[might interest people on this list]
o o o
Los Angeles Times
December 31, 2004
PROFITS CLOTHED IN SADNESS
A Southern town benefits by supplying the troops
in Iraq, but for many with loved ones at risk,
the work has its downside.
By David Streitfeld, Times Staff Writer
OPP, Ala. — Euna DuBose works in a factory sewing
camouflage trousers for the Marines. As the
grandmother of three soldiers, this gives her
some uneasy moments.
An extra-small pair of pants will make her think:
This fellow's just a baby. She'll wonder: Will he
get home safe? And what about her son's sons —
one in Afghanistan, one awaiting orders in
Mississippi, one just home from Mosul but perhaps
destined to return to Iraq?
DuBose never had thoughts like this with her last job, when she made Levi's.
"I'd rather be doing jeans," the 70-year-old said. "No emotions were involved."
She doesn't have much of a choice. The last jeans
factory here failed two years ago. But the Marine
uniform plant is thriving.
The war in Iraq is boosting Opp and many other
communities. Over the last two years, military
spending has become a pillar of the economy for
the first time since President Reagan ordered the
Cold War buildup of the mid-1980s.
Defense spending accounted for 11% of the third
quarter's economic growth, double the rate of two
years ago, according to government data released
this month.
That figure does not fully depict the effect of
the war, analysts say, because it doesn't account
for the way military contractors are upping
orders of equipment and raw material from their
own suppliers, creating a wide ripple.
Companies in Evansville, Ind.; Union City,
Calif.; Mullins, S.C., and McAllen, Texas, have
just been awarded contracts totaling $91 million
to make soldiers' ready-to-eat meals. Companies
in Mount Gilead and Waynesville, N.C.;
Belleville, Ill., and Atlanta won contracts worth
a combined $70 million to quickly make black and
desert tan hot-weather boots. In San Ramon,
Calif., ChevronTexaco Corp. received a
$108-million contract for jet fuel.
All of these contracts were awarded by the
Defense Logistics Agency, an arm of the
Department of Defense that buys apparel, fuel,
medicine, construction material and repair parts.
In the fiscal year that ended Sept. 30, the
agency bought $28 billion in materiel and
services, up 12% from the previous year.
No one is tracking what this spending is doing to
employment, but it might be considerable. Sopakco
Inc., the South Carolina company making
ready-to-eat meals, publicized a $35-million
contract extension two years ago as creating 250
jobs.
Opp needs any stimulus it can get. Its heyday was
20 years ago, when this region near the Florida
border was thick with apparel plants producing
dresses for Ralph Lauren, shorts for Arrow,
children's wear for J.C. Penney Co. and lots of
jeans for Levi Strauss & Co. and Lee Co.
The quest for cheaper labor drove all those
factories to Mexico, the Caribbean and Central
America. That caused a downturn that has left
Opp's downtown with 14 empty stores along its
two-block width. Even the McDonald's recently
closed.
Yet if the war is providing Opp with a rare jolt
of economic adrenalin, the cruel reason for the
work prompts ambivalence.
"If it weren't for the war, we wouldn't have a
job. But that doesn't mean it's good that there's
a war," said Patricia Walker, who outlines the
flies on 600 trousers a day. "It makes my head
spin." Walker's daughter, Salena, is stationed
with the National Guard in Italy.
Economists have long known that war can stimulate
jobs and growth. World War II is widely credited
with pulling the U.S. out of the Great
Depression. In 1939, the increase in military
spending amounted to 2% of the growth in the
economy. By 1942, it was 100%.
War has been a stimulus in other eras, too. In
1967, at the peak of the Vietnam War buildup,
increases in military spending equaled half the
rise in gross domestic product. In 1985, at the
crest of the Cold War, it was about 15% of that
year's growth.
During the 1990s, however, inflation-adjusted
military spending declined. It's not a
coincidence, economists say, that the decade was
one long boom.
"Government spending and the taxes that finance
it drain resources from the private sector, where
the money would have been used to create more
jobs and more wealth," said Daniel Mitchell of
the Heritage Foundation, a Washington think tank
with conservative views.
The supplemental appropriation for combat
operations in 2004 was $65 billion. Every dollar
of that is a dollar the government doesn't have
available to spend on other things. Economists
call this the opportunity cost.
"We're cutting or under-funding all kinds of
useful stuff, from worker training to child
healthcare," said Jared Bernstein of the Economic
Policy Institute, a Washington think tank that is
critical of the Bush administration. "So I'd
argue that the opportunity cost is high."
Here in Opp, the workers at the American Apparel
Inc. plant see opportunity in a more personal
light.
Rita Mitchell, for instance, used to make $5.50
an hour at a local dry cleaner. She had no
insurance coverage or other benefits and had to
put up with the public, which she didn't
particularly like. She came to the factory only
six months ago, but she's already fast enough to
earn more than $9 an hour. She also has health
insurance.
"There are a lot of single parents here," said
the 38-year-old Mitchell. "They can make enough
to live on."
Whether single or married, a lot of these workers
have personal connections to the war. A survey of
American Apparel employees during the Gulf War in
1991 found more than half had a loved one
involved in the fighting, and management
speculates the figure might get that high this
time too.
Mitchell has a photograph of her nephew, Jason,
tucked away on her sewing table. "He drives a
fuel truck somewhere near Fallouja. Not the
safest thing, I know," she said. "I cry myself to
sleep every night."
Founded in 1987 and based in Selma, Ala.,
privately held American Apparel has doubled in
size in the last five years to 1,700 employees.
(The company is unrelated to the identically
named Los Angeles-based maker of casual wear.)
Part of the reason for the growth is an
aggressive expansion, but an equal amount is
because of increased demand for its products.
Uniforms used in battle wear out much more
quickly than dress uniforms worn on parade.
"I'm glad we do what we do because I think we do
it well. I just wish we weren't doing as much as
we are for the reason we are," said American
Apparel President Rick Cippele.
The company has six factories making 17 items of
clothing, all for the military. All the plants
are in Alabama, which has a multitude of empty
factories and women trained to work in them.
What keeps American Apparel from going the way of
so many of its commercial colleagues is a federal
law requiring the military to buy from U.S.
companies whenever possible.
Kevin Burke, president of the American Apparel &
Footwear Assn., credits military contracting with
keeping most of the organization's 100 domestic
apparel members alive.
The Defense Supply Center, an arm of the Defense
Logistics Agency, spent $2.6 billion on clothing
and textiles during the 2004 fiscal year. That
was a jump of 28% over fiscal 2003.
"This is what happens in any wartime situation,
whether it's 2004 or 1942 or 1953 or 1968," said
Burke. "But even when the hostilities are over,
there will still be a need to make apparel for
the armed services."
Not, of course, that the hostilities appear anywhere near over.
"In terms of business, that's good news," Burke
said. "The plants will be running at full
capacity."
Despite this, some of the clothing contractors
are trying to diversify their portfolios.
Although American Apparel has no intention of
getting into commercial work — "We dipped our
toes in several times, and got bitten off at the
kneecap," said Cippele, the firm's president —
other companies see benefits.
Capps Shoe Co. in Lynchburg, Va., won a
$35-million, five-year contract last month for
women's dress Oxfords for the Army and Air Force.
It's waiting to hear about a $25-million contract
for men's shoes.
"It will put you in an early grave trying to get
these contracts finalized," said Chief Executive
Tom Capps. "If I did only military I'd have had
to lay off just about everyone."
And if he did only commercial?
"A lot of the people in our factory wouldn't be working today," Capps said.
Between the two sides of his business, he hopes
to expand his workforce by a third, to 200 people.
While American Apparel began as a military
contractor and Capps has put increasing emphasis
on government work, other firms are getting into
defense work that never imagined it.
Randy Gardiner, president of Red Dot Corp., a
manufacturer of heating and air-conditioning
systems in Seattle, said its first government
contract came "right out of the blue" last spring.
The military brass realized that armoring Humvees
to make them less vulnerable to Iraqi mines was
making them the equivalent of quick-bake ovens.
Approached by the military with an emergency
request for help, Red Dot promptly hired 100
people and prepared 10,000 specially engineered
air-conditioning kits in less than five months.
Although Gardiner wouldn't comment on what this
did to the employee-owned firm's bottom line, he
said 2004 revenue would be up about 20%.
The venture was successful enough for him to seek
out other military work. Red Dot is now supplying
cooling systems to a Houston manufacturer of
armored trucks for the military. Defense
subcontracting work like Red Dot's isn't tracked
by government statisticians but it's an integral
element of the war economy all the same.
"I don't think there's any downside to this,"
Gardiner said. "Every night I ponder the
television programs that show wrecked and burned
vehicles in Iraq and say, 'They're going to need
to replace them.' "
Although that's also true for the uniforms being
made in Opp, the town's new mayor realized the
180-employee plant can't do all the work of
revitalization. H.D. Edgar was scarcely sworn in
when he flew to Korea in October.
He wouldn't say what he was after, but local
speculation centered on a plant that would supply
the massive Hyundai Motor Co. auto factory that
will open in the state capital of Montgomery next
year. On his return, Edgar also said it looked
"real good" that a company from "up north" would
be announcing an Opp plant in a week or two.
Weeks have stretched into months. Meanwhile, a
few miles away in Dozier, one of the area's last
remaining commercial apparel plants just closed.
In a statement to the local media, Dozier
Manufacturing Inc. Vice President Nathaniel
Wright said, "We just ran out of options,
unfortunately." The plant made uniforms for
Disney World employees.
Laid-off Dozier workers are joining the stream of
those applying to American Apparel. The plant
will be hiring 25 or 30 more workers in the next
few weeks. And if American Apparel wins the two
big contracts it's vying for, it will probably
grow even more.
Maybe it's the nature of the work, maybe it's
because everyone's relatively new, maybe it's
just because this is the South, but there's an
easy camaraderie on the plant floor. Many of the
women have worked for the manager, Peggy
Henderson, at one of those failed plants. Many
say they just love sewing.
And they all are proud to be participating in the war effort.
Carol Wyatt was hired in July, a month before her
oldest son, Morgan, was sent to Iraq. She's
waiting for him to call so she can ask whether
his uniform was made by American Apparel.
"I'm so glad we can make the soldiers what they
need, that we have this opportunity in Opp," said
Wyatt, 44.
She and her co-workers don't really discuss the
reasons for the war, although there seems to be
general agreement it was necessary, if
unfortunate.
Said Wyatt: "We went because of the terrorist
stuff. But I'd rather my son was back home. Any
mother would."
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