Decline of an industry: What happened to American textiles

Robert Barnhardt is the dean emeritus of the College of textiles at N.C. State University, where he served from 1987 to 1999. He is an expert in traditional textile manufacturing business models.

What were the factors that lead to the decline of the American textile industry?
There were three main areas of the textile industry: a third were in apparel, a third were bed and bath products and a third were industrial and automotive textiles. The apparel industry was affected first. For example, to make jeans you had 26 or 27 different parts that needed to be attached. That was very expensive because it was all labor-intensive.

That section began to move off-shore, to Mexico, and that’s where NAFTA got started. The bed and bath industry didn’t face the same problem, because they sold their products directly to the retailers. They made the brand name products for JCPenneys and others. Then big box retailers, like Wal-Mart and then Target, came along. The problem came, as the Wal-Marts grew, the JCPenneys and others had trouble competing because they didn’t have the same volume as Wal-Mart.

Over time, the industry survived by getting more efficient, but supplying the retailers became more and more difficult, particularly when the retailers kept asking for lower and lower prices. Some companies decided to move offshore; some decided to stick it out. Then the whole supply chain changed when the retailers found out they could buy directly from the Chinese. The Chinese didn’t have a general cost vs. sale price because it was all controlled. It was a change from manufacturing-driven to a retailer-driven industry.

How much did unionization factor into the declines of textiles?
I remember specifically when Fieldcrest closed a plant — it wasn’t Kannapolis yet, but the local TV station came by the college to ask for comments about it. They showed the images of the Christmas decorations in Eden. My response then was, “But look at the efficiency they achieved.” Closing an inefficient plant — that was the only way they could compete, and that goes not just for unionized plants, but any plant. Technology had a lot to do with labor costs, but eventually, the companies got all they could out of technology.

When was the decline in the textile industry really apparent?
The problem is the textile industry has been a leading indicator of economic downturn. They tend to go down quicker and tend to come back quicker, and it cycled for years. I spoke with the associate deans and faculty at the college in the late 1990s, in one of those dips, and I said the industry was going to change dramatically and we’ve got to be ready to change with it. At the dean’s meeting, they didn’t agree with me. The faculty had seen the dips before and said this was just another cycle. There had been some profitable years there. But the European industry had declined much earlier, and it became a whole lot more obvious to people like me that this was going to happen. We had to convince the faculty that this was the case and we commissioned a study on what the future of the industry was.

When Pillowtex closed, how did it affect the textile industry in the state?
When a company like Pillowtex closes, there are two effects: a financial effect and a psychological effect. The effects set in across the board, and other companies start to think, “Well, if they can’t make it, who can?” There is an uneasiness there. When Pillowtex closed, it was an awakening to our leaders in state government that the textile complex was not able to provide the same amount of jobs and taxes that it had for years. Things had changed, even if they didn’t know it beforehand, certainly after Pillowtex, it became very evident.

What is the future of the textile industry in America?
The non-woven area is strong. The protection [garment] area — for fire, police, public safety and military — is very strong. The transportation area is strong, even with the problems at GM, there are other companies here that need textiles. Bed and bath looks like it continues to decrease. Also the U.S. market is still the largest in the world. There are jobs in fashion and in marketing. What really happened is companies moved manufacturing offshore. That hurt a lot of people because [those companies] employed a lot of people.