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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 >>

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

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?
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.