Mike Easley Discusses the Effect of the Decline in the Textile Industry on North Carolina

Jacki Lyden, host: The American textile industry says it's coming apart, thread by threat, job by job. In North Carolina and South Carolina alone, 200,000 jobs have been lost since 1997. Chuck Hayes is president and CEO of Guilford Mills in Greensboro , North Carolina . It's become the fourth major North Carolina textile company to file for Chapter 11 bankruptcy protection.

Mr. Chuck Hayes (CEO, Guilford Mills): The time has come where our industry can no longer be the pawn that is used by our government. There has to be other means of helping Third World nations without continuing to erode the textile industry that employs so many of us here in the United States .

Lyden: Yesterday, North Carolina Governor Mike Easley convened a textile summit in North Carolina in the town of Dallas to demand that Washington pay more attention to the turmoil in a major American industry. The summit was attended by governors from other textile states-- South Carolina and Georgia --and representatives from Virginia . Governor Mike Easley joins us by telephone now.

Thanks for joining us, Governor Easley.

Governor Mike Easley ( North Carolina ): Oh, good to be with you.

Lyden: Tell us something about the retrenchment in textiles, the losses in both manufacturing and finishing. How important has the textile industry been to the US ?

Gov. Easley: Well, I think especially in wartime, you know, the first two items you need are steel and textiles, and what we've seen is textiles being traded away and a mixing of textile policy with foreign policy.

Lyden: Why are things so bad? Two hundred thousand jobs in two states is sort of on par with what happened in agriculture.

Gov. Easley: Basically what happened is first the transshipment or what we call the illegal smuggling and dumping of textiles into the US , which has flooded the market. Consequently, we have far too much inventory, so regardless of how productive the textile industry becomes, you just can't compete when demand is much lower than the supply. Secondly, the dollar is very, very strong and we don't seem to be able to get it down even with the lowering of interest rates. And the Asian currency continues to be devalued, and we're not doing anything on the federal level to combat that.

Lyden: What is it you want Washington to do? Obviously, to stop illegal dumping, but also are you asking for tariff protection as the steel industry has just won?

Gov. Easley: Well, we certainly would like to have tariff protection. If you think dependency upon foreign oil is difficult, you certainly don't want that situation with your textiles and with your steel. Secondly, and most importantly, we want the federal government to enforce NAFTA. If they don't enforce the NAFTA agreement, then we're going to continue to have the transshipment problems--that is, Asia taking goods to Mexico and then they're coming into the United States with a Mexican origin on them. If that continues, we will not be able to compete.

Lyden: You yourself referred to the steel workers, and they have been very successful at lobbying the White House. They--the AFL-CIO showed itself to have tremendous clout when it came to the protection for steel--a 30 percent tariff. Do you think there's any sense in this administration that the steel workers are somehow more important politically than textiles workers and perhaps represent states where things are less certain for the White House than textile workers do?

Gov. Easley: Yeah, I don't know the White House politics on that, and I'd be a poor one to judge which group the White House finds politically most important. But in the textile industry, so many of the foreign countries--greatest example is Pakistan--in order to build the war coalition, the war effort, we agreed to give special preferential treatment to Pakistan on textiles, and I think there are three and a half million Pakistani textile workers. Well, when that happens, we understand it needs to be done in order to build a coalition, but 28 percent of the textile workers are in North Carolina , and we suffer a disproportionate share of the burden. And that's why we think it's important for the federal government to turn around and help remedy that situation.

Lyden: Governor Easley, thank you very much for speaking with us.

Gov. Easley: And thank you. I've enjoyed it.

Lyden: Mike Easley is the governor of North Carolina and the convener of yesterday's textile summit.

Exporting textiles to the United States is crucial for the economy of Peru , where President Bush arrived today on the second stop in his tour of Latin American nations. Peru 's president, Alejandro Toledo, wants the US to scrap the 21 percent tax it imposes on clothing made in Peru.