The Sadness of Seeing The Death Of An Industry

Although Free Trade has been a subject of deep controversy for many decades, and there have been episodes of harsh dissention, it never did catch on to becoming a real world problem until after World War Two and the creation of the United Nations organization. One of their earliest programs pointing at free trade was GATT (General Agreement on Tariffs and Trade) which began in 1948 and was the predecessor of the World Trade Organization (WTO) which was officially begun on January 1, 1995. In addition to this widely encompassing organization, we have the following regional agreements:

(DR-CAFTA) Dominican Republic-Central America Free Trade Agreement between the U.S., Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and the Dominican Republic.

(NAFTA) North American Free Trade Agreement, between, Canada, U.S. and Mexico.

(FTAA) Free Trade Area of the Americas.

(TAFTA) Transatlantic Free Trade Area between the U.S. and the E.U.

And we have individual bi-lateral agreements with the following countries:

Israel (includes Palestinian Authority; 1985), Jordan (2001), Australia (2004), Chile (2004), Singapore (2004), Bahrain (2006), Morocco (2006), Korea (pending), and Peru (2008).

Free trade simply means allowing inter-commerce without tariffs, fees or quotas. It sounds great and many people swear by it. Here is one definition:

What is said there is truthful but the implications not mentioned are wide, varied and, in many cases, unfair in my opinion. Let us consider, from these free trade agreements, what has happened to the U.S.  In years past, the U.S. has been a world leader in the following areas, development and production of electronic products, textiles and clothing, and automobiles. Manufacture of electronics are almost nil in the U.S. today, clothing likewise. The automobile industry, which was once among the leaders of productivity in the nation, is struggling to survive. Our annual imports are almost double our annual exports in U.S. Dollars. When two nations' economy and productivity are near equal, free trade can certainly be a great asset. But when one's economy has grown and inflated to the point of our own here in the U.S., we are left at a tremendous disadvantage when dealing on an equal level with some impoverished nation. My subject today is concerned with the clothing (garment) industry.

When I was discharged from the Army in 1953 (Korean War), I determined to attend college and had veterans benefits under the G.I. Bill which would pay me $130 per month towards that end. That being inadequate, I sought employment and attended evening courses at Jacksonville State University (college status at that time). Work was not plentiful at that time so the best I could find was a peon position at a local clothing manufacturer. It was not my intent to pursue a career in the garment business since the high competitiveness of the industry resulted in low wages and few benefits. But after spending a few years with them, I learned to enjoy the work and was upgraded a couple of times. I also found that higher levels of supervision and management with large companies offered some attractive careers, so I decided to pursue that goal.

During those times, it was difficult to find a southern town of 3,000 population or more which did not have at least one garment factory, and more being built every day. It was a very thriving industry and I felt I had made a decent choice for my career. It required moving to another company and location now and then to gain a step up the ladder, but I wound up as an assistant manager of a sizable and growing company in North Carolina where we finally settled down (in a little town of less than 600 with two sizable clothing plants). But during this period of growing, imported clothing had begun to flow into the U.S.  In the beginning the quality of most was horrible even though priced very cheap. It was not seen as catastrophic, especially for the higher quality lines of clothing. But it caused many firms to have to tighten their belts a little and improve their quality control departments.

But like a cancer, year by year, the imports improved in quality and quantity and began to squeeze into the profits of virtually all of the U.S. clothing firms. Our company was no exception. One of our large customers went into bankruptcy, owing our company a large sum plus losing about one third of our annual orders. That really hurt while facing the ever increasing competition from imports. But the garment industry was tenacious and determined to go down fighting if it must go down. The small companies fell early but those with financial backing, invested in automated equipment and intensive training of employees in order to speed up production without sacrificing quality. Included in all of these cost saving methods and production improvements, came a squeeze in employee earnings and an end to additional benefits and in some cases, the loss of benefits.

The founder, president and principal stockholder of our own company passed away, leaving two daughters as heirs of the business. The girls were unprepared to take over so relied heavily on the integrity of their top level management. Bad choice. There were disagreements and jockeying for power until it became obvious that the company was going to fold. Not wanting to be left out of work some 600 miles from family and life long acquaintances, I resigned and returned to Alabama. I wound up starting over in a different industry at age 59 and by the grace of God, it turned out to be the best thing I had ever done. But it was still a sad day when I learned that my old company was defunct.