Chinese Textiles: Made in America

This piece originally ran in The Greenville News.

Every year, a group of former textile managers from Springs Industries gather in downtown Greer, South Carolina for a reunion lunch. Crowded into a local “meat and three” diner, they share family stories and reminisce about working for one of the largest textile companies in the world. They even occasionally debate the political decisions that helped destroy South Carolina’s textile industry and their careers.

Greer, home of BMW’s only manufacturing facility in North America, showcases South Carolina’s shift to a new manufacturing economy. It lies just minutes away from Greenville, once known as the “textile center of the world.” Though South Carolina tried to offset the loss of textile jobs, the shift to the new economy came too late for our reminiscing textile managers.

Some might say that they were warned. South Carolinians listened for years as our political leaders chimed the long death knell of the textile industry. It was clear early on that our jobs never had the same political value as those in the automotive industry.

We listened to our political leaders tout the advantages of North American Free Trade Agreement only to see our textile manufacturers sprint south of the border toward cheap labor while illegal immigrants flooded our borders.  The ill-considered labor consequences of NAFTA cost the jobs of U. S. textile workers and Mexican farm workers alike. Our workers depleted our unemployment reserves and scrambled for job training. Their workers, after losing out to U.S. subsidized agricultural imports, had nowhere to go but north.

We watched our political leaders stand by when the WTO admitted China in 2001 as a free trade partner while winking at their communist controlled economy where free trade is restricted. The WTO agreement required the elimination of trade barriers between the U.S. and China by 2005. Since then, the flood of U.S. textile jobs moving to China has only been matched by the influx of cheap textiles coming from them. For proof of China’s textile dominance just check a few labels at your local department store.

The long awaited demise of the textile industry seemed a self-fulfilling political prophecy. These disastrous political decisions killed 83% of South Carolina’s textile jobs from 1995 to 2012 leaving a little over 20,000 still working. The loss was not limited to South Carolina. According to a USDA study on the textile industry and rural America, 91% of non-urban displaced textile workers were in the South.

In a stunning reversal, Hefei Keer, a Chinese-owned textile company based near Nanjing, recently announced that it will build a new mill in Lancaster County bringing with it 501 new jobs. Lancaster lies close by Fort Mill, the birthplace of Springs Industries, a fact that will only increase the indigestion felt by our lunching textile managers.

State and local officials, desperate for any drop in unemployment, are heralding the return of textile jobs to our state. One Lancaster County development officer said in The Charlotte Observer that he was “grateful for the opportunity to partner with the (Chinese) company.” Gov. Nikki Haley promoted the new jobs on her re-election campaign website. (She even recognized the company in her State of the State Address.) After praising the $218 million investment on her website, she concluded with her trademark phrase, “It is a great day in Lancaster County!” Maybe so, but the return of Springs Industries would have made a better day in South Carolina.

Our leaders have conveniently forgotten the past. They rejoice without showing any concern that the country who took advantage of our bad political decisions will resurrect our textile industry on their own terms while we pay them for the privilege. This Chinese largesse comes at a cost of $11.7 million worth of incentives from South Carolina taxpayers.

The incentive package offered to the Chinese company comes out to $23,353 per job, assuming that all 501 jobs are actually created. No one has revealed the quality of jobs to be created, whether they are management or hourly. The taxpayers have not been told what happens if the jobs are not delivered as promised. Do we get our money back if the quota is not met? Are we first in line for jobs? Secrecy abounds.

This strange turn of events reveals that the textile industry remains viable in South Carolina. It also exposes the problem with crony capitalism where companies collude with government to receive a competitive advantage. By rewarding the unfair trade practices of our largest international competitor – allowing them to own the means of production on our dime and at the expense of U.S. owned firms – we sacrifice transparency, accountability, free market competitiveness and, in this case, our self-respect.

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