Posted September 16, 2014
Q. Mr. Answer Man, I heard a Chinese company is opening a yarn manufacturing plant in South Carolina. What do you know about that?
A. I know what I’ve read. They haven’t given me access yet. And an Indian company is building one in Savannah, Ga.
Q. What does that mean for us, as in the U.S.?
A. It means the U.S. is a great place to do business and a great place to manufacture. It means we have an attractive infrastructure, a skilled talent pool and good lending rates. It means we have high-quality cotton, a terrific supply chain and reliable and inexpensive power. It means the U.S. is the cheapest place in the world for open-end spinning.
Q. But is it good news, really? We’ve competed with those and other players for years … now they want to build in our own backyard? I think you should shy away from reporting much about their activities. Their U.S. competitors might not like that.
A. Hey, I’m just the messenger. Besides, I’ve been told that at least in the case of the Chinese company, they’re producing yarn that is 100 percent targeted for its market. Haven’t heard about the Indian company’s end use yet.
Q. Well, that’s good. At least they’ll be employing Americans. Tell me something else …
A. Shoot, Mr. Brain Picker.
Q. The U.S. textile industry is on a good trajectory, something I never thought would happen again. I’ve been thinking about expanding, but I’m hesitant because I’m not sure if another bubble will result in the next few years. What do you think?
A. Hmmm … well, I’m not an economist, a market expert or a soothsayer. But I do hear things, read things and report things. I think the environment for continued growth is excellent for the foreseeable future. Retailers and brand owners are figuring out that a country without a strong manufacturing base faces a shrunken middle class – and, hence, a smaller customer base. They’re realizing consumers need jobs to buy their stuff – and it’s often difficult to afford much of their stuff if you’re working in a service job.
Not just textile jobs, but manufacturing jobs are good jobs for millions of Americans. These jobs pay well. They have good benefits. And U.S.-based manufacturing underpins a broad range of jobs such as accountants, bankers, lawyers, researchers, transportation and energy providers, etc.
Q. I totally agree. But will those facts translate into tangible, long-term sustainability for our industry?
A. I believe the outlook is good. Several companies in the industry have not only figured out ways to survive up to this point, but are working collaboratively – with a keen eye on the next few years – to ensure they remain competitive. They’re engaging a number of players in the supply chain to develop new solutions to new challenges. We have some very smart leaders in our industry who have proactively worked to differentiate their companies. Consumers, and therefore retailers and brand owners, want quick fashion turns. They want high quality at the lowest price. They want sustainable products made sustainably. We’re the best in all of those categories.
Mr. Answer Man
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Q. OK, but what about that TPP I keep hearing about? We know the government has treated us like pawns for years. Won’t that put us in another tailspin?
A. To be honest, the potential is there, according to what I’ve heard from lobbying groups. A “bad” Trans-Pacific Partnership agreement could damage the industry immensely. But I’ve been told by those in the know that a yarn-forward rule of origin will be included in the deal, if it’s ever reached, which could mitigate the negative impact. If that happens, TPP won’t kill us. And I think NAFTA/CAFTA will continue to grow as a regional supply chain.
Q. Even so, with so much uncertainty, how can you be so sure the industry will thrive?
A. Well, I understand your cautiousness. You have a business to consider and people who rely on you for a paycheck. But we’ve seen this movie before. The last couple of decades, you and many of your colleagues made it through vast import surges, the Asian financial crisis, China’s entry into the WTO, the removal of textile and apparel quotas, the Great Recession and more. Your obituary has been written and revised several times over the years. Yet, here you are … talking about potential growth and expansion.
Q. Well, I appreciate your insights. You make some rather persuasive points. I have one more question for you: You aren’t just telling me these things to make me feel better, are you?
A. Not a chance. I don’t spin yarns.