Where Industry and Security Intersect
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This report responds to a Congressional directive that the U.S. Department of Commerce’s Bureau of Industry and Security (BIS):
[C]onduct a comprehensive study on the health, competitiveness, and the contribution of the U.S. textile and apparel industry to the U.S. economy and in particular to the U.S. Armed Forces. The study should include a review of whether the United States is increasing its dependency on foreign sources for critical textile-related materials; potential threats to internal security from increased foreign sourcing and dependency; and whether the Berry Amendment and other Buy American restrictions are being effectively enforced by the Department of Defense.
BIS’s Office of Strategic Industries and Economic Security (OSIES) is the focal point in the Department of Commerce for issues relating to the health and competitiveness of the U.S. defense industrial base. OSIES works to maintain and enhance national and economic security by conducting primary research and analyses on critical technologies and defense-related industrial sectors. OSIES’s capabilities are leveraged through partnerships with a wide range of defense and civilian federal agencies, state and local governments, industry associations, and universities. Congressional mandates and executive orders grant BIS the unique authority to conduct surveys and assessments of defense-related industries and technologies and to monitor economic and trade issues critical to the U.S. industrial base. Specifically, this study was conducted in accordance with BIS’s authority under the Defense Production Act of 1950, as amended (50 U.S.C. App. Sec. 2155). BIS is delegated the authority under Section 705 of the Defense Production Act of 1950, as amended, and Section 401 of Executive Order 12656, as amended, to collect basic economic and industrial information from industry.
BIS worked in conjunction with an outside consultant, Strategic Resources, Incorporated (SRI), to prepare this report. SRI is an economics consulting firm with substantial experience in conducting industry analyses such as these.
The primary sources of information for this report included:
In the preparation of this report, and in particular the Industry Survey referenced above, BIS worked in coordination with two working groups: one consisting of relevant U.S. government agencies; the other made up of associations from the textile and apparel industries.
The inter-agency working group consisted of representatives from Commerce’s International Trade Administration and Bureau of the Census, the U.S. International Trade Commission, the U.S. Bureau of Customs and Border Protection, the DoD’s Defense Logistics Agency and Defense Contract Management Agency, the U.S. Department of Labor, the Central Intelligence Agency, and the U.S. Department of Agriculture.
The industry working group consisted of representatives from the textile and apparel industries: the American Apparel & Footwear Association, the American Fiber Manufacturers Association, the National Cotton Council of America, the National Textile Association, the American Yarn Spinners Association, the American Textile Manufacturers Institute, the United States Industrial Fabrics Institute, the Industrial Fabrics Association International, the American Manufacturing Trade Action Coalition, and Clemson Apparel Research.
Significant parts of the report’s analyses derive from the results of the BIS survey. The survey covers both U.S. and foreign-owned businesses with operations in the United States. Foreign businesses operating outside the United States were not included in this study.
BIS used the expertise of the aforementioned industry working group, as well as input from the inter-agency group to pre-test the survey and identify companies that were included in the survey mailing list. The time period covered in the BIS survey is 1999 through 2003, with 2003 data estimated by the textile and apparel firms. The final survey was then sent to the Office of Management and Budget for review and approval for compliance with the Paperwork Reduction Act.
BIS sent the survey to more than 1,600 firms, and a total of 1,024 responses were received. Of those, more than 500 firms were exempted from completing the survey because their operations were not within the scope of the study, they ceased operations, or they were very small (typically with fewer than 10 employees). Of the remainder, 497 submitted valid and complete responses with critical data. The responding firms represent a significant share of the textile and apparel industries in terms of employment, shipments, and sales. Table 1 compares survey response-generated employment data with total textile and apparel employment statistics from the Department of Labor for 2002 and is provided to show the portion of the industries represented by the survey responses.
Table 1. Comparison of Department of Labor Data With BIS Textile & Apparel Survey Data: 2002 |
||
| Source of Data | Total Workers | Production Workers |
|---|---|---|
| Labor Data (NAICS) | 847,000 | 691,500 |
| Survey Data | 291,362 | 179,681 |
| Survey % | 34.4% | 26.0% |
This shows that survey results came from firms representing 34.4 percent of the total textile and apparel workforces, and 26 percent of textile and apparel production workers respectively, both indicating substantial responses.
The textile and apparel industries in the United States are comprised of both publicly traded and privately held companies. This study incorporates data obtained from publicly traded and privately held textile and apparel companies operating domestically. Firms included in this report engage in one or more of the following activities:
In an effort to meet the requirements of Congress, BIS collected information about each firm’s textile and apparel activities, such as their product lines, defense production, financial operations, investment, R&D expenditures, employment, partnerships with federal agencies and industry, competitors, and market projections. A copy of the BIS survey is included in the appendix. Consistent with the statutory authority under which the survey is issued, the individual responses filed by companies are kept confidential.
For the purposes of this assessment, the textile and apparel industries are comprised of companies that transform a basic fiber (natural or synthetic) into a product, such as yarn or fabric, that can be further processed or manufactured into woven, knitted, bonded, felted, needle-punched, lace, and crocheted goods for commercial or industrial use. The industries also include companies involved in two distinct manufacturing processes: (1) cut and sew (i.e., purchasing fabric and cutting and sewing to make a garment) and (2) the manufacture of garments in establishments that first knit fabric and then cut and sew fabric into a garment.