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Excerpt from Oral History Interview with Gordon Berkstresser III, April 29, 1986. Interview H-0263. Southern Oral History Program Collection (#4007) See Entire Interview >>

Overseas competition poses a real challenge to American textiles

Overseas competition is posing a real challenge to American textiles, Berkstresser claims, and he stresses the need to embrace the global market as well as securing American markets against imports. He suggests that lobbying for trade protection might help the industry.

Citing this Excerpt

Oral History Interview with Gordon Berkstresser III, April 29, 1986. Interview H-0263. Southern Oral History Program Collection (#4007) in the Southern Oral History Program Collection, Southern Historical Collection, Wilson Library, University of North Carolina at Chapel Hill.

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Right now, for example, we have a lot of competition, from overseas, some of which is the type of thing that, again, I think that our government ought to get involved with. When you're talking about competition from what I like to call, or what Copper () calls the "New Japanese"—the South Koreans, Taiwanese, etc., where you're really talking about a managed economy, subsidized things, low labor costs, these types of things. I think that we have to, there, open our eyes and say, even though it isn't our tradition, we better get government and industry involved together, or what's going to happen to us is the same thing that happened to Sweden. Fifteen years ago, Sweden produced 80% of its apparel internally. Today it produces 12% of it—it imports 88% of its apparel. Even if there weren't, for us, defense implications, there's certainly economic implications. So from that standpoint there's one element. Now, on the other hand, there are other elements where the import penetration is not because of just the low labor cost and the subsidies. You take a look at the phenomenon—if you've seen these Benetton stores—a few years ago, these cats started off in Europe, right? And what they did was they had the same equipment that everybody else in the world has. They had no technological advantage over anybody. What they did is they took a marketing concept: we're going to target a group. The first group they targeted was 14- to 24- year-olds. And we're going to do it through marketing. We're going to give them bright, bold, sassy colors and patterns. We're going to go the trickle up theory, that is, get it into the youngsters and hope that it'll trickle up into the middle age people, as far as demand. They did certain things with their marketing that were just fantastic. They said, we're not going to have big inventories. What we'll do is we'll stock—in a given area, they may have ten stores—and each store has a different type of look. Store A may be on a pink kick. Store B is a very bright blue-green mixture. Store C is another thing. O.K. That's this week. Sunday night Store A packs up everything in the store and ships it to Store B. Store B packs up everything in the store, ships it to Store A, so Monday morning when they open up—and, after all, these are neighborhood stores—it's a complete new look, every week. It's fresh, it's vibrant. If you don't buy the damn sweater this week, don't come back next week, it's not going to be there. This kind of thing was kicky and turned people on, it kept their inventory low. Man, they have made money. That's marketing. And no amount of government cooperation with industry is going to help that particular thing. Those people just absolutely out-marketed us.
PATRICIA RAUB:
What country are they from?
GORDON BERKSTRESSER, III:
Italy, just outside of Venice is their head office. I'm going to be over there, as a matter of fact. I'm leaving the 12th and that's one of my stops, to see how they do it. So, I think that really what we have to look at in the industry is that it is a global industry. Hell, when I graduated from N.C. State, we didn't think in terms beyond our domestic market. We didn't need to. We had a domestic market that was growing fast enough to absorb all of what we could produce in the U.S., plus whatever imports came in. And now what's happened is that we've got to the point where in America we consume over 50 pounds of fiber per capita per year. And that's plateaued for the last few years. There are some indications that that is about as much as you can expect any fully-industrialized nation to consume on a percapita basis. We have run out of closets to put things in. I don't know about you but I'm not allowed, by my wife and my children to buy any new clothing unless I throw something out. Because the "stuff" quotient has gotten to that point. But, really, we're at that point. We are still the biggest market in the world, but our capacity to consume more is really quite limited. You take Europe, you're talking twenty to thirty pounds per capita per year. And then you take the underdeveloped countries and you're talking two and three pounds. In China you're talking, I don't know, maybe five pounds. You know, if you could convince the Chinese to each consume one pound more of fiber per person per year, you'd have a billion pound market opening up all of a sudden. You wouldn't worry about them exporting to the U.S. But, at any rate, that itself—this bit of wild growth of this market has come to a screeching halt—has forced us to a realization now that any of these increases in imports come at the expense of the apparel industry. Up until right now, it really has not come at the expense of the fiber and textile fabric industry. In 1985, we produced more square yards of fabric than we produced in 84. 84 was more than 83. On ad nauseam backwards. That's hit a plateau. Now the imports are already cutting into current domestic production of apparel. Whether it's 86 or 87, somewhere around now we can expect the imports to start cutting into, and hurting, current production. Not only taking all the growth potential, but really hurting current situation. And I think that's one of the things that's going to speed up this process of revolution that the industry's going through. Up until a couple years ago, you'd gripe, complain about the imports, but on the other hand, you knew that the figures—if people really wanted to get to you on the figures—they could get access to the same figures and say, Hey, wait a minute. The market is growing at the rate of a half a percent a year. Your production is growing at the rate of a quarter of a percent a year. That means that the imports are going at a fairly fast rate, because they're a lower percent of the market, but you aren't actually decreasing, you're plateauing. So you really haven't lost any jobs to imports, and that's true. You lost the jobs to technology. The increased technology has meant a lower number of people working, of course. We intend that. We don't like to talk about it, but we intend that. The Japanese automated sewing system that Meetee() is sponsoring, 60 million dollars, intends to cut out 80% of the labor involved in making garments, that translates down to losing 80% of the apparel jobs. That's all there is to it. Well, they know it. Of course. People want to stop working in those kinds of places, at that kind of job. And it's probably socially good, just like it was socially good to get people out of some of the dirty, dangerous jobs in the mines and steel mills. But the problem now is that the imports are really beginning to cut into what's happening now. So, wow! All of a sudden it's important. So, wow! All of a sudden we need to get in and lobby for some protection—short term…