Last week, Milliken & Company, one of the largest U.S. textile manufacturers founded in 1865, was featured in a Wall Street Journal article on the changing position of the U.S. textile industry on international trade. As you may remember in our case study, it was Roger Milliken, the chairman of the Milliken & Company, that founded the Crafted with Pride in the U.S.A. campaign in the 1980s. The campaign not only encouraged U.S. consumers to purchase more “Made in USA” products, but also intended to raise the public awareness of “import threat”. However, titled “free trade gains a convert”, the WSJ article argues that Milliken & Company today has “dropped protectionist stance as business went global”.
The article is a great reminder of the changing nature of the U.S. textile industry in the 21st century. One of them is going global. According to the Hoover’s Academics (2015). Milliken & Company today operates about 40 manufacturing plants in the US, Belgium, China, France, and the UK, as well as sales and services offices worldwide. In particular, as mentioned in the WSJ article, China nowadays is seen as Milliken & Company’s future. The company opened an industrial-carpet factory near Shanghai in 2007 and also moved its Asia headquarters from Tokyo to Shanghai in 2012. And rather than using Chinese labor to make goods for export back to the United States, most Milliken & Company’s products made in China target the local market. As estimated by GlobalData, urbanization and an increase in house ownership in developing countries like China, India, Vietnam, Thailand and Indonesia have led to an annual 7.9% growth of carpets and rug sales in the region.
It is also important to recognize that Milliken & Company’s business model is no longer based on manufacturing basic yarn or fabrics used for apparel. Instead, the company mostly produces highly tech-driven and capital intensive industrial textiles as well as chemicals and colorants that offer more than 100 applications including infusing washable markers and liquid laundry detergent, killing bacteria, melting ice, and blocking UV rays. In many industry sources, Milliken & Comopany is even counted as a chemical company that directly competes with industry giants such as DuPont, Dow Chemical and Shaw industries. Overall, it is product and business innovation that drive this hundred-old company moving forward.
Additionally, we shall not misread title of the WSJ article—i.e. the U.S. textile industry 100% supports free trade with no condition. As a matter of fact, the rules regulating global textile and apparel trade are still very complicated and restrictive in nature. For example, the U.S. textile industry still insists strict yarn-forward rules of origin to be adopted in the Trans-Pacific Partnership (TPP) and the Trans-Atlantic Trade and Investment Partnership (T-TIP). However, many U.S. apparel companies and fashion brands see the restrictive yarn-forward rule of origin outdated and incompatible with the 21st century global apparel supply chain.
No matter how, it is a noticeable change that the U.S. textile companies like Milliken start to shift their position on international trade, even just in a subtle way. Globalization has demonstrated its impact on shaping the new landscape of the U.S. textile industry and will continue to do so in the years to come.
FASH455 Global Apparel & Textile Trade and Sourcing 
Milliken also produces goods for the U.S. Military, which need to be Berry Amendment compliant. Do you feel that their new stance on international trade helps, or hinders this division? If other companies that produce for the military made this shift, do you think the Berry Amendment could potentially be modified or removed? From a military goods standpoint, I think that their shift hinders only because that high end, exclusive market could be opened to international companies/competitors.
Great questions. First, I think Berry Amendment definitely helps maintain US domestic textile and apparel manufacturing. Supporters of the Berry Amendment come from both the US textile industry and the apparel sector, meaning there is no major industry opposition against the continuation of the program.
Second, according to one recent CRS report: http://www.fas.org/sgp/crs/natsec/RL31236.pdf , some policy makers believe that Berry Amendment contradicts free trade policies and produces negative effects such as reducing business incentive to modernize, causing inefficiency due to a lack of competition and causing higher costs to DOD. But overall these concerns are general in nature and far from being serious enough to overturn the program (it should be noted that there is no expiration date for the Berry Amendment).
Third, I see the major uncertainty regarding the future of the Berry Amendment comes from the negotiations of the Trans-Atlantic Trade and Investment Partnership (T-TIP). During the negotiation, the European Union is seeking removal of “buy America” requirements such as the Berry Amendment to get more access to the US government procurement market. Whether the US trade negotiators will trade off the Berry Amendment in exchange for bigger gains in other areas is a pending question.
On the other hand, beyond the berry amendment, I think the expansion of international investment by US textile companies will have a major change on the industry’s overall view on trade policy. Particularly, emerging economies such as China and Vietnam provide most of these new investment opportunities, implying the US textile companies will benefit from a stable and sound US-China relationship rather than a disruptive one.
Milliken & Company in 1865 had a very well thought out business plan. As the T&A industry started to grow internationally, Milliken had to change with the times. During the 80s Milliken had a model adhering to a similar one presently instated by Wal-Mart, called “Made in USA.” There is a paranoia or fear that outsourcing will hurt our economy or limit job growth. But Milliken observed the potential for growth for themselves over the U.S. as a whole, thus they abandoned “Made in USA.”
If Milliken had remained local, and sourced in the U.S., would the company had thrived or sunk?
Would Milliken be a good match for Wal-mart in their “Made in USA” campaign if they reverted back to their model from the 80s?
Has globalization in the T&A industry permanently damaged the U.S. in terms of manufacturing or is it reversible?
In response to YSL1994:
I think that Milliken could have had the power to have thrived if they remained sourced in the US. They could have grown and developed locally and possible been a force in the production world. If they had success in the US then it would have given more production factories to put up shop in the US rather than abroad. I think this would have made for a great match for Wal-Mart’s “Made in USA” model if they were to go back to their 1980’s model.
I agree with some of the comments listed above that companies such as Milliken must change with the time. At one point in time they encouraged US consumers to try to purchase only goods that were made in America, but in more recent times, they are manufacturing their goods overseas. Although Milliken is an American company, globalization is a growing phenomenon that cannot be ignored, and in the end, the companies and enterprises that do not embrace globalization are the ones that will no longer remain competitive within the textile and apparel industry. Product and business innovations are what keep businesses driving forward, as specified in the article, however without factoring globalization into these business plans, companies will not be able to survive long term.