HEDGING THEIR BETS: FASHION EXECS PONY UP FOR PRESIDENTIAL RACE
Byline: Joanna Ramey / Jim Ostroff
WASHINGTON — Calvin’s a Bradley man, while Blass is for Bush. Kenneth Cole supports Gore, while The Gap’s Donald Fisher is covering his bases by contributing to Bush, McCain and Bradley. And so is John J. Pomerantz, who is playing it safe by contributing to Gore and Bradley.
Those are a few of the fashion world executives who have weighed in so far on the 2000 presidential campaign.
The issues at hand? Regulation of presidential primary season’s defining event, Super Tuesday, with its slate of 11 primaries and four caucuses, may well decide the Democratic and Republican nominees.
Since the economy is strong and consumers are busy shopping online and in malls, the historical tendency might be to not pay attention to who should occupy the White House in January.
But for business executives like Peter McGrath, president of J.C. Penney Purchasing Corp., such an attitude is completely off the mark. McGrath contended that the next president would place his imprimatur on issues crucial to the fashion business, whether a company is making apparel in Chinatown or Southeast Asia, selling it at Saks Fifth Avenue or Wal-Mart.
McGrath advised that people pay less attention to rhetoric and more time studying the four major candidates’ records to decide which politician best fits an organization’s or individual view on the issues.
Among the key issues the next president is likely to affect are trade policy, enforcement of labor laws, increases in the minimum wage and, of growing significance, regulation of e-commerce, not to mention an overall impact on the general economy, which has soared under President Bill Clinton.
One of the hottest e-commerce debates is whether there should be Web-wide taxation on the Internet. It’s an issue pitting traditional retailers, including those conducting e-commerce, against pure Internet merchants who only have to collect taxes where they have a physical presence.
The bricks-and-mortar bloc, and most state leaders, are lobbying for Internet-wide sales tax, arguing all businesses should share the burden of collection.
Only two candidates have taken a position on Internet sales taxes: Sen. John McCain (R., Ariz.) and Democratic candidate Vice President Al Gore. McCain wants a permanent ban on Web sales taxes; Gore, an early Internet advocate, takes the opposite tack.
Republican George W. Bush, governor of Texas, and Democrat Bill Bradley, a former New Jersey Senator, have yet to take positions on the issue, although Bush has hinted he’s sympathetic to allowing Internet sales taxes. Texas doesn’t have an income tax and depends on sales taxes for about half its revenues.
The candidates’ trade policies are a bit more difficult to compare. All four contenders claim to be free traders. This sits well with retailers and importers that want the next president to reaffirm the U.S.’s commitment to end all apparel and textile import quotas on Jan. 1, 2005.
Robin Lanier, senior vice president of industry affairs at the International Mass Retail Association, said Bush was the only candidate without a clear record on international trade.
“He talks a good line about NAFTA, but his trade experience has only been regional,” said Lanier, referring to Bush’s statements on how NAFTA has benefitted his state.
Steve Pfister, senior vice president of government relations at the National Retail Federation, finds Bush “has been generally supportive of free trade.” However, he frets that the two Democrats’ pro-trade stance could be a bit soft, given their intense courting of unions.
It is especially “dicey with Gore,” Pfister said, citing the candidate’s AFL-CIO endorsement. Gore also voted for textile-apparel import quota restrictions when he was Senator from Tennessee, considered a textile state, but that support isn’t viewed as tarring his free-trade credentials. Plus, Gore has been part of a Clinton administration that has built a strong trade reputation, while placating labor interests.
Lanier cited Bradley’s free-trade credentials as being well tested on apparel and textile import issues. She recalled how in 1986 Bradley said retailers were being flat-footed in their opposition to that year’s apparel-textile quota bill. This scolding occurred during a lobbying stop Lanier made to Bradley’s office with other retail officials.
“He had that bull-dog Bradley expression and he told us that he might vote for the bill because the retail industry hadn’t done its job,” Lanier said.
Feeling frustrated in carrying the no-import-quota banner, Bradley exacted a commitment from retailers to “get 100,000 letters up here in opposition to the bill.”
Lanier said a retail-wide meeting was immediately called at Marshall Field’s headquarters in Chicago. Industry officials organized an unprecedented lobbying campaign, and the bill was defeated.
“If it hadn’t been for the fact that we had a meeting with Bill Bradley and he hadn’t done his bull-dog routine, I don’t know that we would have won that vote,” Lanier said.
For UNITE president Jay Mazur, Gore has sent the right message to earn the union’s endorsement because “he has indicated he would not support any trade bills that didn’t include provisions for worker rights and environmental standards and we take him at his word.”
However, Gore’s seemingly unequivocal labor and environment commitment on trade — made last month before the AFL-CIO — has become muddled. After the meeting, Gore reasserted his support for Congress to grant China permanent normal trade relations status. Organized labor wants China’s trade status to be conditioned on various human rights, labor and environmental standards.
Commenting on the four major candidates, Marty Granoff, chairman of Val d’ Or, a New York apparel maker, and former chairman of the American Apparel Manufacturers Association, said, “Any one of them would be fine, as far as their trade policies.” Granoff has contributed $1,000 to the Gore campaign, according to Federal Election Commission records.
Larry Martin, the current AAMA president, shares the same sentiment, particularly since both support granting Caribbean Basin and Central American apparel makers free-trade parity with Mexico.
Bud Konheim, ceo of Nicole Miller, and a campaign adviser to New York Mayor Rudolph W. Giuliani in his bid to become a senator, said he’s “having a hard time seeing any serious differences between the candidates.” Konheim said all four would be “capable of being president,” a job he said was akin to being a ceo managing a massive corporation.
With the economy strong, “there is no crisis facing the United States now,” Konheim said. However, he is supporting McCain because of his call for campaign finance reform.
“That’s the one thing that will have a long-term effect on the country,” Konheim said.
Federal Election Commission records show the industry is already taking a stake in this year’s presidential race, supporting candidates in their primary bids.
Leslie Fay’s chairman, John J. Pomerantz, has given the $1,000-per-candidate maximum allowed to Gore and Bradley. Jones Apparel Group ceo Sidney Kimmel has given Gore $1,000 and Sara Lee’s chief, John Bryan, has written Bradley a $1,000 check, as has Levi’s new president and ceo, Philip Marineau.
Calvin Klein has sent $1,000 to Bradley and Bill Blass has given the maximum allowable to Bush. Kenneth Cole’s giving has been directed to Gore, who received $1,000 from the designer.
Among retailers that have opened their wallets for the primary are The Limited’s chairman and ceo, Leslie Wexner, who gave Bush $1,000, and Gap chairman Donald Fisher, who contributed $1,000 each to Bush, McCain and Bradley.
Andrew Szamosszegi, a fellow with the Economic Strategies Institute specializing in trade, said the candidates’ differences on trade should become more apparent as the race progresses. Only after each party selects its candidates will they get down to the crucial issues of how free trade should be managed — for example, whether the U.S. should more readily invoke anti-dumping and countervailing duty tariffs when a trading partner breaks the rules, he said.
While Bradley and Gore have talked about beefing up assistance and retraining programs for workers displaced by trade, none of the candidates has singled out particular industries as affected by global commerce, like apparel and textiles, as needing government assistance to offset import policy.
“I haven’t heard a word on anything from the candidates about the garment industry,” said Seth Bodner, executive director of the National Knitwear and Sportswear Association, whose members are small to medium apparel makers and domestic contractors.
On labor issues, ranging from minimum wage to workplace standards, Granoff said he assumed the Republicans would be more sympathetic to industry and less likely to impose workplace regulations. Martin noted the Clinton-Gore team sought to impose workplace ergonomic standards “which didn’t please us” and has fought for a higher minimum wage, “which is not a good thing to do.”
Mazur of UNITE countered this sentiment: “We’ve fought for years for a higher minimum wage, and poll after poll has shown that consumers — that’s voters — support a higher, livable minimum wage. “This is not a political issue, it is not Democratic or Republican one, it’s a question of timing — how much to increase the wage and when.”
The NRF’s Pfister argued, “Gore, in all likelihood, would tow a straight labor line on increasing the minimum wage and seeking workplace ergonomic standards” to reduce repetitive motion maladies. Bradley, though, likely would be “at least as aggressive, if not more than Gore, in pursuing the whole labor rights agenda,” he said, in marked contrast to the two GOP aspirants, both of whom likely would “allow business to do its business without the long arm of government interference.”
Commenting on this attitude, Mazur said, “This is the 21century, not the 18th century. In the same way that government has determined the air we breath is safe, it ought to be concerned about people’s health in the workplace. Workplace disability costs total billions of dollars, and we pay for it one way or another.
“Sweatshops have returned with a vengeance in the last 10 years and it’s become an issue in other industries, as well. Government has a responsibility to protect our citizens, whatever the workplace. We feel not enough has been done.”
McCain has been an advocate of government taking a hands-off approach to business, including opposing minimum wage increases and calling for caps on damages in lawsuits. Bush’s pro-business record as Texas governor includes a damages-limiting tort reform law he backed.
Bush or McCain as president would mean a lighter regulatory load for business, said Morrison Cain, IMRA’s vice president of legal and public affairs. Although he doesn’t think either of the GOP candidates would cancel the Labor Department’s crackdown on domestic apparel contractors and manufacturers that cheat workers out of wages — a big Clinton administration push — Cain said there could be an easing of such policies.
“If there’s a party change in the White House, I expect to see what we saw after the Carter administration. Ronald Reagan came in and put an across-the-board freeze” on new regulations and then began cutting back on government rules altogether, Cain said.