By  on June 21, 1994

TAMIMENT, Pa. -- In what promises to be a year of challenge, the two key issues that concern the textile industry are health care costs and the impact of the GATT Uruguay Round Treaty.

That's the opinion of James Marion 3rd, who was elected president of the Textile Distributors Association last Wednesday.

In addition, says Marion, there are other issues: the continuing threat of rising imports and an ongoing watch on the effects of the North American Free Trade Agreement -- a trade pact that nearly divided the association last year.

Marion, the 43-year-old president of Bloomsburg Mills, was elected to his two-year term at the opening of the group's three-day annual meeting at Tamiment Resort and Conference Center here. He succeeds Isaac Kier, chairman and chief executive officer of Lida Inc., who becomes TDA chairman. Marion had been executive vice president of the TDA, a position taken by Martin Tandler, ceo of Tandler Textiles.

"There are going to be no clear-cut, easy solutions to any of these problems as we move forward," said Marion, who was interviewed here following the election. "But the challenges also present opportunities, and the TDA is made up of a lot of resilient companies, firms that have had to deal with tough issues before."

There are 150 firms in the organization.

Discussing health care, Marion pointed out that many textile mills, including his own, are facing yearly, double-digit increases in the cost of benefits. A national health care plan -- which he feels should reduce these costs -- would allow textile companies to spend more money on research and development.

"Those high costs hurt, especially when you're competing with imports," said Marion, "because Far Eastern firms don't have to worry about paying those benefits.

"I'm not saying that the government's going to come in and do a great job, but there has to be some reform because we can't afford it," he added. "Five years down the road, the way things are going, 30, 40, 50 percent of what you're paying someone is going to go toward medical benefits. That's a very tough thing to deal with if you are a manufacturer."Marion said discussions and seminars on health care are in the works.

"We had thought of having them before, but without anything definitive worked out by the government, the TDA board felt it was a bit premature," he said. However, he added, even though government action is still pending, TDA members have become familiar with the issues.

Textile executives at the meeting agreed with Marion's assessment that controlling health care costs is vital. Although the impact of costs on mills is generally greater -- due to their size -- it also hits converters.

"The rising costs are impacting us," said Gerald Greenstein, president of JBJ Fabrics, a New York-based converter. "We are looking into bigger group policies. We have 49 employees and it costs me an average of about $6,000 per employee for health care benefits."

James Gutman, president of Pressman-Gutman, added, "These costs are ludicrous. We pay them because our people need to be covered, but they are really getting out of hand."

GATT, too, said Marion, will get more attention; several seminars have been scheduled through the rest of the year. In Marion's view, the new GATT treaty for liberalization of world trade -- which still needs Congressional approval -- is a far greater threat than NAFTA.

"If we thought NAFTA was unclear as far as being bureaucratic gobbledegook, then GATT is beyond comprehension," Marion said.

"There are some who may well benefit from it, but the apparel industry is not one of those industries. There are still key issues, such as market access and protection of intellectual property, that haven't been fully addressed. And we really haven't had the level of discussions on GATT as we've had with NAFTA."

Even though it became a reality Jan. 1, NAFTA continues to be a hotly debated topic among TDA members, Marion said. Last year, the issue caused such a stir throughout the association that TDA decided not to take a stand. Marion said the association will continue that stance.

"At the time, we didn't feel we would have a lot of influence over what the ultimate decision was going to be," said Marion, who, like his predecessor, Kier, is pro-NAFTA. "We thought it was more important not to divide the membership."From my perspective, NAFTA could keep some of the manufacturing in the Northern Hemisphere, as opposed to Asia," Marion added, noting that more opportunities exist in home furnishings and domestics, rather than apparel. The labor intensity of the apparel manufacturing business, he said, "may make keeping it here more difficult."

"Still, there's no point in fighting it any more," he said. "Now we have to make the best of it. Some will prosper, some will lose."

Blaming imports generally, Ed Freidenberg, president of Brittany Fabrics, said he has seen his customer base dwindle in the past 10 years. Brittany, a seersucker specialist, said many of his firm's accounts have gone out of business.

Gutman added, "We've had to become more flexible and find new areas. Acetate is one area that has been relatively import-proof but, given time, that too will change. Through niche categories and quick turnaround, you can be successful in this business."

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