East Tennessee textiles and apparel manufacturing feels the squeeze of international competition
by Tamar Wilner
The day in 1971 that Luvernel Clark started working at Jim Robbins Seat Belt Company, her bosses assigned her to the spring winder. She found that working on the machine, which compressed seat belt retraction devices, was dangerous and frightening. Springs would occasionally pop from her hands and fly all around her.
The union local president approached Clark and asked her to sign a union card.
"I was 18. I didn't know what I was signing," says Clark, who eventually became local president herself. "[But] the next thing I knew, I was off that machine."
Twenty years later, the Knoxville plant would be a very different place. The name was now Allied Signal, Inc. Jobs had been slashed throughout the late 1970s and into the '80s as car sales fell. Some of Allied's operations had moved to non-union plants in Alabama, then south again to Mexico. A two-year-old group called the Tennessee Industrial Renewal Network decided to visit workers in plants south of the border to see what had become of Knoxville's manufacturing jobs, and how this was affecting the Mexican workers.
Touring an Allied plant in the Matamoros/ Reynosa region in 1991, Clark saw many of the jobs that had left Knoxville. A young woman worked the same spring winder Clark had signed her way out of 20 years before. The workers made such low wages that many of them lived in cardboard boxes.
Not many dislocated American textile workers get to see first-hand what happened to their jobs, as Clark did. But they do know why cloth and apparel companies are abandoning domestic manufacture and leaving thousands of Knoxvillians unemployed. NAFTA, the North American Free Trade Agreement, is squeezing the last drops from an already suffering textile industry. Whether you loved or hated 1994's giant leap towards liberalizing trade between the U.S., Mexico and Canada—which free-trade proponents say brought great benefits to U.S. exporters and consumers—there's no denying the last eight years have seen dramatic drops in East Tennessee manufacturing employment, particularly in the textile and apparel sectors. (Strictly, "textiles" refers to the manufacture of cloth, while "apparel" refers to the finishing of that cloth into garments. "Textiles" can, however, refer to both textiles and apparel; and some companies, like Allied, finish cloth for products other than clothing.)
The Economic Policy Institute, a nonpartisan think tank that focuses on the economic needs of low- and middle-income Americans, reports NAFTA and the 1995 creation of the World Trade Organization have led to the loss of 2 million manufacturing jobs in the United States. Tennessee lost 78,000, with 21,000 of those in textiles and apparel. Tennessee ranks fourth among states hardest hit by NAFTA.
The Knoxville area has accounted for about a quarter of the apparel jobs lost in Tennessee since 1994, with local employment in those industries dropping 61 percent. And while weekly earnings for textile mill employees in Tennessee have oscillated, those for apparel workers have dropped every year since 1998, according to the state Department and Labor and Workforce Development.
"NAFTA's pretty much been a disaster for the textile, garment and shoe industry," says retired organizer Dave McIlwaine of the United Food and Commercial Workers' Textile and Garment council.
Brad Rayson, director of the Tennessee-Kentucky district of the Union of Needletrades, Industrial and Textile Employees (UNITE), says textile and apparel felt the downside of globalization even before 1994, and those industries were even more susceptible to NAFTA's failings. "It was really the apparel industry first, because it is really labor intensive. The equipment is fairly portable."
Of course, the trend is also accelerated by the tendency of major chains like Wal-Mart to buy clothes manufactured abroad and by shoppers' proclivity for bargain hunting, no matter what the cost to American jobs.
Four years and one month ago, Levi Strauss & Co. closed its two Knoxville plants on Cherry Street, laying off more than 2,000 workers. Levi's had been the Knoxville area's sixth biggest employer. All at once, 10 percent of Knoxville's industrial workforce was out of a job.
McIlwaine, who negotiated contracts for Levi's workers, says Levi's had spent millions on new equipment and implemented a new production strategy shortly before the closing. It appeared the jeans giant might just buck the globalization trend after all.
"It was hummin' like a new machine and it was just starting to go great," McIlwaine says. "It was really heartbreaking to watch them year after year; everyone's working as hard as they possibly can... then boom, the plant's closed."
Now apparel workers and union officials are experiencing deja vu. In April of this year, Levi's announced the closing of another six plants nationwide, including one in Powell that employs 948. All in all, the company will lay off 20 percent of its workforce. Only two Levi's plants will remain in the United States—both in San Antonio, Texas—and of those, one will suffer a 300-position job cut. Many have described the Levi's plant closings as the work of NAFTA. But Levi's spokesperson Linda Butler says the move is more indicative of the company's self-makeover, as it shifts focus from manufacturing to marketing and research. More and more, Levi's jeans are made by foreign contractors who do all their own hiring and firing.
"We would still be making these changes [even without NAFTA]," Butler says. "This is really about becoming a market leader."
Of course, Butler simultaneously brags about how long Levi's maintained its U.S. presence.
"What you find is we're one of the very few large branded apparel companies that has been maintaining a large domestic manufacturing base for years and years," she says.
The use of outside contractors to manufacture goods is not without ethical concerns. As Rayson points out, cutting off a contractor is an easier and less guilt-ridden process than firing one's own workers. And use of contractors often means less control over working conditions, a problem Levi's says they've countered with their "Global Sourcing and Operating Guidelines," a document outlining minimum standards for Levi's contractors. Indeed, Levi's has long positioned itself as one of the industry's more progressive-thinking corporations, one that cares about its employees. Still, workers can't help but feel abandoned.
"Just from a morale viewpoint, factory workers in our industry feel under siege when they see big manufacturers like Levi Strauss close," Rayson says.
McIlwaine concurs. "What's left is really impossible to organize, because there's that threat hanging over their head."
The threat is hard to ignore. Nine Knoxville companies, their workers or their unions have applied for NAFTA's Trade Adjustment Assistance (TAA) money since 1994, claiming over 700 job losses; all nine were apparel manufacturers. Bring in the surrounding counties, and you've got 15 textile companies claiming they shut down plants and laid off workers because of cheap Mexican labor and NAFTA-enabled imports. Plaid Clothing and suit maker Palm Beach closed factories completely, laying off more than 200 employees apiece. BREED Technologies, formerly Allied Signal, announced plans to move 60 injection molding jobs to Mexico this year. Volunteer Knit Apparel recently announced it will lay off 82 workers and close a factory in Rutledge this August. (It still operates plants in Knoxville and Claiborne County.) Other layoffs in recent years include 86 workers from TN Machine & Hosiery of Dandridge, 120 from Value Line Textiles of Lenoir City and 127 from Berkline Corporation of Rockwood.
Sports equipment manufacturer BIKE Athletic will be Knoxville's largest apparel company when the Powell Levi's plant closes; it sent 48 jobs to Mexico in 1995. Rayson says BIKE, a UNITE plant, now does more distribution than cutting or sewing—a common trend in the industry. For instance, the old Standard Knitting Mills factory now houses Delta Apparel, a distributor.
"A lot of the warehouse work is physically demanding in a way that sewing isn't," Rayson says. Companies also can pay new packing and shipping hires less than they would pay cut-and-sew workers. "The jobs we lose are good manufacturing jobs. The organized jobs have good benefits and they're hard to replace," Rayson says.
BIKE has undergone additional turmoil this year, appointing a new president and filing for Chapter 11 bankruptcy protection.
What's left is a number of smaller workshops, employing fewer than 50 workers, and a few larger plants of 100 or more. The larger plants include Sports Belle, Colerich Custom Clothes, Dan River, Dalen Products, Alpha Industries, Rockford Mfg. Co., CR Daniels Inc., Lesportsac Inc., Imagewear, Roane Hosiery and Volunteer Apparel Inc. These companies, some of which are headquartered in Knoxville, make athletic wear, linens, flight jackets for the U.S. armed forces, canvas, handbags, uniforms and other products. In total, the Knoxville area employs 3,900 textile and apparel workers.
As for those laid off, they're not just out of work. They're out of a career. Because most manufacturing jobs have gone south or threaten to do so soon, textile workers must change tracks, even if they're 50 years old with 30 years of textile experience under their belts. Most go into the service sector, where they're usually paid less and receive fewer benefits, if any. Some work several jobs to get by.
"Workers who became immediately reemployed lost an average of $2.41 in wages per hour. Sixteen percent of the sample lost their health insurance," University of Tennessee associate professor of social work Cynthia Rocha writes in "From Plant Closure to Reemployment in the New Economy," her six-month study of dislocated Levi's workers. She found over half the laid-off workers suffered clinical anxiety and depression, whether or not they had found new jobs.
Rocha quotes one worker saying, "I feel like they just threw me away... I am scared for my future."
Knoxville Area Chamber Partnership economic and community development vice president Rhonda Rice prefers to look on the bright side. "When Levi's closed its plant in 1998, the unemployment rate never changed," she points out. The chamber is working with the Knoxville Career Center and the state Department of Workforce Development to publicize job opportunities for dislocated textile employees. A job fair in Powell Aug. 23 will offer special hours just to displaced workers.
Emily Hatfield, manager of the Knoxville Career Center, says her organization encourages laid-off textile workers to go into the health care field, where "we know there'll be jobs tomorrow." The career center arranges retraining, focusing on careers that require a relatively short educational period. For instance, one can become a licensed practical nurse in about a year. Hatfield says those who train will almost certainly make better wages and benefits than those who jump directly into the job market. As for tuition, Hatfield says money is available from the career center and from the federal government via the workforce investment act and TAA.
Rocha found nearly half her sample took advantage of their severance package to pursue an education, but there will likely be differences between the experiences of the Cherry Street workers and those of the Powell employees. For one thing, the severance packages aren't as generous this time around, because of Levi's financial decline in the last five years. Dave Johnson, international vice president of United Food and Commercial Workers and president of the union's Textile and Garment Council, says Powell's package features a cut-off on weeks' pay that Cherry Street's did not. Tennessee's budget woes also add to the problem. Johnson says state government regulations prohibit the Levi's workers from going on TennCare until they finish 18 months of COBRA health coverage. Levi's extends COBRA to its workers, but the premiums are high.
Suzanne Coile, labor coordinator for the AFL-CIO's technical assistance program and a former Cherry Street employee, says many dislocated workers will have to abandon hopes of furthering their education because they simply can't afford to pay for insurance.
"They were the best people on the TennCare rolls," she says.
While NAFTA has wiped out 2.3 percent of American jobs and job opportunities, Knoxville residents who work outside manufacturing might never know it. Textile and apparel workers live all over town, and their job loss rarely makes much impact on the local economy. Some smaller communities are, however, more affected. Browsing through a list of NAFTA-TAA certifications, one comes across Tennessee towns of less than 1,000 people—places like Bean Station, 470, which lost 50 jobs; or Saltillo, 383, which lost 211.
On the other hand, the impoverishment of a small Appalachian town pales in comparison to the destitution of Mexican colonias, worker shantytowns that spring up alongside American-owned factories, many of them apparel plants. A TIRN educational video shows houses made of cardboard boxes and wooden palates, hunkering down in the shadow of shiny new factories set in green industrial parks. Some of the colonias stand in several feet of stagnant water.
Clark made two visits to the Mexican BREED plant. She found workers were often afraid to speak their mind, and they emphasized the generosity of the employer in paying for lunch and transportation. Clark says those benefits came out of the workers' paychecks.
"BREED pays better than a lot," Clark admits. The company pays Mexicans about $7 to $8 a day, she says, while some manufacturers pay as little as $3 or $4. But, she says, "They pollute the water... They don't care because they're making big bucks." The managers usually live across the border in Texas, she notes.
Over the last 11 years, TIRN has made nine trips to Mexico, and Mexican workers visited Tennessee several times. Another Mexico trip is planned for this November. After the first trip to Mexico in 1991, TIRN members testified before a Congressional panel on NAFTA.
"We are against any kind of system that pits workers against workers on the basis of which can be forced to take the lowest wage. We're against any system that can encourage multi-national corporations to go shopping for the lowest wage, or the most lax law enforcement, or the biggest tax break...," Clark testified. "I have fear that the kind of North American Free Trade Agreement favored by [then-president George Bush] will turn most of Mexico into one big maquilladora zone. I have fear that joblessness will continue to increase in our own country."
Unfortunately, most of Clark's fears were realized. U.S. manufacturing in the maquilladora, or border region, has exploded as jobs from Tennessee and other states are sent there. Now textile manufacturers have begun leaving Mexico for even cheaper countries in Central America, South America and Asia. TIRN executive director Judy Roitman says they'll be aided in their quest by the proposed Free Trade Agreement of the Americas, which would extend NAFTA-like liberties to the entirety of the Americas except Cuba.
"People who lost out from NAFTA are really concerned about what FTAA will mean," Roitman says.
Of urgent import to TIRN is the proposed Trade Promotion Authority legislation, also known as Fast Track, now winding its way through Congress. If passed, this bill would force Congress to vote only "yes" or "no" on any trade agreements, prohibiting the lawmakers from adding amendments or changing wording. That means Congress wouldn't be able to tack on provisions for labor standards or protection of the environment. Fast Track has passed the Senate, and it passed the House by one vote, with Rep. Jimmy Duncan (R-Knoxville) voting against. After a joint committee writes the final draft, both the House and Senate will vote on Fast Track one last time, which may come as early as this summer.
"The one we're most enraged with is [District 4 representative and gubernatorial candidate] Van Hilleary, because his district has lost the most jobs in Tennessee," Roitman says, adding that Hilleary voted for Fast Track after declaring he was 99 percent sure he would vote against it. TIRN plans to hold a rally tomorrow, July 19, in Crossville.
For union officials, the fight against job exportation continues at home.
"We can play a greater role in deciding whether to close plants... We've tried to be a little more creative, looking at ways to promote productivity and reduce inefficiencies," Rayson says.
"But if a company is really just looking at bottom-line labor costs and says, 'We can get this made in Mexico for $1.10 an hour and here for $10 an hour,' there's no way we can compete."
July 18, 2002 * Vol. 12, No. 29
© 2002 Metro Pulse
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