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And we respectfully urge not only this subcommittee to pass the override on this resolution, but also we hope that the full committee will do it, the Committee on Ways and Means, and hopefully the Congress.
There could be no other way that I can think of that all the elements for such a decision will come together as they do in this decision, in this case here involving these 5,500 leather apparel workers of the United States.
Thank you, Mr. Chairman.
[The prepared statement follows:] STATEMENT OF THE AMALGAMATED CLOTHING AND TEXTILE WORKERS UNION, AFL
The overwhelming import penetration and injury suffered by this industry is well documented in the report to the President from the U.S. International Trade Commission. The evidence of injury was so great and the need for relief so clear, that the ITC unanimously found injury and made a unanimous recommendation on remedy
Of all industries which have filed for “escape clause” import relief, under the Trade Act of 1974, only six received unanimous findings of injury and of these only three received unanimous recommendations on import relief. The leather apparel industry is the only one to be denied any import relief by the President. If the President's decision is allowed to stand, the law and Congress will have lost their credibility in the eyes of thousands of workers, the majority of whom are members of our Union.
The thousands of workers whose livelihood depends on this industry are from the inner city of New York and Chicago and Newark, New Jersey, as well as from small towns in Missouri, Wisconsin, and rural New England. To think that these workers can find alternative employment, such as assembling airplanes in Seattle or programming computers in California, is absurd. Yet all people knowledgeable about the industry agree that American leather apparel workers are by far the most productive in the world.
The Senate Finance Committee in the legislative history to the Trade Act of 1974 put the jobs of American workers above some marginal cost to the consumer which may result from import relief. The inflationary impact on the consumer of import relief for the leather apparel industry will be so small as to be virtually unmeasurable.
Our people must see that the laws are not just for the rich and the powerful, that even the smallest, but legitimate, voices asking for help are heeded. The industry is prepared to do those things necessary to become more productive and more competitive. Our union has been and will continue to work with the industry in this process.
STATEMENT I am Murray H. Finley, President of the Amalgamated Clothing and Textile Workers Union. Our union represents close to One-half million workers in the apparel, textile and related industries, including the great majority of workers making leather apparel. I am also speaking today on behalf of the International Ladies' Garment Workers' Union and the United Food and Commercial Workers Union, the two other labor organizations which were co-petitioners in this case before the U.S. International Trade Commission.
We welcome this hearing and the renewed opportunity it provides to alleviate the hard-pressed situation of the people who depend upon the leather apparel industry for their livelihood. These are people from the inner city of New York and Chicago and Newark, New Jersey. These are people from small towns in Missouri and Wisconsin, and from rural New England where the supplying tanneries are located. The workers are predominantly from various ethnic minorities and most lack a high school diploma. To think that these people will find alternative employment—that they would simply begin to assemble airplanes in Seattle or become program computers in California or administer oil entitlements in Houston-is absurd.
No one put it better than our member, Simon Tennenbaum, who testified before the International Trade Commission. Mr. Tennenbaum explained how he had spent his working career of 33 years as a leather cutter and now was unemployed. At age 61 he had been looking for another job for almost a year and had despaired of
finding work again. When asked whether he had been offered retraining and, if so, what kind, Mr. Tennenbaum replied that no retraining opportunities had been made available to him. When the Labor Department asked him what he would like to be retrained for, he replied “How about brain surgeon!" Mr. Tennenbaum thus highlighted the complete lack of realism on the part of those who advocate readjustment assistance as a solution for the thousands who suffer the true impact of increased imports.
We are talking of 6,000 leather apparel workers who have already lost their jobs in the last few years and the remaining 5,500 who face unemployment in the near future if no action is taken. And I want to emphasize that all people knowledgeable about the industry agree that American leather apparel workers are by far the most productive in the world.
Gentlemen, the facts of this case make it unique in its injustice among all escape clause cases. The overwhelming import penetration and injury suffered by this industry is well documented in the ITC's report and need not be repeated again. Just keep in mind that three-fourths of the American leather apparel market now is imported garments.
But there is one fact we cannot neglect, nor, for that matter, can we explain to our unemployed membership. Of all industries which have filed for "escape clause” import relief, the ITC has made only six unanimous findings of injury since passage of the Trade Act. Of these six, some type of import relief was granted to all except one, the leather apparel industry being that one exception. Even more compelling, the ITC was also unanimous in its recommendation for import relief. This has happened for a total of only three of the above six industries, and the other two did receive import relief. It is not an exaggeration to say that what is at stake here is the very credibility of government action and the efficacy of our laws.
Congress passed the Trade Act of 1974 to encourage freer and expanded world trade. At the same time it provided a policy of import relief for those industries and workers who suffered a disproportionate burden from the consequences of expanded trade. Congress set explicit and stiff criteria that had to be met before import relief was granted. But at least it made available a means for obtaining such relief. The leather apparel industry met those criteria-in that there was no disagreementbut yet no relief was provided. If this case does not merit import relief, how then can any relief to any industry be justified under this statute? If the President's decision is allowed to stand, the law and Congress will have lost their credibility in the eyes of our membership-and with good reason.
Recall that when the President was considering whether or not to provide import relief to the leather apparel industry, it was just at the point of peak acceleration of our inflation problem. At that time inflation was running at an annual rate of 18 percent and everyone was running scared. Those advising the President to deny import relief to the leather apparel workers and industry thought this would be a significant step in reducing inflation.
On top of this basic point, the Committee should be aware that prices of leather apparel this year have declined from last year. In addition, there is a great misconception that retail prices directly reflect rises or declines in the duties assessed on imports. This is not the case.
But this is the wrong industry to bear the burden of the fight, a kind of Charge of the Light Brigade against the overwhelming Czarist forces. The attack is being made at the wrong point. Simple mathematics shows that providing import relief to the leather apparel industry-even of the most extreme type---would have a totally inconsequential effect on our nation's inflation problem. It is unconscionable that the remaining 5,000 plus workers in this industry be the cannon fodder in the inflation fight.
We ask all those who would oppose this override resolution what great national economic harm would be done if the modest tariff relief recommended by the ITC would be implemented?
Congress has an opportunity to tell the White House that its policy intent was very clear when the Trade Act provided a means
for an industy to obtain amelioration from an overwhelming flow of imports. The Senate Finance Committee's report on the Trade Act states: "With regard to the effect of relief on consumers, the Committee feels that the goals of the Employment Act of 1946 should be paramount ... If the choice is between (1) allowing an industy to collapse and thereby creating greater unemployment, larger Federal or State unemployment compensation payments, reduced tax revenues, and all the other costs to the economy associated with high unemployment, or (2) temporarily protecting that industry from excessive imports at some marginal cost to the consumer, then the Committee feels that the President should adopt the latter course and protect the industry and the jobs associated with that industry.'
The one remaining chance of survival for the leather wearing apparel workers I am privileged to represent is to have Congress rectify the President's errant judgment. The recourse of the escape clause mechanism must regain credibility, both to regain respect for law and for government in general. Our people must see that the laws are not just for the rich and the powerful, that even the smallest, but legitimate, voices asking for help are heeded. The industry is prepared to do those things necessary to become more productive, more competitive, as you will hear shortly. Our union has been and will continue to work with the industry in this process.
We ask this Committee, and subsequently the rest of Congress, to provide the import relief the leather apparel industry and its work force surely deserve by quickly affirming the override resolution before you. Positive action will redress the insulting slap in the face given the thousands of insecure workers still dependent on domestic leather apparel production, will give the industry the chance it needs to regain its legitimate cost-effective market share, and will allow the Committee to reaffirm the coherent, equitable trade policy the Trade Act of 1974 was meant to provide. I urge the Subcommittee and full Committee to report favorably House Concurrent Resolution 383.
Mr. GIBBONS. You make an eloquent argument, Mr. Finley.
Mr. GIBBONS. Mr. Cooper?
SPORTSWEAR MANUFACTURING CO., INC.; CO-CHAIRMAN,
Mr. COOPER. Mr. Chairman, I am Morton Cooper, president of Cooper Sportswear Manufacturing Co., which produces leather apparel. I am currently cochairman of the Import Action Committee of the National Outerwear and Sportswear Association.
Let me tell you something about ourselves and our industry. Cooper Sportswear, a family business, was founded by my father about 1914. My brother and I joined the company in the late 1930's and except for a 342-year period-each of us served in the armored division of the U.S. Army-we have been with Cooper Sportswear. We now have a third generation in the business.
My father struggled through the panic of the 1920's, through the depression of the 1930's, a tornado that destroyed a factory in Gainsville, Ga., in 1935, and yet never failed to meet a payroll on time, even though sometimes this meant pawning a ring in Simpson's Pawn Shop in the Bowery in New York.
We have seen our company grow slowly but steadily, and in the 1970's we became one of the largest manufacturers of leather apparel, employing at a peak over 800 workers who worked the year around. Our factories are located in the older cities of New Jersey–Newark, Perth Amboy, and Trenton. Our work force in the last couple of years has diminished and we are now down to about, oh, less than 500 workers, and they are not working full time.
The makeup of this industry is of small companies. These companies exemplify the American capitalistic system. If you trace the origin, you will find that it was started by one or two workers who scrimped and saved some money and invested their skills in a small business. Some prospered and grew into larger companies, and others failed. But at least they had the opportunity.
Over the years, after many disappointments and rejections and finally when we as an industry achieved what we thought was a
major victory—the unanimous finding of injury and the unanimous recommendation of an increase in tariffs by the ITC—this exaltation did not last too long, because the President stunned the industry by rejecting the ITC recommendation.
In the meantime, while a number of companies have gone out of business, those of us who are left are working harder than ever to improve our competitive position.
Cooper Sportswear, in an effort to improve its efficiency, has done the following: We have increased the design and sales force; we installed a computer system to improve the collection of data for management analysis. These data enable us to spot trends in the market as they occur and to make adjustment in ordering supplies and producing different styles, and in targeting our sales force more effectively.
We recently, with aid from the Trade Adjustment Assistance Center of the New Jersey Development Authority, hired through competitive bid a top-notch consulting and engineering firm who are currently doing a complete survey and study of our company, management, marketing, factory layout, equipment, style and product mix, quality control and the development of a full in-house engineering department.
The recommendations we get from this analysis, when they are implemented, will further our efforts to achieve greater efficiency.
My brother and I believe that we can reverse the trend. We believe so strongly that we have put a lifetime of savings and security with our bankers so that our company would not be sort of working capital.
We need the time to accomplish this. You are our last hope to rectify a terrible wrong.
House Concurrent Resolution 383 offers a perfect opportunity for the Government and U.S. industry which provides valuable employment opportunities to thousands of Americans to work hand in hand toward an objective we call deserve—a healthy U.S. industry making an important contribution to the U.S. economy.
In listening to the administration's position earlier about the hide situation in the world market, I must address myself to either an understanding of what the hide situation is around the world or a camouflaging of what really is going on.
The United States is the world's largest exporter of hides. We have the largest and most diversified, most reliable source of this type of material. There are countries around the world who have closed their export of this raw material to the advantage of their local industries. Be that as it may, let's concern ourselves with the impact of this resolution, with what the impact would have on American hide producers, which seems to be of great concern to some of the Congressmen who have a parochial interest-and I can appreciate that.
The raw material that is used by the Far Eastern manufacturers, principally in Korea and Taiwan, for garment purposes does not come from the United States; next to no cattle hides are used in the production of leather garments in these countries. The raw material that is principally used is made of cattle hides from Argentina, tanned by Argentine tanners and shipped to the Far East.
Naturally, they were also made for producers in their own countries, but the principal users over the past years of American cattle hides for garment purposes have been the American manufacturers.
So the cattle people would lose an important customer unless this customer is aided.
The concept that the U.S. Government has been working out agreements with the South Americans, well, yes, we have made an agreement with Argentina. They have reduced the export duty on hides from 30 percent to 15 percent; but everybody in the Government failed to cite any figures as to what happened to the sale of these hides around the world.
The sale of these hides has been negligible. The bulk of South American hides in Argentina, which is the principal producer, has remained in Argentina and is put into leather and either put into finished products or shipped abroad in tanned products, in tanned material.
So there is no advantage to the hide producers of the United States in turning down the leather garment industry; they would be just shutting off one of their customers, and I know that everybody wants to have as many customers as is possible.
The administration failed to mention that just recently there was a visit by our Commerce Department, trying to work out an agreement with-I think-principally Argentina and Brazil on the subsidization of the export of leather products; and they were flatly turned down.
So this whole talk about the effect that this would have on our relations with these other countries is just a smokescreen; it is just a red herring; it is not a hide; it is a red herring, just trying to disguise the fact that the administration went against us, and now they are trying to justify the position that they took, but the facts do not bear out what they have presented to us today.
The industry is at a crossroads. The administration, on the one hand, talks about the fact that it doesn't pay to give this industry any protection because it wouldn't help anyway. On the other hand, they scurried around this past week to find out what they have been doing for us; and they did find out some things are going
The economic adjustment assistance has started; it has not been implemented, but the machinery is there, and with the aid of this machinery, which would be loans and technical assistance, progress can be made. So, on the one hand, they are telling us how they are helping us, but, on the other hand, they are telling us it won't help anyway. We believe it will help. We believe we are like a sick patient: A diagnosis has been made of the type of aid needed for the sick patient, but he needs oxygen to keep living while this aid will take place, while the patient will have a chance to gain his health and vigor back.
Now, the duty recommended to be implemented over a period of 3 years is the oxygen that this industry needs, and the benefits derived, not only by the industry but also by the entire country, are most important to the welfare of individuals who are seeking to find gainful employment, to businesses who have spent a lifetime in cultivating markets in this country and who are doing every