Saturday, July 14, 2007

Quaker Fabric

The thing I dislike most about blogging is regurgitating the news. That is to say, to simply rehash a news event without adding any perspective or opinion. That why I haven't commented about Quaker Fabric (Providence Journal Link Registration Required) until now.

Quaker Fabric has been a mainstay to the Fall River economy for over sixty years, less than a decade ago it was Fall River's largest employer with over 2,400 people on the payroll. Quaker was a success story in the area's declining textile industry. However things changed just a few short years ago, seemingly due to international trade, as Quaker started posting quarterly losses and laying off employees. Despite all attempts to turn the tide Quaker shut down for it's annual 2 week break and announced that it was unlikely that they could remain open.

The announcement was treated with great surprise and there has been a community effort to try to make all resources available to retrain and reemploy Quakers workers. Senators Kerry and Kennedy have moved to secure funding under the Trade Adjustment Assistance Program, which would provide funding for training and extended unemployment benefits.

Lefty's view: It's wonderful that the community has rallied to support these displaced workers but so many of these employees who lack the skill set and educational background to move into another industry are going to face huge challenges to 'reinvent' themselves. I hope the support they are receiving now is there after this is no longer a front page news story.

It's also wonderful to have the support of Kerry and Kennedy but I have to wonder did the 1,400 plus employees who lost their jobs when Quaker was still fighting for viability benefit for any similar actions?

Good will aside, how did Quaker get into this mess? How does a company go from being a strong, successful and growing company to having to liquidate in such a short time? Much has been made about the fierce foreign competition but how much of this competition has been brought on by changes in U.S. trade policy? Is it fair to open up trade with countries where the costs of business are so much cheaper because workers are exploited and have almost no rights? Where children are considered part of the labor force and health, safety and environmental regulations are minimal at best? When you factor in the costs of the standards we demand how can U.S. companies compete? Is it fair to open up trade with countries that put U.S. companies at such a disadvantage and where the 'playing field' is anything but level? Did our elected leaders consider the effects such unfair competition would have? If the argument is that free trade is good for the 'national' economy is it okay to sacrifice some for the greater good?


Lefty said...

[Editor's note the following comment was left in another post but since it pertains to Quaker Fabric, I'm posting it here.]

Regarding Quaker Fabric, there are many reasons why it went under, but it was no surprise for those who worked there. Everyone knew it was in trouble.

In a sense, the Quaker Fabric leadership brought this on themselves. Regarding the free trade, if you Google the CEO Larry Liebenow, you will find a lot of references to his support of free trade. I realize his excuse was that it would enable his company to sell in foreign countries without barriers, but how many people in those countries with cheap labor could even afford to buy the high-end furniture that Quaker was making fabrics for. You can't do business with people who don't have money.

On WSAR, they were initially asking where the officials were and what they were doing for the workers. Really, the only thing that they could have done to save manufacturing was to oppose free trade, and that is a federal issue. Barney Frank did this, while Senators Kennedy and Kerry did not.

Another factor was the expansion. They bought buildings all over Fall River instead of strengthening what they had. Usually, once businesses expand, they go under shortly thereafter.

As for the two year trade benefits, the employees laid off previously were eligible for that. This application is so the remaining 920 employees could have this as well. So despite the talk on the radio about the catering to the last 920 workers, the only things they have done different were 1) having a job fair at BCC which I understand anyone could go to, 2) announcing an opening of a career (unemployment) center for Quaker Fabric employees and 3) the Senators and Congressmen writing a letter of support for the trade adjustment assistance program that those previously laid off were eligible for anyway.

Lefty said...

Again thanks for the comment Anon,

It's good to know that the previous Quaker employees have been eligible for the same benefits as the remaining employees who have just been laid off.

When it comes to trade policy, they say that opening up trade is good for our economy and maybe it is, but is it fair to sacrifice the economy of a city, or region for gains in other cities and other regions?

Perhaps it is unavoidable but if so actions need to be taken to help revitalize the economies of the areas you are going to hurt.