Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, October 24, 1993 TAG: 9311030383
SECTION: BUSINESS PAGE: C1 EDITION: METRO
SOURCE: LON WAGNER STAFF WRITER
DATELINE: LENGTH: Long
Mason, president of a small, Rocky Mount apparel company, admits he was thrilled when U.S. Rep. L.F. Payne invited him to attend the briefing. But he remains convinced NAFTA is ``another nail in the coffin'' of the 230 workers of his Virginia Apparel Corp.
In fact, an exchange between Mason and Bill Daley - son of the late Chicago political boss and the man Clinton brought in to peddle the trade agreement - cemented Mason's opinion about NAFTA.
Daley was talking about how fear of anything south of the border was driving the anti-NAFTA forces. Mason raised his hand, and asked a question:
What should he tell his workers who saw half of their company shut down when a major customer contracted with a Caribbean Basin apparel manufacturer instead of the Rocky Mount company? How should he quell their fear, knowing two-thirds of the apparel exported to Mexico consists of fabric ready to be stitched into clothing and shipped back into the United States?
``His answer was - and this is a quote because I'll never forget it,'' Mason recalled - ```Sir, I'm not going to begin to tell you that certain businesses and certain industries are not going to be adversely affected by this agreement. Next question.'''
Virginia Apparel used to have two factories; its Blackstone, Va., plant limped along for about a year after the company lost the big contract to the Caribbean manufacturer. In June, Mason shut the Blackstone shop for good, laying off 110 workers.
If NAFTA is approved, Mason said, the Rocky Mount operation will be vulnerable. The administration claims 200,000 higher-wage jobs would be created over the next two years to replace low-wage jobs that would move to Mexico. Mason says that doesn't help his employees.
``I didn't go up there to be antagonistic,'' he said of the White House briefing, ``but ... my people are afraid of losing their jobs.
``What American job is worth sacrificing?''
Many of the employers in this region see NAFTA as a gateway into Mexico and Canada. Westvaco's Bleached Board Division in Covington, for instance, favors NAFTA because one-fourth of the plant's production is exported.
Martinsville-based Tultex Corp., which employs 3,000 people, sees Mexico as a growing market for both its finished T-shirts and sweatshirts, and its unfinished fabric. Tultex already operates a 100-worker sewing factory in Mexico's maquiladora region, a low-tariff belt of land along the Texas border where thousands of international companies have built plants.
Tultex President Charles Davies said the costs at the maquiladora plant are ``not a lot better for us,'' but the operation gives the company better access to Mexican, Texan and West Coast markets.
``It's possible that we may do more sewing in Mexico if we were growing, but that would create more textile jobs for us'' in Virginia, Davies said.
``The people that are against NAFTA either have a very narrow interest or they are misinformed.''
Mason is not misinformed, but he admits to having a narrow interest. Name brand ``manufacturers'' such as The Gap, Polo and B.D. Baggies actually have no manufacturing facilities but contract to have their private-label clothes made by others. Virginia Apparel is one of those contractors.
And that's the kind of business Mason worries that low-wage contractors in Mexico might take away; or that Gap, Polo and the others might be tempted under NAFTA to build their own plants there.
Payne, a Nelson County Democrat whose 5th Congressional District includes more than 50,000 textile and apparel jobs, has to balance Mason's interest against the interest of textile manufacturers like Tultex. He is waiting on more information from trade officials about the impact of NAFTA on both textile and apparel jobs before deciding how he will vote, Payne said.
But last year, during his re-election campaign, Payne stopped at Virginia Apparel to hammer at one of his more emotional issues - the Made in USA labels being put on clothing made in Saipan, a Pacific Ocean island that's a U.S. protectorate.
Mason told Payne that Saipan's apparel was ``a drop in the bucket'' in the context of his other global competition. Payne, it seems, got the message.
``I guess, in many ways, they are being threatened with or without NAFTA by low-paying producers of apparel throughout the world,'' Payne said of Virginia Apparel, ``whether they be in Costa Rica or China or Mexico.''
\ The impact of NAFTA nationally is unclear, but few dispute that apparel companies like Mason's would be squeezed. U.S. Rep. Rick Boucher's 9th District holds 9,000 apparel jobs. Boucher said many of those labor-intensive jobs have been sheltered by tariffs - taxes intended to make imported goods more expensive than similar products made at home.
Tariffs average 10 percent for goods entering Mexico, and just under 4 percent for goods coming from Mexico to the United States. Those would be phased out under NAFTA.
Like Payne, Boucher has not yet committed his vote on NAFTA. ``I'm getting conflicting answers about the impact,'' Boucher said. ``The general trend seems to be the more advanced a company is in terms of technology and the less labor- intensive it is, the more likely the company is to favor NAFTA.''
The opposite applies to apparel companies. Virginia Apparel's base pay is $5.60 an hour.
``I don't sell a product,'' Mason said. ``I sell labor. We're going to have to constantly stay alert for a piece of equipment that allows us to cut our cost, which means cutting our labor, which means jobs.''
The Franklin County company, which Mason's father started in 1971, cuts and stitches clothing for catalog merchandisers - L.L. Bean, J. Crew, Lands' End. Mail-order merchants, as Mason knows, send their business to the contractor who offers the best price.
Throughout the 1980s, Virginia Apparel battled with Asian and Caribbean countries for the catalogers' business. A law passed early in the Reagan administration allowed name-brand companies to send fabric to Caribbean countries, where it was stitched together and shipped back to the United States at a 2 percent tariff.
Virginia Apparel survived the onslaught of competition from low-wage countries for three reasons, Mason said: better quality, a quicker turnaround time and a more flexible production schedule. For example, if Lands' End placed its initial order for shirts with a Haitian manufacturer, Virginia Apparel would get the call when the inventory ran low and Lands' End needed more shirts quickly.
But the quality gap between U.S.-made goods and cheaper imports has narrowed. And with Mexico's proximity to the United States, much of Virginia Apparel's advantage in quick turnarounds will be eliminated, especially if the U.S. manufacturers open their own plants in Mexico.
And Mason knows he can't compete with Mexican labor costs. Even NAFTA proponents put the average Mexican manufacturing wage at about $2.35 per hour.
``All I want is a level playing field,'' Mason said. ``They can't make a better garment, they can't service their customers the way I can. The only thing they can do is make it cheaper.
``There's no such thing as a level playing field, and that's what burns me up.''
In one way, Bill Daley - Clinton's hired gun - effectively pinpointed the catalyst for NAFTA debate: fear.
Many economists agree philosophically that the long-term effect of the trade agreement would benefit the United States. The argument goes that Americans should willingly swap low-wage, labor-intensive jobs like those at Virginia Apparel for higher-paying, higher-skill jobs the export market would create.
But don't try to sell that theory to Larry Eanes, a member of the International Union of Electrical Workers union. Eanes works at General Electric Co.'s Drive Systems factory in Salem, which produces computerized control devices for industrial equipment.
``We build high-tech stuff, but the way they got it broken down, everything is compartmentalized,'' Eanes said at an anti-NAFTA rally last week. ``There's no job here that a Mexican cannot do.''
GE Drive Systems has not laid off hourly workers in more than five years; in fact, this summer the company added 70 wiring jobs to its manufacturing job base, bringing the number of hourly jobs to nearly 1,000 and total employment to 2,100.
But at the rally, the union's president, Bill Bywater, did his best to put the fear of NAFTA into the GE workers.
``If this is passed, some of you people in this room are going to lose your jobs,'' he said. ``Maybe not right now, but in a year or five years. Every time you go in to negotiate, the company's going to say, `We'll go down to Mexico; we got a plant down there.'''
Like many multinational companies, General Electric's management disagrees about NAFTA with its rank-and-file workers.
George Jamison, a spokesman at GE's Fairfield, Conn., headquarters, said the reduced tariffs under NAFTA would make GE more competitive in the Mexican market with its Japanese and European competitors.
Last year, GE Drive Systems - which has another plant in Erie, Pa. - exported $20 million in equipment to Mexico, Jamison said. That business translates to about 400 jobs.
``Under NAFTA, we think we can increase that,'' Jamison said. ``If NAFTA fails, it's extremely possible some of this work is at risk. Our interest in NAFTA is primarily exporting products made in the U.S. to Mexico.''
With a vote in the House of Representatives scheduled for Nov. 17, the Clinton administration is trying to sway the 40 to 70 uncommitted House members by arguing that fears of a massive migration of large manufacturers to Mexico are overblown. U.S. Rep. Robert Goodlatte, R-Roanoke, agrees.
``I think there are plenty of incentives right now, and will continue to be even without NAFTA, for companies who want to take advantage of low-wage rates,'' Goodlatte said. ``I don't get the impression companies are sitting there waiting for this so they can go to Mexico.''
Tom Mason believes the long-term results of NAFTA will help the United States. After all, who would disagree that increased exports would benefit U.S.-based companies, or that higher-wage jobs are better than most jobs in a sewing factory?
``Sometimes I feel guilty or un-American - who am I to try to stop it?'' Mason said.
``If something should happen to this factory that we had to shut down, it would hurt me and my family but we would survive. These people out here, they count on me for jobs, for health care. If I don't fight for these people, who will?''
by CNB