist. The cellulose source

for his product was the fibrous inner layer of the mulberry tree. Until 1924, rayon was called artificial silk.

The first commercial production of this material was

by the Frenchman Chardonnet, who became known

as the father of the rayon industry. The first U.S. plant

producing rayon was the American Viscose Corp.,

which opened in 1910. There were four rayon-producing plants as of 1983, down from 26 in 1950.11

The other large category of cellulosic fibers is acetate and acetate derivatives. Acetate, also a regenerated cellulose, was first commercially produced by

Celanese in 1924. Production was halted temporarily during the Depression. As of 1983, there were

five acetate-producing plants operating in the United

States.

The major end uses of cellulosic filament yarn are

for products of the apparel industry, though some

home furnishing and industrial uses are also important. Six product categories using cellulosic yarn account for about 80 percent of consumption in the

United States. These six categories are, in descending order of magnitude:

1. fabrics for lining apparel;

2. robes and loungewear;

3. drapes and upholstery;

4. topweight fabrics;

5. tires; and

6. underwear, nightwear, and bras.

All of the categories show a decrease in consumption of this yarn type in recent years, as other fibers

continue to make inroads.

“’Manmade Fibers, ” “Apparel, ” U.S lndu.striid outlook, 1984, p p

40-5 to 40-8, 41-1 to 41-5,

10[,r.$ lrldustrld] outlook, 1987, Op. ~it., p. 4 1‘4

I l,~fa~made Fiber Fact Book, Op cit.

‘~lbid.

I ~Te,Y~;]e organOn, VOI 54, NO, 9, September/October 1983

The major end uses of cellulosic staple fibers are

dominated by products of the industrial sector, with

over 30 percent of the fibers used by the medical,

surgical, and sanitary category for disposable items.

The top six major uses of cellulosic staple fibers account for about 82 percent of total U.S. consumption. These six categories are, in descending order

of magnitude:

1

2

3

4

5

6

medical, surgical, and sanitary;

drapery and upholstery;

topweight fabrics;

miscellaneous industrial-type products;

bottomweight fabrics; and

sheets and other bedding.14

From 1976 to 1982, actual consumption of all

fibers in these six categories declined by about 25

percent. The major declines in use were 57 and 39

percent, in the drapery and upholstery and the medical, surgical, and sanitary categories, respectively—

in contrast to an increase of 18.8 percent for the other

five categories as a group.

Noncellulosic Fibers.—Noncellulosic fibers represent the growth segment of the fiber industry. This

segment is dominated by nylon, acrylic, and polyester. While noncellulosics are manufactured from

a variety of products, petroleum is the predominant

raw material in this sector. Between 1972 and 1983,

the quantity of noncellulosic fibers shipped grew by

40.6 percent, with the value of shipments exceeding the inflation rate.15 Noncellulosics also represent

an area of significantly growing exports, with the

value of shipments more than tripling over the period—from less than $200 million in 1972 to nearly

$775 million in 1983.

Nylon 6,6, invented by Carothers in 1931, was first

produced commercially by Du Pent in 1939. A nylon salt, produced through chemical processes,

would “polymerize’ ’-the small molecules were

linked up to form long, chainlike molecules. This

thick, syrupy material would then be hardened by

a shower of water, chopped into flakes, melted again,

and forced through the fine holes of a spinneret to

form filaments of yarn. Nylon was introduced as a

“miracle” fiber, which performed well in such diverse products as sewing thread, parachute fabric,

~~lbid.

IsIbid,, VOI. 55, No, 3, March/April 1984, p. 35.
41

and women’s hosiery. Its use became widespread

in military applications during World War 11, as a

replacement for other materials used in tires, tents,

ropes, and other defense supplies. At the conclusion

of the war, 80 percent of the fiber consumed in the

United States was still cotton, with manmade fibers,

silk, and wool accounting for the remaining 20 percent. In the early 1950s, nylon became popular in

carpeting and automotive upholstery, further increasing the manmade market share of fibers.

Because nylon is the major fiber used in carpeting and the demand for carpeting is largely determined by construction, the severe and cyclical curtailments in the construction industry were the chief

reason for a decline of 11.1 percent from 1979

through 1983; by 1985, however, rug shipments had

nearly recovered to their 1979 level. Noncellulosic

fibers introduced in the late 1940s included strong

metallic fibers by Dow Badische, modacrylic-a

flame-resistant variation of acrylic-by Union Carbide, and olefin—a light fiber used for such items

as boat ropes, since it floats in water—by Hercules.

In recent years shipments of olefins have increased

dramatically–by 80 percent between 1975 and 1983.

Acrylic was introduced in 1950 by Du Pent as a manmade substitute for wool. A few years later the first

wash-and-wear product was marketed, with fiber

composition of 60 percent acrylic and 40 percent

cotton.

Polyester, which is a petroleum-based fiber, was

first produced in the United States by Du Pent, and

in the rest of the world by Imperial Chemical Industries, in 1983. It dominates the manmade fiber market and accounts for over 40 percent of the market

share, and over 28 percent of the market for all natural and manmade fibers. Despite its continued dominance in the field, polyester has experienced recent

drops in total shipments–7.9 percent from 1979 to

1983. During the rest of the 1950s, research efforts

into manmade fiber production turned from the development of new textiles to the modification, diversification, and commercialization of existing products. In the 1960s, spandex was introduced to the

United States as a lightweight, highly extensible fiber. This was followed by the introduction of aramid,

a lighter fiber but one that is tougher than steel.

In 1982, the top 12 uses of noncellulosic filament

yarn accounted for over 85 percent of noncellulosic

yarn sold in the United States. The 12 major enduse categories, representing a mix of apparel, home

furnishings, and industrial uses were, in descending order of magnitude:

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

carpets and rugs;

electrical and reinforced plastics;

bottomweight fabrics;

tires;

miscellaneous industrial-type products;

rope, cordage, and fishline;

topweight fabrics;

underwear, nightwear, and bras;

retail piece goods;

drapery and upholstery;

11. industrial narrow fabrics; and

12. sheer hosiery.l6

The single category of carpets and rugs consumed

over 20 percent of the noncellulosic yarns sold in

the United States, with industrial uses dominating

the remaining large users. From 1976 to 1982, the

largest declines were found in the apparel categories, as imports and a switch to natural fibers moved

bottomweight, topweight, and retail piece goods

fabrics away from the noncellulosic fibers.

The category of carpets and rugs dominates the

noncellulosic staple fiber uses, consuming over 25

percent of these fibers. There are 12 major categories of noncellulosic staple end uses. They are, in

descending order of magnitude:

1. carpets and rugs;

2. bottomweight fabrics;

3. topweight fabrics;

4. fiberfill, stuffing, and flock;

5. sheets and other bedding;

6. retail piece goods;

7. drapery and upholstery;

8. craft and handwork yarn;

9. sweaters and related accessories;

10. medical, surgical, and sanitary;

11. anklets and socks; and

12. unallocated industrial nonwovens.17

The apparel categories of bottomweight and topweight fabrics, along with sheets and retail piece

goods, consume large quantities of noncellulosic staple fibers, primarily as a polyester staple in the production of blended fabrics. The top 12 end uses of

lqb]d , 1,01. 54, No 9, September/October 1983.

ITlbld
42

noncellulosic staple fiber account for over 80 percent of the fibers consumed in the United States, with

the largest single increase coming from medical, surgical, and sanitary use.

Technological Innovations

Innovations are occurring throughout the specific

industry segments involved in yarn formation. Machines using new technology are capable of providing a four- to five-fold increase in productivity with

respect to open-end spinning, and about a twentyfold

increase with respect to ring spinning. In addition

to innovations already being adopted, this section

will review innovations that are pending or needed

in fiber production.

Innovations in Specific Areas of

Yam Formation

Texturing. -Innovations in texturing have stimulated growth in the knitting sector. The ability to

have heat set a crimp in synthetic fiber provides additional and desirable bulk to the fiber.

Opening and Picking of Cotton. -Traditionally,

a bale of cotton had to be separated manually into

layers and fed into hoppers, where the cotton was

tumbled to break it into small tufts and to mix the

cotton from various bales. The material was then

transported, either by belt conveyor or through pneumatic ductwork, to pre-openers or cleaners, in order to reduce the tuft size and remove some of the

nor-dint material. If the cotton was to be blended with

other materials, such as synthetic fibers, additional

hoppers similar to opening hoppers were used. Waste

from the hoppers was manually removed. The next

step was the production of a partially cleaned, flat,

even sheet, in a roll, which was then hand-fed to

the next stage, carding.

New technology in opening, cleaning, and picking has led to substantial automation of the process, increased productivity, improved product quality, and an enhanced work environment. Automatic

bale plucking systems have been known to the industry since the mid-1960s, but their incorporation

into the production process has just recently gained

momentum. The carousels and automatic feeders,

which pick off of several bales at once, have the following advantages:

● faster picking,

● a more intimate blend of cloth, since carousels

can pick off of several bales of cotton at once,

● bypassing the manual picker, which eliminates

the related back-breaking work, and

● eliminating some of the dustiest work of the production process.

Carding Cotton.—The purpose of carding is to

further separate the fibers from the bits of leaf, trash,

and short fibers, to straighten or parallel the cotton

fibers, and to forma soft, untwisted, ropelike material called sliver. Carding is accomplished by bringing fibers over a feed plate to a feed roll and a cylinder covered with wire teeth, called the licker-in. The

licker-in rotates rapidly over the lap of cotton held

by the feed roll and gradually opens the tufts of cotton in the lap. As the tufts are opened, dirt and trash

fall out. As cotton is processed by the card, fibers

collect between the wires of fillet card clothing—

consisting of fabric and wire—and must be stripped

away traditionally by hand. Carding has traditionally been the source of greatest cotton dust exposure

for workers, especially for strippers.

New carding technologies, especially chute-feeding

systems, have been available since the 1960s, but

their adoption in the textile industry accelerated only

recently. The use of chute-fed cards encloses the

process and removes the necessity for manual carding and for most manual cleaning. At least 11 production advantages result from the use of new carding technology:

1. elimination of doffing and racking;

2. elimination of the manual transport of materials to the card room, and of hanging the material onto cards and later into feed rolls;

3. improvement in yarn, since the automatic

process on feed rolls reduces heavy places in

the yarn;

4. more than doubling of speeds, in some cases

by using metallic-clothed cards instead of flexible cards;

5. improvement in card settings due to roller

6

bearings on cylinder supports, which allow for

adjustments leading to more even clothing

with closer tolerances;

better integration of fibers, resulting in a more

uniform and stronger piece of yarn with improved sliver CV and weight variation;
43

Photo credit: Charles Gardner. School of Textiles North Carolina State University

Pictured on left, a high-speed chute-fed carding device; on right, its technological predecessor, the lap-fed card.

7. improved spinning performance, due to sliver

improvements, meaning fewer ends down;

8. reduced requirements for floor space;

9. reduced labor turnover by eliminating undesirable lap-laying tasks; and

10. reduced dust exposure due to enclosure of

cards, and because hand cleaning of cards traditionally done twice a day can be reduced to

once a week.

Spinning.—Spinning is the process by which fibers become yarn. The purpose of the spinning process is to stretch the sliver to its final diameter, and

to insert the desired amount of twist. Thus, the yarn

acquires its necessary strength. The traditional spinning method is called “ring spinning. ” In ring spinning, bobbins are hung in a creel and ends are individually fed into drafting rolls. The twist is imparted

by passing the yarn through a traveler on a ring

while it is being wound onto bobbins placed on a

revolving spindle. Fine trash and short fibers are

often released into the air during this process.

Spinning has traditionally been labor-intensive,

accounting for anywhere between 50 and 70 percent of all yarn manufacturing labor costs. More specifically, costs of spinners and doffers would amount

to 50 to 80 percent of spinning labor costs, with high

labor costs focused on cleaning, piecing, doffing,

maintenance, and transportation.18

Thn S Ham I]\r (ed ), The Arr]er/c~/? COttOn Handbcmk, 3d ed (New

York lntersclence Publishers, 1965), p. 374.

There has always been a strong impetus to try to

reduce labor costs with the installation of more modern equipment—especially equipment that reduces

ends down and repairs broken threads automatically.

By the mid-1960s, a new technology called openend spinning became commercially available. In

open-end spinning, the open-end frame is supplied

with sliver from a draw frame, eliminating the need

for a roving frame; passes sliver through a drafting

system into a centrifugal rotor; and creates a wound

package, eliminating the need for a subsequent winding operation. When open-end spinning is installed

to operate from sliver through winding, the number of conventional processes is reduced, thereby

significantly contributing to an automated system.

Other advantages of open-end spinning, when

applicable, include:

●

●

●

●

increasing the production rate by four to five

times that of the ring spindle;19

the ability to process a far lower grade of cotton than ring spinning;

reducing cotton dust exposure by enclosing the

process and being more adaptable, which alleviates the need for local exhaust ventilation;

and

reducing the noise level in spinning rooms.

l~cerltaur Associates, lnc , for OSHA, “Technical and Economic Analys]s of Regulating Occupational Exposure to Cotton Dust, ” vol. I, Januaq 1983, p, 3-48
44

Photo credit American Textile Manufactures Institute

Open-end spinning was introduced in the mid-1960s.

It represented an improvement over ring spinning in

terms of yarn quality, productivity, and safety.

There have also been innovations in spinning attachments. Automatic doffing (unloading) machines

reduce unit requirements for doffer operators. Automatic devices for piecing (tying) broken yarn reduce

unit requirements for spinners.

Winding.—Loading, or automatic creeling of machines with automatic tying-in of yarn ends, reduces

unit requirements for operators, Integration of filling winding with weaving eliminates separate processes and associated handling.

Pending Innovations in Yarn Formation

In general, the ideal yarn manufacturing process

would take fiber from a bale, convert it to a sliver,

and move it to a spinning process—such as openend spinning—with automatic transfer of the yarn

output either to a warper or a loom. Emphasis would

also be placed on computer monitoring of both quality and production rate, with the quality monitoring being tied to appropriate feedback and control

mechanisms. The monitoring technology is already

available for drawing, and technology for monitoring either open-end yarn or other kinds of yarn is

on the horizon.

Another area of considerable importance with respect to monitoring is the ability to determine the

need for machine maintenance by continuous monitoring of yarn production. This requires that all ends

be monitored continuously, and that faulty positions

be identified immediately. The repair, when it is

needed, could be made automatically, or that end

could be stopped and machine maintenance ordered.

A useful system would also monitor and record longterm gradual deterioration, as opposed to short-term

problems. The goal of the system would be to prevent the manufacture of defective material.

In general, it is important to measure and control

quality at every step of the yarn formation process.

Adequate computer technology is already available;

the real problem seems to be the development of

appropriate sensing elements.

There are a number of opportunities in the present

yarn process for automated materials handling, including the use of robots. This is particularly true

for systems that have reduced the number of process steps, such as open-end spinning, but it could

also be used with ring-spinning technology, in which

the automation of roving frames is a current need.

Connecting winders to large spinning frames is a

potential development, but winders need to be designed to accommodate some flexibility of yarn

count. This could perhaps be accomplished by designing winders with space for extra positions. Such

a linking technique would allow less handling of yarn

packages—a distinct advantage, since it would also

allow better package identification and control.

Although techniques for the continuous monitoring of various stages of yarn processes are available,

knowing where to direct that information or what

corrective actions to take is still largely unknown.

Since it is necessary to be able to identify abnormal

parts of the process, the real issue is to determine

where in a process faults occur, what their interre-
45

lations with other process steps will be, and what

feedback loops are needed to exercise control.

There is potential for the automatic analysis of incoming bales of fiber, particularly if robots or other

automatic devices that could direct the bale to the

appropriate storage area could be involved in the

analysis. Automated bale storage is a labor-saving

technology that leads to less handling, as well as presenting the opportunity of coding each bale for future identification. This is important because of the

desirability of tracking the identity of the material

in each textile process, from the initial bale through

the final step. This, in turn, allows one to know the

accurate history of all material and all processes, and

allows for solutions of quality control problems based

on more complete information.

Development of New Fasciated Yarn Systems.20

—Du Pent developed a fasciated yarn system in

which there is never an open end, and there is a

continuous strand from the core drafting system

through the twister to the wind-up device. In the Du

Pent system, fibers on the outside of the yarn have

a different helical pitch to the fibers in the core of

the yarn. An extreme case of this type of yarn structure occurs when the core fibers have no twist and

the sheath is wrapped helically around the core,

causing the whole structure to cohere. Developing

from the Du Pent system, it becomes possible to contemplate laying fibers onto false-twisted yarn, with

a fiber laid parallel to the axis of the yarn and anchored there, becoming a wrapper after it passes out

of the false-twist zone. A stream of fibers landing on

a false-twisted core creates a fasciated yarn having

a twisted sheath, but a virtually twistless core. Alternatively, fibers can be raised from the surface of

the yarn and then laid over the false-twisted core

to produce similar effects. Fasciated yarn systems

tend to prevent inter-fiber slippage.

Alternatives to Rotor-Type Open-End Spinning.-There has been considerable interest in alternatives to the rotor-type open-end spinning system.

Pavek’s rotating needle basket was used to capture

fibers and consolidate them at the open end of a

1“TWCJ mdjor Ideas dre In\ol\ed III making fdsc]ated or Wrapped l)\][ldle ~rarns 1 ) the eff]cti[} of using a wrapping filament or fiber to create

IItwr (ohesIon” In ~n untw’lsted staple fiber I)undle, and 2) the fact that

when a f]twr (jr part of one IS Iald on a false-tw]~ted hund]e, the laid-on

fikr t)ecomw d w’rapper w’hen the faise-t~$’ist IS remok”ed

forming yarn. Goetzfried and others were interested

in air-vortex systems, in which a helical or circular

yarn end rotated inside a stationary tube and the

yarn motion was caused by an air vortex. Fibers were

injected into the tube and laid on the “open end. ”

The major difference between these systems and the

ones known today is the way in which the arriving

fibers are brought into contact with the departing

yarn. The common feature is that all these cases have

an open end to the forming yarn.

Development of Mixed Systems.—It is possible

for arriving fibers to be false-twisted into a core onto

which a sheath is deposited. If the core is discontinuous with the core fiber supply, then the system

is an open-end system. It can also be a fasciated system, by virtue of the sheath fibers which are laid

onto false-twisted ones,

Emergence of New Twisting Systems.—Whereas

conventional machines use a relatively massive rotating component to put in “twist, ” such as a ring spindle, a flyer, or a rotor, a new systems feature is for

the twisting medium to act directly on the surface

of the yarn. Where metal surfaces are used, it is possible to create a pair of counter-surfaces acting on

a yarn. The frictional forces acting on the yarn surface create a torque which generates twist. Alternatively, fluid friction can be used. The most common

of these latter types is an air-vortex, which can readily be made to rotate at extremely high speeds; the

fluid friction creates the torque in the yarn.

Creation of New Yarn Structures.—Earlier experience with open-end yarns has shown that the

disorderly sheath structure, with its tight wrapper

fibers, causes a harsh hand and weakness, which

have been major causes restraining growth of the

open-end spinning system. These problems are being solved in some new machines through differences in the sheath fiber orientation.

Needed Innovations in Yarn Formation

While many innovations are being brought to yarn

formation, more are envisioned. At least eight general technological developments are needed in the

process of yarn formation, according to a study by

the American Textile Machinery Association (ATMA):

1. higher speeds, better quality, universal systems

in spinning;

2. uniformity monitoring in carding;
46

3. overall process consolidation;

4. automation, in process and quality control;

5. fewer steps in manufacturing;

6. sizing in the spinning and winding processes;

7. on-line analysis of the trash content of cotton;

and

8. emphasis on friction spinning, with ring spinning becoming obsolete.21

The advent of the Murata air-jet spinning system

and the Fehrer and Platt friction spinning systems

have heightened interest in new forms of manufacturing staple yarns. Fehrer, Schlafhorst, and Suessen are working on a different friction spinning system, and Toyoda, Howa and others are working on

different air-jet systems. It is believed that higher delivery speeds will become common, and that there

will be different count ranges for each of the different systems. Air-jet and friction spinning will likely

fill a gap left by rotor-type, open-end spinning.

Industrial Structure

During 1985, domestic fiber output fell significantly. Even though cotton fabric shipments rose

nearly 9 percent, manmade fiber domestic shipments

dropped by 19 percent, and woolen fabric shipments

from U.S. mills fell by 21 percent.22

As with the entire textile industry complex, one

of the most important single factors influencing the

economic future of the fiber sector is imports—both

fiber imports, which compete directly, and fabric and

apparel imports, which compete by reducing domestic demand. A positive balance of trade still exists

in all synthetic fiber categories except cellulosic yarn

and monofilament, but this surplus has shown substantial decline.

Between 1979 and 1985, developing nations were

busy increasing their production of fiber. The growth

was especially significant in noncellulosics, with

China increasing its production over that period by

361 percent, India by 203 percent, and Indonesia

by 102 percent.23 China expects self-sufficiency in

manmade fibers by the year 2000.24 During the same

period, U.S. production of noncellulosic fibers lost

21 American Textile Machinery.ASsociat]on, ‘(Needs Identification” Annual Meeting Report.

ZzText;]e organony vol. 57, No. 8, August 1986.

~slbld,, vol. 57, No. 7, July 1986.

~~lbld,, VOI 57, No. 3, March 1986

world market share, from nearly 33 percent to 23

percent. In addition, cellulosic fiber production in

the United States fell from 12.5 percent of world production in 1979 to 8.4 percent in 1985. U.S. employment in manmade fiber production during the decade from 1975 to 1985 fell by 41 percent—more than

40,000 jobs.25

Natural Yarns

The fiber sector of the textile industry consists of

both large integrated corporations and small flexible units that compete and trade with each other.

The rivalry among producers is high, and there are

an especially large number of competitors in the cotton yarn industry; there were approximately 270

firms in the industry through the 1970s. The concentration of the cotton industry is low and stable,

at a level of 20 percent.

The cotton and wool yarn markets are characterized by low growth, making an expanded market

share dependent on taking markets away from competitors. The different yarns are easy substitutes. The

biggest problem in this sector is competition from

manmade fibers, comprising 10 perfect substitutes

for natural fibers. The resulting intense competition

reduces profit margins. Cotton and wool yarn prices

have experienced large decreases due to competition with synthetics.

Technology for natural fiber is largely supplied by

a few machinery producers, of which none are U. S.-

owned. The development of this machinery is only

done by machinery producers. The turnover of machinery is frequent, making the technology used an

important factor in competition. Productivity increases with new technology are high.

There is no potential threat from the suppliers to

integrate forward, toward end use of the product;

the agricultural and textile industries are too different, and their interests are on different levels. But

there is a threat of backward integration by fabric

producers. Yarn costs play a large part in the buyer’s

industry, yet the buyer’s bargaining power is high.

The reason for high bargaining power is that different yarn types are competitive, and the sector is characterized by frequent overcapacity.

2Slbid.
47

Entry and exit barriers into the industry are a

question primarily of capital cost. Industries with the

necessary financial resources can easily enter the

spinning industries. Inexperience can be easily overcome with new technology, which is available in

abundance.

Large-scale operations seem to have a competitive advantage in being able to reduce overall raw

materials costs by purchasing large quantities. A key

to achieving cost advantage is buying cotton at the

right time. Cotton prices are largely a result of supply and demand in the U.S. commodity exchanges.

As a result, cotton spinners try to buy cotton in large

quantities at preferential prices; this, however, leads

to large inventory costs. The more vertically integrated firms have a slight advantage in this competition, especially when the large firms are also their

own suppliers and can add to the end-product stage.

Competitive position depends heavily on the relative importance of yarn production in the overall enterprise.

On the other hand, there is some offsetting cost

advantage for the smaller firms because of their

higher flexibility in production. An example is Tuscarora Mill, a specialized yarn producer that carries

a wide assortment of yarns. The success of the company lies in constantly finding market niches with

high margins. Industry experts believe that flexibility of small firms will allow them to become more

dominant in the marketing sense, which will create

more small and flexible firms within the industry.

A strong future for the U.S. fiber industry will likely

require a reduction in production overcapacity, and

on emphasis on out-innovating competitors—not in

basic fiber production, but through specialized. products. The industry will shrink and become more

competitive. Profits are likely to be low, unless some

cooperation with the textile and apparel sectors of

the industry is accomplished through vertical integration. Observations from machinery expositions indicate that small and flexible fiber production units

are in demand by textile companies.

Synthetic Fibers

The synthetic fiber industry is characterized by

similar manufacturing processes, easy substitutability

of products, similar markets, and similar expenditures in R&D. Texturizing and twisting, which add

to the desired quality of synthetic yarns, are two processes that distinguish manmade yarn production

from natural fiber manufacturing.

Fiber shipments for some companies constitute a

large amount of their total shipments. In 1974,

Celanese had 50 percent of its business in fibers, and

Avtex 100 percent. All other large chemical companies have a fiber business that is less than one-third

of their total shipments. Major fiber firms have been

reducing their dependency on fibers, with the exception of Badische.

Fiber markets are nearly saturated, and there currently is a problem of overcapacity; these markets

depend largely on the apparel market, and U.S. apparel markets have suffered from severe import

penetration. The two major fiber markets are the

commodity market and the specialty market, each

of which has its own distinct characteristics. While

the United States is strong in the development of

specialty fibers, its main outputs are commodity

fibers.

Suppliers to the fiber industry provide raw materials and technology, and do research and development. Some fiber companies operate their own

refineries; others must make purchases from competing multinational chemical companies.

There are substantial entry and exit barriers. Entry barriers in the fiber industry are a function of:

● large economies of scale,

● low product differentiation,

● low cost advantages,

● high capital requirements, and

● limited access to distribution channels.

Suppliers of the fiber industries have the potential of entering the industry. But fiber producers are

unlikely to have the necessary resources to integrate

backwards, into an even more capital-intensive industry.

Technology for the synthetic fiber industry is

largely supplied by a few machinery producers, of

which only a small percentage are U.S.-owned. The

development of this machinery is done primarily by

machinery producers. Updating of machinery is fairly

frequent, so that the technology used is an important factor in competition, but is one over which most

firms have little control. Some of the technology,

however, is developed by fiber producers who keep

proprietary rights on the developments.
48

The Throwing, Winding, and

Thread Processes

The throwing, winding, and thread industries consist of a few specialized firms—some vertically integrated, mostly throwing and winding, and some

independent corporations, mostly thread—which

compete in intermediate markets in the textile industry. Many of them are jobbers that serve the

fabric-producing industries. They are defined by their

similar manufacturing technologies, their similar distribution channels and markets, and their high capital expenditures for plant and equipment.

The throwing and winding industries (Standard

Industrial Classification (SIC) 2282) and thread industry (SIC 2284) have similar technologies, but their

structures are quite different. Throwing and winding firms face competitive forces similar to those of

the spinning industries. The thread industry on the

other hand, is characterized by its distinctiveness and

flexibility. Both industries have high profitability but

declining productivity.

Technology turnover is high in throwing and winding operations. Expenditures for new plant and equipment are primarily by large-scale operations. In contrast, the thread industries increasingly consist of

small locations where little is spent for new machinery.

Throwing and winding represent mature industries that compete on a cost basis, and machinery

replacement tends to replace labor. The industry is

characterized by increasing concentration and high

imports. But due to high profitability, imports are

decreasing while exports are increasing.

The number of companies in the thread industry

is low. All are highly specialized, serving their individual markets. Most of these companies are small

and flexible. They are able to serve markets quickly,

and to produce small amounts efficiently. The specialization of their service gives these companies an

individual touch, especially in volatile markets where

demand depends largely on the current quality behavior of the customers. Most of these companies

are not diversified, and threads are their only products. Expanding market share is possible with an

expanded product line, and it is relatively easy due

to the low number and specialization of competitors.

There is low standardization among producers; competitors can be distinctively different and unique.

Costs are a less competitive force in this industry. Profit potential is high, due to a favorable structure marked by high product specialization and low

cost competition. Profit potential in the industry is

also enhanced because entry barriers are only moderate, being a function of flexibility, capital requirements, and product specialization, and because exit

barriers are low, since most of the machinery depreciates in a short time period. Profitability in the

thread industry is largely determined by:

● the relative importance of the thread process

in overall yarn production,

● the relatively low bargaining power of these corporations against their suppliers,

● the price consciousness of their customers, and

● low barriers of entry and exit—especially the

forward integration of the yarn industries.

The thread industry is still in a growth period. Exports are increasing rapidly, and imports are at low

levels. Employment has actually increased, and these

small companies benefit from their flexibility in the

marketing sense. One might expect that the small

thread firms would form excellent cash cows for

larger textile corporations, especially spinning industries which buy thread. As long as thread producers maintain their uniqueness, however, their solid

bargaining position will make vertical integration less

likely to occur.

General Prospects for the Fiber Industry

The U.S. fiber industry is in the middle of massive structural change. Part of the current situation

is caused by the technological maturity of the whole

fiber-textile-apparel industry complex. Part is due to

the shift from natural to manmade fibers. And part

is caused by an erosion of the competitive base of

the United States as a place for production, even for

capital-intensive industries.

The U.S. fiber market is mature and saturated.

Massive overproduction has depressed prices in a

low growth market. High investments in machinery, aimed at gaining a competitive edge by means

of productivity and a reduction of costs, have not

yet resulted in satisfactory returns.

Furthermore, one can observe a drastic change

in international fiber production. The Far East—
especially South Korea, Taiwan, Japan, and China—

is expanding fiber production, and may soon exceed

the production level of West Germany. These countries are expanding their production in areas that

western countries once dominated. The plants under construction in many developing countries indicate that these countries use the fiber industry to

gain a niche in international markets, and not simply to satisfy their own demand for textiles and apparel. Most projects are financed by western banks,

and the technology is usually sold by European

countries.

With the exception of Japan, fiber producers in

developing countries are following the strategy of

competing in basic fibers on a cost basis. Japan, on

the other hand, produces high quality and highly

specialized fibers for export. The success of these

strategies is evidenced by the growing import penetration of fibers into the United States.

49

— .

U.S. and European fiber producers’ strategies to

counter these trends in international markets have

been diverse and, more or less, successful. The most

apparent move is to reduce dependency on low-cost

fiber producers, as is being pursued by Du Pent,

American Enka, and Rhone Poulenc. These companies are also establishing production facilities in

developing nations, to overcome the political trade

barriers that sometimes prevent access to overseas

markets.

The big American fiber companies are still trying

to compete on a price basis with imports, whereas

in European countries there is increasing emphasis

on specialization and service. One can expect that

it will be some time until U.S. fiber producers change

their strategies of high volume and standard fibers,

since most developing countries produce the same

fibers.

TEXTILE MILL PRODUCTS

Like the fiber sector of the industry, fabric formation has undergone changes in both technology and

business structure. New weaving machines have

been responsible for increasing the speed of production and the quality of the product, while at the same

time improving the work environment. Because of

the high cost of new machinery, adoption of the new

technology has been primarily by the largest and

most profitable companies. New economies of scale

have caused mergers and consolidations, the building of new plants, and the closing of old ones. While

the textile mill sector of the industry leads U.S. manufacturing in productivity increases, it has been hit

by a flood of imports that threaten profits and even

survival.

Background

The textile mill products sector of the textile industry includes all operations that are involved in

converting fiber to finished fabric and the production of many nonapparel consumer products. The

health of the U.S. textile mill production is clearly

affected by the health of the U.S. apparel sector, with

some estimating that loss of the apparel sector would

almost certainly doom 35 percent of the domestic

textile industry.

The textile mill products sector is the tenth largest

industrial employer in the United States, with approximately 700,000 people—86 percent of whom

are production workers. Shipments total over $50

billion annually. The industry is characterized by

substantial productivity increases but sagging earnings, increased capital investment but declining employment, and plant expansions as well as plant

closings.

The largest textile company in the United States

is Burlington Industries, followed by Stevens and Milliken. Other major textile manufacturers are West

Point Pepperell, Springs Industries (which has now

acquired Lowenstein, on its own a major producer),

Dominion Textiles, Collins & Aikman, Cone Mills,

United Merchants & Manufacturing, Dan River, Fieldcrest, and Riegel. The top 12 publicly held U.S. textile mill companies produce approximately 26 percent of total sales dollars. The typical large public

textile company showed a 10-year average return

on sales of about 3 percent, and a 10-year average

return on equity of about 9 percent.

The Traditional Production Process

The major traditional production processes for

woven fabrics are winding, warping, slashing, weav-
50

ing, and finishing. In addition, there is fabric that

is knitted or manufactured using other nonwoven

techniques.

Winding.—The output of spinning machinery is

spindles of short-length yarn. These spindles cannot be used in the next production process because

they are of unequal length, because there is not

enough yarn on a spindle, and because the spindle

size is unsuitable for the weaving and knitting processes. For these reasons yarns must be rewound onto

large packages suitable for the appropriate production process. Weaving requires a different package

than knitting. These different requirements for the

next processes make a uniform winding process almost impossible. Low-quality yarns perform badly

in winding, and weak spots in yarn are detected

through yarn breakage. Recently, most winders have

been equipped with automatic splicing devices to

prevent the knots that can enter yarn from repair

of breaks. These splicing machines detect a break

problem, pick the two ends up, and splice them together. Such devices decrease the labor intensity of

the process, as does automatic feeding of the individual winding positions.

Warping.-The warping process produces the

“warp” threads for weaving, which run lengthwise.

The goal is to reach a very high density of yarns on

the beam for the warp; 400 to 700 yarns are wound

onto the beam at once. This is done at a high speed,

with great attention given to the tension of the yarns.

A frequent problem is the uneven length of the yarn

on the packages. The more precisely the winding

process is performed, the fewer the unused yarns

left over in the warping process. Still, the warping

process is time-consuming. The packages are manually put onto a frame, where the yarns are guided

through a reed, which separates the individual yarns

and ensures that they stay parallel.

Slashing. -Four to six beams are run together on

a slasher to achieve the correct density and amount

of yarns on the warp beam. Yarns receive a protective coating that shields them from excessive abrasion during the weaving process. Without this treatment, most yarns would not stand the constant

friction and tension; the result would be frequent

end breaks, with an associated decrease in productivity. The “chemistry” used in the slashing process is confidential in every weaving plant, due to

the significant differences it can account for in the

efficiency of the weaving process.

Weaving.—Weaving transforms yarn into fabric

by interlacing lengthwise warp yarns and widthwise

filling yarns at right angles. A warp is planned for

several pieces of fabric, which are usually about 300

yards long. To keep the efficiency of weaving plants

high, changes in the warp on the loom must be carefully planned, Computer-aided production monitoring of the complete weaving process helps to keep

the looms running at high efficiency levels.

There are several basic weaves. The simplest is

called the plain weave, in which pieces of yarn pass

over and under each other alternately. In the twill

weave, the filling yarns go over and under two or

more warp yarns at regular intervals, creating a diagonal pattern. In satin weave, the intersections of

warp and filling are varied, resulting in a tightly

woven cloth with a smooth appearance. One of the

most famous looms for intricate patterns is the Jacquard loom. The pattern for this fabric is programmed

on a series of punch cards similar to modern computer cards. The cards, in turn, manipulate the warp

yarns to create the desired pattern. Flowered bedspreads, towels, and decorative fabrics such as upholstery are produced in this way.

Knitting.-The knitting process is divided into

several distinct segments. Some knitting mills are

like weaving mills, in that they manufacture rolls

of fabric for shipment to apparel plants to be cut and

sewn. Others specialize in particular apparel, such

as knitted underwear, sweaters, pantyhose, and

socks. The different types of knitting are usually

made on different machinery and m different plants.
51

The basic distinction between knitting and weaving are that the woven yarns are interlaced together

and the knitted yarns are looped; a knitted fabric

is a series of interconnected loops. The most frequent

knitting processes are weft or warp knit production,

performed on a flat bed knitting machine or on a

circular knitting machine, and single or double knit

production.

The knitting process consists of hundreds or thousands of needles in a row or a circle, which pull yarn

through the loops. The spacing of the needles determines the gauge of a knitting machine. The whole

process makes the impression of being more continuous than the weaving process. The number of

knitting positions determines the productivity of the

machinery. All yarn preparation processes through

winding are required in the knitting process, but neither warping nor slashing are necessary. Yarns come

to knitting directly from the winding machine.

Nonwoven Fabric Manufacture.—Some nonwoven fabrics are produced directly from fiber by

machines that apply combinations of heat and pressure to fuse the fibers into fabric. Fabrics that are

bonded this way have greater porosity, better shape,

higher bulk, and nonraveling edges. Other fabrics

are “needle punched, ” or produced directly from fiber by machines that tangle or mat fiber. Laminated

fabrics consist of two fabrics, or fabric and a material like urethane foam bonded together by heat or

chemicals.

One very popular nonwoven process is tufting.

Tufting is the most widely used process for carpet

manufacturing. In this process, a bar carrying a row

of closely spaced needles is positioned above a flat

backing fabric. Each needle is supplied with a yarn

drawn from a separate yarn package, forming one

of a number in a creel in the back. The needle bar

is lowered so that the needles pass through the backing fabric to a controlled distance, where a corresponding number of loopers are positioned. Defects

in the fabrics are easily corrected by a hand tufting

machine, without any quality loss. One tufting machine usually requires one operator. The tufting operation is capital-intensive, and there is potential for

future automation of the process with concurrent increases in productivity.

Finishing.–Fabric must be bleached, dyed, or

printed before it is ready for use. [t may also be

Photo credit” Char/es Gardner, School of Textiles, North Carolina State University

A traditional, plain-jersey knitting machine,

sheared, brushed, or scrubbed. Fabric may be treated

to repel water or to absorb it. It can be finished to

make it rigid or soft. Some textiles are coated with

plastics, in order to produce the look and feel of

leather. Others are finished to look like the fur of

wild animals.

Technological Innovations

Innovations are occurring throughout the process

of fabric formation. In addition to innovations already

being adopted are those pending development and

those that need to be developed.

Innovations in Specific Areas

of Fabric Formation

Weaving.—Traditionally, weaving has been accomplished on a shuttle loom. A new technology
52

for weaving, the shuttleless loom, has emerged since

the 1950s, and has virtually revolutionized the weaving process.26 These looms operate at faster speeds

and require fewer auxiliary operations than shuttle

looms. The four basic types of shuttleless looms are:

1. missile or projectile;

2. rapier—flexible, rigid, and telescopic;

3. air-jet; and

4. water-jet.

There are also multi-phase looms, which may combine weft-wave or warp-wave systems with shuttleless technologies.

Although the majority of the world’s weaving industry is still dependent on shuttle looms, there is

no doubt that their share of the market is steadily

decreasing. Rapier and projectile looms have been

the most widely used since the mid-1970s. Waterjet looms were more widely accepted than air-jet,

mainly for filament weaving, because of their greater

width and speed. Recent advances in air-jet looms,

however, give air the edge over water, and air-jet

weaving is expected by many experts to be the most

widely used shuttleless system of the late 1980s.

Projectile Looms. —The two basic types of projectile looms are the single and multiple projectiles. Single projectile looms have not made a major impact

in the industry, due to low rates of filling insertion.

~GThis discussion of specific types of shuttleless looms is based largely

on M.M. Mohamed, “The Current State of Weaving, ” North Carolina

State University, Raleigh, NC, 1984.

The projectile is accelerated and stopped by compressed air. Major manufacturers are Investa and

Crompton & Knowles.

Multiple projectile looms are manufactured by Sulzer, although others produce the same loom either

by license or by duplicating the Sulzer loom. The

gripper or projectile used on the Sulzer loom is capable of inserting the filling in one direction only,

and is projected at a speed of approximately 100 feet

per second through guides. The grippers are returned

to the picking side by means of a conveyor chain,

one per 10 inches of chain length.

The Sulzer loom introduced a number of new concepts to loom design. The first is the use of strain

energy of a torsion bar to activate the picking. The

second is the use of cam-driven lay with a long dwell

in the back center, and the use of guides to ensure

a straight line path for the projectile. Other new features are tucked-in selvedge, and a different reed design that allows for more air-space between wires.

This particular design is thought to be responsible

for the reduction of warp breaks on the Sulzer loom.

The Sulzer loom is a highly engineered machine,

which has been refined over a 30-year period. The

loom is available in tappet, dobby, or jacquard, and

in single- or multi-color filling. A new and significant development is the Crompton & Knowles airpropelled projectile, in the form of a tube: a length

of filling sufficient for one pick is crammed into the

plastic tube prior to the insertion. Picking occurs from

both sides, as on conventional looms.

Rapier Looms.—The three basic types of rapier

systems are rigid, flexible, and telescopic. In some

cases, only one of these three types is used to insert

the pick from one side to the other. In other cases,

two rapiers are used, and one of the rapiers takes

the filling yarn to the center and delivers it to the

second rapier, which then takes it to the other side

of the fabric. New developments in rapier looms include considerable refinements in weaving a wide

range of yarns, offering four-, six-, and eight-color

selection mechanisms for filling. Increased width and

speed of most rapier looms qualify them to be considered by many as the conventional looms of the

future.

One of the most significant developments in rapier looms is the two-phase Sauer-500, in which a

rigid rapier is used to insert the filling in two fabrics
woven side-by-side on the same loom. This development eliminates the space requirement problems

of the single-rigid rapier loom. The rapier is driven

in the middle of the loom, and enters one warp shed

as it leaves the other shed. All functions of the loom

lag by a phase angle of 180 degrees on one side,

as compared to the other side. A rate of filling insertion of up to 1,100 meters per minute is possible.

Air-jet Looms. -Even though air-jet loom development can be traced back to the 1920s, the modern era in air-jet weaving has taken place over two

stages. The first stage was the development of the

Maxbo loom. Each loom had its own compressor,

and was limited in width to about 100 centimeters

because no control was used on the air flow through

the shed. Due to this limitation, air-jet weaving did

not receive much attention during the early 1960s.

The second stage, which started in the late 1960s

and early 1970s, is characterized by the development

of jet control systems and the use of auxiliary nozzles. These events made it possible to have loom

widths up to 330 centimeters and speeds up to 600

parts per minute. Many experts believe that air-jet

looms will increase their share of the shuttleless market, especially at the expense of water-jet looms. This

is mainly due to the flexibility of air-jet looms in

weaving filament and spun yarns.

The three main types of air-jet looms are single

nozzle with confuser type guides, multiple nozzles

with guides, and multiple nozzles with profile reeds—

each of which has advantages and disadvantages.

Systems that use guides tend to suffer from a high

level of abrasion between the guides and the warp.

The use of a reed reduces the level of abrasion, but

tends to increase the cost of production due to the

high cost of the reed; however, Ruti, the Swiss company, has developed a semi-profile reed, which can

be used with plain weave fabric and reduces the cost

of a profile reed.

Although modern air-jet looms represent a tremendous advance in weaving, there are still limitations

to be overcome. One example is the restriction on

multi-color filling. Even though Ruti has developed

a system of filling mix that uses two main nozzles

oscillating up and down, only one color was used.

Also, the use of fancy yarn in the warp or filling direction still presents a major challenge. In addition, fabric weight is limited to light and medium weights

of about 400 grams per square meter.

53

Photo credit Char/es Gardner, School of Textiles North Carolina State University

An air-jet loom: Electronic controls help

make this technology faster and more

efficient than shuttle looms.

Water-jet Looms. —With water-jet looms, a waterjet takes the yarn across the shed. Water-jet looms

achieved higher speeds at larger widths than early

air-jet looms. But water-jet looms have the disadvantage of being limited to filament synthetic yarn. Other

disadvantages are that the warp has to be sized with

a nonwater-soluble size, and that the fabric has to

be dried.

Although experts predict reduced market growth

for water-jet looms, there are two recent important

developments. First, Nissan has developed a “Super Speed” loom that operates at a speed of 700 parts

per minute with a 72-inch width. Second, Investa

has modernized its OK-6/H2000 loom to use two

central nozzles at the middle of the loom, thus enabling the loom to weave double-width and to use

two-color filling. Water-jet looms have also been very

successful in weaving fiberglass, lining, and taffeta

fabrics.

Multi-phase Looms.—instead of the sequential

functions of shedding, filling insertion, and beat-up

of single-phase looms, a multi-phase loom can perform these three functions simultaneously and for

more than one shed. The two types of multi-phase

looms are weft-wave and warp-wave.

In the weft-wave system, the warp shed is divided

into a large number of sections that operate independently from one other. Filling carriers have a

piece of yarn long enough for one pick, and enter

the warp from one side. As they progress across the

warp, each shed changes for the next carrier. Beat-
54

up of the pick also occurs in segments, after each

part of the pick is inserted. The most important feature of this type of loom is a high rate of filling insertion achieved at a reduced noise level. The main

drawback is a limitation on yarn range and fabric

design.

With the warp-wave system, the sheds are created

for the full width of the warp. Filling insertion occurs in more than one shed simultaneously; beatup is done over the entire pick. The Bentley “Orbit” loom operates on a curve’s cylindrical warp path,

and claims to reach a rate of filling insertion of 3,600

meters per minute for a two-fabric loom, using rigid

rapiers to insert 18 picks simultaneously in each of

the two sides at the rate of 100 times per minute.

The “Orbit,” however, suffers from limitations of fabric width and design construction.

An ongoing development that will combine the

use of air-jet insertion and flat warp-wave shedding

is the McGinley loom, which uses conventional shedding like cam dobby or jacquard. Using guides that

will become a tube for the air and filling insertion,

the amount of air needed per pick will be considerably reduced.

Shuttleless looms have the following advantages

over traditional fly shuttle looms:

●

●

●

●

●

●

productivity of some shuttleless looms is as

much as three times that of conventional shuttle looms;

cloth can have greater width;

cloth flaws are reduced, thus improving fabric

quality and marketing;

noise levels in weaving rooms are reduced;

temperature and humidity control, demanded

by the sensitivity of the machinery, improve

both the cloth quality and the work environment; and

traveling cleaners on the equipment take care

of more dust problems at the source than traditional cleaners.

Dyeing and Finishing.—There is a general view

that the number of discrete processes in dyeing and

finishing needs to be substantially reduced, and that

as many as possible should be combined. The goal

would be to make dyeing and finishing a truly continuous process, rather than a series of batch processes

each with its own control and materials handling

problems. What this suggests is the development of

sophisticated monitoring and control systems for dyeing and finishing, the more important of which seem

to be the ability to monitor and control both the color

of wet fabric and the moisture content. The aim is

to be able to predict accurately the color of the final

dry fabric by measuring its characteristics at the moment it is being dyed.

Continuous dye ranges now have considerable

automation, but they are hampered by an inability

to run very small lots efficiently. Systems need to

be developed that will allow rapid changeover from

lot to lot on a continuous range system, with a minimum fabric band between the changes. In addition

to suitable monitoring and control functions, ways

to rapidly alter dye baths in order to change color

must be developed quickly. The aim is to produce

systems with very rapid response times. This will

require precision instrumentation for adding chemicals and controlling the parameters of the process.

It is also important to have absolutely uniform

desizing and bleaching. In this area, there may also

be applications for computer-based monitoring feedback and control systems. There are general needs

for reducing the energy cost in dyeing by reducing

either the setting or the drying requirements. For

some products, it would be useful to have dyeing

be the last of all finishing steps, in order to improve

order and warehouse versatility. Finally, the development of continuous computerized finishing integrates dyeing and finishing techniques, incorporates

computerized instrumentation, reduces unit labor

costs, and improves quality.

Innovations in Fabric Formation27

Automation is a major trend throughout the textile industry complex; most current applications of

robotics are in the area of materials handling. An

important concept, related to automated materials

handling, is automated identification of the material, which allows for the recognition of quality control problems with respect to their material source.

Such automated materials handling is, or eventually

will be, built into process technology itself, but maZTThe following ciiscusslon is based largely on D.R. Buchanan and

G.A. Berkstresser, “Automation in the Textile Industry: Prospects and

Impacts,” North Carolina State University, Raleigh, NC, cited in “Technologies for the Textile and Apparel Manufacture in the U.S. ,“ contract

report prepared for the Office of Technology Assessment, February 1985,

pp. 295-309,
55

Photo credit: Charles Gardner, School of Textiles, North Carolna State University

This modern knitting machinery permits increased

flexibility and productivity in fabric formation.

terials handling problems that will require special

technologies remain—the newest of which are driverless vehicles and robots. Of all the technological developments emerging in the textile and apparel industry, the increase in automation and monitoring

of fabric production processes has had the largest

impact on productivity and product quality.

Pending Technologies. -Pending innovations in

fabric formation are almost all in the areas of monitoring and control, inspection, and materials handling. Modern weaving and knitting machinery allows the choice of many options, facilitating the

decision of whether to emphasize productivity or

flexibility. The important trend outside the design

of fabric formation machinery is the elimination of

menial materials handling jobs. As an example, fabric handling with driverless tractors is well proven,

although this is an area in which potential savings—

other than those associated with labor—are difficult

to identify. In conjunction with automatic inspection

and grading, it would also be desirable to devise systems for automatic doffing of cloth and automatic

cutting.

Inspection of fabric is thought by many to be a

process that might be eliminated if suitable process

monitoring and control systems are invented. There

is, however, a difference in philosophy, depending

on whether a greige mill or a dyeing and finishing

plant is involved. In the former case, it is more likely

that inspection could be eliminated if the finished

fabric is inspected later; there will always be a need

for some inspection, but it can be automated. In particular, inspection systems should be capable of viewing the fabric with both plant capabilities and customer demands in mind, changing the latter with

respect to the customer and changing the former

with respect to the fabric style. Computer-controlled

inspection systems should also interface with computer-controlled cutting systems, to optimize the cutting of quality yardage. These issues become more

important as the textile industry moves to higher

quality and greater output levels, when inspection

speeds could limit process speeds.

Monitoring in weave rooms and other fabric formation areas is done generally for the purpose of

producing management information. Although this

is an important function of such systems, diagnostic monitoring that will locate and diagnose loom

malfunctions—preferably before they lead to producing off-quality material—are also needed. Such systems would be part of a larger monitoring system

that could deal with the flow of raw material into

the fabric formation process, or with the fabric formation itself. The development of truly reliable monitoring and control systems is closely related to the

development of automated inspection systems, since

the latter depend on the assurance that defects are

minimized in the process.

Needed Technologies.—The technological revolution has already occurred in fabric formation, with

the development and increasing adoption of shuttleless weaving. Nonetheless, at least six technological developments are expected to be the focus for

future advances. These developments center around

increasing the amount of automation in the process, reducing the number of manufacturing steps,

and gaining fuller control over production processes

than over changing machinery technologies. The six

developments are:

1. monitoring and controlling of slashing,

2. weaving without size,

3. new slashing techniques,

4. fewer steps,

5. built-in cleaning, and

6. microprocessors and CAD/CAM28 for loom

changes.

The Impact of Robotics.–Robot v. Hard Automation. —While hard automation dominated techno-

‘*Computer-aided design/computer-aided manufacture
56

logical developments in the textile and apparel industry of the past, some predict that robots may be the

trend of the future. To date, new technological developments in the industry have emerged primarily from

custom-engineered, automated manufacturing machinery, built to accomplish a specific set of tasks and incapable of doing other tasks without disassembly and

rebuilding. This process defines “hard automation. ”

Robots, however, whose applications have already

revolutionized the automotive industry as well as some

simple textile tasks, are defined as:

. . . reprogrammable multi-functional manipulators]

designed to move material, parts, tools, or specialized devices through variable programmed motions

for the performance of a variety of tasks.29

Clearly, a robot is something quite different from

a piece of machinery classified as hard automation.

The extent of future automation through the application of robots is still an issue of hot debate within

the textile and apparel industry.

Hard automation is used for such technologies as

automatic knot tying devices, which do what humans

had done previously with greater consistency. Modern techniques of yarn splicing, however, represent

a process that humans cannot duplicate. Other developments include faulty end detection using

computer-driven detection systems, and production

monitoring using computer-controlled systems. Also,

among the more inventive materials transfer

schemes are ring-spinning yarn packages brought

to a winding frame.

Currently available robots can have most, if not

all, of the following characteristics:

●

●

●

●

●

●

●

●

●

●

spatial flexibility, with up to 6 degrees of freedom,

teaching and playback capability,

memory of any reasonable size,

program selection by external events,

position repeatability to 0.3 mm,

weight handling capability to 150 kg,

point-to-point or continuous path control,

synchronization with object movement,

interface ability with external computers, and

high reliability—typically 400 to 500 hours between failures.

Pending Developments in Robotics.—Textile uses

for robots will probably not become revolutionary

~(’The Robot institute of America

but will remain evolutionary, until most of the following seven items have been developed to the point

that

1.

2.

3.

4.

5.

6.

7.

they are available at a reasonable cost:

vision, for recognition, parts orientation, and

flaw detection;

tactile sensing, for recognition, orientation, and

physical interaction;

real-time, computer-based interpretation of

visual and tactile data;

general-purpose versatile effecters, or “hands”;

mobility, or the ability to move from one work

station to another;

self-diagnostic error tracing; and

inherent safety.

Entire robot systems, in which integrated and interrelated technologies operate with a minimum of

human supervision and intervention, are likely possibilities for the future. Hard automation will likely

be part of such an automated factory, unless some

way is found to substitute some of the successfully

automated textile machines with robots. Most experts

predict that hard automation will be accompanied

by robots, particularly in materials transfer assembly and special operations applications, At the front

end of such a factory, it could be expected that computer-aided design, as well as transfer of instructions

and information directly to the manufacturing machines will be a featured. In addition, information

from a sophisticated computer-based system will be

sent to management for use in decisionmaking.

Three areas for likely use of future robot systems

in the textile industry are materials transfer, inspection, and process control. More sophisticated systems

of materials transfer are likely to emerge, especially

with respect to mobility; a number of spinning frames

could be served by one system, for example, and

the output directed to a number of places. These materials transfer systems will also have much more

sophisticated sensing systems, and may even monitor quality as they perform transfer tasks. More sophisticated versions of the driverless vehicles now

available are also likely to emerge. These may have

even more sophisticated computer control, and

would probably not depend on floor tracks for their

guidance system. If the latter were developed, this

would represent peak flexibility for these devices.

Effective inspection will take place automatically

at many more positions in the textile processes of
57

Photo credits: Charles Gardner, School of Text//es, North Carolina State University

This robotic device (above) inspects yarn to determine

whether yarn quality is sufficient for knitting. Such

technologies are replacing the hand inspection process

(below), and allow for greater flexibility, more accuracy,

and faster speed during inspection.

the future than in those of today. Inspections will

utilize rapid response, vision, and/or tactile systems

in some cases; in other cases, transducers will measure physical properties. In addition, the overall inspection system will be programmable, to allow decisionmaking based on both plant and customer

specifications; these may be changed nearly instantaneously as the product being manufactured changes.

Finally, such a system has to provide a complete

management information package on demand, and

this probably will be a built-in part of future innovations.

Real-time, efficient sensing systems will be needed

for process control, and these systems should be able

to operate at nearly every phase of the textile product manufacturing process. In addition, they will

have the ability to maintain complete records of a

product’s history, and of its complete component and

process identification. This will be extremely useful

when production difficulties occur.

Robots represent a logical extension of the hard

automation developments in textile technology, which

started with the Industrial Revolution. The importance of future developments will depend on the

degree to which robots and hard automation are

combined with computer control of design and information systems, in order to form flexible automated factory systems capable of producing highquality, low-cost products that can be sold profitably.

Impact of Automation on productivity. –The cumulative effect of a continuing flood of inventions since

the Industrial Revolution, mostly in the hard automation class, has been dramatic improvement throughout the textile industry. In each 70-year period since

1760, productivity in yarn and fabric formation increased tenfold. The introduction of robots into the

industry should assure a continuation of this historical trend of rising productivity.

The improvement of quality in processes that use

sophisticated automation, and particularly in robot

applications, is largely the result of enhanced repeatability and reliability. Depending on the job, it is possible not only to work more efficiently, but to effect

savings in parts or supplies because of the greater

efficiency of robotic applications. This can be facili-
58

tated by interfacing with feedback and control loops

for rapid response to external events. Finally, there

is a view that human intervention in the manufacturing process should be restricted to the greatest

extent possible, in that many human functions, such

as handling, are actually detrimental to quality.

The enhancement of flexibility occurs particularly

with robotic applications, due to the possibility of

reprogramming in a simpler fashion when circumstances dictate. Since there is an identified trend in

the textile industry towards increased levels of manufacturing adaptability, the flexibility built-in to automation can be of value to a firm that is close to the

marketing and fashion end of the business. While

humans represent the ultimate in flexibility and

adaptability, it is quite conceivable that robots may

be able to replace some human functions in manufacturing processes that require high levels of flexibility.

Impacts of Automation on General Management.

—Over the centuries of development in the textile

industry, management has had to adapt to change,

but the rates of change of the past were more gradual than those of today. Frequently, “trial and error” methods of adaptation worked. But the predicted

rate of change that will face the industry over the

next several decades may be so rapid that management will not have the luxury of a long time period

in which to adapt. Those who wait and try to adapt

to future changes, rather than planning for their

emergence, may not survive.

For the U.S. textile and apparel industries to enjoy the benefits of robotic systems applications, management must recognize that entirely new approaches

to human factors and financial management maybe

required. The structure of the industry may have to

change in order to survive in a global market economy; indeed, the $55 million spent by Burlington

Industries to modernize its Erwin plant is going to

look very small in a few years. Even with moves

toward higher value-added products, survival is not

guaranteed.

Recent research on textile industry structure indicates that large firms, with access to large amounts

of capital and large economies of scale, show the

highest productivity using the value-added measure.

Small firms, with the least access to capital but high

flexibility and usually producing high value-added

products, have the next highest productivity. Medium-sized firms, which have been a very important

segment of the industry, face both limited access to

large amounts of capital and limited flexibility, resulting in the lowest productivity. As the industry

moves toward a more capital-intensive structure, the

dominance of larger firms increase.

Impact of Automation on Human Factors Management.—The impact of automation on human factors

management will be pervasive. The following areas

are

●

●

●

●

●

likely to change;

—

traditional practices of recruiting large numbers

of low-skilled workers, and relying primarily on

on-the-job training, may need revision;

fewer workers will be needed, but those who

are needed may have to possess higher skill

levels;

textile companies may not be able to afford

traditionally high annual labor turnover rates;

management may have to revise the standard

layoff-recall practices that have been used to adjust output for demand; and

new technologies may bring massive changes

in the man/machine interface, implying changes

in managerial skills as well.

Training supervisors in textiles and apparel has

always centered on developing the ability to manage substantial numbers of low-skilled workers, while

the factories of the future are likely to demand supervisors who manage fewer people performing

more highly skilled functions. If the current labor

or supervisory force cannot make the transition to

the new system, the industry may need substantial

restaffing. The costs and time required to train more

highly skilled workers and supervisors would then

increase, giving larger firms an even greater advantage over more moderately sized companies.

Other industrial nations have already made plans

to address these human factors aspects. The European Community has provided $1 billion in funding for retraining of textile and apparel workers, and

for wage subsidies during training. Sweden has its

own $27 million fund for retraining and relocation

for displaced workers. The United Kingdom has a

$110 million fund that includes money for retraining, and Spain provides funds for early retirement

of excess employees.
59

—

Industrial Structure30

The Weaving Industry

The U.S. weaving industry consists of hundreds

of companies, both large and small, which compete

in the cotton and raw fabric market. The fabrics produced by weaving firms are intermediary products,

which are then sold for further fabrication.

The industry is defined by:

● nearly identical manufacturing technology and

machinery,

Ž easy substitutability of products,

● similar channels of distribution, and

● high expenditures for new plant and equipment.

Companies in the weaving industry are horizontally and vertically integrated in different degrees.

Production of fabrics is done both at large- and smallscale locations, resulting in different degrees of flexibility. The ability to move between large-scale production and flexibility is the key to success in the

weaving industry. Fabric production for some producers is only a small percentage of their total production, whereas it is the only product for others.

The industry has frequently been revived by the

introduction of new weaving technology. The newest

technologies for shuttleless looms, for example, have

significantly increased productivity. Clear signs for

the rejuvenation of weaving have been the more

than doubling of fabric exports, and substantial increases in output per employee.

Capital expenditures are concentrated mostly in

large-scale production facilities. The concentration

of the four largest companies, which is currently

around 40 percent, is likely to increase; these companies benefit from enormous economies of scale.

Nonetheless, the total number of companies has also

risen slightly in recent years, primarily due to a combination of low entry barriers and the potential for

higher earnings.

Technology is largely supplied by several foreign

machinery producers. The development of machinery is a high-technology matter in the hands of a

few companies, which compete in an almost oligopolistic market. The frequent updating of technologies

~~Th is discussion is based largel}’ on “Technologies for the Textile

and Apparel Manufacture in the U S ,“ op. cit., pp. 146-173,

that substantially improve productivity requires high

expenditures.

The profitability of the weaving industry is largely

determined by:

●

●

●

●

●

high degree of rivalry among corporations,

increasing degree of substitutability, of the different textile fabric types,

low bargaining power of these corporations

against their suppliers,

high price competition among the producers,

and

low barriers of entry and exit.

The rivalry among fabric producers is high. There

are about 200 companies in the cotton weaving industry, and about 250 companies in the manmade

fiber weaving industry. All fight for market shares

in a low growth market, where expanding market

share for one firm means decreasing shares for the

others. Fabric producers face the additional problem of being cost-efficient in large-scale plants, but

of losing production flexibility if they grow too large.

With more than 1,000 different fabrics in demand,

flexibility within a single firm is difficult to achieve.

Fabrics, both woven and nonwoven, are highly substitutable.

Competition in the weaving industry is a question

of price. The more vertically integrated firms have

a slight advantage, in that they can add the margin

at the textile end-product stage. Cost advantages can

also be achieved by higher productivity through improved use of technology.

The suppliers of the fiber industries have the potential to enter the weaving industry with relative

ease. In addition, larger weaving firms frequently

integrate backwards, since entry barriers are merely

a function of the high capital requirements for machinery. The skills required for the operation of a

weaving plant are not too demanding.

The Circular and Warp Knit Industries

The circular and warp knit industries are essentially fabric forming industries. While they have similar technologies, they generally compete in independent markets—the former in the fabric market

for apparel goods, and the latter in the home furnishings market. Warp knit is also used in some underwear. Industry competition resembles that of the

weaving industry.
60

The circular knit sector currently benefits from

productive machinery with computer control and

high future prospects of more automation. The warp

knit sector, on the other hand, uses complex technology that does not change rapidly. Eastern European countries are the leading producers of this machinery.

The circular knit industry is currently consolidating. In recent years, the number of companies has

declined from over 600 to under 500. The number

of employees has also declined. In contrast, the warp

knit industry is fragmenting, with an increasing number of firms. Improvements in this industry are focused on production, not marketing.

Profitability in both sectors is depressed, mainly

because of import competition. The U.S. industry has

no productive advantages. Labor costs, even though

the industry is capital-intensive, are the crucial factor in competition. Many experts believe that prospects for the industries are dim. Technological advances do not tend to improve financial performance,

and imports significantly threaten existing markets.

The Tufting Industry

The tufting industry produces carpets, a highly

standardized product guided by standardized technologies. The U.S. industry consists of several hundred large-scale corporations. The industry is defined

by a unique manufacturing technology, well-defined

markets, and high capital intensity. Tufting technology has reduced the production costs of carpets significantly, and has created entirely new markets in

home furnishings. Most tufting companies are independent from textile companies; however, many of

the large integrated textile companies have tufting

operations as well.

The industry is not highly concentrated, but is

growing rapidly. Fiber producers, who play a critical role already, will probably become even more

important as industry growth slows. Improvements

are needed in both marketing and production, since

tufting is largely an export industry; quality and cost

advantages over foreign competitors can be increased by extensive R&D from fiber producers.

The profitability of the tufting industry is largely

determined by:

● the increasing degree of rivalry among the corporations,

● the innovative capacity of fiber companies,

● the relatively high bargaining power of these

corporations against their suppliers, and

● high barriers of entry.

One can, nonetheless, expect substantial numbers

of entries into the industry. Entry barriers are becoming lower, while exit barriers remain low.

The tufting industry’s supplier firms enjoy a particularly large potential to enter this sector. Industry suppliers consist of large fiber producers that develop special fibers for carpet producers, These fiber

suppliers compete heavily on a price basis. Still, the

relative bargaining power of the tufting industry with

its suppliers is high, and its companies are largely

in control of the pricing process.

Rivalry among tufting companies is moderate but

increasing. There are 300 to 400 similar sized companies competing. High growth rates have enabled

these companies to compete comfortably, without

problems of overcapacity. High standardization of

both the production process and the product have

made it difficult to be distinctive. A substantial experience curve exists, promoting relatively large

scales of production. Competition is increasingly forcing a cost emphasis in the struggle for market share.

Technology for tufting is largely supplied by a few

machinery producers. The technology is relatively

simple, highly standardized, and does not require

substantial reinvestment. The units of production are

relatively small, and require about one normal-sized

room.

Tufting is an emerging industry in a transitional

phase, with the corresponding structure of high exports, increasing competition, and a decreasing experience advantage. Prospects for the tufting industry are good, The industry is fragmenting, due to

negative returns to scale. As market segments become more differentiated, fiber producers are likely

to play an even more essential role in new developments.

Other Nonwoven industries

The U.S. nonwoven industry consists of a rapidly

growing number of small-scale firms, which compete in a wide variety of different markets with hundreds of different products. Some of these small firms

are owned by large corporations. The industry is

characterized by:
6?

● diversity of manufacturing processes,

Ž easy substitutability of certain products,

● diversity of markets, and

● high expenditures for R&D.

Companies are horizontally and vertically integrated to differing degrees. The nonwoven sector

is a small percentage of total production for some

producers; for others, it is their entire production.

Because of nonwoven fabrication processes, it is

sometimes difficult to include this sector within the

traditional textile industry complex. However, the

industry also exemplifies the tremendous possibilities of a future textile industry. Experts suggest that

the textile industry would be well advised not to miss

these opportunities, a large share of which may be

captured by industries like paper and chemicals.

Profitability is largely determined by several factors, including:

the high degree of rivalry among competitive

products,

high degree of substitutability of different nonwoven structures,

relatively high bargaining power of these corporations against their suppliers,

wide variety of applications for the products, and

variety of different markets.

Also, high entry barriers contrast with low exit barriers. The most important factor in profitability, however, is that the nonwoven industries are a relatively

young market sector—numerous new applications

are on the horizon.

Technology for the nonwoven industry is developed by some U.S. machinery manufacturers, as well

as producers. The kind of technology used is an important factor in future productivity increases in the

END USES

Textile mill products have three major end uses–

apparel, home furnishings, and industrial and specialty products. Historically, apparel has dominated

consumption. But this is no longer the case. While

there are cyclical variations, the other two uses have

been growing in importance; apparel’s share of fiber consumption remained at approximately 37 perindustry; others parallel the chemical industry. Some

technologies are close to those in the paper industry. One can expect that new processes will boost

this industry even further. Standardization within the

industry is low with respect to the technologies used,

as many new products are related to the development of new machinery and manufacturing technologies.

Suppliers of the nonwoven industries are entering the industry in great numbers. One can expect

that this development will afford large multinational

corporations—many of which are chemical companies—an opportunity to enter the traditional textile

industry. Capital expenditures for technology and

R&D are high. But once the standardization of the

production technology starts, already the case for certain products, entry barriers will be low, due to production machinery that is inexpensive, small, and

productive. The reverse situation, backward integration, is less likely. Nonwoven producers do not have

the necessary resources to integrate backwards.

The suppliers’ bargaining power is strong for the

nonwoven industries. One can expect their importance to increase. The buyers’ bargaining power, on

the other hand, is low. Most nonwoven products are

quite different from one another. Competition is low,

so prices can be kept high. The diversity of customers makes it easy for producers to find highly profitable market niches. Furthermore, demanded quantities are large. One example is geotextiles, used in

landscaping.

Nonwoven products are highly substitutable. Nonwovens compete with both textile products and products from the paper industries. It is likely that these

products will experience cost reduction and quality

improvement as a result.

OF TEXTILES

cent between 1979 and 1985, whereas the share of

home furnishings grew from 31 to 38 percent. Industrial textile products still consume over 20 percent of fiber production.31

II~e,ytj/eorganon, vol 57, No. 9, September 1986, p. 204
62

Industrial Structure

Traditional Apparel

The traditional apparel industries, dominated by

the clothing industries, account for nearly half of all

textile and apparel sales. In 1985, U.S. consumers

spent $133 billion on apparel, or nearly 5 percent

of total disposable personal income.32 Production includes the manufacture of men’s, boys’, women’s,

girls’, children’s, and infants’ apparel and apparel

accessories, excluding footwear. Apparel and apparel

accessories are chiefly made by cutting and sewing

woven and knit textile fabrics, or by knitting from

yarn. Some items are made by cutting, sewing, cementing, or fusing such materials as rubberized

fabrics, plastics, and leather.

Unlike much of the rest of the industry, where significant numbers of small- and medium-size businesses are giving way to vertical integration, apparel

remains an industry segment dominated by small

manufacturers, jobbers, and contractors. Manufacturers perform the entire range of operations of garment making. Jobbers are responsible for their own

designs, acquire the necessary fabric and related materials, and arrange for sale; however, they contract

out most production operations, with the exception

of cutting. Contractors receive already-cut garment

part-bundles from jobbers, and process them into

finished garments.

The apparel industry is characterized by:

●

●

●

●

many small firms,

ease of entry,

threat of failure, and

individual firms acting as price-takers, with respect to supplying firms and retail channels of

distribution.

The industry comes close to textbook conditions for

“perfect competition,” but, ironically, what keeps

shops so small is in part the specialization that each

has in a particular narrow product line.

Manufacturers can readily expand and contract

output through the use of jobbers and contractors,

which reduces reliance on heavy capital investment

for expansion or the cost of unused capacity for contraction. Indeed, jobbing and contracting are growing, relative to manufacturing (see table 5). In women’s

3ZTeXt;je If;gtlljgtrfs, Op. cit., p. LO.

outerwear, for example, while there were 35 percent fewer manufacturers between 1977 to 1982, the

number of contractors and jobbers increased by 26

and 52 percent, respectively. Apparel contractors

contribute approximately $3 billion of the value added to apparel products each year.33

Labor-intensive operations still predominate in the

industry, and wage costs have become one of the

critical factors in competition. Apparel is one of the

largest employers of women and minorities. People

from small towns with few alternatives, the undereducated, and immigrants are widely employed in

the industry, providing a low wage, exploitable labor force. In fact, this system–a mechanism for shifting production from one area to another, in quest

of labor cost advantage—is a source of employment

for the “hard-to-employ,” especially for undocumented

immigrants.

According to a study by the International Ladies’

Garment Workers’ Union (ILGWU), the current expansion of the contracting system means that:

. . . sub-minimum wages, overtime and child labor

violations, and illegal homework are once again commonplace in the apparel industry .34

In fact, there is evidence of the growth of a number of “underground” apparel operations which,

according to some calculations, comprise up to 35

percent of garment production in unregulated shops

and illegal operations.35

As of 1982, there were 16,655 companies operating 18,233 establishments in apparel manufacturthis excludes knitwear, which is categorized

as part of textile mill products by standard industrial classification (SIC), as well as part of such other

assorted manufacturing categories as rubber and

plastic clothing, surgical corsets, and feathers (see

table 6 for branch categories of the apparel sector).

Including these other manufacturers brings the number of companies to just over 19,000, and the numJ3George Wine, American Textile Manufacturers ]MllUle,perSOrla]

communication.

jq[nternational Ladies’ Garment Workers’ Union, Research Department, “The US. Apparel Industry, 1960-1985, With Special Emphasis

on Women’s and Children’s Apparel,” Oct. 18, 1985, p. 10.

3sLetter t. OTA of Apr. 20, 1986, from Dr. M. Patricia FernandezKelley, Department of Geography and Environmental Engineering, The

Johns Hopkins University, p. 3.

16U,S, Department of commerce, Bureau of the Census, 1982 Cerlsus

0/ Mmulacturers.
63

Table 5.—Number of Establishments and Production Workers, by Type of Establishment,

Women’s Outerwear industries, 1963-82

Total Manufacturers Jobbers Contractors

Industry: women and misses blouses (SIC 2331):

All establishments

1963 1,175 171 157 692

1967 990 285 137 568

1972 971 242 163 566

1977 1,422 424 166 832

1982 1,955 296 369 1.288

Production workers (000s)

1963 521 91 24 381

1967 501 132 2,8 345

1972 548 141 2.9 378

1977 742 156 3.6 55.0

1982 794 138 7.0 58.6

Production workers per establishment

1963 443 532 15.3 551

1967 51 0 463 204 607

1972 564 58.3 178 668

1977 522 368 21,7 661

1982 406 466 19.0 455

Industry: women and misses dresses (SIC 2335):

All establishments

1963 4,752 970 681 2,434

1967 5,225 1,870 713 2,642

1972 5,567 2,364 712 2,491

1977 6,112 3,444 449 2,219

1982 5,627 2,105 644 2,877

Production workers (000s):

1963 1771 39.5 9.3 113.9

1967 183.7 54.9 12.1 116.7

1972 187.0 60.5 12.4 114.2

1977 1468 51. 7 8.2 86.9

1982 120.0 27.9 8.1 83.8

Production workers per establishment,

196 3 373 40,7 137 468

1967 352 29.4 170 442

1972 336 256 174 458

1977 240 150 183 392

1982 21 3 133 126 29.1

Total Manufacturers Jobbers Contractors

Industry: women’s and misses suits and coats (SIC 2337):

All establishments

1963. 2,516 573 455

1967. 2,101 712 423

1972 1,618 386 340

1977 1,677 445 316

1982 1!512 306 352

Production workers (000s):

196 3 755 201 6.6

1967 71 6 23,1 8.4

197 2 649 181 55

197 7 728 194 67

1982. . 632 132 8.9

Production workers per establishment:

1963 30.0 351 145

1967 341 32.4 199

1972 401 46.9 1 6 2

1977 4 3 4 4 3 6 21 2

1982 41 8 43,1 253

Industry: women and misses outerwear

(not elsewhere classified) (SIC 2339):

All establishments

1963 1,297 704 153

1967 1,100 470 169

1972 1,373 476 197

197 7 1.802 831 189

1982 1,746 450 341

Production workers (000s).

1963 51 4 250 3.6

1967. . 51 7 225 41

1972 71,5 253 3 9

1977 88.3 324 6.5

1982 93,5 29.1 87

Production workers per establishment

1963 396 355 235

1967 470 479 24.3

1972 521 532 198

1977 49.0 390 34.4

198 2 536 647 255

SOURCE U S Department of Commerce, Bureau of the Census, Census of Manufacturers, 1982

ber of establishments to nearly 21,000 (see table 7).

The average number of establishments per company

is therefore approximately 1.1 for apparel. It is important to note that the number of companies and

establishments has decreased since 1982; however,

most estimates suggest that little change has occurred

in the ratio between the two.

The average manufacturing shop size is quite

small. As of 1982, in nearly all branches of women’s

apparel, the typical size of an apparel shop was less

than 75 employees—basically unchanged from the

1950s. In women’s dresses, the average shop size

is only 21. This decentralization means that whereas

industries such as drugs, petroleum refining, tires,

steel, or motor vehicles account for 90 to 100 per1,092

966

892

915

853

423

401

41 4

46.6

41 1

38.7

41.5

46.4

509

482

440

461

700

782

955

228

251

423

493

557

51 8

544

604

630

583

cent of domestic production through the operations

of their 50 largest firms, in women’s apparel—which

accounts for about 60 percent of total apparel sales—

the 50 largest seldom make up more than half of

domestic shipments. And, in contrast to other parts

of the overall textile industry, government data do

not show a trend toward concentration in apparel.

Domestic apparel production has grown only moderately in recent years. Using 1977 as a base year,

the Apparel Products Index showed a 1984 level of

100.9; industrial production for clothing was only

95.0.37 And while the volume of apparel in 1967 dol-

‘“ Federdl Resem e Board ]ndustrid] Production, stat]st ical release, Nm’

14, 1986
64

Table 6.—Branches of the Apparel (Knit and Woven)

Industry, by Standard Industrial Classification

Code Number

SlC

code Branch of industry

2253†

2254†

2259

2311

2321

2322

2323

2327

2328

2329

2331 ●

2335*

2337*

2339*

2341 ●

2342*

2361*

2363*

2369*

2381† 

2384†

2385†

2386†

2387†

2389†

2395*

2397†

3069†

3079†

3151†

3842†

3962*

Knit outerwear mills

Knit underwear mills

Knitting mills, not elsewhere classified

Men’s, youths’, and boys’ suits, coats, and

overcoats

Men’s, youths’, and boys’ shirts (except work

shirts), collars, and nightwear

Men’s, youths’, and boys’ underwear

Men’s, youths’, and boys’ neckwear

Men’s, youths’, and boys’ separate trousers

Men’s, youths’, and boys’ work clothing

Men’s, youths’, and boys’ clothing, not elsewhere

classified

Women’s, misses’, and juniors’ blouses, waists,

and shirts

Women’s, misses’, and juniors’ dresses

Women’s, misses’, and junior’s suits, skirts, and

coats (except for coats and raincoats)

Women’s, misses’, and juniors’ outerwear, not

elsewhere classified

Women’s, misses’, children’s, and infants’ underwear and nightwear

Corsets and allied garments

Girls’, children’s, and infants’ dresses, blouses,

waists, and shirts

Girls’, children’s, and infants’ coats and suits

Girls’, children’s, and infants’ outerwear, not elsewhere classified

Dress and work gloves, except knit and ail-leather

Robes and dressing gowns

Raincoats and other waterproof outer garments

Leather and sheep-lined clothing

Apparel belts

Apparel and accessories, not elsewhere classified

Pleating, decorative and novelty stitching, and

tucking for the trade

Schiffli machine embroideries

Fabricated rubber products, not elsewhere classified (insofar as it includes vulcanized rubber

clothing)

Miscellaneous plastic products (insofar as it includes plastic clothing)

Leather gloves and mittens

Orthopedic, prosthetic, and surgical appliances

and supplies (insofar as it includes surgical corsets, belts, trusses, and similar articles)

Feathers, plumes, and artificial flowers (insofar as

it includes artificial flowers)

tBranch of Industry specializing in producing articles of apparel for both sexes.

“Branch of industry specializing in producing women’s and children’s apparel.

SOURCE U.S Executive Off Ice of the President, Office of Management and

Budget, Standard /ndustr/a/ C/ass/f/cation A4anua/, 1972

lars rose, five other important production measures

have declined (see table 8):

1. employment of production workers,

2. production hours worked,

3. volume of production in pounds,

4. volume of production in square yards, and

5. physical output in millions of dollars.

But even these discouraging production figures may

overstate domestic production. Commerce Department data on domestic apparel production include

garments cut in this country and sent abroad for sewing and other processing, under the provisions of

Item 807 of the Tariff Schedules of the United States

(see box C, ch. 5). These “807” items maybe comingled with goods fully produced in this country and

reported to the Bureau of the Census as part of the

quantity and value of domestic production.38

Intense competition among many small producers is reflected in a slower rise in apparel prices relative to the economy as a whole.39 Between 1967 and

1984, the wholesale price of all apparel increased

101.1 percent; that of women’s, misses’, and juniors’

apparel rose 79.1 percent; and that of girls’, children’s, and infants’ apparel rose 102.7 percent. For

all commodities, wholesale prices increased by 210.3

percent, more than twice as fast as apparel.

Competition in apparel is also demonstrated by

comparatively low profit margins.40 For most of the

past three decades, after-tax profits for apparel firms

ranged between 1 and 2 percent of total sales. In

contrast to a profit ratio of 5.2 percent before taxes

and 2.7 percent after taxes for all manufacturing in

1980, the parallel returns in the apparel industry

were 3.9 percent before taxes and 2.0 percent after.

Because of the small size of the typical garment

firm and the large size of the national apparel market, apparel firms tend to be highly specialized. Most

establishments produce a single generic product, or

a small number of similar products. This degree of

specialization does not exist abroad, where production of a wide range of garments is more common.

Sslnternational Ladies’ Garment Workers’ union, op. cit., P. 7

‘gIbid., p, 12.

~Olnterna[ Revenue Service data, cited in Ibid., PP. 12-I 3.
65

Table 7.— Number of Establishments Per Company,a Apparel (Knit and Woven) Industries, United States, 1982

Number of Number of Establishments

Branch of industry companies establishments per company

Women’s blouses . . . . . . . . . . . . . . . . . . . . . 1,825 -

1,955 1,07

Women’s dresses . . . . . . . . . . . . . . . . . ... . . . . . 5,489 5,627 1,03

Women’s suits, coats, and skirts . . . . . . . . . . ... ... . . . . . . 1,431 1,512 1,06

Women’s outerwear, not elsewhere classified ... . . . . . . . . . . . . . . . . . . . . . 1,595 1,746 1,09

Women’s and children’s underwear . . . . . . . . . . . . . . . . . . . . ... . . 477 604 1,27

Corsets and allied garments ... ... . . . . . . . . . . . . . . . . . 134 151 1,13

Children’s dresses. . . . ..., . ., ., . . . . . . . . ..., . . . . . . . . 490 556 1.13

Children’s coats.. . . ..., . . . . ..., . . . . . . . . . . . . . . . . . . . . . . 71 81 1.14

Children’s outerwea, not elsewhere classified . . ..., . . . . . . . . . ..., 279 332 1.19

Robes and dressing gowns . . . ..., . . . . . . . . . . . . . . . . . ..., . . . . . . 128 135 1,05

Waterproof outergarmentsb . . . . . . . . . . . . . . . . . . . . . . . . . . . ..., . . . . . . 98 112 1,14

Leather and sheep-lined clothingb ..., . . . . . . . . . . . . ..., . . . . . . . . . . . 186 186 1.00

Apparel beltsb . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 317 319 1.01

Apparel, not elsewhere classifiedb . . . . . . . . . . . . . . . . . . . . . . . . . . . . 362 369 1.02

Schiffli machine embroideries, . . . . ..., ..., . . . . . . . . . . . . 356 366 1.03

Pleating and stitching, ..., ..., . . . . . . . . . . . . . . . . . . . . . . . ..., . . . . . 906 912 1,01

Knit outerwear . . . . ..., . . . . ..., . . . . . . . . . . . . 893 923 1.03

Knit underwear. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72 84 1,17

Fabricated rubber products, not elsewhere classified . ..., . . . . . . . . . . . 1,213 1,380 1,14

Artificial flowers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..., . . . . 207 215 1,04

Men’s and boys’ suits and coats . . . ..., . . . . . . . . . . . . . . ..., . . . . 443 528 1,19

Men’s dress shirts and nightwear . . . . . . . . . . . . . ..., . 535 741 1,39

Men’s and boys’ underwear . . . ..., . . . . ..., . . . . . ..., . . . . . . . . . . . . . . . 61 77 1,26

Men’s and boy’s neckwear. ..., . . . . . . . . . . . . . . . ..., . . . . . 165 170 1,03

Separate trousers ..., ..., ..., ..., . . . . . . . . . . . . . . . . . . . . . . . . . . 269 356 1,32

Work clothing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 305 544 1.82

Men’s and boys’ clothing, not elsewhere classified . . . . . . . . . . . . . 575 646 1.12

Fabric, dress, and work gloves . ..., ..., ..., ..., . . . . . 78 102 1.31

Leather gloves . . . . . . . . ..., . . . . . . . . . . . . . . ..., . . . . . . . . . 80 96 1.20

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,040 20,830

aA company IS deftned to Include all manufacturing establishments owned by the company, plus all manufacturing establishments of subsldlanes or affiliates over

—.

which the company has acknowledged control

bThls branch of Industry produces Items for wear by both sexes

SOURCE US Department of Commerce, Bureau of the Census, 1982 Census of hlanufacturers

Nontraditional Apparel41

While most apparel involves the cutting and joining of garments from fabric, knit items use a different technology. The knit sector of the industry is

divided into two major categories: hosiery and knit

underwear products, and knit outerwear products.

Both are facing severe challenges from imports, Product standardization has allowed developing nations

to gain quick footholds in this market segment, despite lower labor costs relative to traditional apparel.

Prospects for the knitwear sector will depend not

only on controlling the level of import penetration,

but also on aggressive marketing of identified market niches and perhaps, especially with knit outerwear, by forward integration into retailing.

‘~lThls’~eC~l~n is based Iarqel;r on “Technologies for the Textile and

.Appdrel Nlanufacture in the [{s,” Op cfi pp ]~1.]~$),

The Hosiery and Knit Underwear Industry.–

The hosiery and knit underwear industry (SICs 2251,

2252, and 2254) consists of 500 to 600 corporations

—some integrated horizontally, others vertically—

which compete in two separate homogeneous and

undifferentiated markets, the hosiery market and the

underwear market.

The hosiery and knit underwear industries are

characterized by a common manufacturing technology, the circular knitting process. The products are

essentially apparel goods, but with almost no sewing except for knit underwear. Labor costs are considerably lower than those for traditional apparel.

Rivalry among companies is high, due to:

• the large number of firms,

● low growth rates of the markets,

● standardization of the products, and

• diversification of the industry.
66

Table 8.—Apparel Industry in the United States, Production Measures, 1967-84

(a) (b) (c) (d) (e) (f) (9)

Production Apparel

workers Volume in Volume in Volume in Phyiscal Products

Year emplt. manhours 1967 dollars pounds square yards output Index

(thousands) (millions) (millions) (millions) (millions) (1977=100)

1967 . . . . . . . . . . . . . . . . . ...........1,268.3

1968 . . . . . . . . . . . . . . . . . ...........1,278.3

1969 . . . . . . . . . . . . . . . . . ...........1,277.0

1970 . . . . . . . . . . . . . . . . . ...........1,239.1

1971 . . . . . . . . . . . . . . . . . . ..........1,210.6

1972 . . . . . . . . . . . . . . . . . ...........1,230.9

1973 . . . . . . . . . . . . . . . . . . ..........1,257.4

1974 . . . . . . . . . . . . . . . . . ...........1,188.7

1975. . . . . . . . . . . . . ...............1,078.2

1976. . . . . . . . . . . . . ...............1,140.0

1977 . . . . . . . . . . . . . . . . . . ..........1,130.3

1978 . . . . . . . . . . . . . . . . . . . . . . . . . . ..1,138.3

1979. . . . . . . . . . . . . . ..............1,106.1

1980 . . . . . . . . . . . . . . . . . . . . . . . . . . . .1,079.0

1981 . . . . . . . . . . . . . . . . . . . .........1,060.7

1982. . . . . . . . . . . . . . . . . . . . . . . . . . . . 985.3

1983. . . . . . . . . . . . . . . . . . . . . . . . . . . . 980.6

1984 . . . . . . . . . . . . . . . . . . . . . . . . . . . .1,001.5

2,299,812 ------ - - -

2,347,827

2,319,972

2,220,113

2,185,677

2,225,876

2,267,561

2,100,560

1,900,751

2,056,519

2,014,759

2,017,123

1,952,828

1,916,385

1,893,119

1,712,798

1,776,621

1,816,785

$15,952.2

17,571,2

17,817.9

18,491.1

17,430.5

18,987.1

19,475.3

18,608.7

18,562.5

19,414.0

19,579.0

20,726.9

21,440.5

21,440.0

21,625.1

20,804.0

21,543.9

N.A.

3,615.4

3,745.4

3,599.7

3,585.1

3,733.4

4,195.0

10,244

3,746,1

3,697.2

3,877,8

4,158.1

4,097.4

3,990.4

3,939.8

3,759.7

3,437.0

4,015.3

3,772.9

N.A.

N.A.

N.A.

N.A.

9,934

10,762

10,244

9,910

9,378

9,790

10,497

10,299

10,131

10,060

9,924

9,729

10,135

10,086

$14,028.3

14,465.1

14,003.6

13,130.4

13,231.6

14,640.7

14,431.0

13,775.7

13,516.7

13,847.7

13,664.0

13,915.7

13,704.3

13,680.3

13,747.1

12,652,0

13,306,4

N.A.

80.9

82.9

85.6

82.2

83.2

88.3

89.0

85.0

77.6

91.5

100.0

103.1

98.3

97.3

96.1

87.3

95,3

102.8

NA.—Not available

SOURCES Prepared by the International Ladies’ Garment Worker’s Union, from Cols. (a) &(b) data from U.S Bureauof Labor Statistics (SIC 23-239+2251+2252+

2253+2254. COI (c) dollar volume Interms of items produced in the United States as shown in the Annual Apparel Survey, Censusof Manufacturers, and

Annual Sumey of Manufactures Col (d)U,S Textile Economics Bureau, Inc, Texti/e Orgarron. Col (e) National Cotton Council of America, Cotton Counts

//s Customers Col. (f) quantities produced In the United States, shown by the Annual Apparel Surveys, Census of Manufacturers and Annual Surveys of

Manufactures weighted by average values of different productsln 1967 taken from the same sources Col (g)lndexof Production for Apparel Products,

compiled by the Federal Resewe Board

There are many similarly sized companies which

compete in a comparatively low growth market. High

standardization of the product prevents competitors

from becoming distinctively different from one

another. Furthermore, as a result of all firms being

on a similar experience curve, the cost structure determines prices.

The key to profitability in the hosiery and knit underwear industry appears to be eliminating the currently high level of standardization among products.

It is essential to have excellent marketing programs.

Also critical, at least according to some prominent

experts, is higher product differentiation and marketing flexibility. While this production-oriented industry has been changing, such developments have

tended to be more reactive than proactive.

Some experts see the industry as one in decline.

The industry is consolidating into smaller units, and

disinvestment is occurring. Technology turnover is

low; productivity improvements are unlikely to come

from newer technology; and employment is decreasing, as are the number of companies in the industry. Nonetheless, some parts of the industry are

showing export strength, suggesting that the low

profitability in the industry is due largely to missed

marketing and innovation opportunities, and not just

to industry structure. Much of the export boost is

due to innovations of the fiber companies in new

fibers and related products, In summary, the hosiery

and knit underwear industry, while currently declining, could be revived with proactive marketing.

Technology for the industry is largely supplied by

a few machinery producers, of which only a small

percentage are U.S.-owned. Updating of machinery

is fairly frequent, making the technology used an

important factor in the competition.

The Knitting Outerwear Industry.--The knitting outerwear industry (SIC 2253) consists of several hundred small-scale but growing operations.

These companies compete in several different mar-
.

67

kets, including sweaters, shirts, and general outerwear, While such markets are interrelated, there is

much potential for segmentation. The industry is

largely part of the apparel industry, but only a small

percentage of the production technology involves

sewing.

Rivalry among fiber producers is high, due to:

the large number of firms in the industry,

the variable size of industry firms,

low growth rate of the markets,

high imports,

high amount of fixed costs,

standardization of the products produced by

U.S. manufacturers, and

general industry diversification.

Gaining market share in this sector is extremely difficult. The unnecessarily high degree of standardization of apparel products in U.S. markets provides

an opportunity for some manufacturers to create

strong market niches for knitting outerwear products. But even though manufacturers could substantially differentiate their products, few have done so.

In addition, the industry faces extremely high import levels from more flexible firms, which often

have higher quality products.

Buyer bargaining power is substantial. Products

are competitive, and those of the buyer industry,

retailers, are high. Due to the large amount of competition, substitutability among domestic and foreign

knitting producers by retailers is relatively easy.

The knitting industry has the potential to integrate

forward. The lack of profitability in this sector could

be made up for by an appropriate retail chain. Italian outerwear knitters, for example, have successfully opened a retail chain in the United States. This

should be possible for U.S. producers as well, since

there are no substantial entry and exit barriers in

the industry.

Low entry barriers are a function of:

● low economies of scale,

● low product differentiation,

● marginal cost advantages,

● moderate capital requirements, and

Ž access to the distribution channels.

Low economies of scale provide a good incentive

for small and flexible units to enter the industry, if

they have access to distribution channels. Disadvantages to firms that lack vertical integration can easily be compensated for through marketing flexibility and better product mix. The industry has a high

potential for profits if firms react to consumer demand, if they forward integrate, and if they adopt

innovative marketing techniques.

The technology used in this sector is basically mature, and is supplied largely by a few machinery

producers—of which only a small percentage are

U.S.-owned. Updating of machinery is moderate in

the knitting sector, and low in sewing operations.

No single competitor has distinctively different technology.

Pending Technology

Cutting Technologies

Most experts agree that the making of markers by

computer-controlled systems, as well as the cutting

of fabrics under computer control, is a likely development for some aspects of apparel production. And

a number of desirable advances in the actual spreading and cutting of fabrics can be envisioned.

Spreading, unlike most other apparel technology,

has not changed much in recent years. More important, however, is the question of whether cutting

multiple layers of fabric to form bundles will be either replaced or augmented by continuous cutting

of fabric, one layer at a time. The current bundle

system acts as a buffer between various process steps,

creating a reservoir to absorb or augment the flow

of material through a system of processes. The bundle system is also directly responsible for the long

in-process time that is characteristic of today’s apparel processes. Replacing a process that requires

a garment to spend anywhere from 2 to 20 days in

the manufacturing chain with a process that would

allow a garment to appear several hours after cutting makes for an attractive alternative.

The reciprocating knife is thought by many to be

the weak link in modern cutting systems; otherwise,

current computer-controlled systems are generally

adequate. Depending on one’s view, what is needed

is the ability either to cut more plies more reliably,

or to cut single layers quickly with immediate transfer to assembly stations. Reciprocating knives are

limited in speed and flexibility, while jet cutters can
68

Photo credit: Charles Gardner, School of Textiles, North Carolina State University

The new computer-controlled apparel laser cutting

technologies (left) represent a major advance

over hand cutting (right).

suffer severe energy losses if too many layers are

presented to them. Laser cutters tend to fuse fabrics

that are cut in more than one layer. An ideal cutting system could first be defined by whether multiple plies or individual layers were being cut. In addition, an ideal system could:

● apply to all fabric types,

● have a circular cross-section of minimum diameter,

● operate in conjunction with a computer-controlled guidance system, and

● be able to enter the fabric at the center as well

as at the edges.

Materials utilization is of major concern. The

amount of waste in cutting can vary from as little

as 8 percent for well-placed, computer-generated

markers on unpatterned material, to as high as 25

percent for patterned fabrics. Since the fabric cost

is roughly one-third to one-half the garment cost,

this represents a major loss. Any technological development that could reduce either the waste level

or the actual cost of the fabric waste would be of

Photo credit: Copyright (©) 1986, 1987 by Bobbin International Inc.

All rights reserved

great interest. Areas needing investigation include

the packing of patterns with maximum efficiency,

the optimization of seams and their associated seam

allowances, and the relationship between cutting

techniques and waste generation. Other ideas include the building up of garments or garment subassemblies directly from fiber, in order to ensure generation of zero waste.

As cutting technology automates—and as fabric

quality continues to improve, making apparel manufacturers increasingly willing to accept fabric without their own quality inspection—some predict that

a new degree of vertical integration will emerge, with

certain elements of cutting becoming part of textile

mill manufacturing.42

Joining Technologies

Today, sewing contributes the largest portion of

the labor cost to an apparel item, even though as

much as 70 to 80 percent of what is ascribed to sewing cost is really materials handling. According to

some experts, automation of materials handling, both

before and after the sewing machine, poses the greatest potential for successful automation.

It is a widely held view that sewn seams will never

be totally replaced. They have both mechanical and

aesthetic attributes that are essential in some parts

of garments. On the other hand, many have the view

that alternatives to sewing can and should be inves42(&orge Wine, pers~nne] cOmm\lnicatiOn.
69

-— .

tigated closely. These alternate technologies would

be in the general areas of glueing, fusing, and welding of fabrics. It also seems likely that some of these

techniques could be automated more successfully

than sewing. There may also be use for these techniques as temporary joints, prior to a final joining

by sewing techniques.

Technologies for Apparel Assembly

The apparel sector is characterized by relatively

simple technology and a high degree of labor intensity. In the global marketplace of apparel, most experts see a reduction in import penetration and increased automation as the only long-term solutions

for the survival of apparel production in industrialized nations. Automation is considered the solution

for reducing labor costs, adding production flexibility, and standardizing quality. In addition, there are

many new uses for apparel, ranging from space suits

to disposable apparel for medical use, and from protective suits for chemical plant employees to lightweight, bullet-proof vests for protecting soldiers and

police officers.

Today’s basic piece of equipment, the sewing machine, is fundamentally a mechanized tool. It has

remained substantially the same throughout the century. This is due primarily to the small and specialized nature of individual establishments, and to the

ever-changing styles and fabrics of the fashion

market.

Simple technologies with low fixed assets per emPloyee, 43 coupled with management and manufacturing flexibility provided by the contracting system,

mean easy entry and exit from the industry and a

highly competitive economic environment. Competition is not confined to producers manufacturing the

same types of products, but extends to firms that produce substitutes. Firms making dresses, therefore,

compete with those manufacturing skirts, blouses,

sweaters, suits, slacks, and a variety of other products. Such competition results in a high rate of turnover, with hundreds of apparel firms going out of

business each year.

Clearly, the potential for improving productivity

in the apparel industry through new technological

developments and adaptations is substantial. Where

production is sufficiently large in volume, more advanced technologies are being used. This is especially true in fabric spreading and cutting, and in

specialized stitching operations.

Most sewing technologies remain homogeneous,

and are largely worker-paced rather than automatic.

Some new systems for automated sewing are in development, such as the sewing of sleeves for men’s

suits developed through the tripartite support of government, industry, and organized labor. One such

effort, organized as the Textile/Clothing Technology

Corp. ((TC)2), spearheads the U.S. effort in automated

sewing. (TC)2 has succeeded in automating the production of sleeves for men’s suits, significantly reducing the time it takes to manufacture each of 20

million sleeves per year.

During the past decade, research in apparel manufacturing has expanded from the mechanical engineering base to microelectronics applications and a

“total systems” concept. Information processing has

become highly advanced and lower in cost. This is

especially germane to apparel manufacturing, where

the number of different bits of information needed

to cut, route, and assemble the components of many

different styles and sizes of garments reaches enormous proportions. Without relatively inexpensive

computers with high memory capacities, it is impractical to automate apparel manufacturing processes.44

The development of automated pattern-making

and cutting equipment, which replaces operations

formerly done by hand, has become technologically

feasible since the advent of sufficiently powerful yet

relatively inexpensive information processing of

microelectronic capabilities. Many apparel firms have

already installed computer-assisted pattern making,

marking, and cutting systems. Automatic sewing machines are used in some locations, and automatic

conveyor systems for handling in-process goods are

in evidence in many apparel plants.

The next critical step in apparel automation has

been the development of technologies that can identify and pick up a single ply of fabric from a multiply lay, position the piece, and join it to another.

Such advances, another result of the efforts of (TC)2,

~~Acc~rdlng to 1981 data from the Census Bureau, the apparel industry (as represented by SIC 23) had average fixed assets per employee

of onl~ $40{)0, in contrast to an average of $31,100 for all manufacturing

tl~jordon Berkstresser and ~azuo Takeuc}li. “.~llt~mati~[] A ~lghting (’hance’)” fhbb]n Alagazine, }Iarch 1985, p. ,50
70

Photo credit Copyright (©) 1986, 1987 by Bobbin International Inc.

All rights reserved

Graders at H.L. Miller and Son are using the Gerber

AM-5 system to remake new patterns out of old patterns

stored in the system. What used to take 1 hour when

done manually now takes less than 2 minutes.

has been transferred to the Singer Sewing Co., which

plans to begin commercial use in late 1987. This innovation, of course, depends on robots that have

more than limited decision making and movement

flexibility capacities, such as those that exist in current industrial robotics.

Another promising technological development in

apparel, currently being worked on at Japan’s Research Institute for Polymers & Textiles, is the application of computer graphics to apparel design.45

Other developments are ready for marketing. Toray

of Japan is ready to market a low-cost, microcomputer-controlled, pattern-making system this year.

The Nagano Prefectural Research Institute for Information Technology in Japan has developed sophisticated software for microcomputer-controlled evaluation of fabric.

In the early 1980s, the Japanese Government provided $60 million to a special apparel research group.

The overall objective of this group has been the development of a system to administer and control the

total manufacturing process and to reduce production time by 50 percent, with a pilot plant operating

by 1989. Although the project has encountered some

difficulty in fulfilling its goal of simultaneously addressing problems faced by both large and small businesses, several of its programs—especially those that

target large-scale production—are proceeding vigorously. The group’s four specific objectives are:

1.

2.

3.

4.

A

To develop pre-sewing technology, including

evaluation of the fabric, material stabilization

technology, pattern making and cutting, automatic spreading, and inspection for fabric

defects.

To automate sewing and assembly of parts, including the development of machines to fold,

cut, and bind temporarily; of programmable and

automatic sewing machines; and of devices for

automatic pressing on forms. Also to be explored is the development of innovative methods of joining garment sections without the use

of conventional sewing techniques.

To improve materials handling, including creating devices to hold material similar to human

fingers and arms, which can transfer garment

parts to precise locations; can assemble component parts into segments to be sewn together,

such as collars with interlinings; and can transfer parts from one process to the next.

To implement a control system with the technology to integrate the production line, especially when types of products are changed, such

as the flexible manufacturing system (FMS) concept; to monitor the production line, and repair

or replace damaged machine parts automatically; to detect, remove, and replace defects in

the goods in process; to establish a method of

marking the fabric parts with sewing control information; and to develop devices to read control information during the production process.

highly automated and flexible apparel manufacturing system will have a profound effect on the

distribution system, as will the introduction of sophisticated microelectronic devices in retail stores

for customer sizing and selection. This process will

require the development of a more sensitive and sophisticated marketing orientation. In other words,

the apparel industry must get “closer to the consumer. ”

If there is to be a technological revolution in apparel, a substantial adjustment by the apparel labor

force may be required of both production workers

and managers. Unemployment among apparel workers is likely to grow; plans to minimize dislocation

could be made now, rather than later. Aside from

changes in the numbers and types of production

workers, there will be new demands on managers.
71

Photo credit: Copyright (©) 1986, 1987 by Bobbin International Inc.

All rights reserved

This supervisor of a “unit production” system (see ch.

2) monitors a number of workers, parts, and production

speeds simultaneously, through the use of advanced

computer technologies. The skill level needed by such

a manager is clearly different than that needed by

the traditional supervisor in a nonautomated

apparel facility.

Skills necessary to supervise large numbers of workers using simple machines with repetitive tasks are

distinct from skills necessary to supervise automated

lines with automated control systems and a few

highly trained technicians. Management could also

plan for orderly change within its own ranks.

Pending Automation in Apparel.46—The apparel industry of the industrialized world seems unable, with current technologies, to retain markets.

Differences in labor costs are so great that even with

the higher cost of long distance shipping, low labor

cost countries often have a substantial price advantage. According to many experts, once the surge of

imports can be slowed, the best long-term solution

for the survival of the apparel industry in industrialized nations is increased automation—which will

reduce labor costs, add flexibility, and standardize

quality.

Research projects now under way in the United

States, Europe, and Japan are demonstrating the

technical feasibility of automating apparel production processes. Using computers, development of

three-dimensional graphics capability for apparel deJfiThis section is based ]arge[} on Gordon Berkstresser, PeJ’ton B. H~ldson, and Ka}uo Takeuchi, “Automated Apparel Manufacturing: A Global

Perspective~” cited in “Technologies for the Textile and Apparel hlanufacture In the U S. ,“ op clt

sign has been achieved by the Japanese Research

Institution for Polymers and Textiles. The introduction of microprocessor-controlled machine functions

can change the sewing operation in fundamental

ways, as demonstrated by the “FIGARMA” system

developed at the Chalmers University of Technology in Sweden. “FIGARMA,” or Fully Integrated Garment Manufacture, is an extension of the concept

of flexible manufacturing systems. FIGARMA not

only points out critical areas for the development

of specific new technologies, but is also a total systems approach that goes beyond technological development and into management areas, such as

building computer models for processes needed in

planning.

Chalmers, a Swedish company, has a history of

apparel technology development. In addition to the

FIGARMA approach, this firm is using an Eton overhead rack materials handling unit in its apparel laboratory to conduct research on how computers might

be able to position pieces to be sewn together at two

sewing stations. Some years ago, Chalmers developed an air-jet, single-ply separator. As in so many

cases of this type, however, there was no short-term

commercial payback for industry, so the prototype

has gathered dust in the laboratory.

(TC)2, the tripartite endeavor of industry, labor, and

the U.S. Government, housed at the Massachusetts

Institute of Technology’s Charles Stark Draper Laboratory, has made major strides in modernizing the

production of men’s tailored clothing. Figure 14 provides a model of this technology, which:

. . . has developed a computerized production process with robots which will take cut fabric and fully

automate the manufacture of subassemblies. The cut

fabric will be automatically fed into a machine and,

with a computer-aided vision system and robot, will

sew, turn, and fold the fabric. The conversion of limp

fabric into sewn parts of garments, with the use of

computers and robots, represents a major technological breakthrough. Until this development, the use of

robots in the production process was essentially limited to rigid materials such as metals.47

Having proven success in workable technology for

sleeves, coat backs, and trousers, Draper Labora-

~~statement of Murra} H Finley, President of the Amalgamated CIOthing and Textile Workers’ Union, AFL-CIO, to the Subcommittee on

Commerce, Justice, and State, the Judiciary and Related Agencies, Committee on Appropriations, US. House of Representatives, Mar. 3, 1986,

p, 4,
72

Figure 14.—(TC)2 Automated Sewing System

Vision Auto

robot

module

loader

SOURCE: Bobbin Magazine, September 1986.

tories are beginning a new activity to apply the technology to knitwear—permitting automatic sewing of

knit parts.48 Production of jacket sleeves was to be

the first effort and would be used initially by Palm

Beach, Inc. of Cincinnati at their Knoxville, TN, plant,

and by the Hartmarx Corp. Future development of

a machine to sew trousers may be initially tried by

Greif Companies, a division of Genesco, for its Allentown, PA, plant. The plan is to contract with a

U.S. machinery manufacturer to commercialize the

technology. And the Singer Sewing Co. has placed

into production a functional prototype of the (TC)2

technology; Singer finds “the presence of a significant market in the near term for application of automated sewing systems. ”

49 As for the future, Singer’s

vice president of industrial products has stated that

“we are only scratching the surface in terms of utilizing the technology.”50

According to Amalgamated Clothing and Textile

Workers’ Union (ACTWU) President Murray Finley,

the payback from technologies being developed

today is rapid and substantial. Production time and

labor costs can be reduced. The inventory of fabric,

in the form of bundles of sewn parts awaiting the

next stages of manufacture, is greatly reduced as well.

Industry and organized labor are providing approximately $5 million per year for these and similar efforts, and the Federal Government has pledged an

additional $3 million, With hundreds of thousands

of jobs and tens of millions of production dollars at

stake, the amount could be far greater; Japan is

spending $80 million to develop a fully automated

apparel process for the 21st century, one which

dwarfs anything on the drawing boards in the United

States. The Japanese plan to develop a system in

which a salesman in a clothing store would take a

hologram of a customer’s body, and digitally controlled machines would then tailor-make an article

of clothing.51 As this goal makes clear, the difference

between the United States and Japan lies both in

levels of funding and in mandate. While (TC)2 is an

effort to automate the production of sewing, the Japanese program represents state-led industrial restructuring.

481 bid., p. 5.

4gFrank Bray and Vince Vento, “Chapter Two Begins With Singer, ”

Bobbin Magazine, September 1986, p. 170.

501 bid., p. 174,

slBruce Stokes, “@tting Competitive,” /National Joumaf, June 7, 1986,

p. 1363,
73

Photo credit Copyright (©) 1986, 1987 by Bobbin International Inc.

All rights reserved

Pictured above is the factory prototype machine of (TC)2,

the apparel manufacturing technology developed at MIT’s

Charles Starke Draper Laboratories. Below are two parts

of the (TC)2 manufacturing process: the “interlocking

belt system,” shown with the interlocked open (middle),

which guides the fabric along the surface during

production; and the “end effecter” (bottom), which

is a high-technology sewing head mounted on

a standard robot.

New automated design techniques have also been

developed. Designers can electronically “sketch” design, color, and texture onto a computer screen. The

design variety is nearly infinite, and multiple possibilities can be reviewed in moments.52

Computer-controlled, high speed sewing machines

do exist today. However, most experts feel that these

machines may be inadequate for the technology of

5 years from now. Some of the areas in which sewing machine architecture and operation could be investigated include: the possibility of three-dimensional sewing rather than flat sewing; independent

computer control of both the bobbin and the needle, to allow greater flexibility; and technologies that

move the sewing head to the fabric instead of vice

versa. This last technique is a major component of

the technology developed at the Draper Laboratories

by (TC)2. It also is suggested that inspection of the

sewing machine could be of considerable advantage,

and might possibly be integrated with the sewing

process itself.

sz~e,y(j)e lfjgt)/jgh(s, Op. Clt

Photo credit’ Copyright (©) 1986, 1987 by Bobbin International Inc.

All rights reserved

In addition to apparel production, the Singer Sewing

Co. has brought robotics into the manufacture of such

end-uses as washcloths (above) and upholstery.
74

TEXTILE MACHINERY MANUFACTURE

Background

The textile machinery segment of the industry is

the smallest of the four. It has approximately 640

plants, employing 18,300 people—12,200 in production—in 1985.53 While the U.S. textile industry represents the largest single textile machinery market

in the world, U.S. machinery manufacturers are losing this market to foreign manufacturers. Whereas

U.S. textile machinery manufacturers in 1960 supplied 93 percent of the domestic market, by 1979

the figure had dropped to 55 percent; much of the

1979 sales were in parts, rather than in new, complete machines. By 1982, domestic suppliers held

only 48 percent of the market.

Of the $1.6 billion spent by the U.S. textile industry in 1981, only half was being spent within the

United States; that portion was largely for parts, materials handling equipment, and less sophisticated

machinery. Only about one-quarter of U.S. textile

machinery manufacturing firms even make complete

machines.54 The other half of the $1.6 billion, which

was spent for high-technology textile systems, went

primarily to West Germany, Switzerland, Italy, France,

Japan, and Great Britain, The United States, however, continues to be a major producer of dyeing and

finishing equipment, and also exports a considerable amount of high- and low-technology textile

equipment, equal to 16 percent of total production.

The U.S. textile machinery sector (SIC 3552) is losing ground in other areas as well—not only in the

$1.6 billion annual U.S. market, but also in the $7.1

billion world market. World market share for U.S.

manufacturers during that same period fell to well

under 10 percent.55 The United States is no longer

a leader in the textile machinery market. Rather, it

has become a large market for the textile machinery of overseas competitors.

5SU.S. Department of Labor, Bureau of Labor Statistics, EmPlOYmenf

and Earnings, March 1986, p. 46.

S4U.S. /ndUstriaI Outlook, 1982, op. cit., P. Zos.

s5u.s. I)epartrnent of Commerce, “Opportunities and Strategies for

U.S. Textile Machinery Manufacturers to Improve Their Competitive

Positions in Domestic and Foreign Textile Markets, 1980-1985,” September 1980, p, I-33.

Indeed, spare parts represent a disturbingly large

fraction of all sales of U.S. textile machinery firms.

Spare parts are only 27 percent of Italy’s international

sales, 49 percent of West Germany’s, and 51 percent of Great Britain’s—they are 92 percent of the

sales of U.S. producers.56 As for exports, nearly all

U.S. overseas sales of textile machinery are spare

parts for previously purchased equipment. This

points to past U.S. machinery success, but bodes ill

for current and near-future markets—especially for

complete machines. U.S. technology is furthest behind the state-of-the-art in projectile and jet shuttleless weaving, open-end spinning, high-speed winding, and knitting equipment.57

Most U.S. imports of textile machinery come from

Japan and the European Economic Community

(EEC), and are concentrated in the fabric and yarn

industries. West Germany and Switzerland together

account for two-fifths of the world exports in textile

machinery, while Czechoslovakia and Japan have

emerged as important competitors.

Concentration in the industry is high, and is growing through an increasing number of mergers, acquisitions, and joint ventures. The Swiss-based Sulzer

Corp. recently acquired Ruti, its strongest competitor;

Sulzer-Ruti has close ties with both Toyoda, the Japanese leader in looms, and British air-jet technology. This enables Sulzer-Ruti to lead technological

developments in an oligopolistic manner. Also to be

contended with are Hollingsworth-Hergeth, ReiterScragg, and Barber-Colman-Warner& Swasey. While

such concentration is likely to have a negative impact on competition, the R&D departments of these

combined market forces is expected to advance the

development of new technology dramatically.

Multinationals are beginning to dominate textile

machinery manufacturing. Similar to chemical fiber

manufacturers, these global corporations are highly

concentrated on national and international levels.

In Switzerland, for example, machinery production

for the three major processing stages is dominated

by Rieter, Saurer, Dubied, and Sulzer-Ruti, four giants in spinning, weaving, and knitting; in Britain,

Sslbid., p. 1-47.

sTAmeriCanTexti]e Machinery Association, Texfde kfaChifW~ Statistics, October 1981, p. 6.
75

—

by Platt-Saco-Lowell and Bentley; in the United

States, by Platt-Saco-Lowell; in Japan, by Toyoda,

Howa, and a division of Nissan, the automobile corporation; in Czechoslovakia, by Investa; in Spain,

by Jumberca; in West Germany, by Shubert & Salzer, Sulzer, Zinser, Mayer, Schlafhorst, and Stoll and

Terrot; in France, by SACM and ARCT; and in Belgium, by Picanol.58 The “big eight,” ranked by estimated market shares, are Sulzer-Ruti, Rieter, Investa,

Platt-Saco-Lowell, Nissan, Toyoda, Schlafhorst, and

ARCT. Sulzer-Ruti alone has staked out approximately one-fifth of the global market for shuttleless

looms, either directly or through licensing.

There are specific market niches, however, for

smaller companies. The Swiss company Maschinenfabrik Jacob Muller AG, a subsidiary of Frick, is a

world leader in high-speed narrow fabric looms. Germany’s Karl Mayer Textilmaschinenfabrik claims to

have 85 percent of the world market for Raschel and

tricot knitting machines. While Schlafhorst is a major producer overall, it is also the acknowledged

leader in the narrower markets of warping machinery and various automatic and non-automatic winders,

Capitalizing on similar market niche opportunities

may be one of the most critical strategies for the U.S.

industry of the future.

The licensing of technology is a major method for

capturing market share. Czech licenses for weaving

machines, for example, have been granted to Enshu,

Nissan, Toyo Menka, Draper, Crompton, Knowles,

and Mayer. And although market positions stem

largely from more R&D investment, most U.S. machinery producers lack either the means or the

momentum for needed R&D.

Much of the European success is also due to service. The big foreign machinery producers have service facilities in the heart of the U.S. textile industry.

Employees speak English, whereas a reciprocal approach seems to be neglected in U.S. export offices

operating in non-English speaking nations. Spare

parts can be flown in within a reasonable amount

of time. Murata of America, a Japanese firm, has

headquarters in Charlotte, North Carolina, as do

Omintex of Czechoslovakia, and Toyoda and Nissan of Japan. Sulzer of Switzerland, Pignone of Italy,

and Hargeth of Germany have offices in Spartansburg, South Carolina. The British firm Platt-SacoLowell operates in Greenville, South Carolina. In

1980, Platt-Saco-Lowell boasted an order backlog of

9 months to a year on most of its product lines; that

same year, the Sulzer Group had order intake for

weaving and knitting equipment of over $430 million—a large increase over the previous year. The

joint efforts of Schubert& Salzer Machine Works with

Ingolstadt of West Germany also reported record

sales in 1980.

Some U.S. companies have experienced growth

as well. In early 1980, for example, Automatic Material Handling announced orders of $2.5 million to

two U.S. companies for 12 Bale-O-Matics and new

hoppers. Another textile manufacturer bought 21

chutes from that firm, and substantial sales were

made to French companies. Leesona, Draper, and

others—including many air control equipment companies—have also increased sales, both within the

United States and abroad.

According to industry analysts at the U.S. Department of Commerce,59 U.S. manufacturers are not expected to regain the technological advantage they

once had in winding and weaving in the near future. On the other hand, they may stay competitive

in support equipment and equipment used in opening through ring spinning. By the end of the 1980s,

even newer versions of textile equipment are expected to increase productivity, safety, and energy

conservation still further, presenting U.S. manufacturers with another difficult but important challenge.

The technological and economic results from this

development remain to be seen. Creation of the Textile/Clothing Technology Corp. by companies, unions, and government may breathe new life into the

textile machinery sector; expansion of such R&D efforts could help significantly.

Industrial Structure

The condition of textile machinery manufacturers

in the United States may best be understood from

a global perspective. Ernst Nef, publisher of the International Textile Bulletin, writes:

The American textile machinery manufacturers increasingly lose their position in . . . [both domestic

and world] markets. There is no significant loom
76

manufacturer in production. Spinning machines are

produced by Platt-Saco-Lowell. If they have no huge

success with the new friction spinning machine, they

will lose the whole market. The Japanese machines

are better. Leesona is no longer of importance. All

the rest are companies which are accustomed to the

American market. internationally, they are unimportant.

Draper and C&K used to be the world leading

loom builders, whereas Saco, Lowell, and Whitin

were the leaders in the spinning machinery sector.

Furthermore, other leaders used to be Textile Machine Works, Reading, in knitting and Leesona in

texturing and winding. Unifil, Johnson used to be

the number one slashing machinery producer.60

Nevertheless, U.S. machinery manufacturers have

developed new technology to rebuild old equipment,

such as new cards and conversion from shuttle to

shuttleless looms. Cards can be completely rebuilt,

with cylinder speeds increased and setting accuracy

improved. With loom conversion costing 15 to 25

percent of the price of a new loom, a company can

increase its productivity up to 70 percent by converting conventional shuttle looms to air-jet looms;

Leesona and Draper offer loom conversion. However, while the technology for these rebuilding efforts is innovative, it still leaves U.S. machinery manufacturing strengths primarily in the area of parts

and servicing of existing machines—not a good prognosis for the future.

The U.S. textile machinery manufacturing industry is well aware of its declining markets in the area

of new machine systems. In the introduction to a

report from a cooperative grant between the American Textile Machinery Association (ATMA) and the

U.S. Department of Commerce, ATMA acknowledges

the problem:

. . . the U.S. textile and apparel machinery industries

have not kept pace with the high-technology advances

being developed and introduced by foreign competitors. The reasons for this lag include the industry’s

~~The previous two paragraphs are based largely on Ernst Nef, publisher, International Textile Bulletin, Zurich, Switzerland, personal letter, cited in “Technologies for the Textile and Apparel Manufacture in

the U.S.,” op. cit , p. 341.

inadequate attention to research and development,

its failure to recognize the growing technological

strength of foreign companies, and the lack of study

and communication needed for the transfer of technology from one U.S industry to another. Often, basic

research conducted in the United States is being exploited by foreign competitors, instead of being

adapted by U.S. industries. U.S. firms have not encouraged communication among themselves or with

inventors; consequently, U.S. patent applications are

now in the minority and continue to decrease.61

In order to correct for the above deficiencies,

ATMA has recognized the need for machinery manufacturers to heighten their awareness of both machinery technology and the state of this technology

within the textile industry. Along with the Department of Commerce, ATMA embarked in 1984 on

a study to:

● identify needs for high-technology applications

to textile and apparel machinery;

● identify potential resources of high-technology

research and development, to be applied to textile and apparel machinery; and

● develop an organization to establish long-term

approaches, including the development of a

high-technology institute for the textile and apparel machinery industries, which would be

aimed at the commercialization and the attainment of a greater share of the world market for

U.S. manufacturers.62

Revitalization of textile machinery manufacturing

is considered by most to be crucial to a strong domestic textile industry. Some believe, however, that

machinery development in the future could better

serve the industry if it were done by the textile manufacturers themselves, rather than by a separate machinery manufacturing sector. That more domestic

R&D is needed is not debated; where and by whom,

and with how much money and from whom, is very

much in question.

slAmerican Textile Machinery Association, Development of National

Approaches to the Application of High Technology to the Textile and

Apparel Machinery Industries, for the U.S. Department of Commerce,

Cooperative Grant No. 99-26-07170-10, October 1984, p. 1.

c21bid., p, 2.
Chapter 4

Areas for Decision:

Trade, Technology,

and Employment
Chapter 4

Areas for Decision: Trade, Technology,

and Employment

Having laid out each step of the fiber/fabric/end sumer has been affected by these changes. Next, the

use production chain in chapter 3, this chapter will chapter looks at recent developments in the research

examine the role of textiles and apparel as a com- and development of new products and production

petitor in world markets and as a player in the U.S. techniques used by U.S. textile and apparel firms,

economy. First, the chapter reviews global reactions and assesses the importance of capital investment

to the increasingly international textile and apparel to the future of the domestic industry. The chapter

industry, outlines how the U.S. public and private concludes with a discussion of the past, present, and

sectors have responded to changing conditions at potential future effects of trade and technology on

home and abroad, and addresses how the U.S. con- those who work to produce textiles and apparel.

DECLINING TRADE BALANCES SHAKE TEXTILE AND

APPAREL MARKETS

Declining trade balances, perhaps more than any

other single economic or technological issue, have

been responsible for upheaval in the textile and apparel industry. The experience of this industry is part

of an unfortunate recent trend in the trade performance of the U.S. economy. In 1986, the U.S. trade

deficit was $170 billion, and deficits were seen in

virtually every manufacturing industry. The United

States has become a debtor nation for the first time

since World War I.

Textiles and apparel had a negative trade balance

in 1986 of $21.1 billion (see table 9). Approximately

half of the value of apparel purchased in the United

States is foreign-made, in contrast to two-fifths in

1984 and one-fifth in 1976.1 In terms of volume, textile imports into the United States have grown by

an average of nearly 15 percent per year since 1980,

while the U.S. textile market has grown by only 1

percent per year. In addition, since 1985 imports

have begun to penetrate new areas of the textile industry, including raw yarn and unfinished fabric, as

well as household goods like draperies, sheets, and

towels.2

“’Amer~ca’s Textile Industry: Holding Its Salvation in Its Own Hands,”

The Ecorrorms/, Apr 5, 1986, p. 79

2W E, Schmidt, ‘‘Textiles Defends Its Last Bastion, ” The New York

Times, June 23, 1985, p, 4F

The origins of imports are diverse. The countries

of the Far East—and increasingly China—have become major producers, and are penetrating the U.S.

market. By 1985, import penetration in textiles had

reached 33 percent, in apparel it had grown to 48

percent, and for industrial products and home furnishings it stood at 16 percent—increases of 100 to

500 percent over a decade earlier (see tables 10, 11,

and 12).

The impact of current levels of import penetration

on the economy in general, as well as on the textile

industry in particular, is devastating. It is estimated

that every billion yards of fabric and apparel imported represents 100,000 lost job opportunities to

U.S. workers. Imports, therefore, may account for

well over one million lost job opportunities, not to

speak of the additional million lost through “ripple”

effects.

The major trends affecting textile and apparel trade

are:

●

●

●

●

the emergence of a global marketplace for textiles and apparel,

the growing protectionism of other nations,

an “overly strong” dollar, and

significantly lower wages and working conditions abroad.

79
80

Table 9.—U.S. Textile and Apparel Trade

Textiles Apparel Textiles and apparel

Trade Trade Trade

Imports Exports balance Imports Exports balance Imports Exports balance

F.A.S. valuesa

1970 . . . . . . . . . . . . . . . . . . . 1,135

1971 . . . . . . . . . . . . . . . . . . . 1,392

1972 . . . . . . . . . . . . . . . . . . . 1,526

1973 . . . . . . . . . . . . . . . . . . . 1,568

C.I.F. valuesb

1974, . . . . . . . . . . . . . . . . . . 1,752

1975 . . . . . . . . . . . . . . . . . . . 1,336

1976 . . . . . . . . . . . . . . . . . . . 1,791

1977 . . . . . . . . . . . . . . . . . . . 1,939

1978. . . . . . . . . . . . . . . . . . . 2,400

1979. . . . . . . . . . . . . . . . . . . 2,399

1980 . . . . . . . . . . . . . . . . . . . 2,676

1981 . . . . . . . . . . . . . . . . . . . 3,250

1982 . . . . . . . . . . . . . . . . . . . 3,000

1983 . . . . . . . . . . . . . . . . . . . 3,460

1984 . . . . . . . . . . . . . . . . . . . 4,874

1985: . . . . . . . . . . . . . . . . . . 5,274

1986: . . . . . . . . . . . . . . . . . . 6,151

603

632

799

1,225

1,795

1,625

1,970

1,959

2,225

3,189

3,632

3,619

2,784

2,368

2,382

2,366

2,570

– 532 1,267

– 760 1,521

– 747 1,883

– 343 2,168

+ 43 2,517

+ 289 2,826

+ 179 3,938

+ 20 4,493

– 175 6,108

+ 790 6,291

+ 956 6,849

+ 369 8,008

– 216 8,703

–1,092 10,292

–2,492 14,513

–2,908 16,056

–3.581 18.554

200

204

240

278

400

403

510

608

677

931

1,202

1,232

953

818

807

755

899

–1,067

–1,317

–1,643

–1,890

–2,117

–2,423

–3,428

–3,885

–5,431

–5,360

–5,647

–6,776

–7,750

–9,474

–13,706

–15,301

–17,655

2,402

2,913

3,409

3,736

4,269

4,162

5,729

6,432

8,508

8,690

9,525

11,258

11,703

13,752

19,387

21,330

24,705

803

836

1,019

1,503

2,195

2,028

2,480

2,567

2,902

4,120

4,834

4,851

3,737

3,168

3,189

3,121

3,469

–1,599

–2,077

–2,390

–2,333

–2,074

–2,134

–3,249

–3,865

–5,606

–4,570

–4,691

–6,407

–7,966

–10,585

–16,198

–18,209

–21,136

aFAs Free Alongside

bCIF:Carflage Insurance Freight

SOURCE: U.S Department of Commerce, FT.135, FT-140, SITC Classification 65 &84. Data are in millions of dollars

Table 10.—The U.S. Textile Market Table 11 .—U.S. Apparel and Apparel Fabric Market

Import share

Importsa

of market

U.S. market (million SYE) U.S. fabrics ‘?/0

Import share

Importsa

of market

U.S. market (million SYE) U.S. fabrics %

1973

1974

1975

1976

1977

1978,

1979

198 0

1981

1982

1983

1984

1985

1986

29,613

28,234

27,036

29,103

30,364

31,033

30,431

29,018

28,866

28,282

30,537

31,963

32,652

5,124

4,411

3,829

3,987

3,976

5,738

4,639

4,884

5,776

5,934

7,706

10,146

10,831

12.698

24,489

23,823

23,207

23,116

24,374

23,295

25,792

24,134

23,090

22,348

22,831

21,817

21,821 —

17.3

15.6

14,2

171

16,4

18,5

15,2

16,8

20.0

21.0

25.2

31.7

33.2 —

197 3

1974 . . . . .

1975 . . . . . . .

1976 .

1977 .

1978,, 

1979 .,.,,

1980 . . . . . . .

198 1

1982, ,,,,,

1983 .

1984..

1985 .,,,

1986,, ,

15,557

14,851

14,363

15,345

16,044

16,215

15,627

15,244

15,405

15,619

16,341

17,019

17,334

—

4,313

3,735

3,351

4,318

4,270

4,953

3,988

4,243

4,976

5,061

6,139

7,959

8,322

9,595

11,244

11,116

11,012

11,027

11,774

11,262

11,639

11,001

10,429

10,558

10,148

9,060

9,012

—

27.7

25.2

23,3

28.1

266

30.6

25.5

27,8

32.3

32.4

37.9

468

480

—

almpOfl~ ,“Clu@ frnlsfled tjoods fabrics and yarn of cotton wool and manmade fibers only

SOURCE American Textile Manufacturers Institute

almpoflslncludeappare[and apparel fabrrcs and yarn ofcotlon wool and manmade fibers only

SOURCE : American Textile Manufacturers Institute
81

Table 12.—U.S. Industrial and Homefurnishings

Market

Import share

Importsa of market

U.S. market (million SYE) U S fabrics %

1973

1974

1975

1976

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

14,056

13,383

12,673

13,758

14,306

14,818

14,804

13,774

13,461

12,663

14,196

14,944

15,318 —

811

676

476

699

706

785

651

642

800

874

1,513

2,186

2,510

3,103

13,245

12,707

12,197

13,089

13,600

14,033

14,153

13,132

12,661

11,789

12.683

12,758

12,808 —

5 8

51

3 8

4 9

4 9

5 3

4 4

4 7

5.9

6.9

10.7

146

164

almpod~ ,nclude fl”(shed goods and nonapparel fabrics Of COII!NI wOOI and manmade fibers ~nlY

SOURCE American Textile Manufacturers Institute

The Emergence of a Global

Textile Industry

The world population consumes more than 65 billion pounds of textile products per year, and consumption is currently growing annually by 1.7 billion pounds, or 750,000 metric tons.3 Comparison

of growth rates across regions of the world shows

that textile growth within developing economies and

planned economies has been faster in recent years

than growth within older, more developed market

economies. Virtually every nation in the world has

at least a rudimentary textile industry—in order to

serve its domestic market, provide jobs, and earn

foreign exchange.4

The textile industry occupies a unique position in

world trade and economic development. Because of

the labor intensity of the industry and the low wage

rates of developing nations, many countries view the

industry as an initial rung on the ladder of industrialization. The industry is commonly viewed as one

that, because of its labor intensity, can progressively

displace the textile industries of more advanced nations. But as each developing country’s own wage

levels rise, developed industries will be displaced

by producers in nations further “down the ladder”

3B Tq’ne, et al , The G/oba/ Textlie /nd(M(~ (London George Allen

& Unwin 1 984), P ~~

‘Ibid,, pp 50, 70,

of industrializations As a result, the governments

of many developing nations promote the textile industry as part of an export strategy. In some cases,

this has led to an overexpansion of capacity and a

major export push in the 1980s, characterized by

depressed prices and widespread use of import protection, export subsidies, dumping, and even quota

fraud and smuggling.

In the past, the U.S. textile industry has been relatively insulated from the more dynamic international

market. This situation is likely to change, because

future growth in demand for apparel and other textile fabrics is expected to be largely outside the United

States. United Nations projections are that the world

population will grow by 850 million people between

1985 and 1995—when 75 percent will live in developing nations, 20 percent in those with centrally

planned economies, and 5 percent in industrialized

nations.

Textile industries throughout the world are highly

competitive. There are few important economies of

scale, only modest product differentiation, relatively

small capital requirements compared to other manufacturing sectors, and no significant technological

or resource-based barriers to entry. As a result, there

is a minimum amount of seller market power. Coupled with the continued labor intensity of production, the more industrialized and high wage countries have great difficulties in gaining comparative

advantage. These observations recently led scholars

from several U. S., British, and Japanese universities

to conclude:

Almost without exception, textile industries in

OECD countries have negligible output growth, rising production costs, and declining employment. On

the other hand, several developing countries with a

relative abundance of labor have small but rapidly

growing textile industries.6

The textile and apparel industry complex has

plainly become a global enterprise. The industries

in developed nations are disadvantaged by comparatively stagnant domestic markets, as well as high la3Thomas Howell, et al., “The Textile and AppA Trade Crlsi\.” stud!”

prepared for the Fiber, Fabr)(, and Apparel Coailtl~)n tor Tr,ide, August 1985, p I

6Toyne, et al , op. cit , p 1 IO.
82

bor costs. Advanced equipment is available in international markets.7

The U.S. textile market is, by and large, mature

and saturated. This is especially true for standardized, nonspecialty items. Most analysts agree that

to have a strong future, the U.S. textile industry must

focus on identifying competitive niches—especially

for nonstandardized items—and aggressive marketing strategies at home and abroad. Many also argue

that growing protectionism abroad must be matched

by U.S. protection of its domestic industry.

The apparel trade deficit has reached a critical

level; in 1986 it was nearly $18 billion and growing

(again see table 9). The real value of imports in the

decade from 1975 to 1984 increased by over 240 percent, from $5.5 billion to $18.7 billion. At the same

time, domestic production increased by less than 16

percent, meaning that an industry which had only

25 percent of its domestic consumption served by

imports in 1975 had imports accounting for half of

all consumption in 1984.8 Nearly 30 percent of all

cotton fiber poundage used by Americans for apparel

and textiles is imported. For synthetic garments and

fabrics the situation is less severe, with under 7 percent of all manmade fiber poundage consumed in

the United States coming from imports. Domestic

exports of apparel have expanded since the mid1970s, but still vary greatly with respect to fashion

trends and the value of the dollar.

Important in any analysis of apparel trade deficits

is to distinguish between imports coming from actual foreign companies, products assembled abroad

by U.S. firms, products manufactured by U.S. firms

in joint venture with foreign firms, and products

made by subcontractors catering to the orders of

large U.S. retailers. The role of Item 807 products

in increasing the apparel trade deficit also requires

analysis.9

‘lbId,

SInternati~na] ~dles’ Garment workers’ Union Research Department,

based on data from the US. Bureau of the Census, the U.S. Department of Agriculture, the US. Bureau of Labor Statistics, and the Textile Economic Bureau, 1986.

gltem 807 of the Tariff Schedules of the (-Jnited States (TSUS) Stij)Ulates that if a product made of U.S. materials is manufactured abroad

and then “reimported” into the United States, a tariff is to be paid on

only the value added to that product during overseas production (see

box B).

The Export Market

While the key to domestic marketing is to recognize the growth areas within an overall static market, the key to international marketing is to increase

export sophistication, recognize the areas in which

U.S. technological comparative advantage exists, and

adjust to the growing trade regulations that limit market entry. It is markets overseas that will experience

the most future growth.

Even though growth is primarily in developing nations, the opportunities for expanded export marketing may exist primarily among other developed

countries. 10 To meet this reality, it is argued that companies should seek out international multilingual

marketeers to spearhead export drives. U.S. companies currently lack marketing staffs that are schooled

in the trading knowledge and cultural affinity necessary to work effectively in a foreign environment

of currency exchange and red tape.

Some see substantial opportunities, at least for

some products, in the developing world as well.

According to Du Pent Vice President David Barnes,

for fibers and fiber products the export opportunities are broader than the already industrialized world:

The world market is three times the size of the

present United States market and still growing . . .

Consumption of fiber products ranges around the

world from about five pounds per person in the developing countries to more than a dozen times that

in this country today. This not only suggests the

breadth of growth opportunities but the diversity of

markets we will have to serve if we want to be competitive on world levels.

American exports are competitive today because

of the scale efficiency, higher capacity utilization, and

higher productivity of American fiber and fabric producers as well as the downstream industries. These

fundamental advantages will persist even when such

temporary advantages as currency relationships and

differing oil prices disappear or diminish over time.

Our industry is learning how to export to Europe

the Far East and the developing countries. The U.S.

has more than 20 percent of the world’s textile capacity but has historically enjoyed only about 7 perIOJack C. Werner, “A Time to Lead: A Challenge and Opportunity

for the U.S. Textile Industry,” speech to annual meeting of the Board

of Trustees of the Institute of Textile Technology, Charlottesville, VA,

May 2, 1984, pp. 17-18.
83

cent of the export business. I believe we’re going to

move steadily towards a better balance.11

Barnes goes on to say that such progress in expanding exports is necessary to encourage higher

levels of capital investment and to support the continuation of innovative research and development

(R&D) activities needed to keep U.S. goods at the

top of the competitive heap. ’2

The current U.S. export market for textiles and

their end uses is quite small. Changes in worldwide

trade barriers for textiles will be essential if markets

are to open up for U.S. export. That event is the most

critical. But technological and quality advantages,

as well as substantially more aggressive overseas

marketing—perhaps through overseas production

facilities—are also necessary preconditions.

Trade Regulations and Protectionism

The Response of Developing Nations.—Developing nations want the growing textile and apparel markets within their countries for themselves.

A major response is to protect their own domestic

markets with a variety of trade and marketing regulations. A 1984 survey of 21 major developing countries by the Secretariat of the General Agreement on

Trade and Tariffs (GATT) found that average tariffs

through the early 1980s ranged from 25 to 75 percent. 13

In many individual instances, however, tariffs are

much higher than these averages. In Brazil, for example, duties of up to 205 percent of c.i.f. value—

“carriage insurance freight” value, which includes

shipping and insurance costs—are imposed on imports of woven fabrics; on those of manmade fiber;

woven apparel, and accessories; and on a number

of other products. On top of this duty, Brazil places

a variety of taxes and charges that further increase

the cost to importers. The GATT Secretariat also reported that in addition to tariffs, the majority of these

nations maintained quantitative restrictions on imports, ranging from quotas to outright import prohibitions.

In general, restrictions are more stringent in downstream sectors of the industry, with apparel imports

much more heavily protected by nontariff measures

than textiles. The emphasis is on downstream sectors, since protection of the upstream and midstream

sectors potentially creates competitive disadvantages

for downstream apparel producers by raising the

price of their inputs. Many developing nations have

circumvented this problem by rebating duties paid

on upstream imports used to produce export commodities, or by establishing “export process zones”

in which fiber and fabric needed to produce export

commodities are imported duty free.

A severe challenge faces U.S. producers of textile

products as they search for niches in the global textile market, because import restrictions have proliferated so extensively in recent years. Besides tariffs,

restrictive activities include embargoes, quotas, licensing requirements, prior authorization rules, and

border taxes.

Self-Imposed Barriers. -Many countries ban textile imports altogether. Bolivia prohibits the importation of 19 categories of textile products, among

which are carpets and blankets; cotton outerwear

for men and boys; cotton outerwear for women, girls,

and infants; men’s and boys’ underwear; underwear

for women, girls, and infants; and continuous acrylic

fiber yarns.14 Egypt bans the importation of woven

fabrics of eight categories of textile products, among

which are carded or combed cotton; bed, table, and

kitchen linens; and raw flax.15 Afghanistan bans the

importation of handbags, cotton yarn, rugs of artificial fibers and wool, turban cloth of silk, and traveling blankets and rugs.16

The Korean Federation of Textile Industry stated

in 1981 that many developing countries “are gradually eliminating themselves as textile markets.”17

In 1983, the Textile Minister of Sri Lanka announced

a total ban on textile imports, stating: “Now we do

not need foreign competition any more.”18

I IDa~,ld B~rn~s, h’)ce Fresldent, Textile Fibers Department, E.! d~l

pent de Nemours & co.,]nc , Textile /ndL/.stu outlook, Apr 25, 1980,

p 6.

~~lbld , p 7

I ~Ho~,ell, et a! , op cit., p 29

I~I_J ,S Department of commerce} ,,International Trade .Adminlstratlon,

Office of Textiles and Apparel, “Foreign Regulations Affecting U.S. Textile/Apparel Exports, ” April 1986, p 20

l~lhid , p 78

‘OIbid,, p, 1

I ~Korean Federation of Textil(~ industry, Textile /ndu.$(v’ l’fl Korea

198(]/81, p ]8.

l~Ho\$,el], et al . op (’It., p ~~~
84

In other nations, textiles are taxed at prohibitive

rates. In Burma, for example, items such as readymade wool clothes, silk cloth, and artificial silk are

taxable at 60 percent; jute carpet is taxable at 50 percent; and lace synthetic textiles, textiles made of

combed cotton, imitation leather, and noncotton

blankets are all taxable at 40 percent.19

South Korea maintains a strict system of import

controls with a “Negative List. ” Imports, which must

receive prior approval of an appropriate ministry,

are allowed on a controlled basis, and only if they

are for prompt use to manufacture goods that will

be sold in the export market.

Taiwan virtually bans apparel imports, and strictly

limits imports of textile fiber. But it does allow imports of textiles if they are for prompt use in the manufacturing of goods sold in the export market.

Colombia maintains restrictions amounting to a

de facto ban on most textile and apparel imports.

The government requires the granting of import

licenses for about 65 percent of its textile and apparel tariff categories. As of early 1985, no licenses

were being granted. Surcharges are imposed on

those products whose importation is allowed in order to finance a 6.5 percent textile export incentive

for Colombian products.

Government Subsidies. —Beyond import restrictions, foreign trade is also influenced by the substantial government subsidies that many nations provide

their textile industries. A principal source of capital

for the South Korean textile industry during its years

of rapid growth, for example, was the preferential

allocation of credit by government-dominated banks

at below-market interest rates. The wide range of

export subsidies and incentives given by the Korean

government to its textile exporters was estimated by

the World Bank to have a subsidy value of 27 percent in 1972.20 In addition, Korea has frequently been

charged by other countries with dumping their textile products21—a charge which the Koreans have

even occasionally acknowledged themselves. Dumping, however, is by no means unique to South Korea.

‘

g

Ibid.

Zoworld Bank, industrial Po/;cy and Development in Korea, Staff paper No. 236, 1975, cited in Howell, et al., op. cit., p. 50.

zlJapan Economjc JoUrna/, Apr. 26, 1983, and JTN, November 1984,

cited in Howell, et al,, op. cit., p. 53.

Taiwan offers its textile exporters financial benefits, including tax breaks. Between 1974 and 1979

alone, the Taiwanese Government provided $300

million in loans to textile producers, enabling them

to “modernize their equipment and improve product quality.”22 Most of Taiwan’s textile and apparel

mills have been located in three special export processing zones, where manufacturers can import dutyfree production equipment as well as intermediate

goods and raw materials used for production of

exports—a system that enables the nation to protect its upstream and midstream home industries

without jeopardizing its downstream manufactured

goods.

Hong Kong also utilizes a customs free zone, and

thus takes advantage of the large stocks of upstream

and midstream textile products available on the international market. Its strategy is to concentrate production on the downstream apparel end of the industry.

In 1979, China decided to promote textiles as a

leading economic priority .23 As a result of this decision, the Chinese textile industry received special

loans from the central government; greater allocations of resources from the provinces, municipalities,

and autonomous regions; and was given priority with

respect to raw materials, transport, and electric

power. New textile facilities are concentrated in special economic zones and receive special tax and regulatory treatment, designed to encourage foreign investment and the manufacture of exports.24

Also significant in China is a government exportstimulus program designed to manipulate the exchange rate, and an allocation of foreign exchange

earnings to enterprises engaged in exports. This involved the implementation of a dual exchange rate

system, designed to discourage imports and stimulate exports between 1981 and the beginning of

1985. While the official exchange rate was 2.0 renmibi (RMB) to the dollar, enterprises remitting dollars earned in foreign trade to the Bank received 2.8

RMB per dollar, and were required to pay 2.8 RMB

for dollars used in purchasing imports.25 The policy

zz~re china weekly, Oct. 7, 1979, cited in Howell, et d., Op. cit., p. 55.

231 bid., p, 64,

241 bid,, p. 69.

‘

s

Ibid., pp. 75-77.
85

has been described officially by the Chinese in the

following ways:

The internal settlement rate is used only to subsidize exports and it cannot be called an exchange rate.

It is a means of subsidizing our export industry .. .26

China intends to use the profits it makes on imports to subsidize exporting enterprises mak[ing] a

loss.27

Other nations with emerging export markets in

textiles are also using import restrictions and export

subsidies to promote their textile industries. Among

them is Thailand, which combines stringent import

protection with liberal grants of export subsidies.

The Indonesian Government utilizes an export incentive system to pay compensatory money to exporters. Imports of cloth with batik motifs, sarongs,

and cambric made with cotton yarn are banned altogether; imports of cotton weaving yarn are restricted to specified approved importers or government agencies; and all imports are subject to

surcharges ranging as high as 200 percent.28 The

value of the Indonesian export subsidy on textiles

was between 16 and 43 percent as of 1978.29 In addition, a 1978 devaluation of the national currency had

a dramatically positive impact on Indonesian textile trade.

In Pakistan, where more than half of the country’s total industrial employment is engaged in textiles and apparel, the government made its foreign

exchange reserves available to finance acquisition

of foreign production equipment; these imports were

exempt from customs duty. In addition, the government encouraged domestic banks to provide loans

to producers, which could finance the acquisition

of domestically made textile machinery. Tax incentives were provided for the installation of modern

production equipment.30

In the Philippines, government import protection

involves quantitative restrictions and a high nominal tariff level—a 100 percent tariff on garment imports. At the same time, it permits duty-free import

of textiles used to produce clothing for export. Garment producers are eligible for investment incentives. With the help of the World Bank, the government in 1979 launched a major program to expand

and modernize textile production. The Central Bank

of the Philippines provided credit at below-market

interest rates to finance the production of textile

goods for export.31 Of eight sample textile firms, the

value of investment incentives to textile producers

was between 2.9 and 10.6 percent of total sales.

Although allowing their textile industries to escape

from the economic realities of competition has increased the foreign exchange standing of some developing countries, clearly improving prospects for

industrial employment at home} the effects of such

restrictions and subsidies have not been completely

positive. Industries being created and expanding under heavy government protection have in many

countries grown beyond their capacity to sell their

products. Nations have incurred substantial foreign

exchange debts to pay for modernized plant and

equipment. And some have argued that high levels

of protection have been responsible for a de-emphasis on efforts to improve efficiency and productivity.

Response of Japan and the European Economic Community.—Another part of the explanation for the unprecedented penetration of textile

imports into the United States has to do with the response of the European Economic Community (EEC)

and Japan to the emergence of a global textile market and increased competition, especially from developing nations. The EEC restricts imports pursuant

to bilateral agreements negotiated under the MultiFiber Agreement (MFA) (see box A). Since 1983, restrictions by the EEC have become significantly

stronger. Japan restricts imports more informally—by

placing pressure on the distribution network, and

by concluding a variety of non-MFA bilateral restraint

agreements. Internally, Japan has implemented significant restraints on competition in order to prevent

a “shakeout” of producing firms, as has the EEC with

synthetic fiber production. In addition, EEC governments have provided significant amounts of financial aid to their textile and apparel producers.

In the United States, import restrictions pursuant

to MFA have been used, but the system is viewed

~llbid,, pp. 101-1 OS
as quite lax (see discussion below). Available evidence suggests that the EEC’s adoption of a more

restrictive regime under the MFA as of 1983, coupled with Japan’s continuing restrictions, has had

the effect of channeling developing nation textile exports into the U.S. market.

Since the implementation of new EEC restrictions

in 1983, for example, many of the major suppliers,

such as Taiwan, Korea, and Indonesia, have experienced a significant drop in export volume to the EEC,

and a dramatic rise in the volume shipped to the

United States. Whereas U.S. imports per capita for

the textile sector from developing nations between

1980 and 1984 rose from $5.09 to $10,11, EEC imports declined from $11.82 to $8.30. The apparel sector changes were even more dramatic. In the United

States, the per-capita value of imports from developing nations more than doubled, from $25,56 to

$56.63; in the EEC, it declined from $22.38 to $18.47

(see table 13).

WhiIe Japan and the EEC had a positive net trade

balance between 1980 and 1984 in the textile sector, the United States—which began positively in

1980—developed a sharply negative net balance. In

the apparel sector, while all three experienced a negative net trade balance, only the U.S. experienced

a sharp deterioration in its balance. Japan maintained roughly the same percentage of overall im-
87

Table 13.—U.S. and EEC Imports From Developing

Countries Dollars Per Capita, 1980-84

Textiles Clothing

EEC Us . EEC U.S.

1980 . . . . . . . . . . . . . . . . . .$11.82 $5.09 $22.38 $25.56

1981 . . . . . . . . . . . . . . . . . 8.55 5.83 20.98 29.19

1982 . . . . . . . . . . . . . . . . . . 7.95 4.99 19.25 30.73

1983 . . . . . . . . . . . . . . . . . . 7.86 5.97 17.55 35.61

1984 . . . . . . . . . . . . . . . . . . 8.30 10.11 18.47 56.63

SOURCE The Textile and Apparel Trade Crisis, based on international Monetary

Fund data

ports from developing nations between 1980 and

1984. During the same period, however the EEC

countries imported a lower percentage of textiles and

apparel from the developing world, while the United

States imported a sharply higher percentage (see table 14)

U.S. Response

The impact of significant import protection and

export subsidies on the textile industries of developing countries has been severe. Domestic production has been threatened through increased competition within home markets, and increased restrictions

and competition in international markets. Not surprisingly, textile companies in industrialized nations,

as well as the governments of those nations, have

responded to the threats that they face from noneconomic competition in textile trade.

Factors Behind Varying Costs

Differences in Wages. -Employees of U.S. textile and apparel firms pay substantially higher wages

than firms in Asia and Latin America, although industry wages are among the lowest in U.S. manufacturing. At $6.71 per hour in 1985, a full-time U.S.

textile mill products worker earned just under $14,000

per year; in contrast, his/her average hourly earnings were more than 33 times higher than a comparable Chinese worker earning 20 cents per hour.

At $5.73 per hour in 1985, a full-time U.S. apparel

worker earned just under $12,000 per year, but that

was approximately 28 times more than the comparable Chinese worker earning 20 cents per hour.

Although direct wage comparisons between a centrally planned economy and the U.S. economy are

clearly inexact, the fact remains that labor costs for

U.S. textile and apparel enterprises—indeed, for enterprises from the entire developed world—are higher than those for firms operating in developing countries, This is accentuated by differences in benefits

and working conditions, largely a function of the fact

that many developing nations lack standards that

protect against long hours, long weeks, safety, and

health hazards. Some even use child labor. According to the International Ladies’ Garment Workers’

Union (ILGWU), in 1984, “labor compensation in the

developing and newly industrialized countries ranged

from 2 to 25 percent of the U.S.”32

Some U.S. companies attempt to lower their labor input costs by establishing production facilities

overseas. Especially in the apparel industry, where

labor intensity continues to be very high, production and/or assembly overseas may provide some

economic advantages for individual companies. In

fact, such a strategy is encouraged through U.S. public policy by the “807” rule, which places a tariff not

on all textile and apparel imports, but only on the

value added by specific operations performed outside the United States—in other words, a U.S. firm

can send fabric to a low cost production facility overseas, substantially reducing input costs. However,

there are risks associated with such movement. Po-

~zLetter from f)r. James Parrott, Assistant to General SecretaWTreasurer Jay Mazur, International Ladies’ Garment Workers’ Union,

to OTA, Mar, 31, 1986, p, 4,

Table 14.– Percent Share of Exports of Textiles and Clothing From Developing

Countries by Major Developed Country Markets, 1980-84

EEC U.S. Japan EEC U.S. Japan EEC U.S. Japan

1980 . . . . . . . . . . . . . . 26.80/o 9.90/0 6.4°/0 40.1% 40.0% 5.8% 34.1% 26.7% 6.4%

1981 .., . . . . . . . . . . . 18.2 10.5 5.9 33.9 39.9 6.7 27.1 27,2 6.4

1982 . . . . . . . . . . . . . . 18.4 9.9 32.2 43.9 7.0 26.4 29.6 6.7

1983. , . . . . . . . . . . . . 16.8 11.0 4.9 27.8 48.5 5.1 23.1 32.5 5.0

1984 . . . . . . . . . . . . . . 14.8 15.5 5.6 23.4 61.8 5.8 19.8 42.5 5.7

SOURCE The Textile and Apparel Trade Crisis, based on data from GATT
88

Photo credit: Copyright (©) 1986, 1987 by Bobbin International, Inc.

All rights resewed

This cutting and shipping facility is located in Hialeah,

FL. Cut goods are delivered to two plants in Costa Rica

for sewing, and then reimported to the United States.

litical instability in many low wage countries can

make production unreliable.

Exchange Rate Fluctuations. -During 1983 and

1984, the dollar rose in value more than 30 percent

against the currencies of other industrial countries.

This appreciation, according to many analysts, was

no different than a 30 percent tax on exports and

a resulting 30 percent cost advantage for imports.33

The 1983-84 appreciation came on top of an appreciation of equal magnitude in the previous 3-year

period. Weighing the currency average of the 20 nations with whom we most heavily trade in textiles

suggests that the value of the textile dollar in the

second quarter of 1986 was almost another 30 percent above 1984; of course, the recent decline in the

dollar’s value against other currencies has since

helped to reconcile this difference.

However, while the appreciation of the dollar

clearly exacerbated the textile trade problems of the

early and mid-1980s, many experts are quick to emphasize that massive shifts in worldwide textile trade

patterns are the result of other factors as well, For

example, whereas imports from the Dominican

Republic and Haiti increased by 40 and 28 percent,

respectively, between 1981 and 1984, the exchange

rate did not change at all. Large increases in import

‘33 AFL.C]O~{’30th Anniversa~ Report of the AFL-CIO Executive Council, 16th Convention,” Oct. 28, 1985, p. 156.

penetration by other major textile supplying countries are also recorded, despite far less substantial

changes in bilateral exchange rates. According to an

analyst at ILGWU, the dollar’s rise did contribute to

sizable percentage import increases from a number

of nations in the EEC, but EEC countries accounted

for only 2.2 percent of all apparel imports in 1984.34

Policy Reactions

At the government level, the United States, the

EEC, and Japan have all acted to limit the growth

of imports from developing nations. But while the

United States has taken a number of steps to protect its domestic enterprises, U.S. markets are much

more open than those in Europe and Japan. A study

by European economists concluded that:

While all governments adopted protectionistic policies for their textile mill products industries during

the 1960s and 1970s, the United States government

seemed to be the only one that did not couple this

policy with one of the other policy types. Instead, it

preferred to let internal, partially protected market

forces bring about adjustment. It persistently opposed

the concept of direct government intervention of the

types undertaken by its counterparts in Europe and

in the Asia Pacific Region .35

As a result, the United States is absorbing a large

share of the world’s textile and apparel exports, at

the expense of its domestic industry. Moreover, a

trade imbalance has resulted from the fact that U.S.

exports of textile and apparel are not significant. At

the peak of apparel exports in 1980, for example,

they did not amount to more than 3 percent of domestic apparel production.

U.S. Enforcement of Existing Trade Laws.—

Ineffective administration of the Multi-Fiber Arrangement (MFA) is one reason given for the unprecedented surges in imports and harm to the domestic

textile and apparel industry. Despite the existence

of the MFA, which contemplated a 6 percent annual

growth rate for imports, imports (in terms of square

yard equivalents) grew 30 percent in 1983 and 32

percent in 1984, before falling to 7 percent in 1985;

1986 growth rose again, however, to over 17 percent. Legislation before Congress to require more

aqLetter from Dr. James Parrott, Op. cit , P. 3.

s5Toyne, et al., pp. 178-179
89

Box B.-Trade Regulations That Affect Textiles and Apparel

Currently, the United States can call upon one of several trade policy tools that help U.S. industries compete

in world markets, in the United States, and against the unfair trade practices of other countries. In addition to

multilateral negotiations through the Guaranteed Agreement on Trade and Tariffs (GAIT) and bilateral action

through the Multi-Fiber Arrangement (see box A), two sections of the Trade Act of 1974 and one classification

item from the Tariff Schedules of the United States (TSUS), have been applied to trade of textiles and apparel:

Section 201 of the Trade Act of 1974

This section, commonly referred to as the “Escape Clause, “ is invoked when a U.S. industry has been or

feels threatened by competition from imports of a particular product into the United States. An investigative board

of the International Trade Commission is established to verify the industry’s claim. Unless the commission finds

the industry’s claim to be unsubstantiated, the President then has the option to implement import relief measures in a nondiscriminatory manner—in other words, the President cannot single out specific countries against

which to take action. He may only take action against all imports of a product, since Section 201 is designed

to help U.S. industries against all other competitors in a given product field. If the President does not act on

the domestic industry’s behalf, Congress may do so through a joint resolution enacted within 90 days of the

President’s decision.

Section 301 of the Trade Act of 1974

This section deals with the unfair trade practices of other countries that affect U.S. industries. Since other

U.S. regulations have been created to address the problem of illegal “dumping” of exports into the U.S. market,

and to respond to excessive subsidies of exports to the United States by foreign governments, most petitions

now filed under Section 301 relate to an alleged unfair practice in a third-country market. If U.S. apparel exports to the EEC, for example, are restricted by a competitor country’s apparel exports that have been subsidized

by the the competitor’s government, then the apparel industry can petition the U.S. Special Trade Representative

to recommend that action be taken against the competitor. The President may attempt to negotiate the elimination of the unfair practice; should this fail, he may then impose retaliatory measures against the competitor.

In contrast to Section 201, which is product-specific, Section 301 is country-specific. However, it is important to note that Section 301 is designed to eliminate an unfair practice, not to begin a trade war.

Classification Item 807 of the Tariff Schedules of the United States (TSUS)

Item 807 mandates that a tariff be placed on a product that is manufactured overseas with U.S.-made material. The tariff applies only to that part of a product’s value that is added outside the United States, and the rate

to be paid accords with whatever rate is normally paid upon importation of the product. A U.S. company, for

example, may elect to take advantage of low-cost foreign labor costs and send U.S.-produced fiber to another

country for manufacture, only to reimport the fiber in the form of a finished shirt. Countering the cost advantage,

however, is the fact that political instability in low wage nations can place a great deal of risk on a decision

to manufacture products abroad.

vigorous enforcement of the MFA was opposed by

the Reagan Administration.36 In the MFA protocol

signed in Geneva on July 31, 1986, “none of the improvements sought by the industry are in the new

agreement except for coverage of additional fibers.”37

Senator John Danforth (R, MO) blames many problems on the Administration “refusing to enforce laws

already on the books”38 (see box B). One example

MAFL.C]O, ‘rThe Nationa] Economy and Trade. AFL-CIO Policy Recommendations for 1986, ” October 1985, pp 26-27.

~lAmerican Textile Manufacturers Institute, Textile Highlights, SePtember 1986, p. IV

of the lack of enforcement was cited by Senator

Ernest Hollings (D,SC):

We have a bilateral agreement with Thailand. In

1984 and 1985 Thailand overshipped apparel to the

tune of almost 30 million square yard equivalents.

This overshipment was not discovered by the Department of Commerce until August of 1985, at which

time, Thailand had shipped in [to the United States]

apparel for 1985 already filling 82 percent of their

1985 quota. According to the office of our chief tex-

%lyde Farnsworth, ‘(Watchdog of U.S. Trade, New York Times Magazine, Sept. 14, 1986, p. 88
90

tile negotiator, Ambassador Carlisle, “Frankly, the

system did not work . . . It was inadequate. ” That is

an understatement. After discovering illegal massive

shipments in mid-August, apparel shipments from

Thailand were finally embargoed on October 8th. Negotiations with the Thais were begun. These negotiations are now completed and I understand from

Ambassador Carlisle’s office that the embargo will

be lifted one month prematurely on December lst.

This will enable the U.S. importers to get their goods

out of embargo in time for the Christmas season. The

embargo will be lifted even though the Thais overshipped in 1984 and are probably going to be over

their quota in 1985.

Further, the overshipments for 1984 and 1985 will

not be charged against Thailand’s 1986 quota.39

President Reagan made the following two pledges

to the textile community as he vetoed HR-1562, the

congressional effort to protect the apparel, textile,

copper, and shoe industries:

I am directing Secretary of the Treasury Baker, as

Chairman Pro Tempore of the Economic Policy Council, to investigate the import levels of textiles and apparel to determine if these imports have exceeded

those limits agreed upon in international negotiations. I have directed that he report back to me within

60 days and recommend changes in existing administrative and enforcement procedures, if necessary . . .

Also, I am directing the Office of the United States

Trade Representative to most aggressively renegotiate the Multi-Fiber Arrangement (MFA) on terms no

less favorable than present. Our trading partners

must be put on notice that we will not allow unfair

trading practices to continue.40

Nonetheless, many examples of poor enforcement

have been cited by critics of existing procedures:

● Even though the Treasury Department had requested additional customs personnel to be

posted abroad to stop textile fraud, the State Department refused to authorize the additional

agents. Currently, only about 2 percent of what

comes into the United States is actually inspected by customs officials. This is despite the

fact that customs agents usually earn two to

three times their salary in tariffs collected.41

~qstatementof Senator Ernest Hollings on Thailand, NOV. 13, 1985.

qclveto message of President Ronald Reagan, HR-1562, Dec. 17, 1986

41(&Orge Wlno, Chief Economist, American Textile Manufacturers institute, interview of Nov. 18, 1986.

●

●

●

The

Even though the textile industry has filed a series of countervailing duty cases against several

countries, the Administration negotiated agreements to suspend most of those duties,

There have been many charges of dumping of

textiles against foreign nations. The producers

of nylon impression fabric, for example, have

long been concerned that imported impression

fabric from Japan has been and is being dumped

in the United States.42

Transshipments to evade quotas abound. According to testimony received by the House

Government Operations Committee, garments

that come into the United States under the 807

agreement often involve fraudulent transshipments. In review of U.S.-Canada free trade negotiations, the House Committee on Ways and

Means in 1986 invited written comments, Many

of these comments expressed fear of Canada becoming a “pass through” point for the Far East

if a free-trade arrangement were negotiated.43

There has been some experience in the past

with Canada being a transshipment point for

textile products from the developing world. After the 1978 antidumping duty order, Nissei

Sangyo of Japan apparently began transshipping

broad woven nylon impression fabric through

Canada. 44 The executive director of the Neckwear Association of America expressed his industry’s concern with a free-trade agreement:

. . . our industry is very concerned about the potential of transshipments through Canada. Because

of the low unit value of neckwear, especially from

the Far East, the elimination of duties will make

transshipment through Canada particularly attractive. We are not sanguine about enforcement as

Customs is not able to cope with its present responsibilities. 45

executive director of the Work Glove Manufacturers Association also argued against a free-trade

agreement, saying that:

.lZstatement of Bomont Industries, Inc., cited in “written comments

on Proposed U.S.-Canada Free Trade Agreement, ” Subcommittee on

Trade, Committee on Ways and Means, U.S. House of Representatives,

April 1986.

43’’ Written Comments on United States-Canada Free Trade Negotiations, ” op. cit., p. 346.

qtstatement of Bomont Industries, Inc., op. cit., P. 69.

45”ln Opposition to Proposed U.S.-Canada Free Trade Agreement,”

Statement of Gerald Andersen, Executive Director, Neckwear Association of America, cited in “Written Comments on United States-Canada

Free Trade Negotiations,” op. cit., p. 215.
91

Such an arrangement could not only take advantage of duty-free access to the U.S. market, but permit the circumvention of quota arrangements as

well. The U.S. Customs Service already has its

hands full with its regular import monitoring programs. Recent personnel cutbacks will make it impossible for Customs to guard effectively against

transshipments.46

● The House Commerce Committee published an

investigative report on textile fraud in April of

1985, and found widespread quota violation and

evasion. Examples included shipments of young

men’s sportswear from Hong Kong, China, and

the Philippines for nearly 5 years by means of

false documents; 1,700 dozen pairs of Taiwanese

jeans falsely claimed as having been manufactured in South Africa; a Taiwanese importer

sewing shirts and skirts together and entering

almost 10,000 dozen of them as dresses, which

had a lower duty rate and a larger quota. The

importer admitted the items were separated after entry and sold as shirts and skirts.

Recent Legislative Proposals.-The relative

“openness” of U.S. markets has become a point of

extensive controversy. In 1986, Congress passed legislation designed to shield the industry from imports,

but the Reagan Administration vetoed this bill (HR1562). The administration argued the economic advantages of market equilibration and the consumer

advantages of lower cost textiles and apparel. Senator Danforth, former chairman of the Senate Finance

Committee’s trade subcommittee, argued that other

countries should either reduce their barriers to trade

or face equivalent restrictions. He would use the $360

billion annual American market for both a carrot and

a stick.47

The 100th Congress is likely to vote on another

textile import bill, which has been introduced by Senators Hollings and Strom Thurmond (R, SC); Representative Butler Derrick (D, SC) has introduced the

same bill in the house. This legislation (S-549 and

HR-1154) calls for a general import ceiling, which

is designed to limit import growth to the growth of

the U.S. domestic market. The bill’s sponsors con4b”ln OpposNion to the Proposed U, S.-Canada Free Trade Agreement, ”

Statement of Craig Schulz, Executive Director, Work Glove Manufacturers Association, Chicago, cited in “written Comments on United

States-Canada Free Trade Negotiations,” op. cit., p 344.

4~Clyde Farnsworth, OP. cit.

tend that they have addressed several of the problems cited by opponents of the bill vetoed by the

President:

●

●

●

●

quotas would be set against imports from all

countries, rather than against those from the developing world only;

upper limits against specific countries would not

be mandatory, but the President would have

the authority to set individual quotas within the

overall amount;

quotas would not require rollbacks of foreign

shipments; and

foreign suppliers would be compensated for lost

sales. 48

Private Sector Reactions

An Increase in Capital Investment. -Chapter

3 indicated that U.S. producers have invested heavily

in more advanced production equipment, enabling

them to offset the lower wage levels of developing

nations.49 Some of the more labor-intensive aspects

of apparel production have been moved offshore.

Similar developments are occurring in the EEC and

Japan. In all three geographic markets, fiber and fabric producers are establishing vertical links with

downstream apparel producers. In the United States,

textile mill product manufacturers reinvested between 80 and 85 percent of their retained cash flow

between 1975 and 1985, spending an average of $1.4

billion per year on new plant and equipment. This

average rose to $1.8 billion between 1984 and 1986.50

U.S. firms have invested in such innovations as

robotics, computer control systems, and shuttleless

looms in order to improve productivity. Reflecting

these investments, U.S. textile mill producers’ productivity levels increased at more than twice the level

of all U.S. manufacturing industries in the decade

from 1975 to 1985—5.6 percent v. 2.4 percent per

year. Productivity levels in the United States were

also substantially higher than in nations overseas

in 1981. Increased productivity, however, has been

accompanied by decreased profitability; as a result,

48’’ Compromise Textile Bill Being Readied,” The Washington Post,

Feb. 13, 1987, p. F1

‘gThis paragraph is based Iargelv on Howell, et al., op. cit., pP. 1 f17’-

110 and 172-173.

so~exfjle /f/~/rli~/?K, Op. cit., p. 2 I.
92

marketing strategy in this area becomes fused with

technological development and capital investment.

The “Buy American” Program.-The industry

has worked actively to make U.S. consumers more

aware of U.S.-made goods. This is largely being done

through the “Crafted With Pride in U. S. A.” campaign.

Labels and tickets are displayed prominently on U. S.-

made apparel, and there is an extensive advertising campaign. Such major retailers as Wal-Mart and

J.C. Penney are featuring U.S. products.51

The Crafted With Pride in U.S.A. Council has

nearly 400 members, Their statement of purpose is

simple and direct:

The Crafted With Pride in U.S.A. Council is a committed force of United States cotton growers, labor

organizations, fabric distributes, and manufacturers

of manmade fibers, fabric, apparel, and home fashions,

whose mission is to convince consumers, retailers,

and apparel manufacturers of the value of purchasing and promoting U.S.-made products.52

Surveys by Roper Reports have consistently found

a “Made in the U. S. A.” label to be regarded as “superior or fairly good” by 93 to 95 percent of those

queried. Gallup polls show that Americans regard

U.S.-made clothing to be “as good or better than

overseas” by 75 percent of Americans.53

Since 1984, manufacturers have been required by

law to label domestically-made products with the

words “Made in the U. S. A.” To persuade consumers

to look for those labels before making a purchase,

Council members pledged $40 million in advertising over a 3-year period, They engaged such stars

as Bob Hope, Diahann Carroll, Sally Struthers, O.J.

Simpson, Lynda Carter, and Sammy Davis, Jr., to

appear on television commercials on their behalf.

Encouraging news about the Crafted With Pride

program came from a spring 1986 experiment by

Hanover House Industries, a national catalog house.

Two versions of a catalog were mailed to consumers.

Four million catalogs were sent in all, In one version, 56 specific items carried a special “Made in the

U. S. A.” logo. Sales returns from consumers receiving this catalog were 10 percent greater than the

‘sl-BrUC~St~-keS, “@tting competitive,” Nationaf ./ournal, June T, 1986,

P. 1365,

SZArnerlCan Textile Manufacturers Institute, advertisement in Time

Magazine, September 1986.

531 bid

identical catalog without the “Made in the U. S. A.”

logo.54

The Auburn University Apparel Sourcing Fair of

February 1986 is just one example of efforts underway to promote domestic apparel products. This, the

Nation’s first sourcing fair, brought State manufacturers and retailers together from Alabama and surrounding States. Participating retailers repeatedly

stated that they were looking for partners, in the form

of manufacturers who could fit their products within

the structure of retail lines, and of contractors who

could take on more of the burden of production by

supplying the complete package.55

Trade and the U.S. Consumer

Competitive advantage of textile and apparel exports stems primarily from lower wages in exporting nations, which reduce production costs in both

material manufacture and assembly. But even though

it may cost producers only one-fifth as much to make

their goods abroad, the U.S. consumer may not necessarily enjoy a similar reduction in price. There is

often a large disparity between production cost and

the selling price in the United States, with much of

the difference ending up in the hands of foreign and

domestic shippers, wholesalers, and retailers.56

The extent to which consumers benefit from inexpensive imports is obviously a controversial issue,

one that is difficult to resolve given the lack of appropriate data. However, figure 15 suggests that changes

in domestic apparel prices are not closely correlated

with changes in import prices; this can work both

for and against the interests of consumers. The price

of imports appears to have increased much more

sharply than average domestic sales prices from 1977

to 1982, and has roughly followed domestic prices

since then. Presumably, three factors cause the increase in import prices:

1. a shift in mix, not captured properly in the deflator series that compute price indices;

2. real increases in production prices abroad, due

to rising wages and other factors; and

541bid.

55Joyce Santora, “Retailers Reasses Domestic Sourcing,” Bobbin Magazine, April 1986, p. 63,

sbMurray Finley, president, Amalgamated Clothing and Textile Workers’ Union, cited in AFL-C1O News, NOV. 23, 1985, p. 1.
93

1.1

1.05

1

0.95

0.8

0.75

0.7

0.65

Figure 15.—Price lndices for Clothing (1982=1)

.

/

/ 0

J 1 I

1970 1972 1974 1976 1978 1980 1982 1984

Year

— Domestic purchase s --- Import s

SOURCE Office of Technology Assessment, 1987; based on data provided by the U S Department of Commerce and U S Department of Labor

3. shifts in the way markups are captured here and

abroad.

The Fiber, Fabric & Apparel Coalition has used

Commerce Department figures to show that many

imported blouses, shorts, and shirts actually cost

more than their U.S.-produced counterparts.57 John

Meinert, president of the Clothing Manufacturers

Association, testified in 1985 before a subcommittee of the House Ways and Means Committee about

the financial advantages of clothing imports benefiting retailers, not consumers. He told the subcommittee:

It is no secret that a big attraction of cheaper imported goods is the exceptional mark-up available to

STAFL-C1O News, Nov. 23, 1985, P. 1.

be taken by retailers. It is argued that such low-base

pricing is passed on to American consumers through

lower prices. That argument has been demonstrated

incorrect. The high margins available on these imported goods are used to benefit those who import

them, as the differential is retained by the importerseller. The American consumer does not receive

lower prices, and we know this to be true from our

information about companies which compete in our

retail markets.58

In addition, some have charged that in those cases

where the consumer does benefit from a lower price

SsTeStimOny Of John Meinert regarding HR-1 562, “The Textile and

Apparel Trade Enforcement Act of 1985,” Subcommittee on Trade, Committee on Ways and Means, US. House of Representatives, July 15,

1985, p. 2.
94

on imported apparel, it is often the result of misleading “discount” prices. Some retailers may mark up

the price of their imported garments to match the

price of a similar U.S. garment, only to immediately

discount the initially advertised cost. In this way, the

retailer can still make a profit far above that which

would be earned from sale of the U.S. garment, while

gaining the added marketing advantage brought by

advertising a discount.

When Allied Stores president Thomas Macioce was

asked by Women Wear Daily whether retailers are

really buying markups when they purchase imports,

his response was: “Sure, we are indeed buying better markup, but that’s our job. We would be delighted

to buy only American-made goods if we could make

the same type of markup.”59

A study by the Amalgamated Clothing and Textile Workers’ Union (ACTWU)60 found three foreignmade shirts, from Taiwan, Guyana, and Colombia,

59TestimOnyof SOI Chaikin, President, International Ladies’ Garment

Workers’ Union, Subcommittee on International Trade, Committee on

Finance, U.S. Senate, July 15, 1985, p. 13.

~OAF’L.GIIO News, Oct. 5, 1985, P. 1.

with the same $18 price tag as an identical U.S.-made

shirt. Similarly, a comparison of the costs of men’s

long-sleeve broadcloth shirts found the following.

The wholesale cost of the U.S.-made shirt was $6.50,

and a 100 percent retailer mark-up yielded a $13

retail price. The cost of the same shirt made in Korea was $4.25, including labor, shipping, and tariffs;

a 206 percent markup was added to this shirt, or

$8.75, so that the Korean shirt sold for $13 as well.

For every imported shirt sold at the retail price, the

retailer made an additional $2.25. On an annual basis, ACTWU found that the retailer imported 250,000

dozen shirts, for a total additional profit of $6.75 million. A study by the International Ladies’ Garment

Workers’ Union indicates that “markups on imported

garments typically range from 200 to 400 percent.”61

It is important to note that many U.S. retailers dispute this analysis strongly. They argue that markups on inexpensive imports are not nearly large

enough to deny the U.S. consumer the benefits of

low-cost imported apparel.

GILetter from Dr. James Parrott to OTA, op. Cit., p. 5.

THE ADEQUACY OF DOMESTIC INNOVATION AND CAPITAL INVESTMENT

Research and Development

While improved R&D efforts alone will not ensure

a healthy domestic industry, they are clearly necessary, There are indications that U.S. efforts in R&D

related to textiles and apparel may not be adequate,

given the high social returns that could be enjoyed

from a healthy domestic industry. Even more important than the development of new inventions,

however, is the creation of an economic and management environment that allows American entrepreneurs to make money from investment in innovation. This requires capital and, in many cases,

more patience in waiting for returns than has been

typical of U.S. investors operating under existing

macroeconomic policy.

It is ironic that while many U.S. economic problems have resulted from an inability of U.S. investors to capitalize on the benefits of innovations developed in the United States—most of the basic

inventions behind semiconductors were developed

in the United States, for example, yet it is the Japanese who seem to be succeeding in turning these

inventions into profits—in the textile and apparel

industries the reverse may be happening. Much of

the technology that has made the U.S. textile industry

among the most productive in the world has been

purchased overseas.

Large companies do carry out some of their own

R&D, especially the chemical companies that produce synthetic fibers. But in an industry that to date

is still made up largely of small, family-owned companies, it is difficult to amass the capital for major

technological research. Most of the R&D for textile

equipment is done by the equipment manufacturers,

but little in the way of major innovation has come

in recent years. The electronics and other related

industries are, of course, engaged in R&D related

to computers and electronics, that can be adapted

to the textile and apparel industry.
95

Even though the new surge in investment in plant

and equipment preceded the flood of imports, it is

the decade-long explosion of textile and apparel imports into the United States that has served as the

greatest impetus for restructuring. Many look toward

promoting U.S. technological developments as a major response to the threat of those imports. All agree

that at a minimum, the United States must keep pace

with technological developments that are constantly

occurring throughout global markets.

R&D is critically needed to improve technology,

but also to make strides in organizational structure,

marketing, and public policy. As the chemical industry becomes increasingly aligned with the textile industry, some segments—most notably fibers—

have experienced greater R&D efforts. The U.S.

chemical industry has long understood the need for

aggressive R&D efforts, accounting for 9 percent of

U.S. manufacturing shipments but approximately 15

percent of all industrial R&D and 35 percent of all

research funded by industry.62 Du Pent chairman

E.G. Jefferson credits this level of R&D with assisting the chemical industry in achieving a $9 billion

trade surplus and generating 36 percent of world

chemical sales in 1983.63 Fiber research at Du Pent

has given way to process technology advances, responsible for more than doubling productivity in

manmade fibers during the past decade.64

Rapid technology transfer around the world is a

simple fact of life. It takes the form of exported products, industrial processes, and the skills needed to

apply technical ideas. Driving costs down through

investment in nonproprietary technology cannot prevent long-term, continued growth of imports.65 But

many argue that it can provide an important shortrun technological and competitive edge.

There is evidence that the pace of technological

diffusion is increasing. Technological innovations are

themselves a major contributor to the trend. On-line

international data networks allow global access to

current information in some areas, while new tele-

~lRemarks of E G Jefferson, Chairman, Du Pent, at the 40th Anniversary of the Society. of F]ber Science and Technology, Tokyo, May 11,

1984, p 5

‘]lt)id

b~lbld , p 6

~Speter Harding, Kurt Salmon Associates, Inc , “Quick Response in

the Soft Goods Pipeline, ” synopsis of speech given at the Knitted Textile Assoclat]on Retail Relations W’orkshop, Dec 6, 1985, p. 1,

communications increasingly permit tighter global

integration of production and even R&D. More generally, declining communications and transportation

costs have contributed to an increase in the knowledge and skill base outside the United States, a development visible in the rapid growth of trained engineers, financial experts, and managers in developing

nations. The result is a more competitive economic

environment, in which the life cycle of any product

has been dramatically shortened.

Capital Investment: An Economic

Necessity

Textile executives realize that their companies

must modernize if they are to survive. But with machinery turnover and the period of renewal of machinery growing more rapid from year to year, demand for capital investment funds can be staggering.

The degree of technological change in the industry

requires constant investments to keep up with competition. Some of the larger textile firms, like Burlington Industries, have been investing as much as 85

percent of their cash flow in new machinery.66 The

U.S. textile industry has spent $1 billion or more a

year on machinery for two decades, and is the most

productive in the world.67

One of the costs of the scale of investment needed

for new technology may be the increasing concentration of the industry, as only large and financially

strong corporations may deem themselves able to

absorb the costs. In weaving, for example, the 10

largest companies in the United States account for

85 percent of all purchases in new machinery. It is

unclear if weaker firms are able to afford the constant renewal process demanded by rapidly changing technology. While substantial capital investments

are essential to achieving a competitive edge in productivity, clearly relating these investments to shortrun profitability is often difficult. An example of this

was explained by a Du Pent Vice-President in the

following way:

Our Cooper River plant near Charleston, S. C., is

our newest, largest and most productive facility for

the manufacture of polyester staple and filament. It

GfIw.E, Schmidt, op. cit.

~TFiber, Fabric & ,.4pparel Coalition for Trade, “Fiber, Textile and APparei Imports: Myths and Realities, ” Mar 14, 1985,
started up in 1976. The mid-1980s cost to duplicate

this large modern facility will be almost double our

original mid-1970s investment. We’re talking about

hundreds of millions of dollars. A return of 15 percent would be the minimum required to invest in

such a plant in this decade. Prices for polyester will

need to rise more than cost escalation to make reinvestment in polyester staple an attractive business

opportunity for us in 1985.

Clearly, that’s a formidable challenge when prices

are not even at the point of meeting our past cost

increases. 68

Investment requirements in the industry are by

no means spread evenly among sectors. The traditional apparel sectors have only 14 percent of the

overall fixed assets of the industry. The weaving,

knitting, and yarn sectors, on the other hand, have

55 percent of the overall fixed assets. Within fabric

production, cotton fabric manufacture requires the

highest fixed assets.

MD. K, Barnes, Vice president, Textile Fibers Department, DU pent,

“The Fibers Outlook,” report to American Apparel Manufacturers Association Seminar, New York, Dec 10, 1980, p. 9,

While there appears to be a commitment to modernization, the degree of investment depends largely

on the current economic situation. Purchases of shuttleless looms and ring spindle frames fluctuate heavily with the economic climate. This, however, has

not been true with open-end spinning machines.

And while U.S. firms are investing substantially, the

ratio of new technology to older technology is still

rather small, and some industry experts question the

long-term commitment of manufacturers to make the

necessary investments.

Due to a high gross value of fixed assets as well

as a high turnover of machinery, the weaving segments of the textile industry alone account for 29

percent of total yearly expenditures on new plant

and equipment. Apparel firms spend much less on

new equipment, largely because there have historically been few technologies designed to increase the

productivity of apparel manufacturing. As chapters

2 and 3 indicated, however, this situation may

change rapidly in the near future, through the adoption of Quick Response technologies; U.S. apparel

firms may soon have to make significant new investments in production equipment in order to remain

competitive in world markets.

IMPLICATIONS FOR THE TEXTILE AND APPAREL LABOR FORCE

Advancing technology and the internationalization

of production are revolutionizing employment in the

U.S. textile and apparel industry. The total number

of jobs continues to decline, while new jobs are frequently created in unconventional categories.

The textile industry throughout U.S. history has

been, and in the 1980s continues to be, a major industrial employer. The U.S. textile industry complex

—consisting of fiber, textile, and apparel production—

is the Nation’s largest nondurable goods manufacturer, and employs one in every nine manufacturing workers, or just under 2 million in 1985. Apparel

is the largest employer, with 1.1 million employees.

Textile mill products follow with 700,000 workers.

In the fiber industry, man-made fiber production employs 64,000 individuals. The textile machinery industry, a durable goods sector, employs 18,000.

With 2 million people employed in all 50 States,

and 1983 wages totaling nearly $25 billion—$1 1.1

billion for textile wages, and $13.6 billion for wages

in the apparel sector—major changes in the number and types of textile jobs affect more than just

specific individuals and companies. Many workers

live in communities in which a textile plant is the

only major local employer; job losses in these areas

affect both States and localities, since both suffer from

the depletion of economic activity and the loss of

tax revenue caused by high unemployment. Clearly,

such

omy

effects may propagate through the U.S. econas well.

Employment Changes Within

the Industry

Sectoral Shifts

In apparel, labor-intensive operations still predominate in the industry, and job declines are largely

due to import penetration. The apparel sector em-
97

ploys 48 percent of the total industry, and has the

lowest wages—27 percent lower than manufacturing as a whole, and 13 percent lower than those employed in textile mill products manufacture. It also

has the greatest percentage of women employees of

all manufacturing sectors, 81 percent. In addition,

apparel has the largest percentage of production employees to total employees, 82 to 84 percent v. 70

percent for all manufacturing. Apparel is also the

sector of the industry where job loss is most severe,

especially low wage production jobs filled by substantial numbers of women and minorities.

In textile mill products, automation and adoption

of new, capital-intensive technology have significantly reduced the number of jobs available. Indeed,

there are many examples of modernization eliminating jobs. Since 1978, when Burlington began its

modernization program, it has reduced its work force

by at least 10,000. Stevens has spent more than $480

million on its capital program since 1978, and, like

Burlington, has trimmed 10,000 people from its

payroll.

But modernization does not always lead to job

loss—especially if new plant and equipment can be

used to expand markets. When Burlington replaced

700 Draper fly shuttle looms in its Shannon, Georgia, plant with approximately 450 Ruti air-jet looms

in 1979, none of the 1,300 employees there were

laid off, even though production speeds increased

two- to three-fold. At the Burlington weaving plant

in Vinton, Virginia, when a $25 million modernization program in 1981 converted operations to shuttleless weaving, the 600-employee work force was

fully maintained.69

Within the textile mill products sector, the distribution of employment varies considerably among

production processes. The weaving sectors, for example, account for 16 percent of all employees in

the total textile industry. Knitting and hosiery account for 10 percent of industry-wide employment,

the yarn industries 5.5 percent, and the carpet industries 2.4 percent. All other sectors employ less

than 2 percent; 2 percent, however, still represents

50,000 jobs.

The only industry sector claiming new job creation was retail trade, which gained nearly 250,000

bc’Tex[lle U’eek, Aug. 10, 1981, p 6

jobs between 1970 and 1985. This was largely due

to the sharp rise in personal spending on apparel

after 1970, which necessitated more activity at the

retail end of the industry. However, a gain in retail

jobs in the service sector of the economy may not

help stop the erosion of the U.S. industrial base, especially when an increasing share of what U.S. consumers purchase has been manufactured overseas.

In addition, these jobs provide substantially lower

average wages than textile manufacturing jobs—

themselves low-paying by U.S. industrial standards,

although not by international standards for textile

and apparel workers. Average 1985 hourly earnings

in apparel retail trade were $5.29, in contrast to $5.73

for apparel manufacturing, $6.71 for textile mill products manufacturing, and $7.98 for textile machinery

manufacturing. In the newer manmade fiber industry, however, wage rates were significantly higher,

with average hourly wages at $11.37.70 These compare to an average hourly rate in 1980 for all manufacturing of $8.55.

Job Movement to Overseas

Production Facilities

Much employment has been lost as textile companies transfer some of their production overseas.

WIU ,s, D~partment of Labor, Bureau of Labor Statistics, ~@OJ’~e~(

and Earnings, March 1986, pp. 91-93

Photo credit Copyright (©) 1986, 1987 by Bobbin International, Inc.

All rights reserved

This apparel manufacturing facility, located in Barbados

and used by U.S. firms under the 807 role, employs a

low wage workforce. The lower labor costs that a U.S.

firm pays to these workers often influence the choice

to move labor-intensive tasks offshore.
98

While such activities may deplete a region’s economic base and tax revenue due to the loss of jobs,

some analysts claim that this is balanced by the fact

that overall corporate costs are minimized when

labor-intensive tasks, such as sewing, are performed

in low labor cost countries. However, as the level

of technology and the capital intensity of production

grows, wage rates may decrease in importance. The

education of the people at the machines and in the

control rooms may gain increasing priority,

It is important to note that the United States is not

alone in suffering employment losses in the textile

and apparel industry. Job loss has occurred throughout the developed world—for example, 53 percent

in the Netherlands and 37 percent in the United

Kingdom within the last decade. At the same time,

employment in developing nations is gaining significantly—l 11 percent in South Korea and 194 percent in Mauritius, for example.71

Impact on Individuals and Families

The textile industry is an important employer of

women and minorities. While manufacturing overall had an employment profile that was 32 percent

female in 1980, it was 51 percent for the textile industry, Whereas minorities held 11 percent of manufacturing jobs overall in 1980, they represented 20

percent of textile manufacturing employment.

The industry is also a major employer of immigrants, and immigrants feel dependent on these jobs.

For example, in testimony before the Congressional

Textile Caucus, one Chinese member of the ILGWU

said that except for the garment shops, there were

almost no places outside Chinatown where a nonEnglish speaking immigrant could find work in New

York City.72

In may cases, there may be little or no severance

pay to displaced workers. Because of the low level

of wages, it is unlikely that a displaced individual

has much in the way of savings.

The damage that job loss brings to individuals and

families can be significant; problems are exacerbated

Tl]nternationa]~~r Organization, “Social and Labor Practices of Multinational Enterprises in the Textile Clothing and Footwear Industries,”

cited in Dai/y Labor Report, Bureau of National Affairs, Jan. 3, 1985,

p. A-6,

~lAFL.CIO News, Sept. 21, 1985, p. 5.

for two main reasons. First of all, many of the workers affected are minorities, women, and/or those

with little education and few other job skills. Second, they often live in areas that are highly dependent on textile and apparel employment. Displacement

may mean not only the uprooting of individuals and

families, but of whole communities and regions as

well.

Impact on Communities and Regions

of the Country

The geographical distribution of textile employment makes the industry, both as an employer and

as a tax-paying resident, critical to several regions

of the United States. As of 1980, 46 percent of U.S.

textile employees were in the Southeast, and 17 percent in the Midwest; the latter were predominantly

agricultural workers involved with cotton and wool

fibers. North Carolina houses over 250,000 textile

jobs, more than any other State. South Carolina, New

York, and Texas each have between 200,000 and

250,000 people employed. Georgia and Pennsylvania

rely on the textile industry to supply between

150,000 and 200,000 jobs. And there are between

100,000 and 150,000 textile jobs in Alabama, California, Tennessee, and Mississippi (see figure 16).

Jobs are divided about half and half between small

towns and metropolitan areas. In South Carolina, for

example, approximately 60 percent of all textile and

apparel jobs are in places with fewer than 2,500 people. But textile and apparel businesses are also significant employers in New York, Philadelphia, Los

Angeles, and Miami.

It is conservatively estimated that for every U.S.

textile worker who loses a job, another American

worker is also put out of work (see tables in the executive summary). These connections are particularly vivid when entire communities are affected by

loss of a major plant.

Indeed, in geographic areas where textile employment is particularly concentrated, such as the Southeast, plant closings and job loss can mean economic

devastation to an entire town or region, The decline

in employment has been the greatest in North Carolina, South Carolina, New York, and Pennsylvania.

The region of the country most directly affected is

the Southeast-North Carolina, South Carolina, Geor-
99

Figure 16.— The Geographic Distribution of Textile Employment by State

‘ 1 (

Number of jobs

❑ 200,000-250,000

SOURCE Off Ice of Technology Assessment, 1987

gia, Tennessee, Alabama, Florida, Kentucky, and

Mississippi–where 33,400 jobs were lost in 1985,

bringing textile employment 17 percent below its

1951 level. According to the Bureau of Labor Statistics, 32.2 percent of the region’s total manufacturing employment in 1951 was in the textile industry. By 1985, it had shrunk to only 13.5 percent.73

An example of economic devastation to a small

textile town is Ware Shoals, South Carolina—a town

built by Riegel Textile Corp. nearly 80 years ago,

and now the location of a closed textile plant. Ware

‘~~.S;Department of Labor, Bureau of Labor Statistics, cited In AFLCIO News, July 19, 1986, p, 3.

Shoals has a skilled work force, an abundant water

supply, an adequate waste treatment facility, and

nearly 1 million square feet of manufacturing space

under one roof. The town has access to rail and major highways, and to airports in Greenville and

Greenwood.

Ware Shoals also has severe unemployment mortgage foreclosures, town emigration, empty stores,

and an eroding tax base. Sixty percent of its businesses are gone, including all of its clothing stores.

More than 50 percent of the town’s property taxes

were lost by the exodus of Riegel alone, not to speak

of wiping out the lion’s share of business license

taxes. Younger people are moving out, leaving be-
100

hind an elderly population that faces a severe cut- where textile manufacturers have closed plants over

back in public services due to the town’s eroded tax the past four years. Invariably, the closing of a plant

base. Beyond the tragedy of Ware Shoals is the fact is followed by an exodus of small businesses and a

that this is not an uncommon occurrence: virtual collapse of local economies.74

The story of what happened in Ware Shoals is fairly llR1ldolph A. Pyatt, Jr., “Factory’s Shutdown Tears Fabric of Small

typical of what has occurred in many communities Company Town,” The Washington Post, Oct. 14, 1985, pp. 1, 26-27.
Chapter 5

Policy and Survival
Chapter 5

Policy and Survival

Clearly, the burden of transforming the textile and

apparel industries in the United States lies with the

thousands of private investors and managers that

must pilot their companies through a period of unprecedented change. This will require large amounts

of capital, careful reexamination of “standard operating practices, ” continuous innovation, and taking

some significant risks. Perhaps most importantly,

building a competitive industry will require confidence on the part of investors. Public policy, however enlightened, cannot replace such factors.

On the other hand, while the previous discussion

indicates that many parts of this industry have moved

boldly to build a world-class enterprise, their efforts

alone may not prevent major sections of the industry from being eliminated by low-cost imports. Federal action could assist the industry in a variety of

ways. The government can foster an economic climate conducive to risk-taking and innovation. It can

help firms to retrain workers as production techniques change. It can protect the domestic industry

against unfair trading practices by foreign firms. And

it can act to stem the excessive tide of imports while

the industry works to rebuild itself.

Debate over possible Federal programs in these

and other areas has been long and complex. The

following discussion will not resolve disputes covered more extensively in other, more detailed industry analyses. Rather, it will outline areas where

Federal action has been suggested by a variety of

groups involved in the production and trade of textiles and apparel.

Consensus about appropriate policy directions for

the textile and apparel industry is difficult to achieve.

In addition to basic disagreements about economic

philosophy, complex industry interests are involved.

For example, retailers may care little about domestic manufacturing if their foreign sources are viewed

as secure; they would argue that the consumer benefits from low-cost imports. Some go so far as to contend that the United States does not appear to have

a comparative advantage in many textile and apparel

activities, and should not attempt to prevent the

inevitable—rather, they argue, emphasis should be

placed on industries in which U.S. firms can more

easily compete in international markets. U.S. textile and apparel manufacturers and unions take

strong exception to this perspective, and state that

their industry can remain a major employer—given

appropriate protection in the short term, and adequate support for research and investment over the

long term.

EMPLOYMENT ISSUES

Because the textile and apparel industry is so

labor-intensive—especially the apparel segment—

any severe negative impact on the industry’s employment becomes a problem of national concern.

While some private firms have taken steps to facilitate the transition, several proposals have been suggested for public sector action, and some Federal programs already exist. What follows is a brief discussion

of Federal programs to facilitate job transition and

training. 1

‘For more detailed discussion of this subject, see U.S. Congress, Office of Technology Assessment, Technology and Structural Unemployment Reemplo}ring Displaced Workers, OTA-ITE-250 (Washington, DC:

U.S. Government Printing Office, February 1986).

Assistance for Textile and

Apparel Workers

Currently, it appears that the majority of textile

and apparel firms devote few resources to helping

workers who have been displaced—whether the

assistance comes in the form of advance notice of

a plant closing, or actual help in retraining and relocation. Data on assistance to displaced workers are

not available, but there is little reason to believe that

textile and apparel workers receive more help from

their ex-employers than the average displaced worker. A survey done by the U.S. General Accounting

Office, U.S. Business Closures and Permanent Layoffs

During 2983 and 2984, indicated that of U.S. com103
104

panics employing more than 100 people, only onefifth gave placement help to blue collar workers, and

that the average blue collar worker received 7 days’

notice of a plant closing. As an OTA special report

has concluded, “notice periods this brief do not allow enough time to prepare an effective program of

adjustment assistance for the displaced workers.”2

Should companies be required to give employees

advance notice of pending job losses, as is done in

several European countries? Should severance pay

be required? Should there be any direct responsibility of the company to seek out new job opportunities actively, either through enticing new businesses to the affected community—perhaps to the

very buildings abandoned by the departing firm—

or by searching out appropriate job opportunities for

their employees in other locations? Such questions

affect not only the textile and apparel industry, but

all U.S. industries; two recent OTA reports provide

detailed discussion of programs for advance notice,

job transition, and job training.3

Some of the larger textile firms have relocated displaced workers from one company plant to another.

For example, Fieldcrest Cannon, Inc., attempts to

relocate laid-off employees at other company sites

when practical, according to O.L. Raines Jr., the company’s vice president of human resources. This firm

also notifies area employers and State employment

officials in order to gain further reemployment assistance, and has provided advance notice of a plant

closing—in March 1986, Fieldcrest announced that

it was laying off 1,465 workers in North Carolina and

Georgia; the layoffs began midyear. But, says Raines,

“We don’t have the resources to do as much . . . as

we’d like. ”4

Even more than textile companies, many apparel

firms suffer from a lack of resources to devote to

worker transition. A small apparel job shop may depend on orders from larger firms, and may be unable to project the amount of work to be done in a

few weeks, much less the several months needed

to develop comprehensive worker adjustment plans.

W,S, Congress, Office of Technology Assessment, P/ant Closing: Ad-

~’ance Notice and Rapid Response-Special Repoti, OTA-ITE-321 (Washington, DC U.S. Government Printing Office, September 1986), p. 1.

‘Technology and Structural Unemplo,vment. Reemploying Displaced

Adults, op. cit., ch. 5; Plant Closing: Advance Notice and Rapid Response—Special Report, op. cit , pp. 26-27.

‘The Charlotte Obser\rer, Apr. 28, 1986, p. 17C.

Accordingly, many proponents of advance notice

support a “size qualification, ” whereby firms under

a certain size would not have to satisfy all of the requirements that larger, more capital-intensive firms

could fulfill.

In the United States, only Maine and Wisconsin

require advance notice, while only three other States

have laws that provide for voluntary advance notice, However, none of these States are located in

the Southeast, where most U.S. textile and apparel

firms reside. And it is uncertain whether those States

that do have laws have actually improved their own

programs for displaced workers, since very little data

has been collected on the effects of these laws. Moreover, enforcement has been only modest.

Aside from advance notice, several States have

other laws related to plant closings. Some, for example, require that employers continue health insurance coverage for a period of time. Some offer

technical and financial assistance for worker buyouts, and some give assistance to troubled firms to

help them stay in business,

Some State officials argue that the private sector

is acting effectively to meet the needs of displaced

workers, asserting that today’s textile firms have

“demonstrated a lot more empathy than . . . in the

past. Most of the companies make a good effort to

help their employees. “5 While there are models of

excellent company programs, these are generally the

exception and not the rule for U.S. businesses. As

the Secretary of Labor’s Task Force on Economic

Adjustment and Worker Dislocation recommends,

“greater private sector effort is necessary to alleviate the problems faced by displaced workers and

their communities.”6

Skill upgrading by companies is another question.

Some argue that the production and management

jobs of the future will require entirely different skills.

They contend that more education and different

training will be needed to perform on the job. Beginning some of that retraining now, with existing

employees, could help ease the displacement crisis

that is likely to continue in the industry. It is important to note, however, that these kinds of activities

sRobe~ smith, ~sistant deputy executive director, South CarolinaEmployment Security Commission, cited in The Char/otte Observer, op. cit.

‘The Charlotte Observer, op. cit., p. 6,
105

may benefit society as a whole more than the industry that helps fund retraining programs. As a result,

company-based retraining efforts may often fall short

of a level that would be optimum for the Nation.

State and Local Responsibilities for

Employment Training and Transition

Communities whose tax and economic bases depend heavily on the production of textiles and apparel have a clear interest in ensuring that new employment opportunities respond to plant closings,

and that individuals who must navigate the transition to new jobs have access to assistance programs.

As textile and apparel firms continue to adapt to new

technologies and changing market conditions, local

social service departments may be forced to increase

the money and time allocated to assist displaced

workers and their families.

Active promotion of potential businesses by communities, as well as by regional and State bodies,

has proven successful in many areas. Lowell, Massachusetts, for example, has lost many textile and

apparel jobs over the past 50 years, but in recent

years the town has recruited several high-technology

firms to its community, including Wang. These firms

have provided employment opportunities directly

through the job openings they offer, and indirectly

through the economic stimulus that their presence

brings to the town. North Carolina’s Research Triangle Park has also provided some relief to those

in the State left unemployed by plant closings or

layoffs in the textile and apparel industry.

In order to retain existing firms or lure new firms

to their communities, a local body may have to waive

or reduce property taxes for a period of time. Infrastructure may have to be provided at public expense.

Local governments may have to go to their citizens

with new bond issues. These kinds of expenditures

can help slow the drain on public services resulting

from widespread worker displacement—services

which range from State unemployment insurance

to local programs providing emergency shelter for

a family evicted due to insufficient mortgage or rent

payments. The competition among communities to

attract industry is high. But so are the stakes to communities and their residents—and to States, which

stand to increase their tax base significantly during

times of high employment.

There is, however, a limit to actions that a State

or city can take in order to bring industry into its

borders. Some States are threatening to bring suit

against businesses that have been granted special

incentives, but have then fallen short of fulfilling

original expectations. One 1984 study found that “for

every 50 cents difference that an incentive made in

a company’s profit, it cost a State $1 in foregone revenues.”7 Clearly, too much in the way of up-front

company bonuses can cause the State or locality to

lose more revenue than would be gained through

long term industrial activity. Moreover, some businesses have admitted that prospective subsidies play

a less important role in a location decision than such

factors as a reputable labor force, a natural resource

base, and even “quality of life” considerations.8

Trade Adjustment Assistance9

The Federal Government, through the Trade Act

of 1974, has provided “trade adjustment assistance”

(TAA) to workers who lose their jobs due to foreign

competition, and to firms who suffer from increases

in imports. TAA was established to aid in the orderly transfer of resources to alternative uses, and

to help with adjustments to new conditions of competition. Trade-affected firms can also receive technical assistance from the International Trade Administration of the Department of Commerce.

Workers qualify for TAA funding through certification by the U.S. Department of Labor. The law requires certification in 60 days, but delays have been

frequent. With recent improvements in the process,

about half the petitions now receive a decision within

the 60-day legal mandate.

Once certified as having been displaced due to the

effects of trade, workers are eligible to receive Trade

Readjustment Assistance (TRA), or weekly income

support payments. Through 1981, these payments

were made over and above any payments made

through State unemployment insurance (UI); since

that time, however, TRA has been tied directly to

UI. Workers may now receive TRA and UI payments

combined for one year, and TRA must be at the same

‘Alex Kotlowitz and Dale D Buss, “Localities’ Giveaways To Lure

Corporations Cause Growing Outcry,” The Wall Street Journal, Sept.

24, 1986, p. 1,

‘lbId.

~Thi~ section is based Iargelv on Techno/o@’ and .$truclura/ ~~nemplovrnentReemplo>zing Displaced h’orkers, ~Ip. cit., pp. 196-198
106

level as UI. While receiving this support, workers

can take advantage of considerable retraining and

relocation assistance-ranging from reimbursement

of 90 percent of out-of-area job search expenses (up

to $800) to subsidized “on-the-job training” in new

jobs. Workers enrolled in approved classroom training can continue to receive TRA payments for an

additional 26 weeks after 1 year has expired.

TAA benefits were cut back sharply in the first half

of the 1980s. Outlays for TRAs dropped from $1.6

billion in fiscal year 1980 to $35 million in fiscal

1984. In December 1985, Congress failed to pass legislation that would have reauthorized the program

(the Omnibus Budget Reconciliation Act). However,

funding for TAA services to workers was extended.

No provision was made at the time for TRAs.

In April 1986, a 6-year extension of the TAA program was approved, retroactive to December 19,

1985. TAA outlays were about $146 million in fiscal year 1986, including $118 million for TRAs. Government estimates of outlays for fiscal year 1987

forecast a total program expenditure of over $200

million. These levels are similar to those of the

1970s.

In addition to TAA, box C describes several other

Federal programs for job training and transition.

TRADE ALTERNATIVES

In the arena of public policy, no issue is as im- egy are the subject of debate, If the United States

portant to the future of the U.S. textile industry as wishes to gain greater access for domestic productrade. But the specifics of a coordinated trade strat- ers in the protected markets of other countries, it
107

could announce that retaliatory measures will be

taken unless foreign trade barriers are lowered. Such

an approach} however, must be weighed against the

fact that any effort to gain trade concessions for U.S.

textile and apparel firms—by either increased protection of domestic markets or pressure to open foreign markets—is likely to affect trade negotiations

in other areas.

Most experts agree that programs designed to revitalize U.S. textile and apparel firms will probably

have little impact without a trade strategy that gives

the industry time to complete its massive restructuring. On the other hand, many economists oppose

the principle of trade protection, and contend that

if such action must be taken, it should be in the form

of temporary tariff increases. Tariffs, they argue, are

preferable to quotas and other ontariff mechanisms—

tariffs make the cost of trade restrictions clear to consumers, and the revenue from tariffs goes to the U.S.

treasury, not to foreign exporters who may react to

quotas with higher prices.10

Where the U.S. Government has intervened in textile and apparel trade, its interventions have tended

to be ad hoc and reactive rather than comprehensive. While most major textile and apparel producing nations have implemented sectoral industrial

policies—featuring industry promotion subsidies and

import protection—the U.S. Government has played

a comparatively passive role, seeking to patch up

particular problem areas as they develop rather than

implement a more systematic approach. And, as indicated in chapter 4, many charge that existing trade

regulations concerning textiles and apparel have

been ineffectively implemented.

The surge of textile and apparel imports into the

U.S. market is a reflection of an export drive by developing nations trying to bolster their domestic

economies, and of a defensive response by a number of industrialized nations. The impetus for these

developments has been provided by foreign governments. [f the United States fails to address this problem, much of the future of U.S. textile and apparel

industries may be determined by decisions in other

countries.

l~)~~bert Lawrence, Can Amer;c~ Compete? (Washington, DC The

Brook]ng~ Institute, ]984), p 129

Export Promotion

U.S. textile exports have never been a significant

part of domestic production, and most experts would

agree that they are unlikely to emerge as the major

answer to the current crisis in U.S. textile trade.

Nevertheless, there is growth potential for the U.S.

textile industry in export markets. In 1986, U.S. textile and apparel exports increased 11 percent to about

$3.47 billion; textile products accounted for approximately 75 percent of the total value of these exports,

and for about 60 percent of the increase.’] It must

be emphasized, however, that a substantial amount

of this growth was due to 807 trade—where U.S.

firms move early stages of production overseas and

then reimport the final product, on which is placed

a tariff that applies only to the value added outside

the United States.

One way for most textile and apparel firms to improve their viability is to be sure that they share in

the growth of worldwide demand for textiles. Textile firms must focus attention on penetrating foreign markets, but they will likely need the help of

the U.S. Government to seek reductions in such restrictions as nontariff barriers, import licensing tactics, and 200-percent duty rates. Of course, any U.S.

proposal in this area may be met with counterdemands concerning existing U.S. trade barriers in textiles and apparel and other industries, and may raise

questions pertaining to past and present U.S. policies

toward international exchange rate fluctuations.

Proposals and actions to promote exports include

the

1

following:

In 1979, the United States initiated a long-run

program to promote textile and apparel export

expansion. Implemented by the Office of Textiles and Apparel at the Department of Commerce—responsible for attempting to reduce foreign barriers to the export of U.S. textile

products—in cooperation with Commerce’s Bureau of Export Development, a major study of

the foreign sales potential of U.S. textiles and

apparel was undertaken. Textile and apparel

markets in 47 countries were surveyed. A series of seminars was held in 1980, geared to the

I IArnerlcarl Tex[l]e hlan~lfacturers ] nstitute, ~e,%’fi]e ~i~h/lgh(S. Se~-

tember 1 W%, p. IL
108

needs of the manufacturers of textile and apparel products. The Department of Commerce

has also examined the viability of developing

U.S. export trading companies for textile and

apparel products, in order to facilitate the entry of firms that think of themselves as too small

or too unfamiliar with foreign trade to seriously

consider exporting.12

2. In 1981, the Office of Textiles and Apparel published the known nontariff barriers to U.S. textile and apparel exports in 138 countries.13 The

goal was to use this publication as a basis for

examining the regulations in reference to multilateral trade negotiations. The office established a special “trade facilitation” staff, charged

specifically with the investigation of nontariff

barriers and other trade problems encountered

by U.S. textile exporters.14 Such tools can strengthen the U.S. position during trade negotiations,

3. Export financing is another method of promoting exports. Because some exporters have complained that U.S. export financing for textiles

and apparel is not competitive, the U.S. Department of Commerce set up a task force to study

the subject.

4. The appropriate executive branch agencies

5

could enforce existing laws and regulations that

affect market access for U.S. textiles and apparel

more strictly—such as Section 301 of the Trade

Act of 1974, which allows the President to retaliate against unfair trade practices of other countries in world markets. However, analysis of the

full value and impact of Section 301, and of possible modifications to this provision, are beyond

the scope of the current discussion.

Another proposal is for the government to offer export subsidies to U.S. firms, in order to

offset the advantages that foreign exporters receive from their governments. In the United

States, this would most likely involve setting

special interest rates.

IZB. Toyne, et a]., The Global Textile Industry (London: George Allen & Unwin, 1984), pp. 113-114.

I’IU ,s, Department of Commerce, International Trade Administration,

Office of Textiles and Apparel, ‘

i

Foreign Regulations Affecting United

States Textile/Apparel Exports,” August 1981.

lqToyne, et al., op. cit , p 114.

Import Regulation

As stated, import regulation is a contentious public policy issue, one for which many strategies have

been proposed. Besides the political and philosophical debates about whether a free trade approach as

opposed to some governmental involvement in trade

policy is appropriate, there is also an ongoing debate about whether import protection, if developed,

should be implemented as a long- or short-term strategy. The Fiber, Fabric, and Apparel Coalition for

Trade laments:

In the United States, textile trade issues are too

often debated in an ideological context of “free trade”

vs. “protectionism. ” These terms have little real applicability to an industry which, at the world level,

is characterized by pervasive government intervention in, and management of, the terms of trade.15

Proposals to regulate imports are numerous. They

include:

1. Enacting trade legislation that could:

—Require or encourage the President to act

against foreign governments’ ‘(export targeting, ” or subsidization of textile and apparel

exports.

—Require or encourage the President to impose

duties against “diversionary dumping,” in

which textiles, apparel, or textile machinery

are dumped in a third country and then incorporated into a product to be exported to

the United States. The European Economic

Community (EEC), for example, has introduced an “antifraud” clause, which provides

that fraudulent shipments may be charged

against the quota of the genuine country of

origin. This significantly reduced imports

originating from South Korea.16

2. Enforcing bilateral agreements more rigidly. In

the latest agreement with Japan, signed in November of 1986, the U.S. Government said that

Japan would limit annual growth of textile and

apparel exports to the United States to about

eight-tenths of 1 percent; 1986 exports, however} had already grown 18 percent, In addilsThomas R, Howell and William A, Noellert, “The EEC and the Third

Multifiber Arrangement,” study prepared for the Fiber, Fabric, and Apparel Coalition for Trade, 1986, preface to Executive Summary.

lsHowell and Noellert, op. Cit., p. 99.
109

3.

4.

5.

6

7.

tion, when the last bilateral agreement expired

on December 31, 1985, Japan assured the United

States that its exports would be held at 1985

levels. IT

Imposing tougher import restrictions. Under the

terms of the Multi-Fiber Arrangement (MFA),

for example, the EEC reduced access to its markets between 1982 and 1986 in 14 of 15 categories of its dominant suppliers. Also, quota provisions from MFA could be extended to fibers

not currently controlled; in the agreement to

extend MFA from 1986 to 1991, products of vegetable fibers other than cotton and silk blends

are included as products available for quota

control.

Limiting the growth of textile and apparel imports to the United States to the growth of the

U.S. market; allowing the President to set specific quota levels within the overall total.

Taking action against U.S. trading partners that

have developed an “excessive trade surplus”

with the United States stemming from unfair

trade practices, for either textiles and apparel

or all trade. The definition of unfair trade could

range from direct subsidies to the denial of internationally recognized labor rights and standards. One example of such retaliation might be

a surcharge on imports from any country maintaining a substantially positive trade balance

with the United States. A congressional proposal

has called for a 25 percent surcharge when a

country’s exports exceeded their buying from

the United States by 65 percent, with an exemption earned in a year in which trade surplus was

reduced by 10 percent. Had such a proposal

been in effect in 1985, it would have had an

impact on Korea, Taiwan, Brazil, and Japan.18

Requiring that the U.S. Government turn over

tariffs collected on textile and apparel imports

to the industry for capital expenditure assistance.

Implementing an import licensing system for

textiles and apparel. Such a system could work

to prevent overshipments, since goods would

need a quota allocation to be shipped; ’g and

could limit fraud and transshipment for the pur-

) “American Textde ~fanufacturers institute, 7’e.xt])e Trends, vol XXXIV,

No 45, No\ 14, 1%%, p ]

1~’’The New Trade Strategy,” Business W’eek, Oct 7, 1985, p. 93

IC)senatcjr Ernest Holllngs, Statement on Thailand, No~. 1 ~, 1985, P 2

8

9

pose of quota evasion.20

Establishing a data bank on cost of manufacture of specific textile and apparel products by

country, with details of the cost components.

In this manner, import shipments data and antidumping and/or countervailing duty petitions

could be monitired promptly where appropriate.

Reexamining those aspects of the Caribbean Basin Initiative which allow “maximum access”

to goods sewn in Caribbean nations from U. S.-

made fabric.

Other Trade Policy Areas

Several general proposals, which relate to trade

policy for textiles and apparel in so far as they relate

●

●

●

●

●

to all industries, have been suggested: -

Education: Government support to improve

the general level of “technological literacy” of

the U.S. population is a high priority for public

policy.

Tax Policy: It has long been a recommendation of the AFL-CIO to “purge the tax code of

incentives for the movement of U.S. jobs overseas through eliminating the foreign tax credits

and the deferral of taxes on nonrepatriated foreign earnings.”21

Some believe that tax allowances for small

operations could help them to increase their

productivity. Others propose the use of targeted

investment credits, aimed at adoption of stateof-the-art technology. Changes in tax laws on

depreciation are also part of many proposals.

Tariff Policy: Several groups believe that items

806.30 and 807 of the Tariff Schedules of the

United States (TSUS) should be repealed.

Policy on Multinationals: Existing codes of

conduct for multinational enterprises might be

strengthened to protect the rights of workers employed by these firms, and to provide effective

remedies when these rights are denied.

U.S.-Supported Loan and Investment Programs for Overseas Businesses: It has been

argued that the Overseas Private Investment

Corporation (OPIC) should be terminated. As

ZOTestjmony of .SOI Chaikjn, President, International Ladles’ Garment

Workers’ Union, Subcommittee on International Trade, Committee on

Finance, U.S. Senate, July 15, 1985, p. 3.

21AFL<I() Exwutjve council on Trade, “Ex~utlve Counci] statement, ”

Feb. 18, 1986, p, 2,
110

a government agency that insures private investment abroad, it is argued that OPIC has contributed to the export of U.S. jobs.

Another international program that may need

reconsideration based on U.S. trade interests is

loans from the International Monetary Fund

(IMF), which often require that the borrowing

countries curb imports and push exports in order to pay their debts. Instead, the IMF might

be urged to promote balanced growth in both

borrowing and in lending countries.

While Export Import (Exim) Bank funding—

including direct loan authority, which provides

U.S. industry with tools necessary for international competition—is likely to be maintained,

the AFL-CIO has proposed that funds should not

be used to develop projects in other countries

in industrial sectors where a significant excess

in U.S. capacity exists.22

‘zIbid,, p, 30.

RESEARCH AND DEVELOPMENT (R&D)

Maintaining a technological edge over competitors has been a long standing strategy in the United

States for maintaining a productivity edge and a comparative advantage. Some R&D for textiles and apparel is for new product development; other R&D

is for process improvements. Much research within

the industry complex could be systemwide, not just

centered around automating a small part of the activity. Many current research efforts involve groups outside the traditional textile industry and its supporting research facilities, since the new generation of

equipment—including computers, communication

software, and sensors—requires contributions from

industries that formerly did not participate in R&D

for textiles and apparel. Because of this need for

generic, system-level research, government help may

be required in many areas of technological development.

Public/Private Ventures

Coordinated R&D is a policy option receiving

greater attention as a mechanism to increase the

competitive strength of U.S. textile companies. This

coordination could be done privately, through greater

funding of research institutes by textile companies;

presently, the Textile Research Institute in Princeton, New Jersey, serves such a function. Further

movement in this direction may require review and/

or amendment of some anti-trust restrictions.

Coordination could also be accomplished through

public funding, or some combination of private and

public funding. The Textile/Clothing Technology

Corp. ((TC)2

) is a modest effort at coordinated public/private R&D efforts; representatives from industry, government, and academia are working together

in the development of advanced automation of apparel production, (TC)2 technology is currently being applied by the Singer Sewing CO. *S Such efforts

could be expanded.

One example of coordinated, government guided

and funded R&D in the apparel field is in Japan; the

goals for this R&D program were discussed in chapter

2. In 1982, the Japanese Government created the

Automated Sewing System Technology Development

Association, in response to complaints from Japanese apparel firms of a labor shortage in sewing. The

purpose of such research is to cope with shorter production cycles and an increasing variety of consumer

needs with a smaller labor force. The Japanese project is funded at $60 million, and is due to be completed in 1989. The research segments have been

undertaken by the 28 companies that comprise the

association—firms that include major apparel manufacturers; fiber manufacturers; sewing manufacturers; and manufacturers of microelectronics, robots,

and computers,

Another Japanese example of public/private cooperation in R&D is in microelectronics, a field crucial to the textile industry. From 1976 through 1979,

the government spent 30 billion yen, or about $125

million, on a 72 billion yen public/private budget,

A joint laboratory was setup to develop a large-scale,

integrated circuit technology. Added to the coordinated activities of the research scientists of these

~sFrank Bray and Vince Vento, ‘(Chapter Two Begins With Singer,’”

Bobbin Magazine, September 1986, p. 170.
111

firms was the heavy involvement of management,

including company presidents.24

Some experts recommend that the coordination

of R&D be international in scope, arguing that the

speed of technology transfer makes any technological breakthrough and its economic advantages to the

developer short term at best. An example of such

coordination can be found in a broad EEC program,

“Basic Research in Industrial Technologies in Europe” (BRITE). Over 10 projects related the manufacture of textiles and apparel have been approved

under BRITE’s auspices, ranging from research of

automated sewing and ironing techniques to the development of sophisticated management information

networks. Each BRITE project involves at least two

companies from at least two countries, and the EEC

contributes half of BRITE’s funding .25

Currently, most basic R&D is performed in universities, with the more applied research carried out by

industry. Du Pont chairman Edward Jefferson looks

toward an important government role in providing

support for the basic research establishment in the

universities, and in encouraging cooperation between industry and universities.26

One suggestion to promote R&D is to consider further revisions of U.S. anti-trust laws, which would

allow competing firms to pool and coordinate R&D

resources. While there has been some relaxation of

anti-trust legislation, proponents of pooling resources

suggest that the industry should consider supporting greater movement in this direction. This, they

argue, would allow companies to more often and

more effectively share the costs, risks, and benefits

of major R&D projects. Such large-scale joint efforts

exist in Japan, where major fiber manufacturers

reached an agreement to develop an innovative,

high-efficiency fiber production process. Aimed at

quicker polymerization goals, the results of this effort include 50 percent reduction of energy consumption, 40 percent lower labor costs, and 10 percent

lower total costs. The proposed 1983 budget was $9.6

– pqJapan Economic ,Yew’spaper, Jul~” 7, 198~, P 1

25’’ BRlTE—The Community Programme of Research in Industrial

Technologies–Gets Under Way, ” Press Release, Commission of the

European Communities, Brussels, Feb. 4, 1986.

z~E G Jefferson, Chairman, E.] du Pent de Nemours & CO., 40th Anniversary of the Society of Fiber, Science, and Technology’, Tokyo, Ma~

11, 1984, p. 9,

million, and the project is expected to be complete

in 1988.27

Investment Incentives

The high cost of new technology may make government investment incentives for the industry necessary-especially for the apparel sectors, which remain far behind their textile cousins in terms of

innovation and productivity growth. In fact, (TC)2 represents the first large-scale corporate effort to invest

in apparel R&D. The industry may need stronger

stimulus toward investment; tax policy could be a

likely vehicle. According to Kurt Salmon Associates,

“The government should give the industry money

to help itself, not just burial insurance.”28 John Gregg,

chairman of the Fiber, Fabric, and Apparel Coalition for Trade, and president of Avtex Fibers, Inc.,

has also voiced support for investment incentives.29

Other Strategies

A public/private strategy to make R&D in textile

manufacturing a dynamic force for industrial revitalization will not be easily formulated, especially in an

industry where most important machinery development is done by firms which are not themselves

manufacturers of textile products, but of textile machinery. Indeed, because most R&D is done by machinery manufacturers, textile and apparel firms

have little control over the types of developments

that occur. In addition, the majority of R&D done

by machinery manufacturers is being done by foreign-owned firms.

More control over future innovations is believed

to be important for the development of the U.S. industry. It is too simplistic, however, to assume that

R&D could simply be relocated from the machinery

manufacturers to the textile manufacturers. The expense of R&D alone makes it prohibitive to all but

the largest firms.

One area of textile research that does not “belong”

to the machinery manufacturers is fiber research—an

area in which many of the goals are for the development of new products, or new applications for

“Japan Times, June 21, 1983, p, 12

~~Bruce Stokes, “Getting ~ompetitive, ” National Journa/, June 7, 1986,

p. 1365,

Z!llbld
112

emerging products. Typically, these efforts are undertaken by large chemical corporations and universities. Coordinating trends in fiber R&D with policy

to encourage innovation is important, especially to

producers of textile products for industrial use. The

related field of geotextiles, for example, is growing,

and yet science and technology seem to lag behind

the broad range of geotextiles applications—ranging

from road construction, to beach erosion control, to

highway drainage control, to railroad track stabilization.

Ludwig Rebenfeld of the Textile Research Institute has suggested that work on pore structure of

textiles, and on such fiber properties as cross-sectional shape, is necessary if further control of factors like durability, dimensional stability, abrasion

resistance, bursting strength, and permeability are

to be achieved.30 The use of fibers in composites and

as polymeric reagents are also burgeoning fields, in

which successful R&D could well promote the development of new products for sale. According to

Rebenfeld, the research community for fiber needs

to be integrated into the overall field of materials

science; cross-fertilization among those developing

new materials and material applications with those

developing fibers could have important synergistic

effects .3’

sOLudwig Rebenfeld, “Textile Fibers—Past Trends and Future opportunities,” International Dyeing Seminar, Apr. 17, 1986.

‘1 Ibid,
Glossary
Glossary

Automation: The use of advanced mechanical equipment, especially in combination with high-speed computers and other self-regulating controls. Automation

includes almost every operation that dispenses with

human assistance or control, whether because of newly

developed control machinery or because of mechanical improvements on the assembly line.

Backward Integration: Where a firm extends itself into

a previous stage of the production process.

Cambric: A very fine, thin linen.

Carding: The process in yarn manufacture in which the

fibers are brushed up, made more or less parallel, have

considerable portions of foreign matter removed, and

are put into a manageable form known as sliver.

Cellulose: A substance which constitutes the chief part

of the solid framework of plant life such as cotton. One

of the greatest products made from cellulose base is

the manmade fiber group of textile yarns—viscose

rayon, cuprammonium, nitro-cellulose and acetate.

Chute-fed Cards: The pneumatic transport of cotton

from cleaning through carding.

Clothing, Card: Rollers or flats that are clothed with

fine, cylindrical pressed steel wire, and do carding.

Carding: Removal of all fibers below a certain staple

length; i.e., shorter length fibers; and setting them in

a uniform, parallel order ready for further manipulation.

Concentration Ratio: The percentage of total businesses in a given industry that is handled by a specified number of the largest firms—generally expressed

as the percentage of business assets, production, sales,

employment, or profits accounted for by the three to

eight largest firms.

Contractors: Those who receive cut garment part bundles from jobbers and perform all necessary operations

to assemble and process them into finished garments.

Creel: A device used as a spool rack for winding warp.

Also used to hold warp ends for a sectional beam.

Dobbyweave: A weave with small, geometric patterns.

Doffing: Stripping the sliver from the carding machine.

Drawing: The process of combing individual ends of

sliver (usually 6 to 8) and drafting them to a lower,

specified weight per unit length (i.e., grains per yard).

Durable Goods: Pieces of equipment, for either consumers or producers, that in normal use are likely to

last longer than three years.

End: A warp yarn or thread that runs lengthwise or vertically in cloth.

Ends Down: Warp ends which have broken in weaving, thereby impeding production.

False Twist: The major process used in texturizing filament yarns. A rotating spindle twists the yarn, then

sets it in a heater-box or tube, and untwisting follows.

The twist is not permanent but as a result the yarn

becomes taut.

Filament: A fiber of indefinite length, such as filament

acetate, rayon, nylon.

Filling: In woven fabric, the yarn that is inserted across

the loom. Also referred to as weft, or crosswise yarns

in the fabric.

Finishing: The art and science of making materials

presentable to the consuming public. The final process such as bleaching, dyeing, pressing, printing, or

waterproofing.

Fly Shuttle: Invented in 1938, the fly shuttle is thrown

through the shed of the loom by pulling a cord.

Forward Integration: Where a firm moves into a succeeding stage of the production process or a succeeding stage of activity.

Geotextiles: Woven or nonwoven fibrous networks used

in civil engineering applications. They are used principally for drainage control, where they serve as filters;

for soil separations, where they serve as confinement

media; and for foil reinforcement, where they serve

to achieve optimal load distributions.

Greige: Unbleached and undyed cloth or yarn.

Hard Automation: New technological developments of

custom-engineered automated manufacturing machinery, built to accomplish a specific set of tasks and incapable of doing other tasks without disassembly and

rebuilding.

Hopper: a device into which material is deposited and

from which it is automatically fed into a machine.

Horizontal Integration: The situation existing in a firm

whose products or services are competitive with each

other, the expansion of a firm into the production of

new products that are competitive with older ones.

Jacquard Loom: A loom using a card punched with

holes arranged to create an infinite variety of figured

weaves.

Jobbers: Those with responsibility for their own designs,

who acquire the necessary fabric and related materials and arrange for sale of the finished product. With

the exception of cutting the fabric into the requisite

garment sections, jobbers contract out the production

operations. Many jobbers also contract out cutting and

shipping functions.

Lap: Loosely compressed cotton sheets. The card changes

a lap into a sliver.

Licker-in: A hollow grooved cylinder used in carding;

it opens the tufts of cotton held by the feed roll and

plate.

115
116

Noncellulosic Fibers: These are man-made, “synthetic”

or manufactured textile fibers made from chemical

polymers.

Nonwoven Fabric: A structure produced by bonding

or the interlocking of fibers, or both, done by mechanical, chemical, thermal, or solvent means, and the

combination thereof. The term does not include fabrics

which are woven, knitted, tufted, or constructed by

wool felting processes.

Open-end Spinning: A competitor of the ring spinning

method, open-end spinning has a three to five times

greater production rate. This is possible by isolating

the twisting operations to a drum which rotates the

open end of the yarn while additional fibers entering

the drum are attracted to the yarn by rotational forces.

The use of an air stream is the most common way for

transporting fibers. In open-end spinning, twisting is

not linked to the package and packages are not limited

in size. Rewinding is often eliminated. Less power is

needed to rotate the small end of the frame though

the exact amount of reduction depends on the design

of the frame and the speed at which it operates.

Opener Picker: An auxiliary cleaning machine used

when high-quality cotton yarn is desired.

Opening: The initial treatment of raw cotton; the separation and opening up of the cotton to remove compression because of baling and shipping. Heavier impurities are also removed from the stock. Opening is

concluded when the cotton lap is made ready for actual carding.

Pick: One passage or throw of the shuttle of a loom; one

of the weft threads, or filling yarns; to throw (a shuttle).

Picker Lap: The lap or web obtained as the cotton comes

from the finisher picker machine.

Picking: Continuation of the opening process which casts

out the heavier wastes in cleaning the stock; the process in yarn manufacture of cleaning the fiber and forming it into a sheet which is compressed and wound

on a cylindrical roll.

Ply: The number of individual yarns twisted together to

make a composite yarn.

Ply Weave: Any cloth made from more than one set

of warp and filling threads.

Polymer: A comparatively large molecule produced by

linking together many molecules of a monomeric substance. Such a reaction is called polymerization.

Racking: Movement of the needle beds in a knitting machine in relation to each other.

Reed: One of a number of thin, flat pieces of pressedsteel wire between which the respective warp ends are

drawn after they pass through the correct heddle eye

on the proper harness frame in the loom.

Ring Spinning: In ring spinning, the package is rotated

to insert the twist and to wind the new yarn onto the

bobbin. Package speed is limited by the mechanical

considerations and development of high tensions. Yarn

package is limited in size so as to be confined within

a yarn balloon and requires a great amount of power

both for its rotation and to insert the necessary twist.

Robots: Reprogrammable multi-functional manipulators

designed to move material, parts, tools, or specialized

devices through variable programmed motions for the

performance of a variety of tasks.

Robotics: The study of robots, their design, manufacture, use, etc.

Roving: The last process before spinning in which the

soft strand of sliver is drafted and twisted sufficiently

to hold it together during spinning. Also referred to

as the strand of fiber produced by the process.

S.I.C. (Standard Industrial Classification)-Numerical classification of industries introduced in 1948 from where

a larger number of digits indicates a more disaggregate

classification. Establishments are allocated to digital

categories according to their principle products.

Satin Weave: Has no distinguishable twill line despite

its actual presence in the cloth. Brought about by the

way in which the interlacing of the threads is arranged.

Gives a more solid and glossy appearance on the face

of the goods than any other type of weave.

Selvage (Selvedge): A narrow woven edge portion of

fabric parallel to the warp, made with special stronger

yarns.

Slashing: The sizing of warp yarns to protect the yarns

against injury during weaving.

Sliver: The loose, thin continuous rope-like soft strand

of parallel fibers which is the product from carding,

combing, and drawing, and which is ready for drawing.

Spinning: The final process in forming yarn in which

the soft roving strand is drafted by a series of rollers

and twisted to provide strength.

Staple: The average length of the bulk of fibers.

Tappet: A projection or lever that moves or is moved

by intermittent contact, as with a cam, in an engine

or machine.

Texturizing: When a smooth continuous manmade fiber filament is given a new and permanent configuration which results in an appealing textural surface.

Twill Weave: A weave which repeats on three threads

each way. The number of possible twill formations is

almost limitless.

Twisting: The act of turning a strand of parallel fibers

on itself to provide the necessary strength to hold it

together. Also the process of combining two or more

strands of yarn into a single strand.

Tieing-in Machine: A machine that automatically ties

the ends of yarn from the run-out warp to the ends

of the new warp which will be placed in the loom after the old warp has been taken out.
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Upland Cotton: The standard American cotton and the

one by which all other cottons are compared for properties and characteristics. It ranges from 3/4 inch to

1 1/4 inch in staple length.

Vertical Integration: The operation of a single firm at

more than one stage of production. The most comprehensive type of vertical integration would include

productive stages from the processing of the raw material to the completion and distribution of the finished

product.

Warp: The threads running lengthwise in the loom and

crossed by the weft.

Warping: The process in which several hundred individual strands of yarn are formed into a parallel sheet

and wound onto a special beam for slashing or dyeing.

Weaving: Interlacing two yarns so they cross each other

at right angles to produce woven fabric.

Weft: (Sometimes called woof or filling.) The yarns carried by the shuttle back and forth across the warp in

weaving.

Winding: A process of transferring yarn or thread from

one type of package to another; e.g., from bobbins to

tubes.