The Competitive Status of the U.S. Fibers, Textiles, and Apparel Complex A Study of the Influences of Technology in Determining International Industrial Competitive Advantage (1983) / Chapter Skim
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1. The Textile Complex
1. The Textile Complex
Pages 3-26
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point out a few of the major differences between the importance, structure, and activities of textile complexes in different countries. It is intended as a primer for those who know little about these subjects.
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Finally, Table, 1-2 and 1-3 show the employment linkages within the complex. Table 1-2 shows the direct employment in a segment per billion dollars of shipments to final demand and the resulting indirect employment in other sectors of the complex, and Table 1-3 shows the same impacts measured in terms of actual shipments in 1977.
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Economy on the Fiber/Textile/Apparel Industrial Complex, a report prepared for the ATMI by Economic Consulting Services, Inc., Washington, D.C., January 198 1.
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The segment with the greatest indirect employment impact is floor coverings: nearly one indirect job created for each direct job. DESCRIPTION A N O COMPARISON S OF MAJOR SEG ME NTS I N A TEXTILE COMPLE X Fibers Fibers are generally classified into two principal groups: natural and man-made.
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In the United States, DuPont, Celanese, Eastman, and Monsanto are the largest firms, while outside the United States the largest firms are Italy's ENI and Montedison; West Germany's Hoechst, Bayer, and BASF; Britain's ICI; France's Rhon - Poulenc; the Netherlands' Akzo; and Japan's Mitsubishi Rayon, Toray Industries, and Teijin. Compared to the other major segments of the textile complex, developed countries still dominate production of man-made f ibers.
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* 1977 Direct 1977 Indirect Industry Sector or Employment Employment Subsector Requirements Requirements Man-made fibers 76,746 2,907 Fabric, yarn, and thread mills 574,207 77,832 Floor coverings, carpets, and rugs 70,276 61,119 Miscellaneous textile goods 68,539 27,170 Hosiery and knit goods 265,817 92,661 Apparel (made from purchased materials)
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Outside the United States, the largest producers are Britain's Courtaulds, Coats Patons, Tootal, and Carringto~ Japan's Kanebo, Toyobo, Mitsubishi Rayon, and Unitika; South Korea's Daewoo and Sunkyoung; and France's Dollfus-Mieg. However, both inside and outside the United States there are major differences among the largest firms in terms of their production by end-use categories (apparel, home furnishings, and industrial)
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Most wet processing organizations are classified as either commission houses or finishing divisions of vertically integrated mills. Commission houses process greige (unbleached and undyed cloth or yarn)
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The larger firms' share of output has increased, the capital and knowledge intensity of the industry have increased, and th e product lines produced by many apparel firms have widened. The apparel segment of the textile complex is by far the most labor-intensive and fragmented.
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While often incorrectly considered to be restricted to apparel, its application is much broader and clearly extends to home furnishings and some industrial fabric sectors. Designing textiles includes not only knowledge of fashion but also styling, fabrics, fabric construction, fibers, colors, textures, wearing and cleaning properties and, for some products' aesthetics.
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can be imported or utilized by domestic firms. A griculture Th e agricultural sector basically provides the raw material for natural fibers: primarily cotton, wool, flax, and silk.
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Whether these large retailers buy domestically or abroad can clearly affect the domestic textile complex: the more they buy abroad, the greater is the competitive pressure placed on domestic producers, and the greater is the assistance given to foreign producers. The latter point is important because selling in a foreign market can be more difficult than selling in one's own domestic market.
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INTERNATIONAL DIFFERENCES IN TEXTILE COMPLEXES The basic function and general characteristics of each segment of the textile complex are similar in most countries. For example, a typical sewing plant in Sri Lanka performs essentially the same operations as its counterpart in Germany or in the United States.
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Hong Kong's geographical limitations made it difficult for it to develop is own man-made fiber sector, but its apparel and fabric sectors are at the most advanced stage of this fourth development level. Another level of development is full maturity.
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other Differences Other ma jor dif ferences among countries' textile complexes Involve vertical integration, offshore investment/production, and government involvement. Although there is no irrefutable evidence that vertical integration in the textile complex provides a significant competitive edge, firms in Asia typically are more vertically integrated than those of the United States and have more foreign production facilities.
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In Malaysia and the Philippines, for example, these two Japanese fiber firms control most of these nations' man-made fiber textile complex via equity participation, loans, and/or other contractual arrangements. Other firms that followed similar but less extensive international vertical integration strategies were Textile Alliance Ltd.
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While the competitive impact of major differences in wage rates between the United States and developing nations cannot be precisely calculated, it is particularly significant for the more labor-intensive segments of the textile complex, such as apparel. The huge trade deficit of the United States in apparel reflects the competitive advantage of developing countries in apparel, made possible by combining lower wages with technology similar to that used in many U.S.
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23 _ _ d ~ ~ — _ ~ ~ ~ oo oo _ _ _ 1 _ _ o V)
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Economy on the Fiber/ Textile/Apparel Industrial Complex, a report prepared for the ATMI (American Textile Manufacturers' Institute) by Economic Consulting Services, Inc., Washington, D.C., January 1981.
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7. The figures shown cover indirect employment requir ements in supplying sectors that fall within the fiber, textile, and apparel complex.
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17. For more details on government policies affecting the apparel and fabric industries, see J
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