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Alabama Town Questions an Economy of Socks

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Alabama Town Questions an Economy of Socks

Economy

Alabama Town Questions an Economy of Socks

Alabama Town Questions an Economy of Socks

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Fort Payne, Ala., calls itself the World's Sock Capital β€” and it doesn't like competition. The local congressman convinced President Bush to re-enact a tariff on all socks imported from Honduras. Some in town say Fort Payne needs to diversify if it wants to compete in the global economy.

ADAM DAVIDSON: Jimmy Baker is one of the survivors. He's watched most of his neighbors go out of business. And he's doing whatever he can just to hold on. Things used to be so much better. He started Baker Hosiery with nothing but a beat-up old knitting machine and some yarn.

Mr. JIMMY BAKER (Owner, Baker Hosiery): The company was founded in 1978.

DAVIDSON: How old are you? You're not old enough to have founded it.

Mr. BAKER: I was 22, 23 when the company was found.

DAVIDSON: Like most sock men, Baker doesn't have a lot of education, but he's smart. He's real polite and kind of tough; he looks like he could lift a Matec Mono 4 knitting machine right over his head, which, as it happens, he now has 250 of - humming loudly.

Mr. BAKER: This is our knitting facility. As you can see, it's far from a sweatshop.

DAVIDSON: Sweatshop? There are hardly any workers here. Sock machines are pretty much automatic. Each is about the size of a large washing machine. There's a metal tube in the middle with dozens of needles that act like robotic claws, grabbing pieces of thread and knitting them.

Mr. BAKER: This is a lady's half (unintelligible) cushion no-show.

DAVIDSON: No-show meaning it's like an anklet.

Mr. BAKER: Yes, it's like an anklet. This comes out from the top of the foot.

DAVIDSON: Every few minutes, the automatic machines spurt out what's called a sock core - basically, a gray, uncolored sock tube with the toes still open. Baker tells me he can make a sock core just as cheaply as anyone in China or Honduras - the machine costs the same, so does the yarn, there's hardly any labor. The big cost, the reason more than 100 Fort Payne mills have shut down recently comes in the next step.

Mr. BAKER: Generally, the biggest difference is the closing of the toes or the seaming of the sock.

DAVIDSON: Take your shoe off; look at your socks. That little line near your toes, that seam, it's killing the U.S. sock industry. It's simple, it just costs more to seam a sock in the U.S. than it does in China or Honduras. It doesn't cost a lot more, just a little, but that difference is enough to wreak havoc.

Baker shows me the sewing floor - there are four women sitting in front of specialized sewing machine.

Mr. BAKER: This operator, she has to turn the sock wrong side out, put it on the sewing machine, comes through, turns it back. It goes in the inventory then it goes down under wet(ph) process.

DAVIDSON: It takes about five or six seconds to sew each toe. The faster the sewer can work, the more she makes. Sock workers are paid per sock rather than an hourly wage.

Mr. BAKER: Traditionally, here in the United States, that piece rate will average anywhere from 22 to 30 cents a dozen.

DAVIDSON: In Honduras or China, it's cheaper, a penny per sock cheaper to sew a toe close. But those pennies add up; Baker sells more than 100 million socks a year; nationwide, retailers are buying billions of socks a year. There's no way they're spending a penny more per sock, so Baker and others decided the only way to save the U.S. sock industry is to convince the Bush administration to reverse a decade-old policy.

Back in 1984, the U.S. wanted to help the poor Central American nation of Honduras, where democracy had only just replaced a military dictatorship, by allowing duty-free exports of socks whose toes were seamed there.

Today, Baker wants the U.S. to rescind that deal, to re-impose the old sock tariff.

Mr. BAKER: Let's say they implement the maximum amount, 13 and a half or 14 percent, whatever it is. Well, it then makes it a closer gap.

DAVIDSON: Baker says that for him, getting this tariff back is life or death. With it, his business will thrive; without it, he's doomed. He'll close up shop, so will most American sock makers.

But the president is a committed free trader. He believes that tariffs hurt the U.S. economy. Why in the world would President Bush go along with this? One reason - a deal he struck late one night in July 2005. That night, the president met with Fort Payne's congressman, Republican Robert Aderholt, to talk about tariffs and the sock business.

Representative ROBERT ADERHOLT (Republican, Alabama): I had talked with the president and told him my concerns about it.

DAVIDSON: That meeting was, most likely, the moment Aderholt had more power than at any other time in his life. The House was voting on CAFTA, the Central America Free Trade Agreement. The vote was an exact tie, Aderholt was the holdout, and President Bush very much wanted CAFTA to pass. So, Aderholt told the president that it's simple. He could get his big free trade deal only if he rolled back free trade on one industry, the sock industry.

Rep. ADERHOLT: Absolutely. And I told him this was what I needed; this was the one thing that I had, you know, great concerns about.

DAVIDSON: That night, the president agreed to Aderholt's deal. CAFTA passed, and the White House gave itself a self-imposed deadline of December 19th of this year to put back tariffs on sock exports from Honduras.

(Soundbite of clock ticking)

Mr. JIMMY DURHAM (County Economic Development Officer, Fort Payne): Up here at the lab, we'll take a left.

DAVIDSON: I take a tour through town with Jimmy Durham, the county economic development officer. He shows me just how grim things have been for the sock business here.

Mr. DURHAM: This was a hosiery mill that was closed down.

DAVIDSON: And then this, is it a closed mill?

Mr. DURHAM: That was another one.

DAVIDSON: Five just in…

Mr. DURHAM: Yeah. Yeah.

DAVIDSON: Basically, in just a tenth of a mile stretch.

Mr. DURHAM: Right.

DAVIDSON: But here's the thing, you might think Durham is in despair about the future of Fort Payne - not at all. Those closed sock factories - they're reopening as new businesses.

Mr. DURHAM: Now this is Steadfast Breeds.

DAVISON: I've never seen a pile of (unintelligible).

(Soundbite of laughter)

Mr. DURHAM: Well, they make them and then ship them out.

DAVIDSON: Steadfast employees make decent money; making bridges brings a lot more profit than socks. Down the road is the massive Ferguson distribution/warehouse.

Oh, wow. That is huge.

Mr. DURHAM: Now, see there, they are the largest retail plumbing company in the United States - Jacuzzis, (unintelligible) tubs.

DAVIDSON: In Fort Payne, you meet a lot of people, like Jimmy Durham, who say they don't mind that socks are no longer the single, massive industry that dominates the town economy. There are newer, better-paying industries coming. There's a huge new distribution center for the National Retailer Children's Place, two new metal tube manufacturers, a high-tech label maker. For a town of only 13,000 people, this is a lot of new, good-paying employment. In fact, most of the 4,000 recently laid off sock workers quickly found new jobs. It's an irony that this tariff fought for so hard by some in Fort Payne will likely have its biggest impact thousands of miles away in Honduras.

STEWART: That was NPR's Adam Davidson. You know(ph), come to our Web site npr.org to read more about how Fort Payne, Alabama is trying to prepare its youngest residents for a high-tech future.

And that does it for The Most.

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