A Town Traded Away

People in this pocket of Appalachia aren’t sure what it’s like to work in a Mexican garment factory or an Asian furniture plant. But they know how it feels to be globalized.

For years, manufacturers flocked to Chilhowie and neighboring communities because of their abundant supply of loyal, low-cost workers.

“This was the China of Virginia,” said Mike Hopkins, who supervises production at a local wood products mill.

Then, in a sudden turn of the global screw, plants began shutting down and moving out. Since 1988, Smyth County has lost 10 big factories employing 2,075 workers. Five of the plants and 1,430 of the jobs were in little Chilhowie, population 1,827.

An entire town, in effect, had been traded away.

Chilhowie’s experience is a reminder that world commerce can be a fickle taskmaster. It distributes its bounty and assesses its costs unevenly, not just among nations but within them.

In Washington, activists will take to the streets this weekend to condemn the effect of globalization on developing countries. In Chilhowie, people wonder why no one seems to have noticed the effect it’s had on them.

“The economists say that over the long haul, this is going to help America,” said Town Manager Bill Rush. “Over the long haul, that’s fine. But what are we going to do until then? I’m losing another 250 people in 30 days.”

But other people in Chilhowie reject the theology of trade.

“Just because you can buy a coffee table for $99 doesn’t mean you’re going to live well,” said Scotty Hopkins, a Chilhowie native who has bounced between employers since 1987.

Chilhowie has lived through several cycles of industrial boom and bust. Situated in the Great Valley of the Appalachians, near the point where Virginia bumps up against North Carolina and Tennessee, its first big employer was Virginia Paving & Sewer Pipe Co., which shipped its bricks “from Lynchburg to London” until its vein of clay ran out in 1910. Chilhowie Lumber Co. had its run too, supplying logs to build the Panama Canal before bankruptcy intervened.

It was not until the early 1970s that Chilhowie began to transform itself into a thriving industrial town. Local entrepreneurs enticed makers of furniture, clothing and other goods to set up shop along Route 11. Before long, Chilhowie was attracting workers from as far away as Kentucky.

The industrial boom transformed more than just the landscape. “We went from one breadwinner in the home to the ladies going to work in the sewing factories,” said Tom Bishop, who operates a home supply store, a scrap metal business and a wood framing plant in Chilhowie. With the extra income, families could afford bigger houses, better cars and other middle-class amenities.

The good times kept rolling through most of the ‘70s, ‘80s and early ‘90s. Then Chilhowie’s world turned upside-down.

In 1994, Congress approved the North American Free Trade Agreement with Mexico and Canada. U.S. apparel makers soon found themselves fighting for their lives. Some cut back domestic production; some set up plants in Mexico, where factory workers get only a fraction of the wages paid to Americans.

“To be competitive, you had to go south,” said Larry Gibbs, who has managed Spring Ford Industries’ knitting mill in Chilhowie since 1988. “I’ve seen the whole industry go away. It was all based on cost.”

Four years ago, Gibbs kept 450 workers busy assembling millions of T-shirts for the likes of Reebok International Ltd. and J.C. Penney Co. But Spring Ford announced last month that foreign competition was forcing it to go out of business. Today, Gibbs will lay off his 50 remaining workers.

One by one, Chilhowie’s biggest employers have shut their doors. Tultex Corp. closed its 200-worker sweatshirt factory in 1998. The Buster Brown plant, where 300 people assembled children’s clothes, followed in 1999. Three months ago, Natalie Knitting Mills shuttered its 350-worker sweater factory. Other mills were shutting down too. Spring Ford was the latest to fall.

Soon, trade winds began buffeting the furniture industry. When Congress approved permanent normal trade relations with China in 2000, enabling Beijing to join the World Trade Organization, a tidal wave swept across the Pacific and headed straight for Smyth County.

The products were different, but the equation was the same. Furniture industry officials say it costs about $2,000 a month to keep an American production worker employed. A Chinese factory worker costs about $100.

In September, American of Martinsville began laying off workers in Chilhowie, where 450 people built veneered furniture for hotels and motels. Last week the firm announced it would close the plant and lay off its 245 remaining workers by mid-June. It blamed competition from imports and the effect of Sept. 11 on the lodging industry.

President Noel Chitwood acknowledged that U.S. trade policy had contributed to the firm’s decision to scale back U.S. operations and initiate talks with potential suppliers in Asia.

“I’m forced to change the business model at American of Martinsville to include production from overseas,” Chitwood said. “Unfortunately, the cost of that is eliminating jobs in the United States. Is it regrettable? Sure it is. Do I understand the greater good? Not really.”

In Chilhowie, the greater good seems unfathomable. How can Americans be better off when so many people are losing their jobs? Where are the new jobs that global trade is supposed to create in this country?

The textbook answer is that layoffs are being offset by job growth in other parts of the economy, such as service industries. But few of those jobs are finding their way to Smyth County.

For many apparel workers, the skills they mastered over the years are of almost no value in today’s job market. Most of them qualify for up to two years of government-paid retraining. But in a county where almost no one is hiring, retraining offers no guarantees.

For 26 years, Jim Sawyer worked as a sewing machine mechanic at the Tultex plant. When the company folded four years ago, he signed up for machinist training. He eventually got a job at the Virginia Glove factory in nearby Glade Spring. Now, that company is shutting down too, and Sawyer will begin drawing unemployment again in August.

This time, he’s thinking about learning to be an electrician. “I’ve got a daughter who will be 14 here before long,” said Sawyer, 46. “I told her I’ll probably be going to school when she graduates. We’ll just go to college together.”

For some people, a plant closing is the end of the line.

Ruby Fields worked for 15 years as an inspector at the Tultex plant. She applied for other jobs, but got no offers. She has no health insurance, her pension appears shaky, her unemployment benefits have run out and her husband is on disability. At 60, she doesn’t think retraining makes much sense.

“I’m too old to do that,” she said. “I don’t want to go back to school and retrain. What would I retrain for?”

This distress is putting pressure on local officials to find new employers to take the place of those who left. At the top of everyone’s wish list is technology. But it’s hard to compete against the magnetic pull of northern Virginia’s bustling high-tech community, especially in a region where nearly 40% of the work force didn’t finish high school.

“People come up to me on the street and say, ‘You ought to be doing something, you ought to be out recruiting high-tech jobs,’” said County Administrator Ed Whitmore. “I’m sorry we can’t give them instant results.”

At Chilhowie’s First Church of God, Pastor Bobby Dunn prays that his community sees better days ahead, offers solace to the worried and weary, and wonders why one little town has to suffer so much so other people can save a few cents on the dollar.

“I’m hopeful about a lot of things. God is still alive. The Lord is still with us. He’ll see us through our difficult times,” Dunn said.

“About jobs, I’m not so hopeful.”