Bucking The Odds Scaled-Back Local Garment Industry Hangs On Despite Intense Foreign Competition

I nside a windowless brown building on North Monroe, KL Manufacturing Co. workers deftly operate powerful sewing machines, stitching down-filled jackets for Gerry Sportswear of Seattle.

By most accounts, the down jacket trade had moved to China and other offshore plants years ago.

But this job is an exception: These puffy jackets are headed to Japan, where consumers are willing to pay a premium for products tagged “Made in the USA.”

The irony isn’t lost on KL’s president Joseph Doohan, who has been working for the family owned business since grade school. He’s witnessed, with increasing regularity, giant U.S. garment merchandisers such as Levi Strauss & Co., Jansport and Nike Inc. farming out contracts to garment makers on foreign soil, where a day’s wage may equal what an American worker earns in half an hour.

This trend has allowed the companies to successfully import the clothing back to American shoppers, who spend more time looking at price tags than the manufacturer’s label.

“Any garment that has more than a half hour of labor tends to go offshore,” Doohan says as his crew of 200 workers push bright fabrics under whirling, piston-like needles. “I continue to see a future in apparel, but it becomes tougher and tougher each year.”

Not since the 1980s, when Pacific Trail closed its local sewing factory and moved its manufacturing overseas, has Spokane been considered a serious player in the garment trade. The Spokane Area Economic Development Council used to boast in its literature that garment companies were “moving substantial amounts of production into the U.S. and Spokane is poised to capitalize on this trend.”

It never happened. Rather, the Inland Northwest garment industry continues to shrink under pressure from low-cost, foreign-made goods and the declining number of sewing contracts available.

Earlier this year, it seemed the local industry might die. KL closed its factories in Post Falls and Chewelah after Jansport dropped a contract for backpacks and certain retailers reduced orders after their warehouses became clogged by slow holiday sales. All Season’s Apparel Inc. in the Spokane Valley lost its lucrative Levi Strauss & Co. jeans contract to a Mexico factory, forcing All Season’s to scramble for other customers.

But despite the odds, the local industry continues to survive by increasing its flexibility, speed and quality, and by recruiting skilled workers. In many shops, the work force reflects the recent wave of immigrants from Russia, Vietnam and Mexico.

An estimated 500 people continue to work in the Inland Northwest apparel manufacturing industry, generating more than $5 million in annual payroll.

KL has since re-opened its Chewelah plant; the Post Falls shop will not re-open, Doohan says.

He says the company has made a comeback by taking on specialty jobs, such as sewing 1,200 uniforms for the Brazilian national soccer team, and signing “cut, make and thread” contracts with major garment merchandisers.

Under these contracts, KL buys all the materials, makes the cut and sews the garment. That differs from the traditional practice of garment merchandisers supplying the materials to KL Manufacturing and other sewing shops.

If a sewing company is careful, it can increase its profit with such contracts, Doohan says. About 30 percent of KL’s business is now done under these contracts, he says, and that could grow to 100 percent in a few years.

“We’ve learned to be more versatile,” he says. “Since we don’t have any customers here in Spokane, we must go with what’s hot.”

A handful of smaller companies also produce garments and textile products. MCC Co. in the Valley employs more than 30 people who produce a line of girls clothing called “Cotton Fields” and other products. Others produce a variety of gloves, hospital uniforms and T-shirts.

Mark Gantar, owner of All Season’s, rode out several boom-and-bust cycles over the years by producing mountains of fleece outerwear, underwear and other garments for Helley Hanson, Land’s End, North Face, LL Bean and Columbia Sportswear.

Located in the old Pacific Trail plant at the Spokane Business and Industrial Park, All Season’s bills $3 million a year and employs about 100 people.

“Some of us have survived,” Gantar says, “because of our people, really.”

Gantar says the company has boosted efficiency to deliver garments cut and sewn from new patterns to customers in as little as two weeks, compared with two months from overseas plants.

“Every few months we’re changing again,” he says. “You can’t be lazy in this business.”

All Season’s has lined up enough work to carry it through 1997 and offers an incentive to employees that enables them to earn more than $10 an hour, Gantar says. Workers who earn a starting wage of $4.90 an hour can double that by producing more garments.

But Gantar believes his employees should earn even more. The patriotic Vietnam veteran blames Congress for allowing American garment makers to shift jobs to foreign plants under the North American Free Trade Agreement.

Gantar says All Season’s is handicapped by federal regulations that apply only to those operating inside U.S. borders. Unlike factories staged in Taiwan, Mexico or Indonesia, All Season’s must pay taxes, meet workplace safety codes and contribute to Social Security and unemployment insurance.

“If I decided to do what Nike has done - avoid federal income tax, don’t pay into Social Security and unemployment insurance - they’d throw me in jail,” says Gantar, who keeps copies of the Philadelphia Inquirer series, “America: Who Stole the Dream?” on his desk.

“People working on my floor haven’t had a real raise in 10 years. Why is Michael Jordan so important that he can get million dollar endorsement contracts but a lady working out here, who has three children at home, is not? Something’s wrong with that.”

Gantar says he’d go out of business if he took it upon himself to award across-the-board wage hikes to his employees.

Alison Wolf, spokeswoman for the American Apparel Manufacturers Association, says Gantar is overreacting. She says overseas operations have supplemented a shortage of sewing operators in the United States and absorbed the lower-priced garment production. That’s left American sewing shops to handle the higher skilled and more lucrative jobs, she says.

When asked whether Nike sportswear and Levi jeans were considered “lower-priced items,” Wolf said there may be some exceptions.

In 1995, U.S. consumers spent $178 billion for apparel, the association says. About half that was for imported goods.

Wolf says the outlook for clothing sales this holiday season - and future U.S.-based garment manufacturing - is bright. Consumers, who had delayed buying clothes in recent years because of high prices, may find good deals this year.

“If you’re not buying clothes,” she says, “you should be.”

, DataTimes ILLUSTRATION: 2 Color Photos