The U.S. Textile and Apparel Industry: A Revolution in ...

1 The Textile and Apparel industry : ARevolution in ProgressApril 1987 NTIS order #PB87-196762 Recommended Congress, Office of Technology Assessment, The Textile and Apparel industry : A Revo-lution in Progress Special Report, OTA-TET-332 (Washington, DC: Government PrintingOffice, April 1987).Library of Congress Catalog Card Number 87-619815 For sale by the Superintendent of Government Printing Office, Washington, DC 20402-9325(order form on p. 119)ForewordAmerica s Textile and Apparel industries are investing in new technology at an unprece-dented rate. Productivity growth in Textile manufacturing has been double the average growthof manufacturing as a whole for over a decade, and Apparel production may be on the brinkof a revolutionary increase.

2 New information technologies have the potential to unify dis-parate elements of the industry , from fiber production and weaving to product assemblyand retailing linkages that can reduce costs and tailor products to changing patterns ofconsumer taste and preference. Such new technologies are rapidly changing the face of oneof the Nation s oldest industries. The manufacture of textiles and Apparel has the potentialto remain a significant part of the the optimism made possible by technical progress, Textile and Apparel firmsare in danger. Little of the technology that allowed for increased productivity was developedby enterprises. The same advanced technology is available to firms throughoutthe world, including those in nations that pay workers a small fraction of the minimumwage.

3 Sophisticated networks of and foreign companies use these factors to supplier prices; Apparel imports have grown from 25 to 50 percent of the marketduring the past 10 years. Technology alone may not be able to salvage major parts of in labor productivity and imports have led to significant job losseswithin the domestic Textile and Apparel industry . And while economic growth creates newjob opportunities throughout the economy , plant closings and industrial reorganization cancause severe hardships for communities dependent on local Textile and Apparel firms. It alsoappears that the skills likely to be needed by future Textile and Apparel enterprises may re-quire extensive training programs even for workers remaining in the present state of the Textile and Apparel industry presents Congress with diffi-cult choices on trade policy and on government support for research and development.

4 Wetrust that this special report will provide a framework for making such special report supports a larger OTA project that analyzes the effects of technologi-cal change and international trade on the structure of the domestic economy and optionsfor public policy. The Textile and Apparel industries were selected for special attention be-cause they provide key insights into the problems of changing manufacturing H. GIBBONSD irectorList of ReviewersGorden A. BerkstresserProfessorSchool of TextilesNorth Carolina State UniversityRaleigh, NCPeter ButenhoffManagerInternational Trade du Pent de Nemours & , DEMichael J. CoppsDirector of Government AffairsCollins & Aikman , DCHenrietta DabneyDirectorResearch DepartmentAmalgamated Clothing and Textile Workers UnionNew York, NYMaria Fernandez-KellyProfessorDepartment of Geography and EnvironmentalEngineeringThe Johns Hopkins UniversityBaltimore, MDJames A.

5 ParrottEconomistInternational Ladies Garment Workers UnionNew York, NYJames PlouffeManagerTextile Fibers du Pent de Nemours & , DENicholas C. WilliamsonProfessorManagement DepartmentUniversity of North Carolina at GreensboroGreensboro, NCGeorge Wine*Chief EconomistAmerican Textile Manufacturers InstituteWashington, DC*Material supplied by the American Textile Manufacturers Institute included comments from several reviewers under George Wine s Textile and Apparel industry : A Revolution in ProgressOTA Project StaffLionel S. Johns, Assistant Director, OTAE nergy, Materials, and International Security DivisionHenry Kelly, Project DirectorTechnology and the American Economic TransitionRuth Ruttenberg, ContractorGordon A.

6 Berkstresser, ContractorDaniel Chenok, Research AssistantAndrew Wyckoff, AnalystPhyllis Brumfield, Administrative WilliamsonL. BarrierContentsChapterPageI. Overview .. O .. 3An industry in Transition .. 3 The Challenge From Abroad .. 4 Linkages to the Rest of the economy .. 6 The Impact on the Labor Force .. 7 The Impact on the Consumer .. 8 Looking to the Future: Alternatives for Policy .. 9A Guide to This Report.. 112. The Textile and Apparel industry : Technologyand Structural Change .. Markets for textiles and Apparel .. 16 Characteristics of the Domestic Marketplace .. 16 Trends in Consumer Purchasing .. 17A Technological Revolution .. 18 New Production Technologies .. 19 Consistency, Standardization, and Quality .. 22 Coordination and Quick Response.

7 23 Industrial Structure .. 29 Background .. 29 Structural Changes .. 31 Trends in investment and Disinvestment .. 32 Into the Future .. 333. The Major industry Sectors: Fiber, Fabric, Finished Products, andMachinery Manufacturing .. 37 The Production of Fiber .. 37 Background .. 38 Technological Innovations.. 42 Industrial Structure .. 46 Textile Mill Products .. 49 Background .. 49 Technological Innovations .. 51 Industrial Structure .. 59 End Uses of textiles .. 61 Industrial Structure .. 62 Pending Technology .. 67 Textile Machinery Manufacture .. 74 Background .. 74 Industrial Structure .. 754. Areas for Decision: Trade, Technology, and Employment .. 79 Declining Trade Balances Shake Textile and Apparel Markets .. 79 The Emergence of a Global Textile industry .

8 Response .. 87 Trade and the Consumer .. 92 The Adequacy of Domestic Innovation and Capital Investment .. 94 Research and Development.. 94 Capital Investment Uneconomic Necessity .. 95 Implications for the Textile and Apparel Labor Force .. 96 Employment Changes Within the industry .. 96viContents continuedPageImpact on Individuals and Families .. 98 Impact on Communities and Regions of the Country.. 985. Policy and Survival..103 Employment Issues .. 103 Assistance for Textile and Apparel Workers .. 103 State and Local Responsibilities for Employment Training and Transition .. 105 Trade Adjustment Assistance .. 105 Trade Alternatives .. 106 Export Promotion.. 107 Import Regulation .. 108 Other Trade Policy Areas .. 109 Research and Development .. 110 Public/Private Ventures.

9 110 Investment Incentives .. 111 Other Strategies .. 111 Glossary ..115 BoxesBoxPageA. The Evolution of the Multi-Fiber Arrangement .. 86B. Trade Regulations That AffectC. Current Federal Programs forFigure No, Dollar Value-AddedApparel, and textiles .. textiles and Apparel .. 89 Job Transition ..106 FiguresPageper Full-Time Equivalent Employee: Manufacturing,.. Textile and Apparel Trade .. 5 textiles and Apparel Compensation per Full-Time Equivalent Employees a Percentof Compensation per Full-Time Equivalent Employee in All Manufacturing .. 7 Change in Full-Time Equivalent Employment Resulting From Changes in Trade andProductivity Levels, 1972 and 1984, for textiles and Apparel .. 7 Price index for Apparel .. 8 Personal Expenditure on Clothing and Accessories.

10 8 Personal Expenditure on textiles (Home Furnishings) .. Market in textiles and Apparel .. 9 Apparel As Percent of Total Consumption by Income Cohort, 1982 .. 18 New Capital Expenditures and Productivity .. 21 The Apparel Pipeline at a Glance: Present System v. Quick-Response Strategies .. 24 Retailers Sourcing Cost Comparison: United States v. Far East .. 25 Breakdown of Original Retail Price .. 28(TC)2 Automated Sewing System .. 72 Price indices for Clothing .. 93 The Geographic Distribution of Textile Employment by State .. 99 TablesTable Full-Time Equivalent Jobs Created by $1 Million of Output in Textile and ApparelEnterprises in 1984 .. 6viiContents continuedTable New Capital Expenditures and Productivity .. 203. SIC Codes for textiles and Apparel .