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Transcript on deposit at The Southern Historical Collection, The Louis Round Wilson Library
Citation of this interview should be as follows:
“Interview I-0081, in
the Southern Oral History Program Collection #4007,
Southern Historical
Collection, The Wilson Library,
University of North Carolina at Chapel
Hill”
Robert Sidney Smith, president and CEO of the National Association of Hosiery Manufacturers, discusses the hosiery industry in North Carolina and the United States, delving into its history, present challenges, and future. Smith describes the minutiae of hosiery business, such as the development of new techniques and technologies, as well as stepping back to evaluate the place of American hosiery manufacturers in the world market and the increasing need to market products as well as produce them.
Robert Sidney Smith, president and CEO of the National Association of Hosiery Manufacturers, discusses the hosiery industry in North Carolina and the United States.
[START OF TAPE 1, SIDE A]
Interview with Sid Smith for the Southern Oral History Program's the North Carolina Business History Series. The date is Monday, January 25, 1999. We're at the offices of the National Association of Hosiery Manufacturers in Charlotte, North Carolina. My name is Joe Mosnier of the Southern Oral History Program. This is cassette 1.25.99-SS. Mr. Smith's full name is Robert Sidney Smith. Let me start by asking you to sketch out your place of birth, family, what your folks did, early education, [etc.].
Well, I was born and raised right here in Charlotte. My father worked
for Duke Power Company, the electrical power generator here. He was the
head of their claim department. I am the product of a second family for
him, so he was quite much older than I was and passed away at age
seventy-six. I was only nineteen when he passed away. My mother had been
a schoolteacher and was a homemaker after they got married. I went
through the Charlotte Public School System and then went to college in
Spartanburg, South Carolina. I went to Wofford College. I guess the
first big prominent name I saw on a lot of the big buildings down there
and the name one begins to hear if you're a Wofford student is
"Milliken," with their corporate headquarters in Spartanburg. They were
very gracious to Wofford College. That was kind of my first introduction
to a textile operation, the exposure that I had to the Milliken
operation by going to college in Spartanburg, going to Wofford. I had
signed up while in college for the Marine Corps and had indicated that I
was going to go to Officer's Candidate School after graduating. It was
my full intention and desire to be a full career military officer. That
was my plan. I did a double major, one in economics and another one in
business administration. So, I had a double major and no minor and
headed off into the Marine Corps. Went through
Let me stop you there before we turn to the—. We're interested in leadership themes as well, so that will motivate a few of these questions. What's your sense of the factors most responsible for your values formation? Would you point to your parents, as most people do, community leaders growing up?
The initial values were certainly installed by both parents. They were very strong influences in my life. Again, with my father being so much older than I was, his value system was based in an era that most people my age weren't exposed to. Being born in the late 1800s, his values had late-1800 values and he transferred those on to me. Plus, he was an outdoorsman, physical et cetera, so he imparted those. My mother on the other side was the epitome of grace, culture, class, the right knife, fork and spoon, Emily Post and all that. So I got those two kinds of things imposed upon me. They kind of became ingrained early on. Both parents were also very religious, and so I was brought up in the church. I think that was another good foundation. Like most kids growing up, you know you're exposed to church, but it doesn't kick in until later on in life. When the time came that I really needed to rely on religious and spiritual things, the foundation was there.
Baptist church?
Presbyterian.
Presbyterian.
So, that was there. Then the Marine Corps I think galvanized all of it, particularly Officers Candidate School, recruit training. That really kind of tied everything together in a real strong organizational content for knowing who you are, and then having confidence in yourself, and then being in a position to hopefully be a leader. That's certainly what the Marine Corps imparted.
What was your reason for selecting economics and business administration in college? How did you make your choice about which way to go in [your] studies?
Probably like most kids when I went to college, I didn't have any idea what I wanted to do. I knew that I was not going to be a "professional" lawyer, doctor, et cetera. I also was not the strongest student and I zeroed in on what I thought would be practical [and] that would stand the test of time. There are an awful lot of good majors. There are people that major in a lot of different things and then go on in varying careers in life. I picked one that I thought was practical. Maybe that's parental influence or whatever, but that's why I zeroed in on business. I didn't have any interest too much in the sciences, chemistry. Also [I] was a long way from a math whiz. I knew I did not want to do accounting, so I went for the practical business— what might hold me up if I needed it. I loved economics. Still do today. In fact, even today in my reading habits, I don't read fiction. I'll read textbooks and history books. That's my relaxing, my enjoyment.
Tell me about your decision to sign up for the Marine Corps. That would've happened—. If it happened mid-college, then it's right as Vietnam was just really starting to pop up onto the level of awareness.
I signed on the dotted line, so to speak, when I was about eighteen, my freshman year in college. There was a Marine Corps recruiter there. Even through my high school days, and probably back even in my childhood, I had been pretty enamored with military. I liked it. It was attractive to me. While we lived in town, we owned a farm out side of town, about a hundred and eighty acres about halfway between Charlotte and Gastonia. As I said, my father being an outdoorsman, he taught me guns, rifles, shooting. I could probably shoot as well as I could walk by the time I learned to walk. We would go hunting and we would stay out all night hunting. I really was enamored with that. My father was in the military in World War One, and then I had two half brothers from his first marriage that both fought in World War Two. I grew up with a lot of the war stories and experiences. Then, riflery and being outdoors, that's kind of what attracted me to the military in the beginning. So, when the opportunity came up, I was very attracted to the Marine Corps and when the opportunity was there, I signed up.
Was your experience in Vietnam one that in any substantial fashion altered the course of your sense of yourself, your sense of what you might want to do in the world? Did that have that sort of impact on you or did you entered and come out essentially the same person?
No, it definitely changed me. I don't think anybody can say that—. Even
just going through the Marine Corps in peacetime, you're going to come
out a different person. But to go through the Marine Corps and combat at
the same time, you're going to be altered. There's no doubt about that.
We've all heard the horror stories of Vietnam Vets. I think a lot of
them are excuses and crutches that people stand on, but there's also
some reality to some of them too. I was an infantry officer. I was in
combat every single
Sure. Tell me about what led you back to Charlotte and this organization.
Well again, I got wounded and left the Marine Corps. When you do that,
where do you go? Well, you go home. [Laughter]
Let me ask at that juncture, how big was the organization? What was the staffing level of the Association and so forth? What kind of group were you joining?
Well that was January, 1972. That was twenty-seven years ago now. The staff was approximately fifteen, sixteen people. Five of those were in the statistical department alone. They were doing everything statistically by hand: posting numbers, adding up columns of numbers, et cetera. The first thing that I did was to take those numbers and put them in a format that they could be computerized because this new wizard machine called a computer was now coming up. Most computer activities, unless you were a big corporation and could have a computer department, which took a room with a big machine standing in it—. Most of the businesses, the medium and small business, used an outsourcing service like a computer center. So what I did was I had found the right computer center and I computerized our statistics and cut those five people back to two, me and one other. That went over very well. To add to the statistics and do different things that none of them had ever done before really was kind of the beginning of, "Hey, maybe this guy will work out."
What was the typical project? What would you have gone out to try to put some numbers together on?
Well, the typical project was to do how much was produced and shipped by all the mills each month and they would send in the reports.
On a monthly basis?
On a monthly basis. That's all they'd ever done. They would also do a
wage survey twice a year. That's all they had done. What I did
differently was on several occasions, I took the macroeconomic
indicators published by the government and took them, our industry data,
and compared it to bigger sectors of the industry and then the economy
as a whole. So, [I] could give a reference of what was going on not just
in our own little world, but how it matches up with what's going on on a
macroeconomic area. So, that was one project. The other key thing that
happened I think was that we had some issues crop up in Washington in
the lobbying area. The Association had done typical association
lobbying, but one of the big issues in 1972 was the cotton dust standard
was implemented by OSHA. Controlling cotton dust, which causes
byssinosis, is important. We should do that. But, like most government
agencies when they react, they just throw out a big net and cover
everybody whether it's practical or impractical, needed or not needed.
So, the knitting industry with hosiery specifically, we started lobbying
that one, we don't have a byssinosis problem in our industry. We don't
have brown lung problems in our industry, therefore, why add millions of
dollars to operating costs and therefore, costs to the end consumer in
the product? We started lobbying on that [issue]. I had the facts. I
could prove things in the presentations using numbers. Washington
lobbying was changing about that time in that it was moving from the
emotional to the factual. What I was able to do was to take the Hosiery
Association's positions and arguments and present them in a factual kind
of way rather than just going up there like most industries were doing,
"Don't do this to us." Like basic textiles protectionism against
imports: "Just don't do that." But, that's it. It was an emotional
argument. I began to move our presentations into the factual. I think
that was another key element of why they then
Can you sketch the character of those lobbying meetings up in DC— who you would've met with and folks in OSHA?
Well, there's all kinds of lobbying. The legislator, the Congress if you
will, passes laws which are kind of vague. What they do is grant
authority to regulatory agencies to come up with final rules and
regulations. So, your lobbying is different depending on who you're
talking to. If you're lobbying for or against a particular piece of
legislation, you will talk to congressman and senators, but more likely
their aides that are in charge of that particular subject. In the
regulatory agency you find the department and then the person or persons
that are working on the writing portion. So, you are lobbying after the
fact of the law being passed to frame or shape the final rules and
regulations that are published. So using the cotton dust standard as an
example again, we found the right person in OSHA who was working on the
writing of that standard. They were quite skeptical. They had been given
facts and figures and all these problems with people having health
problems. The labor unions were living with them about we have to be as
tight as we can. Again, nobody wants anybody to have brown lung. It's an
awful disease. We don't want that. If it needed to be controlled in some
situations, good. Let's control it. We made that argument. What we were
trying to show is that is it is wasteful of national economic resources
to try to impose it where it's not needed. So, that's kind of how we
were presenting our argument and showing it in costs, in the
manufacturing
About what year did the cotton dust issue get resolved?
It started in 1972 and was resolved eight years later in 1980.
That much time?
That is another thing that one probably learned and picked up from my background, is patience. You're not going to get a quick answer in everything. You have to have the stick to-it-edness to hang tough through a long haul of trying to get people convinced that what you're doing is sincere. It is honest. You're not misleading them. I think that's one of the things right from the get go that I tried to impart in our Hosiery Association's input in Washington, D.C., is reliability. We're not going to mislead you. We're going to give you the facts, good and bad. We're simply here to make our case. We're not in enmity with you. We're just here. I think over the years on this case and a lot of the others, what we did was build up a certain amount of, "You know what? We can trust those guys. They're not trying to pull wool over our eyes. They're not lying to us. They're here presenting just straight information. We can rely on them." Now we fight real hard to save that and protect that.
Any members of the North Carolina delegation who sort of stick out in your memory as especially helpful to the cause or helped get you access? Did you have much contact with any members in particular that you remember?
Not back in the '70s. Again, that was a regulatory impact. I didn't really rely that much at that point in time on state representatives.
Oh, no. I meant members of the Congress from North Carolina.
Right. I don't remember specifically working with any of them on this particular regulatory agency. And let's remember, just because the Association is located in North Carolina, we don't just rely on North Carolina congressmen and senators.
Sure.
We are a national organization. There are manufacturing facilities in about thirty states. So, we rely on our constituency relationships anywhere we have mill and hosiery operations. We will call on our friends in Pennsylvania and Alabama and Tennessee, just as readily and quickly as we would call on them from North Carolina.
I know you've prepared written pieces in various places that talk about the longer history of the association and so forth. Can you sketch the most salient parts of the trajectory of the Association across the last several decades? What course of the fortunes of the Association—
It was formed in 1905 by a group of national, large companies in the
hosiery industry. They could see, looking at other industries, that
there were some industries that had coalesced together starting in the
late 1800s in manufacturing trade organizations to represent the
interests of that industry. In textiles and apparel there were some
organizations that came before 1905 and there were some that came after
1905. It cropped up in a very fertile era for the development of
industry groups. When they first started, it was run day to day by
active mill owners, out of their own offices. There was no staff. There
was no home headquarters or anything. If my recollection is correct, the
first secretary, if you will, to the organization was a mill owner in
Tennessee. Then it was transferred to and set up with a full-time
headquarters and a full-time paid staff in
So, it meets both the marketing and the technology introduction needs? It accomplishes both of those purposes.
That's correct.
In '79, you said? So you've seen that process through from the very beginning.
Yes. In fact, one of my added on duties was to get that show started
when we were leaving in '79 and I was involved. About that same period
of time my predecessor, whose name was Sam Berry, and he was the one
that was here when I was hired—. By then, I was the executive vice
president and there was another vice president.
Worth mentioning any sort of ebbing and flowing to the membership level in the organization? [The membership] always has been, remains the principle industry trade group, obviously. Any substantial shifts of that sort?
I guess the peak activity of the Association— as was probably true with a tremendous number of other industry groups— was World War Two, because everything in this country went onto war production, including hosiery and socks. Nylon was taken away, so ladies' hosiery you had to go back to silk and cotton. Producing and operating under the War Board instructions, rules, regulations, it necessitated an organization that could be a conduit for information between the industry and government. They needed each other. The industry had to have a group they could turn to to say, "What does this mean? What do I have to do today for the war effort?" I would say that was probably the high water mark for the Association and for every association. Since my joining in 1972, which was my first introduction— and I think probably from the high watermark of World War Two— the trend line has been constantly one of fewer companies, consolidation in the industry. When I joined the industry in 1972, there were probably 600 companies in the business. Today there are 300. I would say if you look back to World War Two, there were 1100. So, it's been consolidation. Now at the same point in time, actual output production in units and sales and dollars has gone the other way. They've gone up. So, it is a consolidating into the hands of bigger groups and bigger organizations.
Looking back across this historical landscape, what have been the most important parts of the story in terms of the broad fortunes of the hosiery industry post war period, thinking of specific periods of import challenges, technological innovations, regulatory developments?
Looking at the product area I think is probably the critical one. We
have to remember that hosiery is really two industry, two sectors. I
like to describe them as being
Meaning that a customer, a woman, might identify and go out and select a L'eggs brand stocking—.
A national brand. That's right.
But in the sock market people still are less brand conscious.
They'll buy store brand. The companies haven't put the money behind the
development of a national brand. Now, there are strong examples contrary
to that. There's some tremendous and wonderful sock brands out there,
but they just didn't make up the same percentage of the total industry
as was true over in sheers. The big thing that changed for socks which
started kicking in in the '70s and 80s was we began to develop and
market socks for specific end uses. There was a time in a man's
wardrobe, or anybody's wardrobe, you had only two or three kinds of
socks, blue, black and brown. You wore them for everything. Then, there
was the athletic sock that was specific. Then, we came out with casual
socks that were somewhere in between athletic and dress. Then, we
started even sub-categorizing, like within the athletic group there are
socks designed for basketball, socks designed for jogging, socks
designed for bicycle riding. They are engineered for the needs of that
particular activity. So, we began a real marketing oriented thrust in
socks, and that certainly raised the per capita consumption and the
interest in the sock market. I think that was a major factor in the run
up, if you will, of the production and sales and popularity of socks.
The two biggest things that we're probably in the middle of right now is
a fashion cycle, the "casual look." Casual has certainly impacted on the
frequency and wear use of ladies' sheer hosiery and has shifted
You mean Wal-Mart, Target?
Correct. If you look back in the '50s and even '60s, department stores—
traditional neighborhood or national chains department stores—were the
predominant way that the consumer bought their goods. They were located
usually in downtown locations. I think one of the critical elements
there was that manufacturers could make a decision of who in a
particular locale would carry their products and then limit that
distribution. They could pick a particular department store and say,
"Okay, I'm going to sell my brand or my products through you. I'm not
going to sell them to anybody else in your neighborhood or in your
city." They could do that. They could also set what the retail price
was, and they could hold the retailer, the department store to that. If
the retailer didn't abide by it, then they lost their license to carry
it and they could shift to somebody else. That kept pricing and channels
of distribution controlled in the hands of the manufacturer and/or the
selling agent and/or the distributor that had that line. That was true
of all apparel, not just hosiery and of a lot of other products too. But
there was a
[END OF TAPE 1, SIDE A]
[START OF TAPE 1, SIDE B]
This is side B of the first cassette with Sid Smith in Charlotte on January 25, 1999.
To reiterate, the amount of sheer hosiery sales through discount is thirty-three, thirty-five percent. Whereas in the sock category, it's sixty, sixty-five percent. In both cases, it is still the largest channel of distribution. That is a tremendous shift from when the majority of all sock sales and the largest channel of distribution, even of ladies' goods, was through other channels— either department stores or for ladies' hosiery, grocery stores. So, that's been a big change.
I imagine that translated into downward price pressure at the wholesale level.
Yes. This country is going through deflation, as most economists have
pointed out. The consumer price index increases have been very low. We
have not had inflation for quite a few years. Bill Clinton gets no
credit for it. It's the discounters. They are driving the retail
economy. They are the market force to deal with. They deal in volume and
they deal in price. At the same time, they demand quality too. So, the
manufacturers are squeezed to produce high quality on one side, but do
it fast, do it quick and do it at a very competitive price. There are a
couple of other things probably that we ought to talk about in
historical developments. They relate to pantyhose only and not the whole
hosiery industry. With pantyhose being a very large product category,
[one development] is the advent of the shift of selling pantyhose in the
grocery store from the department stores. In '65, when Twiggy stepped
out on that runway, most hosiery— including this new product
"pantyhose"— was sold in the department store. That's where women went
to buy their goods. One of the biggest manufacturers at that time, if
not the
Discount stores.
We're seeing that shift over to discount stores. Just in the last year or two, discount has taken the final one or two percentage points it needed to get higher than groceries. It has done that.
You haven't mentioned technology. Any important—. Obviously there are technological aspects say to the development of just the right machines to make pantyhose all in one unit and so forth. You mentioned nylon. You mentioned the crimping that allowed for elasticity. Are those the principle things there or are there other more recent [developments] say in fibers or in—
Knitting technology.
Speed and quality?
There've been several. If you go all the way back to the turn of the
century—. We have to be careful what we say now, we mean the last
century, back to 1900. If you go back to the turn of the century, most
hosiery was still knitted on a flat bed knitting machine. It was still
knitted fabric but it was flat. You would take a pattern for hosiery
whether it would be socks or ladies' stockings. You would lay that
pattern down just like you would for a shirt pattern. You would cut
around and you would roll it over and you would seam it and that was
what created the seam in the back, called fully fashioned or full
fashioned or seamed hosiery. That's why the seam was there. You had to
sew it. By the mid-1920s and '30s, technology had come to where we could
knit in a circular tube or seamless cane. The majority of the industry
had made the switchover to seamless or
Which would have been about—?
First introductions could have been as early as the late '60s, early
'70s. To acquire machines and get large banks of them up and running
probably was not until the '80s and now the '90s. It did a couple of
things, but there's a step in the middle. If you had just a basic
circular knitting machine, it was a mechanical entity. It had chain
drives and cogs, and the chain would move, and the cog would hit the
bottom of the needle and make it jump up, and it was totally mechanical.
The next step was to put in electronics in place of mechanical. The next
biggest technological change was to put electrodes in place of a lot of
mechanical cogs so that electronic circuitry could drive things. That
increased speed. We could now drive these machines much faster. In the
1970s and into the '80s, very roughly and the technical people in the
industry would be better at this than I am, but approximately the
circular knitting speed for a pair of ladies' sheer hosiery jumped from
300 revolutions to 1200 revolutions because of electronics. Once you got
electronics in place, the next attachment is computer control. Now
computer control has kicked in in the last ten to fifteen years, which
would put us into the mid-'80s and of course on into the '90s. When you
had a mechanical machine, to change the pattern or change the product
that that machine made, you had to physically tear the machine down. You
had to have a mechanic with a pair of pliers and a screwdriver that
would take the machine and tear it down, reconfigure the cogs and the
chains, put it all back together and start it over. It generally took
eight hours to change over a machine. So, if you had a hundred machines
in your plant, you took 800 man-hours to change a style. Guess what?
All come to the fore.
It's made the industry more responsive.
How capital intensive was the computerization phase? Did this represent the replacement of one generation of plant equipment with another – say, between the '60s and the '90s?
Yeah. There is a phase in there that one could—. If the mechanical
machine had electronics to it, you could kind of do an add on the
computer. But the computer really could not initiate changing functions
that well as an adaptation. Maybe you could track what was being
produced through a computer, but you really couldn't make pattern
You've begun to hint at it there. Can you take a few minutes and describe the broad character of the consolidation on both sides, [the] factors most responsible [and] the character of the entities emerging from—?
Let's talk about the sheer business first. Remember, we've got to deal
with them like two sectors. There were several hundred sheer hosiery
manufacturers in the United States— probably three, four, five hundred—
back after World War Two. They were making stockings. But, it was that
advent of the switch over from stockings to pantyhose in 1965 through
'70. It was a guessing game. Is this a fad or do I go into this? Do I
start making these pantyhose or are stockings going to come back? There
are people that guessed both ways. There are people that said, "No. I'm
going to keep making stockings." Of course, stocking sales were going
down. Pantyhose sales were going up.
Who was that?
It was a company called Schulte-Diekoff out of Germany. Their family is
still in business today here in America, as one of our companies. They
began to enter the marketplace with very competitive prices. Many of the
American family owned pantyhose companies said, "We're not going to give
this away. We're going to go down
This happened right about when?
About 1970. It's the beginnings of it— '70, '71, '72 was when we were going through it
So people were having a tough time.
Then fashion changed. It changed away from the mini-skirt about 1971, '72. It didn't go back to a skirt. Remember this is Vietnam. This is the hippie era. It went to jeans. We went to pants, which is the antithesis of what hosiery needs in a fashion. That market just slammed to a stop. In 1972, when I joined the Association, over one hundred women's sheer hosiery companies shut down in the first twelve months that I had come to work here. I started going, "What in the heck have I got myself into?" So, it was a very compacted, very ruthless consolidation. But, there were about fifty or sixty companies left in ladies' sheer hosiery. Now that consolidation from 1972 until 1999 has continued, but it has been tapered. The companies that were left then and that are left now are bigger; they are stronger; they are more technologically advanced. They've got excellent management teams. They've got a handle on national branding. They are competitive on a worldwide basis.
Fair to say generally a trend away from family owned and controlled to corporate owned and publicly financed and so forth or not so much?
Yes, that has occurred. Though, there are still a number of family owned entities in the sheer business that have good size to them. Today—from the 1972 era where we had about sixty of them— we're down to about twenty or twenty-five women's sheer hosiery companies. But even out of that, you could probably count on one or two hands, the principle players, that have the lion's share of the business. There are still some people that make specialty products or niches and things, and they'll always be there. Let's start over on socks.
Can we take a quick break for just a moment?
Sure. [break] I think we were going to start on the same trend line for
socks. Socks, there were probably five or six hundred companies in the
sock business when I joined the Association. Certainly there was right
after World War Two. Socks have been always different than sheers. It is
unique in many ways. There are more styles and more sizes and more
colors in socks and more patterns in socks than there are in ladies'
hosiery. There always have been. A lot of people don't realize that or
think about it, but ladies' hosiery really doesn't come in that many
colors. But socks do. It is that degree of differentiation that has been
able to support more entities. Everybody has got something a little
different. It is that diversity that has maintained a fairly large group
of companies. Now, manufacturing technology has changed both in speed
and in computerization and in pattern changes. Companies have made the
capital investments to get into the equipment, which means that the ones
that have made that capital investment have been more competitive. But,
that really didn't matter up until the real emergence of discounters,
when price was the competitive factor. If you can't continue to compete
on price, you are really up against it. We have been predicting—
everybody in the industry has been
Tell me about the challenge— across this span again, backing up and taking the broad sweep of time again— presented over time by imports in hosiery.
Other than the specific period that I mentioned earlier, about a
particular foreign manufacturer trying to buy their way into the
pantyhose market, if you will, and pantyhose imports only got as high as
ten percent— that was high enough to change the
Because the quota went on unit volume, I guess?
Some of them do. Every one of them is different. I'm just using a
situation, that if you did have a limitation, you'd rather use it with
big-ticket items versus a small ticket item. That was a natural
protection. Second of all, through this automation that I talked about—
higher speeds and then computerization— we've been able to get our
manufacturing costs down, and particularly the labor portion of it down.
Labor is somewhere between seventeen and eighteen percent on the bottom
side to twenty-three to twenty-five percent on the topside. Well, if
you've got twenty percent labor in a two dollar product and you save
half your labor costs by going to a low wage country, you ain't saved a
whole lot. I say that for emphasis not for poor grammar. You've haven't
saved much. Then, you add on the transportation costs and the insurance,
you've more than made that up by the time it gets here. The third thing
is, retailers over this period of time want us to carry the inventory.
They don't want any inventory. But, when they want those goods, you ship
it. So, with "just in time delivery," electronic data interchange, all
of those kinds of linkages with our retailers, our mills generally—
whether it's socks or
What was the Association's position on NAFTA?
Let me go back to our Association's position on all our international
trade. Back in 1972, the entire textile and apparel complex was totally
protectionist. It was what I always termed knee-jerk protectionism. When
I took over in '82 or '83 as the CEO, I remember for that whole ten year
period in between, almost every board meeting was a discussion on our
position on some international trade treaty or protectionism or
whatever. We generally— by majority vote, not unanimously—voted to hang
with the textile and apparel complex and back their positions on being
protectionist oriented. Keep them out at any cost. We began to see some
market opportunities overseas through exports for our products. We began
to see some of the inefficiencies that we were being subjected to from
who we were buying from that, we've got great cotton here in the United
States. We've got great cotton spinning, but I wonder what price we
could get from Pakistan on our raw materials? I wonder what quality we
could get? Are we doing ourselves a favor to keep ourselves limited and
our friends in the textile industry certainly would like to keep us
limited. We don't want to buy overseas. We want to buy domestic, but we
also want to make sure we're getting—. Remember this economic
environment we're operating in, we're going to have to source our goods
where we can get them at the
I didn't realize that pantyhose today came off the machine in two different cylinders and had to be sewn.
That may be the next step. But, that 9802 proviso said that you can cut
it and you can sew it, but if you do anything else to it— if you die it
or bleach it or package it— you lose your right to claim 9802. You can't
claim it. You have to pay full duty. So, the
Did you lose members over the issue?
Not to my specific knowledge that somebody called up and said, "Because
of your stance we're quitting." No, because we were doing a lot of other
things too. It
Trace if you would for me the evolution of labor relations and the whole union question and the hosiery side of textiles. Has that been an issue that you've had to spend much of your professional time during your tenure attending to in any shape or fashion?
No, because the hosiery is basically a very low percentage of unionized. It's less than [a] ten percent unionized labor force. Of course, [it is] probably around five percent, if not below. We really have to jump way back in history, just briefly. If you go back to the middle 1800s, the hosiery and the textiles were based in New England and the primary raw material was cotton. The Civil War came around and that textile industry, including hosiery, was cut off from cotton. They had to source cotton from Europe and Asia and other places. They vowed, never again. If you study your history books, there were a lot of people that even after the armistice—.
[END OF TAPE 1, SIDE B]
[START OF TAPE 2, SIDE A]
This is the second cassette in the January 25, 1999 interview with Mr. Sid Smith of the National Association of Hosiery Manufacturers. We are in the Charlotte, North Carolina, headquarters of the Association and this is the second cassette interview; so, it is tape number 1.25.99-SS.2.
Again, even after the Armistice was signed of the Civil War, a lot of
people weren't sure it was going to remain peaceful. It could all spring
up again. The textile interests up in the northeast vowed never again
would they be cut off from cotton. Many of them began to move south to
get close to their raw materials. Land was cheap. They were even able to
come in and buy some of those old places. [They] even began to move down
the spinning [manufacturing from the north]. They put the spinning mills
right at the edge of the cotton field. So, it was a close proximity.
That transition carried on into the 1900s. The deteriorating labor
market in the northeast continued to move everything down south. By the
mid century, 1950s, the core of the hosiery manufacturing had been moved
south. Therefore, we were in the non-labor union south. So, they [the
unions] were not able to get a hold of or get into a lot of companies.
The companies worked very hard to remain non-union. [The Association
has] nothing against the right of a person to unionize, if they'd like.
That is a right and we would, I think, argue even for that right. We
simply argue that we can do a better job working directly with our
people face to face. We take pride and concern about them. You also
remember that almost paternalistic feeling that some of the old textile
mills had. They [the mill owners] provided houses. They provided medical
[assistance]. They provided everything. [Mill owners had] real, close
paternalistic feeling to[ward] their people. Though that has given
Do you have a quick sense of the wage differential between that tiny segment of the labor force within the industry that's unionized and the industry-wide non-unionized wage level? Is it a big difference?
No. I have not quantified it. In some ways the non-union was compensated better. I think if someone would ever do a real, in-depth honest look at a lot of agreements, that in the end one would see that the compensation for non-union is sometimes better. [This is true] particularly if you take into the fact that the union employee is paying through withholding a certain amount of money out of each paycheck. There has been virtually no differentiation. There's certainly been more flexibility in work hours and in things as it relates to the labor force being non-union.
Any important labor challenges, in the span of your [presidency], within the industry?
The hosiery industry has traditionally from World War Two on up until a
few years ago been a light manufacturing [trade], and therefore, has
been very heavily populated by females. We've had primarily a female
workforce. That has, in many cases, been the second income to the
family. The husband works somewhere else. The female of the family works
in the hosiery mill and has an add on paycheck or it has been the second
job of a two job working person, male or female. They've been able to do
a second shift or work another shift at the hosiery mill and make a few
more dollars. Our challenge— and one that many of our people in this
industry desire— is we are anxious to get the wage that we're able to
pay our employees to where it would be the equivalent of
Let me move to a few questions about the broader, North Carolina regional economy in these last several decades and get your perspective on it. [I am interested in] your observations of your fellow business leaders in the state and trends. What's your sense of the most important structural changes in the post-war North Carolina and southeastern regional economy? What would you say, if you had to paint a quick sketch of the most significant shifts?
I think the first one is the one that a lot of us older timers— more
traditionalists— think is the demise of the family farm. I think that's
had a critical impact economically all across this country. North
Carolina had a very agricultural based economy all through the Civil War
and into the current age, so the demise of that family farm has had a
big impact. That has driven those employees, those people, into more
industrial work. Textiles was the first alternative to turn to, going
back several decades. That's why a lot of textile operations opened up
in rural areas rather than big cities, because of labor. The people were
out there, not in the big city. That was [a] help. What we're seeing now
is scarcity of labor. [Now] we're seeing the high tech, high wage
companies move into the area. Our state economy— even our state
government—rightfully so, says, "We would like to diversify our state
economy. We'd like to have a little bit of everything here. We'd like to
attract a lot of these high tech, high paying, new-era companies, the
IBM's, the BMW's, and the others here." That's fine, but it adds to the
labor force [and to] labor market pressures that the traditional
industry faces. It brings a certain amount of consternation among
traditional industries that, "You're taking my tax dollars to attract
another industry. You're actually even subsidizing them or supporting
them in some way and then they take my labor away because they can pay
Has that battle been fought and lost, [do] you think? Or, is that battle still underway?
I think that battle is still underway. I think there has been a raising of awareness in the legislative, regulatory environment, among the eyes of the politicians that don't lose sight of your traditional industries because they're still your biggest employees, employers. They're still your biggest taxpayers. But, looking at South Carolina and the big BMW plant down there outside of Spartanburg, there are people that tell me that with all of the incentives and the write offs, they built a state of the art manufacturing facility [and] that after twenty-five years, they can close that plant and walk away because it's totally paid for and they have nothing invested in it. That's not true in textiles because we built them ourselves. So, I think government has got to get back to understanding that. I think we've raised their consciousness, but I'm not sure we're back to a full understanding of what that really means, nor what they can do to be helpful. Government-industry partnerships in training, in technology and things like that and transferring technology, they're great. That is catching on, but I think there are some other things we can do. I don't have all the answers, but it's a big battle.
To draw you a little further around some of those themes, what's your
sense of the relative political influence of, say, the business
leadership in North Carolina's
I think the basic traditional industries— including textiles and apparel, along with agriculture— used to have both the national representatives, congressmen and senators. They were quite influential with them. I think that has waned a bit. I think that the bigger companies— these new entities that now are headquartered here, whether it be banking or technology or whatever else— they have garnered a greater attention from the national elected representative. However, at the state level these big entities— like I've talked about— don't have that much state interest. So, the textiles and agriculture and other basic traditional industries have continued their influence at the state level. I don't see it having waned at all. It's still in place. So, you've got now a difference. [There is] a national focus that's on the state level that's different than a state focus on the state level. It's going to be interesting to see where those two things come out and what impact. I can see it could be putting two sets of representatives— one national, one local— at odds with each other on some issues down the road. It's going to be interesting to watch that one.
What's your sense of the extent to which the regional distinctiveness of the southeast— maybe of North Carolina, in particular— has persisted or not across time? Is this still a place that's a lot different to do business or—.
Yeah, I think it is different. When I was working with Exxon and was
down in northern Florida and people knew that I was from North Carolina,
their stereotype—. They envisioned everything in North Carolina being
like the "Dukes of Hazzard." I
You mentioned, in discussing the labor situation, the relatively substantial increase in workplace diversity with Spanish speakers [and] other relatively new arrivals from other countries. One thing that I want to point your attention to for a minute: What was your sense of how well the industry accomplished the transition from a largely all- white workforce to a racially-integrated workforce when African Americans really began to first enter the textile industries after the early '60s?
I never saw a problem with it. I never saw or heard of any kind of uproar or disagreement with it. You have to remember, if you were born and raised in the south, black and white grew up raised side by side. No, they maybe didn't go to school together or maybe they didn't shop together, but by golly you were neighbors. You had as many black friends as a child as you probably had white friends, unless you lived in some isolated community or you were in the upper crust or whatever. Middle income and on down, you all grew up together. You dealt with people individually rather than on a race basis. There's an old saying that southerners dealt with blacks as individuals; northerners dealt with them on a race basis, but never as individuals. There's some truth in that. In many ways, when the walls began to fall in the workplace, it wasn't that different because we'd worked in the fields together. You've got to remember that a lot of southern textile people, front-line production people would work their textile jobs just because they knew they could go in at five o'clock in the morning and still get off at two and then go work their fields from two until sundown in the summer. So, they still worked with blacks in the fields. It was just a transferring of what was going in the field to putting it in the workplace.
So, the transition was fairly smoothly accomplished?
Certainly. From my perspective, far more easily than in a lot of other workplaces in other geographic areas.
Do you happen to encounter in textiles generally many African Americans moving into management positions say across the last two decades? Is that a trend that's in evidence much— and women, too? I'd be interested in your perspective on women as managers.
It's an area—. Attracting managers is of concern to all of us in textiles, period. Forget gender and race. Just attracting a young person, let's say in college, to major in textiles, or [attracting] graduating [seniors] out of college to come to work in textiles is a challenge because they have a stereotypical look at textiles. The entire industry has done an awful lot to try to say, "Hey. We're not that way. Come look at us. Come look at the high tech manufacturing we're doing. Come look at the manufacturing environment that we have in place today. We can compete with anybody. We're as high tech as IBM is." But, there's that stereotypical look, idea. What kid's going to go home and say, "Mommy and Dad, I'm going to go and work in textiles." "Oh no. You can't be serious." So, we want any management skilled people. So, male, female, black, white, Hispanic, that's not the issue. The issue is attracting talent. It has been a limit of being able to attract talent. That is part of the interest [reason] as to why there is somewhat a limit in the number of black managers and the number of female managers. There was not [a] racially or gender-based [discriminatory practice]. It was the inability to attract people period. [That is] why, in many cases, if you've got a family owned business, it just went on to the family member.
Sure. Sure. I don't know that the answer that would emerge to this question would be in character any different than many of the themes that have emerged so far, but I just want to put the question [forward] because I know of your involvement with, say, the Executive Committee of the Mecklenburg County GOP. You're engaged in the political arena in that form as well. Obviously, across the last three decades there has been a broad voter realignment in voter registration and self-identification from the traditional southern Democratic Party to the GOP. [This has been] a broad phenomenon across the entire south. What's your assessment of the impact? Has that been a factor that then altered the business climate in important or interesting ways? Or, is that sort of part and parcel of trends that were long since in place— a more superficial realignment of self-identification with party, but not really a shift in values or political concerns?
This is a complex question you've asked that has a local flavor to it,
but is also a part of a big national shift, I think. The south after
Civil War was totally Democratic. The reason was that Abraham Lincoln
was a Republican and it has nothing else to do with it. The south didn't
even have Republican parties down here. When people got involved in
politics, you were born and raised [a] registered Democrat. Anything
different was, "Oh, must be a foreigner moved in from here." As people
in my case growing up, having to make some decisions, stepping out of
school and getting into life, you say, "Well gee. I'm going to have to
start voting here. I've got to be a participant. I'm going to find out a
little bit more about what I'm voting for." So, what I did was study the
platforms, on the national basis, of the two parties. I tried to cut
emotion and personalities out of it. I just found, on a personal basis,
I identified with the Republican platform of less government and
identified with them more often. It was kind
Let me ask you this: In the business [community] here, in the
Association's work, would you have said there was any significant
change, in your feeling, about the responsiveness of government— of
state government— the quality, the contact with state government
between, say, the first Hunt administration, the transition to Jim
Martin administration and the transition back to Hunt's? Is that a
roller coaster in terms of the
I think our state government has been very responsive, both at the legislative and regulatory level. However, I think state government—. As I said, more is being given to them [state government] authority-wise. We've got a new big brother now. Instead of having one big brother in Washington overseeing all of us, you're now getting a whole lot of big brothers at the state level. I think you're finding state government— whether it be North Carolina, South Carolina or any other state— you're finding a bigger role, more intrusiveness, more of a heavy hand by state government, now that they've kind of gotten some of it back from Washington. I feel that from our state government. [I feel] that they're getting more heavy handed and more intrusive. [State government is] trying to make a name, trying to be the best state of all the states. We're going to have our environmental laws better than anyone else's environmental laws. We're going to be the toughest on consumer protection. We're going to be the toughest on insurance rates. [There is] a one-upsmanship and kind of a competition. I feel that arising. I don't relate that to any administration. I think that is a natural evolution of the role of government. Now, I'm sure certain degrees of that would apply from one administration to another, but not the overall trend line.
Are there important things that I haven't asked about? We've ranged fairly widely, but there's always so much more, I'm sure, to talk about. Are there things that you think are really important to the story here of the Association that we haven't touched upon?
Hmm. The biggest change that we're finding in the Association itself, is
that our industry wants us to do more in marketing— something that we've
not done before and we've never been asked to do. We've always done
[work] in the plant, in the factory. [We've had a] human resources,
technology, production, [and] manufacturing based orientation, now they
want us to do marketing or help them do their marketing. That's a big
shift. The reason is that the retailer is pushing that back on the
apparel manufacturer. Used to be we would ship goods to a retailer and
wipe our hands. The deal was up. Then, the retailer started saying,
"Well, I want you to tell me what you think I ought to be carrying in my
hosiery department." Then it was, "Okay, I want you to advise me even on
which styles I ought to be carrying, and you make sure they're there. In
fact, you come in and hang them on the hanger." It's down now to where a
retailer looks at you and says, "If you're going to be my supplier,
you're in charge of the hosiery department. You do the planogram. You do
the layout. You stock it. You put the right styles there, price them in
the right range, and don't be wrong because it doesn't sell, I'll fire
you and I'll get somebody else. You're going to handle the department."
The hosiery manufacturer's going, "I'm not up to speed in this. I'm not
staffed for this. I've got to hire marketing people, retail planogram
people. I can't do this." The Association helps [manufacturers], so
they're pushing us to get more involved in "here's what's involved in
those areas." That's a real transition for this Association. Of course,
the one thing everyone is concerned about is the future: "Can we survive
or are all textiles, all hosiery [businesses] going to leave America?"
No, it won't. It's always going to be hosiery manufacturing here. There
will always be [hosiery production] right here in the United States. We
can still make it cost competitively, pricewise, quality wise. We're
going to
I thank you for taking so much time. You've been very gracious. I really appreciate it.
Well, I hope I gave you something to use.
It was just terrific. Thank you so much.
END OF INTERVIEW