By  on March 31, 2009

BARNWELL, S.C. — The southwestern corner of South Carolina can be seen as a microcosm of the impact of national trade policy on the textile industry.

The region is feeling the pain of the falling economy as two major textile employers, Milliken & Co. and Hanesbrands Inc., plan to shut plants and put more than 400 people out of work.

Milliken’s plant, which employs 120, has been operating alternating weeks and plans to close its doors for good in June, county officials said. Hanesbrands, which employed 319, plans to close its plant by the end of April. Milliken is shifting work from the Barnwell plant to other South Carolina locations, a spokesman said. Hanes is expected to move operations offshore.

Spokesmen for both companies did not return telephone calls to discuss the closures. But a source with knowledge of Milliken said the plant closure is a response to the economy.

“Milliken doesn’t want surplus capacity if it doesn’t use it,” he said,noting the company has almost halved its employee rolls in the past 20 years. “Milliken will always survive, but it has to restructure and it has to navigate through this economic crisis.”

The loss of these two plants isn’t the only blow to this part of the state. A Mohawk Carpet plant in neighboring Allendale County closed last year and put 225 people out of work. Also, in February, Allied Air enterprises in the town of Blackville, which is in Barnwell County, said it would close with the loss of 350 jobs. The plant makes heat pumps and cooling units, and manufacturing is being consolidated in Mexico.

Kay Maxwell, marketing director for the Southern Carolina Regional Development Alliance, which is trying to attract jobs to this rural area, said, “The textile industry was good to this part of the country for a long time.”

Some say that in addition to a faltering economy, U.S. trade policies such as the North American Free Trade Agreement have struck a fatal blow to U.S. industry. Revival of import duties and trade-distorting subsidies from world traders such as Russia, China, India, Argentina, Australia and the U.S. are haunting the upcoming G-20 summit on Thursday in London. Those same calls are being made by many in rural South Carolina.

“Trade policies have ruined us,” said Barnwell City Mayor Edward Lemon, adding policies should be revisited so U.S. industries are better protected from foreign competition.

“I don’t agree with policies that force our companies overseas,” he said. “I just think that every job will end up overseas. If we’re willing to bail out banks and car companies, why aren’t we bailing out the textile industry?”

Pointing to the upcoming closure of the Milliken plant, Lemon said, “When our trade policies hit Milliken, then you know something’s wrong.”

Milliken, based in Spartanburg, S.C., is revered in the state for its ability to survive the vicissitudes of the economy. It has diversified into chemicals and found production niches that enabled it to survive, said Robert Becker, director of the Strom Thurmond Institute of Government and Public Affairs at Clemson University. Just as Milliken has moved quickly in response to economic pressures, so should rural areas such as Barnwell County, Becker said.

Free trade policies have only accelerated what is an inevitable shift in U.S. manufacturing, he said.

“Lower wage jobs and companies would have relocated regardless of trade because of the need for increased productivity,” he said. “Most job losses are because of efficiencies within sectors.”

He points to the automobile industry as an example and said because of heightened efficiencies, fewer man hours are put into each newly manufactured car.

Instead of barriers that would ultimately raise prices, Becker said government could take another tack toward saving domestic industries, such as tax or investment tax credits.

“Much more could have been done,” he said. “Trade barriers are not as effective as people like to believe. There are other ways to be competitive.”

As jobs disappear from Barnwell County, officials have to turn to different sectors to rebuild its employer base, Becker said.

“They have to figure out how to link to sectors that are growing, not to sectors that won’t come back,” he added.

South Carolina Gov. Mark Sanford, a Republican, bucks the conventional sentiment among the state’s textile industry and is an opponent of trade barriers and an advocate of open trade policies. An opponent of the federal stimulus package, Sanford has opposed subsidies to the banking and auto industries, as well.

“Yes, there’s pain in textile job losses, but we’re still able to survive by attracting new industry,” said Sanford’s communications director Joel Sawyer.

Economic survival of rural areas spanning South Carolina depends on human capital, he said. Barnwell County’s workers, with about 10 percent holding college degrees, need to be retrained and educated, Becker said.

“If they don’t have a high school diploma, they need to get it,” he said. “If they don’t have an associate’s degree, they need to get one. Those young enough should go back to school and get retrained.”

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