Posted August 9, 2018

 

Editor’s note: This Q&A was originally published on Feb. 4, 2008 in Southern Textile News (STN). Martin Foil Jr., chairman of Tuscarora Yarns, Inc., Mount Pleasant, NC, was interviewed by Devin Steele, then-STN editor and now publisher of eTextileCommunications.com. Martin led Tuscarora from his father’s passing in 1968 until 2016 and was involved with the company in some form or fashion since he was a pre-teen. One of the last of the still-working breed of Southern textile magnates, he covered a number of topics from his then-60-year perspective in the industry. Throughout his career, Foil, who died last week at age 85, spoke with numerous U.S. presidents and lawmakers about industry issues and testified on Capitol Hill on numerous occasions. Following are excerpts of the interview, reprinted with permission.

 

STN: What factors, externally and internally, have contributed to your company’s success and how has your philosophy and ability to adapt played a role?

 

Foil: Are you asking me why we’re still in business? I think the biggest problem in the last 20 years has been the inability of CEOs to pull the trigger. The industry has always gone through cycles. When you talk to them, it was always, “well it’s not good right now, but it’ll be back in the fall or it’ll be back in the spring or it’ll be back in the summer.” Well, it came a time where it never came back. NAFTA had a lot to do with that. But be that as it may, a lot of these people didn’t invest in newer technologies and they always thought that tomorrow things were going to be better. So they never made provisions for what was necessary to survive.

 

You know, if you’re sitting down there making a zillion yards of whatever and 100,000 yards of this or that and always thought there was going to be a market for it and you didn’t try to differentiate your products but made the same old stuff year end and year out, sooner or later these people with lower labor costs and cheaper products were going to get you. They just didn’t pay attention so they didn’t close those plants that were too expensive to upgrade and they didn’t look to see what else they could do in the marketplace to differentiate themselves.

 

STN: When Tuscarora helped create the American Textile Export Company (AMTEC) in the late 1980s, what kind of writing on the wall were you seeing for the industry?

 

Foil: One was the ability to make a profit. That was the biggest hurdle everybody had to overcome. So when you look at your balance sheet and you look at your income statement, you have to make a decision. Am I making the right products? Am I getting a fair return on my investment? Where can I squeeze out costs?

 

And there are three things you look at for cost. One is your raw material base. Two is your cost of manufacturing – that is your labor and electrical, for instance, fixed and variable costs that go into making a product. And the third and most importantly is your SG&A. And I think that’s where some of the old-line companies failed. They were late in addressing their SG&A.

 

STN: So you saw a change coming and adapted accordingly?

 

Foil: It was either change or fold up. There was no real alternative.

 

STN: What were your initial feelings about NAFTA when was proposed?

 

Foil: We were in favor of NAFTA. We thought it was a good thing. Some people would say a necessary evil. I think, looking back now, I certainly would be more in favor of CAFTA than NAFTA. I don’t believe in free trade – I believe in fair trade. And our government doesn’t know the difference.

 

STN: How important is innovation to your company’s success?

 

Foil: I think that’s the driving force.

 

STN: What about R&D?

 

Foil: I am the R&D. When you think of R&D, most people think, “let’s go out and create something.” Being creative is not a matter of sitting down and saying, “OK, I’m going to be creative today. I’m going to come up with three ideas. Y’all watch out, here I come.” Doesn’t happen that way. You can go months or maybe even years without having a genuine creative idea that will put money in the bottom line.

 

STN: Tuscarora’s Five-Star Process is your brainchild. How was that initially received?

 

Foil: That caused a real stir. It makes your product real homogenous. It gives it (yarn) a very silky hand and it almost looks like a mercerized product. So when you put all that together, a lot of people think that makes a very fine product and we’ve sold a lot of product.

 

Some people don’t want to pay for it. Well, that doesn’t hurt our feelings. But if they want that product and want to differentiate themselves – and that’s a key in the marketplace – then that’s a good way to go.

 

We have some people out there, for instance, who think that selling to Walmart is the greatest thing since sliced bread. We sell Walmart but Walmart is not the end all, where you should chase it. You’ve got Walmart selling $5 or $6 shirts.

 

At the other end of the scale, we’ve got people selling shirts that go to people like Lindsay Lohan for 70 bucks. Well, I’d rather sell the fiber that went into the 70-buck shirt. You’d be surprised how many teenagers want a Lindsay Lohan shirt that costs 70 bucks as opposed to a $5 shirt from Walmart.

 

So there’s a big, exciting market out there that differentiates itself from everything else. And that demands quick turn, it demands attention to detail. It’s like being a surfer. You’ve got to ride the waves while they’re out there. Yeah, we’ve hit a lot of troughs, too, no question about it.

 

STN: You mentioned quick turn and attention to detail, something others such as the Chinese aren’t capable or willing to do. Please address the importance of maintaining a U.S. manufacturing base.

 

Foil: That’s right here (tapping his heart). I have a meeting on with the head of the North Carolina Chamber of Commerce and I’m going to blister him real good about manufacturing. I think our government, led by this president, has done a horrible job of protecting the American worker and the American people.

 

I do not think we’re capable in this country anymore of making the garments for our soldiers, our sailors, our airmen, our Coast Guard. Our textiles have been decimated to the point where I don’t think we could deliver the necessary products for another world war. I wrote the president about that. Of course, I didn’t get an answer. I’m a strong believer in that.

 

A lot of people think of textiles as a Southern phenomenon that’s geared toward extremely cheap wages with people who have no or little education. Nothing could be further from the truth today. And we struggle to do the right thing.

 

A lot of people point their fingers and say, you talk a good game but you buy all your equipment from overseas. That’s correct. And the reason is, our government didn’t do anything to encourage these people to stay in business over here to make equipment to manufacture, to take care of the textile industry. So all of that business did go overseas. And if we’re going to compete with the world today and be able to help our government in a war or keep our people clothed, we have no option but to do that.

 

There are some pockets of people here in the United States who are still thriving, even under these circumstances. And these are the people I’m proudest of and try to pattern our business after. But they’re few and far between. And I’m afraid some day that will come back to bite this country in the fanny when we’re going to need an industry to step up and do what’s necessary.

 

We have to be able to feed our people, we have to be able to clothe our people, we have to be able to deliver the energy to keep it running and we should be able to manufacture what’s necessary in this country to be self-sufficient. And we are not. And if we’re not careful it will be the end of America and the end of a Golden Era.

 

STN: You served in the U.S. Army Quartermaster Corps. Were you enlisted during wartime?

 

Foil: I missed Korea by about six months. In 1959 I won a national award for people in textile schools on addressing the issue of overseas competition. And I haven’t changed my position since 1959. The dean at N.C. State asked me to enter the competition.

 

STN: So, you’ve been personally involved and emotionally invested in that issue for a long time ...

 

Foil: I don’t do the things in NCTO and things like that … I’m more of a voice crying in the wilderness. But I think it’s sad that the government doesn’t understand that our industry is strategic to the survival of our country.

 

I mentioned in my letter to the president that we either would fight the next war naked or we’d have to get our uniforms from the Chinese. Heck, I almost believe that. I mean, it’s really sad.

When the people in the Congress have to tell the Pentagon to source their uniforms in the United States and not buy from China and Pakistan and India and places like that, what are they thinking? What’s going to happen in the next world war if our competition is China and India and Pakistan or anybody else? I’m aghast that they don’t understand.

 

With all the industry that’s closed down, I don’t know that it can be done. The government would have to invest some money in the industry to get it back where it could compete. But even if it did that, where are they going to get the equipment if the world isn’t going to ship it in here to us?

 

STN: How’s your relationship with [then-U.S. Congressman] Robin Hayes?

 

Foil: We’re good friends. We grew up together in Concord. I knew his granddaddy, Mr. Charles Cannon (of Cannon Mills fame) real well. He’s a big booster for the Pentagon and particularly for our (military) folks down in Fort Bragg. He believes as I do that we’re not prepared and we will not be prepared unless we do something.

 

STN: Do you think this free-trade globalization tide is going to be prevalent in this election cycle?

 

Foil: I don’t know. I think this president has done this country a great disservice. I tell a lot of people this story. When I was 13 years old I used to ride the train to Philadelphia a lot. I went to the doctor up there. I would sleep in the top bunk and my daddy would sleep in the bottom bunk. And about 7 o’clock every morning, a guy would come in and wake everybody up and give us time to get ready before we pull into Penn Station.

 

And I would look out my window and we’d be rolling through a town called Chester, Penn. And there was a building that was probably a warehouse near the tracks. It was an old red, weathered building. And it had a white sign on it that was also faded. It was outlined in white and in white it read , “What Chester Makes Makes Chester.” That has always stayed in my mind.

 

What it says is that if we’re going to continue to be a great nation, we’ve got to make things and we’ve got to sell things. We’ve got to be self-sufficient. Well, we’re fast becoming a service nation and that is very, very poor. We’ve got some of the brightest people in the world who work in America and their gifts are being outsourced to people who are taking advantage of us. And our so-called free trade policies have caused us unbelievable problems. And it’s not that free trade is bad. It’s just that our government is myopic and can’t discern the difference between free trade and fair trade.

 

Now if you look at our automobile industry, their problem is not that they’re not smart anymore and not that they’re not automated. Their problem is, you know how much an autoworker makes an hour? About $80. Well, no wonder we’re not competitive. I don’t begrudge $80 an hour if they can make a profit, but they can’t make a profit.

 

Do we still need an automobile industry? Absolutely. How are we going to make tanks, how are we going to make Humvees, how are we going to make the armored personnel carrier? I mean, if we don’t have that ability, we can’t make planes that are competitive. I give up. They need help.

 

But when you go overseas and you look at our competition, it subsidizes its industries. And they don’t have the government making demands on every single thing.

 

Some of the rules have really been good. Like for instance, I used to fuss about clean air. I’m now one of the biggest proponents of clean air. You could eat off the floors at our plants. That environment is good for the people. It should be a nice place to work, it should be clean, it should be safe.

 

The government does do some things that are beneficial. But some of the things they do are really dumb, like rainwater preparedness, storm water runoff. How am I supposed to prevent six inches of rain ... why is that my responsibility? God’s going to do what God does. I wish he’d send some our way.

 

STN: Your company, starting when your father was in charge, has a long history of giving back to the community. Please address the importance of that.

 

Foil: I think companies have an obligation to the citizens of the area in which they operate, not just the ones who work there. And given that they have the resources to make a difference, they should endeavor to make a difference. I’m a big believer in that.

 

STN: Going forward, what is your strategy for growth and prosperity?

 

Foil: I think there’s a finite amount of what we can do because we are not a commodity house of any description. I think there will be pockets of opportunity like the whole green scenario. We’re taking advantage of the green scenario. But we’ve been doing the green scenario since 1960 ...

 

That reminds me of a story about “The Shadow,” (begins speaking in bass voice) “Who knows what opportunities lie out there for textiles?” When you think about it, our biggest competition probably is going to be India in the next 20 years. They’re going to be cheaper than Pakistan and they’re smarter, in my opinion. And they’re loading up on the newest technology.

 

But what you’ve got is when something is being driven by mistake, what are they going to do? They’re going to be going after amazing amounts of volume of the things they can do such as plain-Jane sheets, towels, washcloths, whatever. They will pound it out and sell it to where some of these retailers can’t say no. We want to stay out of the way of that. We want to be on the cutting edge of what’s new and different and be able to offer those kinds of resources to people who are going to be able to differentiate themselves from the masses.