Does this imply there might be a rise in localized, cottage businesses?

Over the last five years (and continuing for the next 5) we’ve reduced our tariffs on textiles, clothing and footwear (TCF). As a result most of our TCF manufacturing has closed down and the bit that is left is not very competitive and Aussies aren’t that fussy as customers so a Made in Aus tag won’t always bring you exta $.

The TCF industry that is left is run so tight that it can’t be responsive to customers.

What’s ironic is that all the buyers who moved their ordering of finished garments to HK and China have now been gazumped by US buyers under the new FTAs who deal in much greater quantities. After a few years of buying cheaply, in about 2005, the Aussie buyers were snubbed because they no longer met much increased minimums or they were charged massive premiums for small lots. US buyers work on much greater numbers and suddenly that’s all China and HK manufacuturers cared about.

As a result a little bit of TCF manufacturing came home. The other result is that the boutique buyers had to club together to make orders so the individuality that we once relied on our boutiques for is no longer there.

Sad but true.

I agree with Mike C on some of the points he has made. It has been frustrating at times to efficiently order material from mills in North America.
I find many suppliers in theory still wanting to do business, but in many cases you can tell in their hearts, many of them are just going through the “motions”, not knowing if you are a sincere long term viable client, or whether you are ordering sample yardage biding your time, before moving everything offshore.
As well, offshore minimums are decreasing every month, so even smaller designers are treated with skepticism by some.
I think many apparel industry suppliers and contractors have simply found it easier to throw in the towel, rather to remain and fight for business.
What I do find encouraging though is that those that have chosen to stay and compete, are fighting back with a higher degree of customer service and follow up, lowering IMO, intial inflated prices, and improving turn times.

Unfortunately, it seems only circular knitters are pulling up their socks, as a vast majority of woven fabric mills are long gone. I am not sure they will return. Start up costs for woven operations are considerably higher than circular or warp knitters.

Here in Toronto, we too are left with only converters to supply us wovens. And this is very limiting. I am travelling this month to Shanghai and Korea to attend fabric shows to secure new sources. If we don’t, our outerwear output will disappear.
This whole industry is now filled with Catch 22’s.

I’m having a hard time drumming up more than perfunctory sympathy for the National Textile Association. The latter by the way, is busily lobbying congress on your behalf in an effort to defeat CAFTA or the Central American Free Trade Act which only affects textile producers. Yes, I’m sure you’re gratified to know that the NTA is busily telling Congress that you’re going to ship jobs overseas because you can’t buy US made fabric. As if. Were that the case, most of you wouldn’t have produced here in the first place since you couldn’t buy fabric made here from the day you opened your doors.

Don’t get me wrong here, I’m opposed to unfair terms of trade but protectionist legislation has always protected this industry to its detriment. Consider the alternative, had the trade faced the sort of historic competition characteristic of other industries, there is every likelihood that apparel related businesses would have evolved their practices to be more efficient…

Bill Waddell has a piece up on Evolving Excellence along these same lines. Apparently, Penney’s has dropped Basset (furniture) as a supplier due to quality problems. Penney’s has replaced them with a Chinese vendor. Basset claims it’s over price but considering Penney’s long standing commitment to quality, I’d view Basset’s position with more than a bit of skepticism.

I haven’t been around for the last several months because I’ve been in over my head. Been reading when I can, but haven’t had time to comment. I have to chime in here.

Our little company, as manufacturers, have been totally committed to “employing our neighbors”. But in January 2005 we made the choice to convert as much of our fabric usage to sustainable fibers as possible. It has almost killed our little company. We’ve had three (3) US organic cotton mills close in two (2) years. The only remaining substantial player in the arena (wovens) behaves just as Mike C has described his potential US vendors behaving. It’s shameful. We cut ties with them months ago. That left us with NO viable US source. We are critically low in inventory levels, even with a fabric broker who specializes in organics. So we have had no choice but to either give up on organic cotton or take our textile business overseas.

Our first delivery from India is in December. I would *never* have moved my manufacturing business overseas for money. Not ever. And I’m not saving money, so it’s a good thing that wasn’t my goal. But I’ve done it to save my little sustainable vision.

I feel utterly disenchanted with the US manufacturing scene. And unfortunately, even the Canadian contractors couldn’t get me out of this one.

I am decidedly ambivalent about protectionist US policies.

I have the same issue that you do. In fact, I have often called Kathleen to discuss the harsh reality that as a small DE, it is much easier for me to buy fabric from a foreign mill, or converter, than it is to buy from a US mill or converter. Often, with a lower minimum. Not always a lower cost, but with a wider variety of options.

Part of the problem is that the companies that the domestic mills often want as customers are the ones who are increasingly sending their production offshore. Once you send your production offshore, you lose the incentive to purchase your fabric domestically. Catch-22.

I think we have operated under the implication that you need massive quantities to purchase overseas, and maybe that was the case when you had to source at trade shows where only the big guys could afford the travel and exhibition expense. But now with the internet, the tiny fabric converter in southeast Asia can now sell their yardage to the small DE in California. And they are eager to do so!

What’s happening, in reality, is that we’re not admitting the truth to ourselves as business owners and operators. We are not exercising foresight, and we are shirking our responsiblity to our local economy and workforce.

This relates back to the Pedro & Charles post where these guys (I presume) were paying themselves way too much, didn’t have sufficient reserves, and could not bear the cost of goods and labor. I cannot know if this is a statement of fact about their company; but, the symptoms are characteristic.

The result of running a business this way leads directly into the catch-22 that Mike C is the victim of (or, Susanne Patternmaker was). There is only one way out of the catch-22… and that’s cold, hard, cash. Either you need sufficient reserves (best option), or you need to compromise your company’s credit (so many ways to go bad (e.g. sell company shares, sell equipment/vital organs, borrow money, &c)).

On one hand, I don’t agree with embargo because you find out after the fact that you “should have….” had your pieces manufactured in another country. So, there is no planning, it’s just a trip wire. The concept of distributing the work fairly is great; but, the administration, execution, and support aren’t there. The current system is a race to the finish line with the slow pokes being eaten alive. This doesn’t sound like equal distribution to me.

I’ve had the (dis)pleasure of familiarizing myself with NAFTA and have read probably 9 cases/judgements, so far. I still have another 40-ish to go before I consider myself to have a reasonable understanding of how it impact my business model. So far, all I’ve seen is posturing (i.e. attempting to pass off sleepwear as loungewear because the loungewear quota had not been met). This is precisely what a poorly designed system forces our reputable business owners to do – and, the tricks get dirtier (i.e. submarining, &c)…

As manufacturers, we have several choices: avoid the system, exploit the system, or work to fix it. In the case of Mike C’s scenario, I would just as easily offshore my resource if I couldn’t find a local one who wanted my business. But, to find out that my shipment was hung up in a port because India (or, whoever) has exported too much, and lose all the money I have invested… I’d probably feel rather desperate, too.