Need for American companies to identify and seize manufacturing opportunities
Berkstresser discusses the kinds of choices American textile manufacturers need to make in order to compete globally and serve the American market. He emphasizes the need for research to determine which segments of the market American manufacturers should work to secure before global competitors find them.
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.
Full Text of the Excerpt
- PATRICIA RAUB:
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Do you think then that if something isn't done to stem the
tide of the foreign imports that it will really have a bad effect on the
industry?
- GORDON BERKSTRESSER, III:
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On some segments, certainly, on some segments. For example, after World
War Two, largely because of its own fault, the American textile
machinery industry lost large portions of its world market to Japanese
and European manufacturers. Certain marketing decisions were made,
certain manufacturing decisions were made that contributed to this
problem. Other structural reasons came about. In
Germany, Dornier () was no longer allowed to
produce bombers so they produced looms and they did a very good job of
it. The Japanese had to start rebuilding from scratch. So sometimes they
didn't have the old mills still in place, still dragging back
people who wanted to move ahead. But a great part of it was the fault of
our own people that didn't look ahead, and see ahead. So what
has happened is we've lost a large part of that industry now.
The cost to get back in, once you've lost it, becomes so
awesome, that what I think that we ought to do, both the industry and
the government is look at the segments of our industry, which we
didn't do, for example, in the shoe industry, and say, which
of these segments is it in our national interest to protect? I really am
embarrassed because if we had a general mobilization we could not shoe
our soldiers, sailors, marines, and air force. And I think
that's awful, I really do. We don't even have that
capacity to take care of ourselves.
I don't think that we should give long-term blanket
protection—no way—I do feel that there are
elements of our industry, and I think we've defined some of
them in our report to the Congress, to the OTA, that do not need any
protection. They compete very well in the global market. Leave them
alone. Fine. There are elements of the industry that are never going to
be competitive on a global standpoint, if there is no strategic
necessity, don't try. It's just putting money down
a sink hole. In the middle, there are some
segments of the industry where I think we deserve to look at them and
say Ok there are certain of these segments that we want to maintain at
least some manufacturing capacity in the U.S. What will it take in the
way of some scheme, say, of some short-term protection, maybe five years
maximum—combined with some research funds, maybe Fund X
supplied by the federal government that has to be matched by Y from
industry and maybe even by Z from states? I don't know. But
something that says, Hey, we'll give you time and help but
when we come to that kind of subsidation of research, don't
do like you do with the cotton—just give them the
money—institute some control. I want a report. I want to see
what you do with the money. The Japanese did this with their fiber
industry. They had a five-year plan, rationalization. Get it into shape.
At the end of the five years, all of the fiber producers had been able
to get to the point at the end of five years of both subsidation and
control that they were competitive. Except for their polyester and the
government then said, OK, you guys have screwed up. You really
didn't do as well as you should… But you made some
progress so we're going to give you another five years. And
here's what you've got to do. So they started
that. As long as you've got some control, some monitor for
it, I think it's a perfectly reasonable thing to do with
public money. I don't think it's lies to throw
money down a sink hole. Hell, no. It's my tax money, too. But
this is the type of thing that I would certainly advocate,
that we take that long hard look.
Now, in the question of something like Benetton…is it of
national importance for us to be able to produce women's and
children's sweaters in the United States? Probably not. Is it
important for us, on the other hand, to be able to produce thermal-type
clothing from the military standpoint? Yes. Do we have to do it by
knitting them in sweaters—traditionally, people in the Navy
have always had big bulky sweaters and so forth—or, is it
better to do it with some non-wovens and some type of nylon and so forth
as a substitute? It doesn't take that much to look at that
and say, Hey, well, we really need to protect some segment of the
sweater industry or we don't. But, when you come down to
things like socks. I've been in the Army, and socks are
terribly important. Socks and underwear. Far more important than the
rest of the stuff. There's a comfort factor that's
really awfully important. Right now, the socks and underwear are not
being threatened by imports. Mostly because you've got about
4% labor factor in that so that the cheap labor doesn't give
them an advantage. But, at some point, they may be threatened, because
of marketing, because of other reasons. I don't know. So I
think that we ought to start taking a look at that, right now. Before
something happens, before the stuff hits the fan. And say, hey, in this
industry, how much of this kind of product should we maintain in the
U.S. and how do we do it?
And I think the most important part of the equation, to
me, is the research. Really set up national research policy
that keeps us in tune with the market. The Japanese put 60 million
dollars into their project—public money. The European
community—I'll be over there in Brussels on May
13th, talking with them—they put up 30 million bucks. Has to
be matched, 50-50, with industry. To do the same kind of research. In
the United States, we have a few projects, sponsored by the Department
of Commerce, the Department of Defense—with a few
institutions like N.C. State, Georgia Tech—doing some
research. It's not coordinated, much less controlled, much
less supervised. It's happening. I think it's
important enough for us to say that we really ought to insist that
somewhere along the line that the importance of this industrial complex
and base to this country is being recognized by saying that here is a
focus, that all of the people who are interested, all of the people who
are concerned, all of the people who want to do some research and so
forth can focus on. I think that's terribly important. And I
think the protection is only important as it helps, once an area of
valid research is defined, if we say, OK, it's going to take
four years, three years, six years, whatever. And for that period of
time, we are going to have quotas.
Actually, of course, what you could do, too, is you could finance the
whole damn thing with the tariff income. If you decided, hey, we need a
hundred million dollars for research, every penny of it could be taken
out of the tariffs because that much more than
that flows in. So it could be a self-supporting type of thing.