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Title: Oral History Interview with Gordon Berkstresser III, April 29, 1986. Interview H-0263. Southern Oral History Program Collection (#4007): Electronic Edition.
Author: Berkstresser, Gordon, III, interviewee
Interview conducted by Raub, Patricia
Funding from the Institute of Museum and Library Services supported the electronic publication of this interview.
Text encoded by Jennifer Joyner
Sound recordings digitized by Aaron Smithers Southern Folklife Collection
First edition, 2007
Size of electronic edition: 96 Kb
Publisher: The University Library, University of North Carolina at Chapel Hill
Chapel Hill, North Carolina
2007.
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Languages used in the text: English
Revision history:
2007-00-00, Celine Noel, Wanda Gunther, and Kristin Martin revised TEIHeader and created catalog record for the electronic edition.
2007-05-15, Jennifer Joyner finished TEI-conformant encoding and final proofing.
Source(s):
Title of recording: Oral History Interview with Gordon Berkstresser III, April 29, 1986. Interview H-0263. Southern Oral History Program Collection (#4007)
Title of series: Series H. Piedmont Industrialization. Southern Oral History Program Collection (H-0263)
Author: Patricia Raub
Title of transcript: Oral History Interview with Gordon Berkstresser III, April 29, 1986. Interview H-0263. Southern Oral History Program Collection (#4007)
Title of series: Series H. Piedmont Industrialization. Southern Oral History Program Collection (H-0263)
Author: Gordon Berkstresser III
Description: 139 Mb
Description: 35 p.
Note: Interview conducted on April 29, 1986, by Patricia Raub; recorded in Unknown.
Note: Transcribed by Patricia Raub.
Note: Forms part of: Southern Oral History Program Collection (#4007): Series H. Piedmont Industrialization, Manuscripts Department, University of North Carolina at Chapel Hill.
Note: Original transcript on deposit at the Southern Historical Collection, The Wilson Library, University of North Carolina at Chapel Hill.
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Interview with Gordon Berkstresser III, April 29, 1986.
Interview H-0263. Southern Oral History Program Collection (#4007)
Berkstresser, Gordon, III, interviewee


Interview Participants

    GORDON BERKSTRESSER III, interviewee
    PATRICIA RAUB, interviewer

[TAPE 1, SIDE A]


Page 1
[START OF TAPE 1, SIDE A]
PATRICIA RAUB:
… They've been looking at the history of the textile industry, as I was telling you on the phone, up to about the Second World War. They've just finished an article that's being published this month in one of the history journals. They've used quite a few oral history interviews with workers who remember the early years of the textile industry and they asked me to go ahead and see what I could find out in terms of trends for later on so they could extend their study a little further.
I was interested if you don't mind starting with this, in—you were talking about your family being involved in the textile industry, from way back…
GORDON BERKSTRESSER III:
Actually, the first member of my father's family who came here from Domshat [unknown] in Germany in 1731 was a weaver and dyer and my family has been involved in textiles and mill ownership and education and executive positions ever since. One of my children has decided to go into textiles as well. I grew up in Roanoke Rapids and I span the period starting in the 30s, since the war, and most of the people that I knew as a young child—because of the way these mill towns are situated where a large majority of them were in the textile business and because of the nature of the industry, the

Page 2
nature of the people in the industry, we have all these trade associations—North Carolina Textile Manufacturing Association, National Manufacturers of Hosery—etc., etc.,—and the conventions that these folks, including me, tend to go to—you keep meeting the same people. The sons and daughters go to school together—State, Clemson, etc.—even at Carolina—I went to Carolina as well as to State—another one of the executives of one of the mills up in Roanoke Rapids went to Carolina—those things keep repeating themselves. A good deal of intermarriage. Just as the textile workers tend to stay in a pretty tight location and work for a pretty tight group of mills, the textile executive "class"—if you like—they're more mobile in that they move around from mill town to mill town for jobs, but they tend to know same people, generations of people—of families—tend to communicate.
Here I am now at State, and I'm teaching sons, daughters, nephews, nieces of former classmates.
I've been involved with what we affectionately call the rag business, since I can remember. It's part of my life.
PATRICIA RAUB:
How did you get involved with the school here, in textiles?
GORDON BERKSTRESSER III:
About 8 years ago, I decided to take early retirement. I'd gone back to City University in New York and written my dissertation. And came here to teach. And I've enjoyed it.

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Part of the reason I guess was I left here and I went to New York in marketing. They wouldn't renew my passport to let me back into North Carolina, I guess, until I had quit working up there for the Yankees and said I would come home and stay here. So that was a way for me to get home.
PATRICIA RAUB:
Had you yourself been working as a marketing executive here in the state?
GORDON BERKSTRESSER III:
No, I was in New York. I worked most of my working career in the industry in New York and Chicago. I've had various jobs like product manager, national sales manager, director of new products—those types of things. For firms like J.P. Stevens, Westpoint-Pepperell, Fieldcrest. And I really enjoyed it.
I was fortunate in that I was able to make that mid-life career change. A lot of people just don't ever have the opportunity. I had it, and took it, and have been very happy that I did, because I think it sort of expands you a bit if you can do that.
But one of the things—I must say—that I've got here in front of me a draft of a report for the Office of Technology Assessment about the state of the textile and apparel industry and where they're going. [Note: I asked for a copy, but he said it wasn't ready for public distribution yet.] In the executive summary we are talking about—we've given it the tentative title—"U.S. Textile Industry: A Revolution in

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Progress."
We're talking about the textile industry being, outside of agriculture, the nation's oldest industry and yet at the same time the newest.
That process of change is really nothing new. From the time I can remmber as a small kid, going into the mills with my father, my grandfather, there was always some new piece of equipment, being studied, being put in place, a new system of doing something. It didn't necessarily have to be the technology of making yarn or fabric or dying it. Sometimes it was just a new business method.
I remember when everybody was going from the FIFO [unknown] accounting system to LIFO [unknown], and the implications to the textile industry of changing your accounting system. And this whole bit was happening.
So, even though I think the textile industry has this reputation of being a sleepy giant, that moves terribly slowly, and is if not reactionary at least terribly conservative, I think that's a bum rap.
That picture up on the wall is a picture of the old Patterson plant in Roanoke Rapids and I've seen—in my lifetime, that plant go through huge metamorphoses, of what it produces, the types of things. The first I can remember of that plant, it was making a very plain fabric called soft-filled sheetings that went around the springs in a Beauty Rest mattress. That business departed, basically because non-wovens came in and could do the job cheaper. We started

Page 5
then making, in that mill, some fabrics for draperies to be printed on. One of the first jobs I had after I graduated from State—my uncle put me to working on making some background weaves, and we came up with a thing called a bark cloth, simulating the bark of a tree, and gave a little surface interest. All it was was a few ancient weaves, we call them Bedford Cords, that we messed up a bit. I've seen the mill go that way, and it survived on that. Now, as a part of the J.P. Stevens complex, it's making Jacquard towels. Same old brick and mortar, a lot of the same people who were living in houses surrounding it—type of thing.
PATRICIA RAUB:
Why do you think those particular changes took place?
GORDON BERKSTRESSER III:
They're a response to the market, obviously. Part of the big metamorphosis that I've seen, too, in the industry, even in my lifetime, has been the forward integration of the industry. Prior to World War Two, we still had as much horizonal structure in the industry as there was vertical. Not only in the manufacturing, but in the marketing vs. the manufacturing. In my own case, my mother's family came from Leipzig and Dresden in Germany and my grandfather was in New York and connected with a selling agent for these mills in Roanoke Rapids, of which my father's family was involved. So my father married his partner's daughter. But right about the time of the 30s and on through the 40s, the selling agent, marketing organization, mostly

Page 6
centered around the Boston-New York-Philadelphia axis were either acquiring control of the Southern mills or the Southern mills were acquiring control of the marketing organization in New York. But that consolidation was happening, and yet up until that point they were separate entities. Of course, kids in the manufacturing end in the South, tended to go to Woodberry Forest, Chapel Hill, and the Varsity Shop, in that order. In New York, you went to Andover, Yale, and Brooks Brothers. My folks sent me to Andover and then back to Chapel Hill to span this bridge because they saw what was coming.
There still has existed, even into my generation, and even to the present time a certain amount of distrust—or dealing at arm's length—even within same company, between the marketing end in New York and the Southern mill people. You speak different languages, you went to different schools, you have different experiences. That is changing, but it's been there a long time and it's hard.
PATRICIA RAUB:
I've read that one of the major trends in the last 30 or 40 years in the textile industry has been a much more integration of marketing into the whole factory process and that that has helped the industry to survive and to do better, that there aren't as many overruns as there used to be.
GORDON BERKSTRESSER III:
It's continuing to happen. If you pick up any of the

Page 7
standard marketing textbooks, particularly Phil Copper, [unknown] who's the best—and always has been—you see that that was about the time too of the generalized change from the sales ethic to the marketing ethic. Prior to WWII a mill made what it could make because of its equipment and then somebody in New York that had a market for it sold it—New York, Philadelphia, Boston.
Now, of course, it's moved to the point where basically you have a market-driven industry. One of the big problems for people trying to understand the industry is when you talk about the textile, or the apparel and textile and fiber industry, as one unit, you're talking about something that even the federal government divides into about 68 different SIC codes. Right off the bat, it's not an industry, it's a convenient thing to call this agglomeration. But the differences between the various segments of the industry are really quite large.
For many, many years, even the educational institutions—for many years, our school here—talked about fiber and textiles. That's where we stopped. In my lifetime we have added—during the past decade—a real, ongoing program in apparel. Cut and sew. Take it one step closer to the consumer. Right now we're trying to add more, through the distribution, we're adding marketing courses, marketing research courses, getting even into the retailing. We're going to have to get into the consumer behavior end of it. There is no question. Because that's part of our business.

Page 8
But, the industry has been in a revolution of not only new technology—and the new technologies are what Drucker called the discontinuities—you go from two thousand years of throwing a shuttle across a loom with the yarn inside of the shuttle, reeling off, either by hand or by water power, by belt power or by electric power, you go from that to no shuttle but either a projectile like a bullet or a drop of water—a spit—or just blowing the yarn across today. That's a complete discontinuity in technology. And all of a sudden you're talking about speeds of a magnitude four, five, six times of what was achieved before. You're talking then about needing a labor force of one quarter of the number of people that you used to use. This type of thing. But also of having to have more highly-trained technicians to fix the bloody machines. Tremendous change that way. Coupled with a tremendous change from a sales outlook to a marketing outlook.
PATRICIA RAUB:
So you do see a real change in the type of composition of the labor force?
GORDON BERKSTRESSER III:
No question, no question. Even in my lifetime—most people don't like to talk about it—prior to WWII, you had almost 100% white male management—unfortunately, you still have about 100% white male management—but, in the work force, you had a majority of young white male, with a good cadre of white female—in the mills.

Page 9
PATRICIA RAUB:
There was a difference, though, in the types of jobs that males and females would have?
GORDON BERKSTRESSER III:
Oh, yes, but females would have a good many of the jobs that required certain manual skills and dexterity. Frequently in the things—yarn preparation, where being able to pick up a loose end of a thread and tie it, you know, in a rapid sort of thing.
But, at any rate, during WWII, when we were asked—my family—we were asked, to produce more goods for both war effort and civilian effort out of facilities where it was harder to get good raw material, where it was hard to get replacement parts for machines and so forth, we were asked to produce all of that not only with the difficulty in getting raw materials and replacement parts, but with a different labor force. Because your best—traditionally thought of as best labor force—the young white male—he was off in the Army, getting shot at. And up until that time, blacks were really confined to yard work, sweepers, or dangerous jobs like working in a picker room that exploded occasionally, and that sort of thing. And since WWII, you've had a large part of your white labor force replaced by black, and that's only happened since WWII. All of a sudden all these blacks got "terribly smart"—they had been "very dumb" up to then—and I don't know what it was, but there was this—they all got educated during WWII.

Page 10
PATRICIA RAUB:
Do you put it back that far? I'm wondering because what I've read so far has suggested that it was only in the 60s that blacks really started moving into—
GORDON BERKSTRESSER III:
Well, it started during WWII because that's when the mills were forced to use blacks and forced to accept the fact that the myth that blacks could not handle mechanical things started to be exploded. Because when they started using them they found that—By God!—they could. It took another maybe even twenty years for people to really move through on that but that's really, I feel, where this dispelling of the myth began occur.
PATRICIA RAUB:
Would you say that was also somewhat a result of white workers then moving into the newer industries that started to move into the South in the postwar period?
GORDON BERKSTRESSER III:
Yes. Part of that, of course, occurred. But the real reason that blacks were excluded from the mills were these old myths and at least those were the rationalizations. Certainly, the white people didn't want them as part of the labor force within the mill—yard work and so forth was O.K.—but they didn't want the social implications of their working together. And the way to keep them out was to say that they weren't suitable, because that was easier to say than we don't want you. And I'm a Southerner, and I say that

Page 11
this was what we were going through in those years. I grew up in it. When I went to school in Roanoke Rapids, all the schools were white that I went to. There were no blacks. When I went off to prep school in New England was when I first saw black people in school. And all of a sudden I realized that, you know, this—what I had been used to in the South—was not the only way, and other people began to realize that. So this was part of this industrial change.
PATRICIA RAUB:
What has happened now with blacks in the textile force now? Are they getting higher positions, or not?
GORDON BERKSTRESSER III:
They had been… the problem is that it's only been a couple of years since the Affirmative Action stuff has been deemphasized from Washington. I don't think we're really ready yet to see what the impact of that. I think that up until a couple of years ago that there was some progress being made by blacks at least into middle-management—not enough, but some. And I put it, both blacks and females, because if you study the industry—the fiber, and textile, and even the apparel industry—the number of blacks and females that have risen to have really responsible management positions is abismally slow. It's obviously not based on those people's abilities. There is no question. But we're certainly trying to do things about that in a school like ours here. We have about 30% female enrollment. One of my advisees who is graduating this year has a straight 4.0

Page 12
average. She is sharp. I think she's going to Chapel Hill for her MBA, as a matter of fact. I know she's going somewhere. I don't know whether she's going there or Wharton—she's got several offers. When I was a student here at school, we had, I think, two co-eds. Philadelphia Textile School had more because they were granting degrees in textile design—that was o.k. for women to go into—but not manufacturing. But now we have girls who leave here and go and are supervisors on the third shift in a Cannon Mill in Kannapolis. And—by God—they do it, they do it well. Some of the older people in the industry don't quite accept it yet, but they will. Its happening.
PATRICIA RAUB:
What's your percentage of black students?
GORDON BERKSTRESSER III:
Blacks is about 5% in this school, and from what I've been able to see the blacks' placement in the industry is about the same as the whites'. The white kids who have better than a, say, 2.5 academic average seem to have no problems. The ones who have lower than that have problems getting jobs. Eventually we get them placed. About the same with the black kids. So from that standpoint, the initial job bit seems to be fine. There isn't the demand and the scurry to hurry up to hire blacks that there was a few years ago when there was more pressure on EEO—Affirmative Action, excuse me—but the—what I want to do is—I have to wait a couple of years—is see what happens to them. Do they hit a

Page 13
plateau and sit there? This, I think, is what's tended to happen to the females. They go into the industry, they rise up a couple of notches, hit a plateau, the first available plateau that management can say, Well, you're doing real good—for a woman. You can go through all of the annual reports of all of the people in the industry and look for the chairman of the board, president, executive vice-president, managing directors, etc., etc., etc., at that level—and you'll find less than one-half of one percent women. And yet this school and schools like this have been turning out very qualified females for the last couple of decades. You shouldn't get me started on that. I get upset. If this industry—in the United States—feels that it's going to move into the 21st century and be able to compete in a global market by excluding over 50% of its available talent base—which are the females and blacks—it's foolish. You're not successful when you exclude those inputs. It's absolutely asinine. Sorry, but that's something we have to change.
I think that one of the things, though, that, looking at the future, that this report that we did for the Office of Technology Assessment really gets into is that, in addition to saying that we've already had a structural change and that now the whole industry is market-driven—people are recognizing that—that the solution is not just to automate, unless you can retain flexibility. Automation by itself is still going to kill you, if you can only produce one thing.

Page 14
The days of Henry Ford being able to say that you can have any car, as long as you like one color—they're gone. But also we have a situation where some people have felt that the only way the industry will survive is if it aggregates and our research here indicates that that is not so.
PATRICIA RAUB:
Do you mean combine, like conglomerates?
GORDON BERKSTRESSER III:
Yes. What it comes down to, it's sort of like looking at teachers' salaries and the consumption of alcohol—statistically, they co-vary, but I wouldn't say that one is the cause of the other. We've got the situation here in the textile industry and apparel and so forth where there are going to be structural changes and they are a result of this being market-driven. In some research that we did here, when we looked at value-added productivity as a function of the size of the firm we found that the very small firms, who have a lot of flexibility, who have very little access to large groups of capital, but a lot of flexibility and a[re] very fine-tuned to a small segment of the market—a small firm that produces one product and knows its market well—it's flexible and can respond and can lay off people and hire people back—control its costs tremendously—those people have a moderately high productivity.
Way at the other end, the very large firm, with access to huge amounts of capital, with economies of scale, with not as much flexibility, true, but ability to plan out in the

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future on commodity fabrics like blue jeans, denims. Again, high productivity. It's the poor people in the middle. The big people, again, usually have what we call a product-management type of organization in that—take companies like Burlington, J.P. Stevens, so forth—for each product that they produce, there is a manager who knows that market. He concentrates on that market. There is a product manager for towels, and a product manager for sheets, and a different product manager for blankets even within the blanket, sheet, bedspread thing. Frequently there will be a different product manager because there are that many being produced, you can afford to have an executive at $100,000 managing each of those things. Poor guy in the middle, he's got a problem. He doesn't have the flexibility of the small firm. He's still got a fairly big capital business. He can't just lay off everybody. He's got a plant, he's got certain overhead expenses—
[END OF TAPE 1, SIDE A]

[TAPE 1, SIDE B]

[START OF TAPE 1, SIDE B]

Page 16
GORDON BERKSTRESSER III:
So what I see, and some of the people who are working with me, is not just an aggregation or conglomeration but both ways, that the important thing is you can't just say that every fiber, textile, apparel firm should get bigger. There's some kinds of commodity fabrics and commodity garment—blue jeans, sure, the way to succeed there is to be a Cone, a Burlington, making miles of denim, or to be a Levi Strauss, cutting hundreds of thousands of dozens of blue jeans because it is a commodity market. No question.
On the other hand, the way to succeed in the high—style thing is to be more flexible and not get caught with the close—outs and the everything else that happens.
And so what I see is an industry that's moving towards the bipolar type of situation. Which, of course, as an educator, I respond to quite favorably because we have some students here who are the type who will go out and compete in a large company in the corporate environment, and they're sophisticated, they'll do very well in that. We have others who will fail miserably in that kind of environment, but who, given the opportunity to be small entrepreneurs, will just take off and go. So I think it's great, from that standpoint. From the standpoint of opportunity, service to the market, that sort of thing. Because you've got all sorts of different elements in this thing, as I say.
Right now, for example, we have a lot of competition,

Page 17
from overseas, some of which is the type of thing that, again, I think that our government ought to get involved with. When you're talking about competition from what I like to call, or what Copper [unknown] calls the "New Japanese"—the South Koreans, Taiwanese, etc., where you're really talking about a managed economy, subsidized things, low labor costs, these types of things. I think that we have to, there, open our eyes and say, even though it isn't our tradition, we better get government and industry involved together, or what's going to happen to us is the same thing that happened to Sweden. Fifteen years ago, Sweden produced 80% of its apparel internally. Today it produces 12% of it—it imports 88% of its apparel. Even if there weren't, for us, defense implications, there's certainly economic implications. So from that standpoint there's one element.
Now, on the other hand, there are other elements where the import penetration is not because of just the low labor cost and the subsidies. You take a look at the phenomenon—if you've seen these Benetton stores—a few years ago, these cats started off in Europe, right? And what they did was they had the same equipment that everybody else in the world has. They had no technological advantage over anybody. What they did is they took a marketing concept: we're going to target a group. The first group they targeted was 14- to 24- year-olds. And we're going to do it through marketing. We're going to give them bright, bold, sassy colors and patterns. We're going to go the trickle up theory, that is,

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get it into the youngsters and hope that it'll trickle up into the middle age people, as far as demand. They did certain things with their marketing that were just fantastic. They said, we're not going to have big inventories. What we'll do is we'll stock—in a given area, they may have ten stores—and each store has a different type of look. Store A may be on a pink kick. Store B is a very bright blue-green mixture. Store C is another thing. O.K. That's this week. Sunday night Store A packs up everything in the store and ships it to Store B. Store B packs up everything in the store, ships it to Store A, so Monday morning when they open up—and, after all, these are neighborhood stores—it's a complete new look, every week. It's fresh, it's vibrant. If you don't buy the damn sweater this week, don't come back next week, it's not going to be there. This kind of thing was kicky and turned people on, it kept their inventory low. Man, they have made money. That's marketing. And no amount of government cooperation with industry is going to help that particular thing. Those people just absolutely out-marketed us.
PATRICIA RAUB:
What country are they from?
GORDON BERKSTRESSER III:
Italy, just outside of Venice is their head office. I'm going to be over there, as a matter of fact. I'm leaving the 12th and that's one of my stops, to see how they do it.
So, I think that really what we have to look at in the

Page 19
industry is that it is a global industry. Hell, when I graduated from N.C. State, we didn't think in terms beyond our domestic market. We didn't need to. We had a domestic market that was growing fast enough to absorb all of what we could produce in the U.S., plus whatever imports came in. And now what's happened is that we've got to the point where in America we consume over 50 pounds of fiber per capita per year. And that's plateaued for the last few years. There are some indications that that is about as much as you can expect any fully-industrialized nation to consume on a percapita basis. We have run out of closets to put things in. I don't know about you but I'm not allowed, by my wife and my children to buy any new clothing unless I throw something out. Because the "stuff" quotient has gotten to that point. But, really, we're at that point. We are still the biggest market in the world, but our capacity to consume more is really quite limited. You take Europe, you're talking twenty to thirty pounds per capita per year. And then you take the underdeveloped countries and you're talking two and three pounds. In China you're talking, I don't know, maybe five pounds. You know, if you could convince the Chinese to each consume one pound more of fiber per person per year, you'd have a billion pound market opening up all of a sudden. You wouldn't worry about them exporting to the U.S.
But, at any rate, that itself—this bit of wild growth of this market has come to a screeching halt—has forced us to a realization now that any of these increases in imports

Page 20
come at the expense of the apparel industry. Up until right now, it really has not come at the expense of the fiber and textile fabric industry. In 1985, we produced more square yards of fabric than we produced in 84. 84 was more than 83. On ad nauseam backwards. That's hit a plateau. Now the imports are already cutting into current domestic production of apparel. Whether it's 86 or 87, somewhere around now we can expect the imports to start cutting into, and hurting, current production. Not only taking all the growth potential, but really hurting current situation.
And I think that's one of the things that's going to speed up this process of revolution that the industry's going through. Up until a couple years ago, you'd gripe, complain about the imports, but on the other hand, you knew that the figures—if people really wanted to get to you on the figures—they could get access to the same figures and say, Hey, wait a minute. The market is growing at the rate of a half a percent a year. Your production is growing at the rate of a quarter of a percent a year. That means that the imports are going at a fairly fast rate, because they're a lower percent of the market, but you aren't actually decreasing, you're plateauing. So you really haven't lost any jobs to imports, and that's true. You lost the jobs to technology.
The increased technology has meant a lower number of people working, of course. We intend that. We don't like to talk about it, but we intend that. The Japanese automated

Page 21
sewing system that Meetee[unknown] is sponsoring, 60 million dollars, intends to cut out 80% of the labor involved in making garments, that translates down to losing 80% of the apparel jobs. That's all there is to it. Well, they know it. Of course. People want to stop working in those kinds of places, at that kind of job. And it's probably socially good, just like it was socially good to get people out of some of the dirty, dangerous jobs in the mines and steel mills.
But the problem now is that the imports are really beginning to cut into what's happening now. So, wow! All of a sudden it's important. So, wow! All of a sudden we need to get in and lobby for some protection—short term…
PATRICIA RAUB:
What has been the trend in federal protection? Has there, there has been some, hasn't there, over the last decade of so?
GORDON BERKSTRESSER III:
The trend has been…one of the things that I think about it is that it hasn't been well thought through. For example, the government supports an abnormally high price for cotton to the farmer. So that American cotton is over-priced on a world market basis. That's a straight subsidy, but it's a subsidy without any control. Now when the Japanese, for example, subsidize an industry, to rationalize it, for example, like they have done with their synthetic fiber industry, they also exert a certain amount of control to make

Page 22
certain that it gets back into line in a competitive situation. We just keep subsidizing the growing of raw cotton without ever any attempt to bring it back into control.
Now when it comes to apparel, on the other end of the spectrum, we don't subsidize directly, but what we do say is O.K., we're going to control the percentage and number of things that can come in. Well, we say that, we put it on the books, but then we promptly ignore it, and everybody else ignores it, so this flood of goods comes in. Everybody laughs at the U.S., we're the laughing stock of the world, when it comes to this, because they know that if they're out of quota on men's shirts and they're producing more men's shirts they just label them handkerchiefs, and—what the hell—send them in, and we won't do anything to them. Or if one country is out of quota, you put another country's label in it. The number of these violations that have been caught, prosecuted and so forth is so low, it's so ridiculous. The punishment doesn't suit the crime.
So we have a situation then where the people who are manufacturing the fabric and the garment are paying more for the raw material, the cotton, but not getting any help at the other end. And that's assinine. It's just plain ridiculous. But, again, that's life. Nobody said it was going to be fair.
One of the problems that I have, of course, the farm lobby started off years ago when there were a lot of farmers

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and a lot of votes. That industry has changed from being labor-intensive to being capital-intensive. But they have still kept a good lobby. They still have a lot of power, even though the votes have gone way down. Well, the textile industry is in the process of making this same transition, that agriculture and steel made before. But right now, we still have a lot of votes. A couple of million people work for textiles and apparel, so forth. And we don't use that power at all, or we haven't been. We've started now in the last couple of years. How long we can sustain it, to what degree we can sustain it, and so forth and so forth, but it appears to me now that there are industries that have a lot more power in Congress than the textile industry with a lot smaller constituency of voting people and money for contributions and everything else. It's simply because we haven't been well-organized.
PATRICIA RAUB:
You do think that's changing now though?
GORDON BERKSTRESSER III:
Oh, yes. They're starting to listen, but it takes time. It doesn't happen overnight and it doesn't happen in one or two years. It takes decades of intense pressure and work and commitment. I think the people in our industry are maybe now becoming sophisticated enough to see that and are doing it.
PATRICIA RAUB:
Who is setting up lobbying activity?

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GORDON BERKSTRESSER III:
The American Textile Manufacturers Institute—ATMI, in Washington—and other groups like FFACT—Fiber, Fabric, Apparel, what is it? I've forgotten. It's a group of manufacturers who have gotten together and have pooled resources to get separate lobbying for some protectionist legislation and they did it that way because they wanted to raise money in addition to the money that flows into ATMI. The other groups, the trade groups like the American Apparel Manufacturers Association…just the fact that these operations are located right around D.C. starts to tell you what's happening.
Then you have other things like the National Association of Hosery Manufacturers. I just spoke to them down in Charlotte. They're headquartered in Charlotte. They have very little import penetration up to now. When I spoke to them the other day I warned them that it was coming and a lot of them just told me I was nuts. They don't want to hear that. They're not ready yet to commit to going up and having their offices in Washington and being part of a general influence on their government because they are still independent little people—the cult of the individual—around in little towns and they're doing very fine, thank you very much, and I feel like John the Baptist, the voice of one crying in the wilderness with these people. When I got through with my talk, I had a young man with me—I do some consulting work as well—and he says, you know, they really didn't want to hear what you were telling them. I said, I

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know. What they wanted me to do is come down and tell them they were all great and this was a good convention and wasn't everybody having fun? And I didn't say that. I told them they'd better watch out, they'd better know their enemy, and they'd better start getting prepared. They didn't like that because it frightens them. But, that's what the hell professors are supposed to do, isn't it? We're supposed to develop a position, and say so. So…I did it. They probably won't invite me back next year and that's all right, too, but…
So that is what I think is happening to the industry and it's definitely, for segments, at least, of the fiber, textile, apparel industry, the next ten, fifteen years, at least through the end of this century is going to be very critical times, and…
PATRICIA RAUB:
Do you think then that if something isn't done to stem the tide of the foreign imports that it will really have a bad effect on the industry?
GORDON BERKSTRESSER III:
On some segments, certainly, on some segments. For example, after World War Two, largely because of its own fault, the American textile machinery industry lost large portions of its world market to Japanese and European manufacturers. Certain marketing decisions were made, certain manufacturing decisions were made that contributed to this problem. Other structural reasons came about. In

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Germany, Dornier [unknown] was no longer allowed to produce bombers so they produced looms and they did a very good job of it. The Japanese had to start rebuilding from scratch. So sometimes they didn't have the old mills still in place, still dragging back people who wanted to move ahead. But a great part of it was the fault of our own people that didn't look ahead, and see ahead. So what has happened is we've lost a large part of that industry now. The cost to get back in, once you've lost it, becomes so awesome, that what I think that we ought to do, both the industry and the government is look at the segments of our industry, which we didn't do, for example, in the shoe industry, and say, which of these segments is it in our national interest to protect? I really am embarrassed because if we had a general mobilization we could not shoe our soldiers, sailors, marines, and air force. And I think that's awful, I really do. We don't even have that capacity to take care of ourselves.
I don't think that we should give long-term blanket protection—no way—I do feel that there are elements of our industry, and I think we've defined some of them in our report to the Congress, to the OTA, that do not need any protection. They compete very well in the global market. Leave them alone. Fine. There are elements of the industry that are never going to be competitive on a global standpoint, if there is no strategic necessity, don't try. It's just putting money down a sink hole. In the middle,

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there are some segments of the industry where I think we deserve to look at them and say Ok there are certain of these segments that we want to maintain at least some manufacturing capacity in the U.S. What will it take in the way of some scheme, say, of some short-term protection, maybe five years maximum—combined with some research funds, maybe Fund X supplied by the federal government that has to be matched by Y from industry and maybe even by Z from states? I don't know. But something that says, Hey, we'll give you time and help but when we come to that kind of subsidation of research, don't do like you do with the cotton—just give them the money—institute some control. I want a report. I want to see what you do with the money. The Japanese did this with their fiber industry. They had a five-year plan, rationalization. Get it into shape. At the end of the five years, all of the fiber producers had been able to get to the point at the end of five years of both subsidation and control that they were competitive. Except for their polyester and the government then said, OK, you guys have screwed up. You really didn't do as well as you should… But you made some progress so we're going to give you another five years. And here's what you've got to do. So they started that. As long as you've got some control, some monitor for it, I think it's a perfectly reasonable thing to do with public money. I don't think it's lies to throw money down a sink hole. Hell, no. It's my tax money, too. But this is the type of thing that I would certainly advocate,

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that we take that long hard look.
Now, in the question of something like Benetton…is it of national importance for us to be able to produce women's and children's sweaters in the United States? Probably not. Is it important for us, on the other hand, to be able to produce thermal-type clothing from the military standpoint? Yes. Do we have to do it by knitting them in sweaters—traditionally, people in the Navy have always had big bulky sweaters and so forth—or, is it better to do it with some non-wovens and some type of nylon and so forth as a substitute? It doesn't take that much to look at that and say, Hey, well, we really need to protect some segment of the sweater industry or we don't. But, when you come down to things like socks. I've been in the Army, and socks are terribly important. Socks and underwear. Far more important than the rest of the stuff. There's a comfort factor that's really awfully important. Right now, the socks and underwear are not being threatened by imports. Mostly because you've got about 4% labor factor in that so that the cheap labor doesn't give them an advantage. But, at some point, they may be threatened, because of marketing, because of other reasons. I don't know. So I think that we ought to start taking a look at that, right now. Before something happens, before the stuff hits the fan. And say, hey, in this industry, how much of this kind of product should we maintain in the U.S. and how do we do it?
And I think the most important part of the equation, to

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me, is the research. Really set up national research policy that keeps us in tune with the market. The Japanese put 60 million dollars into their project—public money. The European community—I'll be over there in Brussels on May 13th, talking with them—they put up 30 million bucks. Has to be matched, 50-50, with industry. To do the same kind of research. In the United States, we have a few projects, sponsored by the Department of Commerce, the Department of Defense—with a few institutions like N.C. State, Georgia Tech—doing some research. It's not coordinated, much less controlled, much less supervised. It's happening. I think it's important enough for us to say that we really ought to insist that somewhere along the line that the importance of this industrial complex and base to this country is being recognized by saying that here is a focus, that all of the people who are interested, all of the people who are concerned, all of the people who want to do some research and so forth can focus on. I think that's terribly important. And I think the protection is only important as it helps, once an area of valid research is defined, if we say, OK, it's going to take four years, three years, six years, whatever. And for that period of time, we are going to have quotas.
Actually, of course, what you could do, too, is you could finance the whole damn thing with the tariff income. If you decided, hey, we need a hundred million dollars for research, every penny of it could be taken out of the tariffs

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because that much more than that flows in. So it could be a self-supporting type of thing.
PATRICIA RAUB:
Have American companies gotten around lower labor costs to some extent by setting up operations of their own in other countries?
GORDON BERKSTRESSER III:
To some extent. The eight-o-seven rule on the tariff which allows goods to go out and come back in without being subject to high tariffs has helped in some cases. There are real problems with Americans doing that type of thing. And, again, a lot of it's behavioral. We are just not used to dealing cross-culturally. It's very difficult for us to do that. We don't have the years, the decades of experience other people have. The Japanese in the Pacific basin had several years of experience in dealing cross-culturally.
[END OF TAPE 1, SIDE B]

[TAPE 2, SIDE A]

[START OF TAPE 2, SIDE A]
GORDON BERKSTRESSER III:
It's difficult for, our people, our management people have not been trained along these lines. There's some truly transnational companies, like a DuPont, a Shell, where the people you know that work for that become almost stateless, because their loyalty is to that transnational country, not to any particular —[unknown] But there's still relatively few people in the world that think in those terms. This gets to be real tough. I do not feel that the long-run use of that

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kind of facility is going to contribute much to the American fiber, textile, apparel industry complex.
PATRICIA RAUB:
Do you think it should basically stay in the United States?
GORDON BERKSTRESSER III:
I think that some companies have already proven that by tending to your own business and doing a good job here. For example, this recent merger, not merger, the acquisition of Cluett-Peabody by Westpoint-Pepperell. Several years ago when I visited New York, I used to work with Westpoint-Pepperell. I met people there who had recently joined Westpoint-Pepperell from Cluett-Peabody. Westpoint sold a lot of goods to Cluett Peabody. They were starting to work together. They achieved this forward-integration. Cluett-Peabody is probably the most automated shirt manufacturer in the world. They can produce—if you're talking about forward integration, of the fabric and the shirt itself, and the control of costs and taking one profit instead of two, throughout the enterprise. I think that that combination has a very, very high probablity of surviving and being successful, as a manufacturer of men's shirts in the U.S. They're close to the market, the whole bit. The minute you have to start cutting goods here and sending them down to Costa Rica to sew them and then come back in here, you've got another step in this chain that takes you a little bit longer to get to the consumer. If you have to go to Hong Kong, it's

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just another one that's being added.
I really feel that there are adequate ways, both from a technological and from a business structural standpoint, to make improvements in our system so that we don't need a great deal of reliance on this. Certainly, there may be some areas where until we get some technological breakthroughs that using some offshore processes would be good. You come back to talking about making a man's shirt. The pockets today are all made automatically on automated machines. Buttonholes are done that way. Even the sewing of buttons in a predetermined sort of line and way can be done. But when you come down to the final bit of assembling a shirt it takes a person on a machine to finalize a shirt. That is the technological bottle-neck. Old Man Singer invented the machine over a hundred years ago and that's still the same technology. Until you can break through that technological bottle-neck, right at that point, labor becomes very important. Maybe the best thing to do is just put the industry on some barges and float it around to whatever country has the cheapest labor.
But in other area where, for example, all of the pattern making—and we have the equipment right here in our apparel lab—that is where you have computers that minimize the waste by cutting out the garment, moving stuff around to see how do you fit these things done by computer, laser cutting of the fabric itself, assemblage of all of the elements into one rack that moves from work station to work station throughout

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the process, automation of various things. All of that process can be done just as well here as anywhere else in the world, just as efficiently and probably more, to tell you the truth.
So, to start looking beyond the borders of the U.S., I think, again, some processes, some elements, but for the majority of them, I don't think it's a viable alternative.
The thing to me is that in discussing this and trying to look at it, we keep trying to look at this industry as if it were just one something that is fairly well-defined, and it isn't, it's a jelly-fish. It's got all sorts of things dangling off of it that do things differently. It changes shape and size and everything—it's a dynamic organism. We can study and we can define small markets and small segments of it, but trying to generalize on the whole thing is terribly difficult. Even when you talk about things like automobiles. I recognize that there are a lot of little parts that go into making automobiles but when you come right down to it, you can generalize about automobiles so much easier than you can about the fiber-textile-apparel. You can generalize about steel production, aluminium production, automobile tire production, even you can separate out industrial construction, business construction, you can generalize about those industries so much easier than you can about—. Because anything you come up with in textiles and apparel where you can prove Point A, I will be able to refute it and find an example of B. There's no question. So if we

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just try to say, hey, these foreign imports are killing us because of low labor coming in here and we need protection, that is assinine because Congressmen are not that stupid. They're pretty dumb, generally, but they're not that stupid. They can look at it and say, hey, wait a minute, it's not this in all cases for everything for ever and ever, amen. And if you try to tell them that, you're wrong.
PATRICIA RAUB:
Do you think then it's too much to generalize to say that within all these parts of the industry that's there's still very little union organization?
GORDON BERKSTRESSER III:
Yes, because in some elements they are heavy. The ILGWU is very active in some localities and some segments of the industry. When we say there's very low union activity, again, there is a lot of shipping by truck between the fiber people to the fabric people, to the dying and finishing, to the apparel, to the warehouse, to the retail store. I've already got six truck shipments, and that's sort of a minimum. Some of the stuff, from the time the fiber is produced to the time something gets to a store or to the consumer can go through fifteen to twenty different transshipments. That's a unionized industry. That's part of this whole complex, that whole distribution circle, is heavily unionized.
PATRICIA RAUB:
That's really the most noteworthy segment that's

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unionized, isn't it?
GORDON BERKSTRESSER III:
Probably, probably, generally, yes. Of course, even some of the retail industry that distributes it is unionized—some isn't. Some of the garment, some of the apparel, a good deal of the fiber industry, chemical industry, is unionized.
PATRICIA RAUB:
Do you think it's fair to say that some of the industry has moved to South because there are fewer unions than …?
GORDON BERKSTRESSER III:
Oh, originally, certainly. I was in prep school in Andover in the mid-40s and I used to stand on the highway and watch the trucks going by, taking the looms and spinning frames from Lowell and Lawrence, Mass. textile mills South. They always went in one direction only. The Northern mills were heavily unionized. I remember at that time that a weaver in those Northern mills—say on a Jacquards—would be operating four looms, negotiated contract. In the South, our weavers in Roanoke Rapids were handling twelve looms. today, you don't have that kind of disparity you're here because you've got lower energy costs, lower labor costs, proximity to market, that type of thing. I don't think there's any real movement into this area now because of…It once was; it isn't now.
PATRICIA RAUB:
[text missing]
END OF INTERVIEW