A town out of work: globalization takes toll on industries

By Warren Vieth

Chilhowie, Virginia, May 11— People in this pocket of Appalachia aren’t sure what it’s like to work in a Mexican garment factory or an Asian furniture plant. But they know how capitalist globalization feels.

For years, manufacturers flocked to Chilhowie and neighboring communities because of their abundant supply of loyal, low-cost workers.

Then, in a sudden turn, plants began shutting down and moving out. Since 1988, Smyth County has lost 10 big factories employing 2,075 workers. Five of the plants and 1,430 of the jobs were in little Chilhowie, population 1,827.

An entire town, in effect, had been traded away.

“The economists say that over the long haul, this is going to help America,” said Town Manager Bill Rush. “But what are we going to do until then? I’m losing another 250 people in 30 days.”

Boom and bust

Chilhowie, situated near the point where Virginia bumps up against North Carolina and Tennessee, has lived through several cycles of industrial boom and bust. It was not until the early 1970s that Chilhowie began to transform itself into a thriving industrial town. Local entrepreneurs enticed makers of furniture, clothing, and other goods to set up shop along Route 11. Before long, Chilhowie was attracting workers from as far away as Kentucky.

The good times kept rolling through most of the ’70s, ’80s, and early ’90s. But in 1994, Congress approved the North American Free Trade Agreement (NAFTA) with Mexico and Canada. US apparel makers soon found themselves fighting for their lives. Some cut back domestic production; some set up plants in Mexico, where factory workers get only a fraction of the wages paid to Americans.

“To be competitive, you had to go south,” said Larry Gibbs, who has managed Spring Ford Industries’ knitting mill in Chilhowie since 1988. “I’ve seen the whole industry go away. It was all based on cost.”

Four years ago, Gibbs kept 450 workers busy assembling millions of T-shirts for the likes of Reebok and J.C. Penney. But Spring Ford announced in March that foreign competition was forcing it out of business. Gibbs was forced to lay off his 50 remaining workers.

One by one, Chilhowie’s biggest employers have shut their doors. Tultex closed its 200-worker sweat-shirt factory in 1998. The Buster Brown plant, where 300 people assembled children’s clothes, followed in 1999. Four months ago, Natalie Knitting Mills shuttered its 350-worker sweater factory. Spring Ford was the latest to fall.

Soon, trade winds began buffeting the furniture industry. When Congress approved permanent normal trade relations with China in 2000, enabling Beijing to join the World Trade Organization (WTO), a tidal wave swept across the Pacific and headed straight for Smyth County.

The products were different, but the equation was the same. Furniture-industry officials say it costs about $2,000 a month to keep an American production worker employed. A Chinese factory worker costs about $100.

In September, American of Martinsville began laying off workers in Chilhowie, where 450 people built veneered furniture for hotels and motels.

In April, the firm announced it would close the plant and lay off its 245 remaining workers by mid-June. It blamed competition from imports and the effect of Sept. 11 on the lodging industry.

President Noel Chitwood acknowledged that US trade policy had contributed to the firm’s decision to scale back US operations and initiate talks with potential suppliers in Asia.

“I’m forced to change the business model at American of Martinsville to include production from overseas,” Chitwood said. “Unfortunately, the cost of that is eliminating jobs in the United States. Is it regrettable? Sure it is. Do I understand the greater good? Not really.”

The greater good?

In Chilhowie, the greater good seems unfathomable. How can Americans be better off when so many people are losing their jobs? Where are the new US jobs that global trade is supposed to create? The textbook answer is that layoffs are being offset by job growth in other parts of the economy, such as service industries. But few of those jobs are finding their way to Smyth County.

This distress is putting pressure on local officials to find new employers to take the place of those who left. At the top of everyone’s wish list is technology. But it’s hard to compete against the magnetic pull of Northern Virginia’s bustling high-tech community, especially in a region where nearly 40 percent of the work force didn’t finish high school.

Skills of little value

For many apparel workers, the skills they mastered over the years are of almost no value in today’s job market. Most of them qualify for up to two years of government-paid retraining. But in Smyth County, retraining offers no guarantees.

For 26 years, Jim Sawyer worked as a sewing-machine mechanic at the Tultex plant. When the company folded, he signed up for machinist training. He eventually got a job at the Virginia Glove factory in nearby Glade Spring. Now, that company is shutting down too, and Sawyer will begin drawing unemployment again in August.

Ruby Fields worked for 15 years as an inspector at the Tultex plant. She applied for other jobs, but got no offers. She has no health insurance, her pension appears shaky, her unemployment benefits have run out and her husband is on disability. At 60, she doesn’t think retraining makes much sense.

“I’m too old to do that,” she said. “I don’t want to go back to school and retrain. What would I retrain for?”

Source: Seattle Times