South Florida's textile industry unravels

South Florida's textile industry unravels

By Jane Bussey
April 3, 2006


Champagne flowed and candles flickered on a cool spring evening at the Biltmore Hotel six years ago as Miami newscaster Beatriz Canals raised her glass and saluted her relatives' textile factory: ``To Arca Knitting, may you celebrate 25 more years of happiness and much success!''

Guests danced the night away during that celebration on March 24, 2000, which marked a quarter century in business for the Hialeah factory that symbolized both the immigrant drive for success and the American dream. It had grown from four employees to a company with 160 employees and $30 million in annual revenue.

But despite the celebratory wishes of the emcee -- the cousin and niece of the owners and founders -- Arca Knitting didn't have 25 more years. Buffeted by shifts in the world garment trade and competition from Asia, mainly China, it survived only five more years.
Last September, Jorge I. Canals, president of the mill and namesake son of the late founder, announced to his employees that he was closing the state-of-the-art facility for good.

''I was crying for weeks before,'' said Canals in a recent interview. ''I knew I had to face it.'' The day he made the announcement, he rounded everybody up on the main floor, broke the news and then shut everything down.

The closing of Arca Knitting mirrors the unraveling of America's textile industry. The U.S. apparel and textile industry has lost almost one million jobs since 1994, including 373,000 jobs from 2001 to February 2005, according to the American Manufacturing Trade Coalition.
Even the more efficient U.S. factories -- and Arca once numbered among them -- can't compete against Asian producers that pay workers as little as 25 cents an hour; receive a host of government subsidies, tax breaks and low-cost or no-cost loans; and often don't adhere to safety and environmental rules. Taxes and healthcare costs also push the cost of production higher in the United States.

Once there was a thriving textile and apparel industry in South Florida, but factories withered away in the face of competition or moved their operations offshore. Even though Arca Knitting did its best to adapt to changing economic realities, in the end it too succumbed to the low-cost of Chinese imports.
Jorge Canals' father and mother, Cuban exiles, founded the company in 1975 -- only 12 years after arriving in United States. His father learned the business after working jobs in knitting mills, first in Elizabeth, N.J., and later in North Carolina.

For most of its existence, Arca thrived -- but the lifting of worldwide garment import quotas in January 2005 meant large retailers and importers switched their production to Asia.

Now as he oversees the dismantling of his Hialeah factory, Canals has plenty of time to think about globalization and its impact on the local economy. Beyond salaries and taxes, monthly bills for the factory included $80,000 for natural gas, $65,000 for water and $60,000 for electricity -- now all lost to the local economy.

But he also worries about the larger impact of moving everything Americans buy -- from electronics to apparel -- offshore: ``People go out and buy a new laptop -- today it's the cutting edge. In six months, it's a worthless piece of electronics. In the meantime, the money that's generated when you buy that laptop is used to build ongoing factories overseas that will continue to generate the next generation of laptops.

''That wealth goes abroad,'' he said.