U.S. Shoe Business Is Booming--With Imports : New England Plants Closed, Workers Fired as Firms Use Cheap Foreign Labor
Each day, Don Breingan watched the supply of leather, laces and stitching shrink at the Bangor factory of G. H. Bass & Co., the shoemakers. There had been no orders for new supplies, he noted.
Rumors of a closing had circulated for months. Breingan began asking friends--salesmen familiar with the New England shoe industry--if they knew of other jobs. He spent nights chasing leads by phone.
Ironically, as Breingan and other Bass workers braced to lose their jobs in September, electricians were installing wiring in the company’s new headquarters in Falmouth.
For, despite the closing of three factories in as many years, business is booming for Bass. Unfortunately for Breingan and the other shoemakers, most of the shoes come from places thousands of miles from Wilton, where George Henry Bass began making men’s boots in 1876.
4 Million Pairs
The places are South Korea, Taiwan, Brazil. There, foreigners stamp the Bass name on more than 4 million pairs of boots, loafers and dress shoes each year.
Bass President Richard Bourret said that to remain competitive with other publicly owned domestic shoe companies, as well as foreign manufacturers, Bass was forced to move into the retail outlet market and sell shoes made by cheap foreign labor. Today, Bass imports about 60% of its footwear.
Fawn Evenson, a vice president of the Footwear Trade Action Coalition, said many other shoe companies also have turned to imports for profits.
“They won’t always tell you, however, that they have had to close factories and lay off workers to make those profits,” she said.
92 Close in a Year
In 1970, 838 U.S. shoe manufacturers were in business, said Alfred Eckes of the International Trade Commission in Washington. In 1984, 459 remained. That year, 92 factories closed.
In New England, once the footwear capital of the world, more than 6,600 jobs--one-third of the industry’s work force--have been lost and more than 40 factories shut down in the last 18 months.
Last year, the industry asked President Reagan to help stop the flood of imports that had swallowed 75% of the domestic market. The ITC recommended that imports be reduced to 60%.
But in August, Reagan refused to impose quotas or raise tariffs. Protectionist legislation was a crippling cure more dangerous than any economic illness, Reagan said.
1,200 Laid Off
In 1978, Bass was bought by Chesebrough-Pond’s Inc. of Connecticut, which also produces Prince tennis rackets, Vaseline and Ragu spaghetti sauce, and in the last three years Bass has laid off 1,200 shoemakers. Yet, since 1980, the company’s sales have increased $125 million, largely as a result of Bass opening 110 retail stores to sell imported shoes.
Bass offered 25 shoe styles 20 years ago. Since it began importing shoes, it offers 225 styles--from Italian-made women’s dress shoes to its classic Weejun loafer. Bass owns factories overseas but contracts for most of its imports.
“If we could wave a magic wand and change the dynamics, we would certainly want to make all our shoes that could be made here,” Bourret said. “But I don’t think if you want to grow and remain competitive you can do it as a 100% American manufacturer.”
Some shoe companies have, however.
Sebago Shoe Co., Dexter, Red Wing and several other private companies in northern New England produce and sell only American-made shoes.
‘A Matter of Policy’
“We produce only what we, in our Westbrook and Bridgton factories, can make, and that has been a matter of policy since 1946 when the company was formed,” said Sebago President Daniel Wellehan.
To say shoe companies cannot remain competitive today unless they import “is kind of the herd mentality of public companies that live from quarter to quarter,” Wellehan said.
Private companies are under much less pressure to show expanding profit margins, Wellehan said. “Therefore, we are able to take a very long-term view of our future direction.
“We live in this community, our roots are in Maine. People in some cases have been working here for 40 years. We feel we owe them a certain amount of allegiance.”
Allegiance to people like Don Breingan.
Working for 25 Years
Breingan, 49, was born in Maine, lives in Old Town. He had been making shoes for 25 years when the Bass factory in Bangor closed in September.
At the end of a shift three weeks before the six-year-old factory made its final shoe, the workers were called together. Everyone knew why.
“They said due to no relief on import quotas we’re having to close down,” said Breingan, the plant’s former supervisor. “They just aren’t making shoes anymore.”
Breingan eventually found a job at Encore Shoe Corp. in Rochester, N.H., 200 miles from his wife and 15-year-old daughter. Encore, which sells under the brand name Zodiac U.S.A., employs 750 and imports only 2% of its shoes.
Near Airport
Bass opened its factory at the Bangor International Airport in 1980 in a one-story metal building less than half a mile from the flight line.
When the factory opened, import restrictions were in place and the company was expanding its domestic shoe business. At its peak, 350 people worked at the plant.
But a year later, Reagan refused to reaffirm the marketing agreements that had restricted imports from Far East countries.
“It turned out to be a problem for the whole shoe industry,” Bourret said. “It created a real opportunity for importers to come into this market.”
700 Lose Jobs
By 1983, Bass factories in Jay and Rumford had closed, leaving 700 without jobs. The company consolidated its domestic manufacturing in Wilton and Berlin, N.H. They employ 1,100.
“We hope we’ve struck a balance between importing and domestic shoe manufacturing,” Bourret said.
Reagan’s refusal to renew the import restrictions was one reason Bass--and other U.S. shoe companies--stepped up their importing in 1981, Bourret said.
In 1984, 726 million pairs of shoes were imported, the ITC’s Eckes said. Of that, 215 million pairs were for American companies like Bass that pay foreign companies to make their shoes.
