Meena Thiruvengadam
The Wall Street Journal
WASHINGTON -- A plan by Treasury Secretary Timothy Geithner to limit lobbyists' influence over the $700 billion bailout program has yet to get off the ground -- even as the program nears an end.
Just a few hours after being sworn in last January, Mr. Geithner promised to craft rules preventing external influence over bailout decisions. More than six months later -- and 100 days before the financial-industry bailout program is scheduled to stop taking applications for aid -- those rules have yet to be finalized.
Mr. Geithner's Treasury has disbursed $10.2 billion to various institutions since January, part of the more than $200 billion the government has funneled into the banking system. Several firms already have repaid more than a combined $70 billion, entering and exiting from the program before the adoption of rules aimed at curbing external influences.
Mr. Geithner told a government watchdog that "other issues had consumed Treasury's time and taken precedence over completing the guidance," according to a report released Aug. 6 by a special inspector general overseeing the government's bailout.
The Treasury, which didn't respond to requests for comment Friday, has largely been consumed with trying to respond to the financial crisis, operating at the outset with just Mr. Geithner and a skeleton crew of advisers.
The watchdog report said the Treasury was completing its draft policy limiting lobbyist communication with Treasury officials. It said the Treasury was waiting for the White House to finalize lobbying restrictions related to the $787 billion economic-stimulus program before issuing its bank-rescue guidelines.
The report noted that while available information gave "little indication" that special interests have influenced the government's bailout decisions, it said inconsistent record-keeping made it "impossible to examine the impact of all potential external inquiries" on the process.
When the Treasury announced its plans to curb bailout lobbying earlier this year, a spokeswoman said the department intended to publish weekly communication logs showing contact between public officials and external entities -- such as lobbyists -- discussing rescue plans for specific institutions. No such logs have been made available.
Saturday, August 15, 2009
Wednesday, March 18, 2009
Obama Top Recipient Of AIG Campaign Cash In '08 Election
By Meena Thiruvengadam
Of DOW JONES NEWSWIRES
WASHINGTON (Dow Jones)--President Barack Obama received more campaign cash from American International Group Inc. (AIG) employees in the 2008 election cycle than did any other candidate, according to data from the Center for Responsive Politics.
Obama - the recipient of more than $104,000 in contributions - is among several politicians who accepted campaign cash from AIG employees but are now vilifying the embattled insurance giant. The company is 80% owned by the federal government, which has provided it with more than $170 billion in aid. It has become the subject of mounting congressional outrage over $165 million in bonus payouts made last week to employees in a division blamed for much of its losses.
Obama has expressed his anger over the company's actions many times in recent days. But he accepted $104,332 from AIG employees during the 2008 election cycle, according Center for Responsive Politics data.
White House representatives didn't return phone calls or emails seeking comment.
The Center for Responsive Politics tracks campaign contributions using data from the Federal Election Commission. The data include contributions from political action committees and individuals.
The group's data show AIG employees in the past 20 years have made $9.3 million in contributions to federal candidates and parties. They contributed $644,218 to federal candidates in 2008 alone.
Employees in the company's financial products division, the unit that last week paid out the $165 million in bonuses, made $142,978 in campaign contributions in 2008 - more than any other division within AIG.
Employees in that division, blamed for much of AIG's financial troubles, have been top contributors to congressional campaigns since 2002, according to the Center for Responsive Politics' data.
Senate Banking Committee Chairman Chris Dodd, D-Conn., in 2008 alone received $103,900 from AIG employees. The sum makes him the No. 2 recipient of AIG employees' campaign funds in the latest election cycle.
Dodd has received more than $280,000 from AIG employees throughout his career.
A spokeswoman for Dodd didn't respond to requests for comment.
AIG's employees in the 2008 election cycle also made significant contributions to Senate Finance Committee Chairman Max Baucus, D-Mont.; Vice President Joe Biden; Rep. Paul Kanjorski, D-Pa., chairman of the House Financial Services Capital Markets, Insurance and Government-Sponsored Enterprises Subcommittee; and former Sen. John Sununu, R-N.H., currently a member of the panel overseeing the government's Troubled Asset Relief Program.
Baucus has received $91,000 from AIG employees throughout his career, nearly one-third of it in the latest election cycle. The senator during his career has collected more money from AIG employees than from employees at any other entity.
A spokesman for the senator said Baucus is no longer accepting campaign money from employees of any company, including AIG, that has received aid through the government's $700 billion financial industry rescue package.
Biden received nearly $20,000 in 2008 while Kanjorski received $12,000. Sununu received $18,500.
Kanjorski is chairman of the House subcommittee that held the Wednesday hearing at which AIG Chief Executive Edward Liddy appeared.
Of DOW JONES NEWSWIRES
WASHINGTON (Dow Jones)--President Barack Obama received more campaign cash from American International Group Inc. (AIG) employees in the 2008 election cycle than did any other candidate, according to data from the Center for Responsive Politics.
Obama - the recipient of more than $104,000 in contributions - is among several politicians who accepted campaign cash from AIG employees but are now vilifying the embattled insurance giant. The company is 80% owned by the federal government, which has provided it with more than $170 billion in aid. It has become the subject of mounting congressional outrage over $165 million in bonus payouts made last week to employees in a division blamed for much of its losses.
Obama has expressed his anger over the company's actions many times in recent days. But he accepted $104,332 from AIG employees during the 2008 election cycle, according Center for Responsive Politics data.
White House representatives didn't return phone calls or emails seeking comment.
The Center for Responsive Politics tracks campaign contributions using data from the Federal Election Commission. The data include contributions from political action committees and individuals.
The group's data show AIG employees in the past 20 years have made $9.3 million in contributions to federal candidates and parties. They contributed $644,218 to federal candidates in 2008 alone.
Employees in the company's financial products division, the unit that last week paid out the $165 million in bonuses, made $142,978 in campaign contributions in 2008 - more than any other division within AIG.
Employees in that division, blamed for much of AIG's financial troubles, have been top contributors to congressional campaigns since 2002, according to the Center for Responsive Politics' data.
Senate Banking Committee Chairman Chris Dodd, D-Conn., in 2008 alone received $103,900 from AIG employees. The sum makes him the No. 2 recipient of AIG employees' campaign funds in the latest election cycle.
Dodd has received more than $280,000 from AIG employees throughout his career.
A spokeswoman for Dodd didn't respond to requests for comment.
AIG's employees in the 2008 election cycle also made significant contributions to Senate Finance Committee Chairman Max Baucus, D-Mont.; Vice President Joe Biden; Rep. Paul Kanjorski, D-Pa., chairman of the House Financial Services Capital Markets, Insurance and Government-Sponsored Enterprises Subcommittee; and former Sen. John Sununu, R-N.H., currently a member of the panel overseeing the government's Troubled Asset Relief Program.
Baucus has received $91,000 from AIG employees throughout his career, nearly one-third of it in the latest election cycle. The senator during his career has collected more money from AIG employees than from employees at any other entity.
A spokesman for the senator said Baucus is no longer accepting campaign money from employees of any company, including AIG, that has received aid through the government's $700 billion financial industry rescue package.
Biden received nearly $20,000 in 2008 while Kanjorski received $12,000. Sununu received $18,500.
Kanjorski is chairman of the House subcommittee that held the Wednesday hearing at which AIG Chief Executive Edward Liddy appeared.
Thursday, September 11, 2008
Dry Cleaners Protest US Tariffs On Chinese Wire Hangers
By Meena Thiruvengadam
Of DOW JONES NEWSWIRES
WASHINGTON (Dow Jones)-- An attempt to protect one vanishing U.S. industry - the makers of steel wire garment hangers - is drawing opposition from dry cleaners who had switched to cheaper Chinese-made substitutes for their customers' shirts, dresses and pants.
The U.S. International Trade Commission on Thursday unanimously voted that low-price Chinese hangers have injured domestic manufacturers, clearing the way for punitive tariffs to drive up the cost of Chinese imports. Dry cleaners complain the measure is increasing their costs at a time when they can least afford it.
Dry cleaners across the country have been writing to the ITC for months, protesting a decision to impose punitive tariffs on the imports.
"U.S. dry cleaners have been devastated paying already double or more for the same hangers which only a few months ago were priced at a reasonable rate," hundreds of dry cleaners from California to New Jersey wrote in letters filed with the commission this summer.
Dry cleaners in their letters estimate their costs for hangers could increaseby $6,552 each this year, a figure they say is equivalent to about 10% of the average income of a dry cleaning business.
Still, the Department of Commerce last month issued a final rule requiring Chinese hanger exporters to pay the U.S. anti-dumping duties of up to 187% of a shipment's value should the ITC determine U.S. businesses have been harmed, as it did Thursday. The duties are meant to punish Chinese companies benefitting from government subsidies that allow them to export hangers at prices below market value.
"For better or for worse," by law, the ITC and the Department of Commerce under which it operates, "are not allowed to take into consideration the views of consumers," a high-level commerce official said in a recent interview.
The official said considering the views of consumers would make the process of assessing and imposing duties less transparent.
The anti-dumping duty is meant to protect the U.S. hanger manufacturing industry from unfair competition, however much of that sector has died since a first failed push for punitive tariffs against Chinese hanger exports six years ago.
Since Alabama-based M&B Metal Products first asked the government to impose anti-dumping duties in 2002, seven U.S. hanger makers have ceased production and hanger imports have leaped by more than 800%, largely boosted by Chinese manufacturers. China is the largest source of U.S. steel wire garment hanger imports.
Employment in the domestic hanger manufacturing sector has dwindled to just 139 in 2007, according to an ITC investigation. The figure is one-third of what it was in 2005. A handful of remaining U.S. manufacturers produce just 9% of the 3.3 billion steel wire garment hangers used in the country each year. In 2007 alone, the U.S. imported 2.7 billion hangers valued at $83.6 million from China.
About 85% of all steel wire garment hanger imports are used by the nation's estimated 30,000 dry cleaning businesses.
M&B, whose first request for punitive tariffs required presidential approval it could not garner. M&B made its second petition for tariffs in 2007 under a different law that wouldn't require presidential support.
And there are signs the U.S. tariffs - despite their unintended consequence - are reviving the U.S. hanger making sector.
"We're much busier," said M&B President Milton Magnus, whose grandfather started the company in 1943. "We've hired a lot more people, and we're buying a lot more materials."
Without the tariffs, Magnus expects he would be forced to shut down his business.
Thanks to climbing product prices, Calif.-based Shanti Industries last year was able to restart production at a previously shuttered Wisconsin plant it bought from a prior owner. The company also has plants in California and Kentucky and plans to boost production because of increased domestic demand for its products in the wake of rising import prices.
Magnus said hanger costs finally have reversed a six-year trend of declines to reach what he calls a fair price of 8-12 cents each.
He believes tariffs are adding between 1-3 cents to the cost of each Chinese hanger imported and said the brunt of the price hike dry cleaners are seeing result from rising costs for raw steel.
Following two years of increases, prices for steel remain near historically high levels despite some softening in recent months.
Prices for steel mill products rose 33% between July 2007 and July 2008, the latest figures from the Bureau of Labor Statistics Producer Price Index show.
"We're paying about 60 cents a pound for steel. Before, we were paying 25 cents," Magnus said, describing the higher prices he now pays for the carbon steel wire used to manufacture hangers.
Of DOW JONES NEWSWIRES
WASHINGTON (Dow Jones)-- An attempt to protect one vanishing U.S. industry - the makers of steel wire garment hangers - is drawing opposition from dry cleaners who had switched to cheaper Chinese-made substitutes for their customers' shirts, dresses and pants.
The U.S. International Trade Commission on Thursday unanimously voted that low-price Chinese hangers have injured domestic manufacturers, clearing the way for punitive tariffs to drive up the cost of Chinese imports. Dry cleaners complain the measure is increasing their costs at a time when they can least afford it.
Dry cleaners across the country have been writing to the ITC for months, protesting a decision to impose punitive tariffs on the imports.
"U.S. dry cleaners have been devastated paying already double or more for the same hangers which only a few months ago were priced at a reasonable rate," hundreds of dry cleaners from California to New Jersey wrote in letters filed with the commission this summer.
Dry cleaners in their letters estimate their costs for hangers could increaseby $6,552 each this year, a figure they say is equivalent to about 10% of the average income of a dry cleaning business.
Still, the Department of Commerce last month issued a final rule requiring Chinese hanger exporters to pay the U.S. anti-dumping duties of up to 187% of a shipment's value should the ITC determine U.S. businesses have been harmed, as it did Thursday. The duties are meant to punish Chinese companies benefitting from government subsidies that allow them to export hangers at prices below market value.
"For better or for worse," by law, the ITC and the Department of Commerce under which it operates, "are not allowed to take into consideration the views of consumers," a high-level commerce official said in a recent interview.
The official said considering the views of consumers would make the process of assessing and imposing duties less transparent.
The anti-dumping duty is meant to protect the U.S. hanger manufacturing industry from unfair competition, however much of that sector has died since a first failed push for punitive tariffs against Chinese hanger exports six years ago.
Since Alabama-based M&B Metal Products first asked the government to impose anti-dumping duties in 2002, seven U.S. hanger makers have ceased production and hanger imports have leaped by more than 800%, largely boosted by Chinese manufacturers. China is the largest source of U.S. steel wire garment hanger imports.
Employment in the domestic hanger manufacturing sector has dwindled to just 139 in 2007, according to an ITC investigation. The figure is one-third of what it was in 2005. A handful of remaining U.S. manufacturers produce just 9% of the 3.3 billion steel wire garment hangers used in the country each year. In 2007 alone, the U.S. imported 2.7 billion hangers valued at $83.6 million from China.
About 85% of all steel wire garment hanger imports are used by the nation's estimated 30,000 dry cleaning businesses.
M&B, whose first request for punitive tariffs required presidential approval it could not garner. M&B made its second petition for tariffs in 2007 under a different law that wouldn't require presidential support.
And there are signs the U.S. tariffs - despite their unintended consequence - are reviving the U.S. hanger making sector.
"We're much busier," said M&B President Milton Magnus, whose grandfather started the company in 1943. "We've hired a lot more people, and we're buying a lot more materials."
Without the tariffs, Magnus expects he would be forced to shut down his business.
Thanks to climbing product prices, Calif.-based Shanti Industries last year was able to restart production at a previously shuttered Wisconsin plant it bought from a prior owner. The company also has plants in California and Kentucky and plans to boost production because of increased domestic demand for its products in the wake of rising import prices.
Magnus said hanger costs finally have reversed a six-year trend of declines to reach what he calls a fair price of 8-12 cents each.
He believes tariffs are adding between 1-3 cents to the cost of each Chinese hanger imported and said the brunt of the price hike dry cleaners are seeing result from rising costs for raw steel.
Following two years of increases, prices for steel remain near historically high levels despite some softening in recent months.
Prices for steel mill products rose 33% between July 2007 and July 2008, the latest figures from the Bureau of Labor Statistics Producer Price Index show.
"We're paying about 60 cents a pound for steel. Before, we were paying 25 cents," Magnus said, describing the higher prices he now pays for the carbon steel wire used to manufacture hangers.
Monday, September 17, 2007
Road May Be Lonely As NAFTA Trucking Program Stalls
By Meena Thiruvengadam
Express-News Business Writer
WILSONS MILLS, N.C. -- When trucker Luis Gonzalez drove from Monterrey, Mexico, to North Carolina last week, he expected to be the first of many who would make such a journey.
Now it appears he may be one of only a handful.
Gonzalez, a driver for Nuevo Len-based Transportes Olympic, is part of a controversial Department of Transportation cross-border trucking pilot program that has the potential to end a 13-year free trade impasse between the United States and Mexico. He hopes it paves the way to new destinations for him.
"I like the adventure of the open road," he said. "Through this program, maybe I will know Alaska. I want to know Alaska." But the day after Gonzalez made the first delivery under the program -- dropping a load of steel at a Baptist church construction site in a small town nestled among farmland, tall trees and picturesque cottages -- U.S. senators voted to pull funding for the program.
No one knows the exact cost of the one-year program, but the 75-23 vote to amend a transportation spending bill falls in line with an earlier House decision to pull funding. President Bush has threatened to veto the bill.
The program aims to give truckers from 100 Mexican carriers access to U.S. roadways and would be a step toward implementing one of the last outstanding components of the North American Free Trade Agreement. As many as 100 U.S. trucking companies also would gain access to Mexico.
More than $500 million already has been spent on preparing to open the country's southern border, according to the Federal Motor Carrier Safety Administration, the agency overseeing the program. Should the transportation spending bill become law, funding for the program would be suspended Oct. 1.
"This is something we've been trying to do for a number of years, but it seems every time we get close, someone in Congress wants to move the goalpost," said John Hill, the safety agency's administrator.
With hopes of breaking a stalemate that dates back 25 years, the Transportation Department announced plans for the pilot program in February. Administrators said it would provide an opportunity to test critics' claims that Mexican trucks are a danger to the environment and to U.S. motorists.
The Teamsters have been the most vocal critic of the NAFTA provisions and have worked for more than a decade to stop their implementation.
"This is the wrong program at the wrong time. It endangers motorists on highways and it endangers national security," Teamsters General President Jim Hoffa said in a Wednesday interview. "Big business wants cheaper labor, and they don't give a damn." Gonzalez earns the equivalent of 13 cents per mile, plus about $20 a day for expenses. U.S. trucking giant Celadon pays truckers 31 cents or more a mile. Truckers in the United States earn an average of about $36,000 a year, according to the Bureau of Labor Statistics.
Cross-border trucking advocates say the real issue is a fear of competition and a desire to protect American trucking jobs, but not all U.S. truckers are scared of their Mexican colleagues.
Like Gonzalez, Victor Dominguez drove a truck from Laredo to North Carolina. But instead of driving his own load across the border, he had to collect his cargo from a Mexican trucker who made the crossing.
Dominguez, an Argentina native who has been in the business 45 years and drives for Trans Texas Transport Inc., believes a trucking shortage on both sides of the border leaves plenty of work to go around.
Gonzalez's safe, uneventful delivery to North Carolina says nothing about the overall ability of Mexican carriers to operate safely in the United States, Hoffa said. "This isn't about one truck. It's the overall fleet that they're going to come across with." Although the Department of Transportation has outlined stricter safety regulations for Mexican carriers than those imposed on their U.S. counterparts, problems still exist in the DOT plan, the agency's inspector general said in his latest report to Congress. The department has "insufficient plans to check every truck every time" it crosses the border, the report says.
Trucking companies would undergo rigorous safety inspections every three months, but drivers' licenses and safety decals would be checked at each border crossing, according to the DOT plan. Initial safety checks also would be limited to only the trucks on a carrier's property when the Transportation Department conducts the on-site inspection.
Companies would not be restricted to trucks that have been inspected, the inspector general's report says. Of the 140 trucks Mexican companies intend to operate in the United States under the pilot program, 78, or 56 percent, have been inspected.
So far, Transportes Olympic is the only Mexican company authorized to operate in the United States under the DOT program, and only two of its trucks have been certified. Owner Fernando Pez said operating his trucks safely is his top priority.
The company has a clean safety record, according to the U.S. government.
The first truck Pez dispatched across the border was a 2007 model sporting less than 150,000 miles. The first driver, Gonzalez, has more than 10 years' experience driving big rigs and is among the company's best, Pez said.
Along the road from Monterrey to North Carolina, Gonzalez regularly performed meticulous checks of his vehicle, stayed within drive time limits, and once motioned to a trucker passing by that his toolbox was open, helping save motorists from a potential threat.
He tracked his driving and rest hours just as his American counterparts do -- with special forms and a pen. He rested for 10 hours a night, spending much of the time in his truck cab's comfortable bed under sunflower-printed sheets.
As other truckers flew past him on the highway, Gonzalez stayed below posted speed limits.
"It's important for me to be safe," Gonzalez said. "I have a wife and two daughters at home." Other than a Mexican license plate and a small caravan of journalists, there wasn't much that differentiated Gonzalez from U.S. truckers. His wasn't a sleepless journey made in a rickety old truck belching black smoke, as critics had predicted. Instead, it was a long haul like the thousands that take place each day in the United States.
On the way home to Mexico, he picked up a load of raw steel in Decatur, Ala. It was headed for a factory in Mexico.
George Griffin, foreman of the construction site where Gonzalez delivered his cargo, said he doesn't mind sharing the road with Mexican truckers.
"I think the really dangerous people on the road are the young and the elderly," he said.
Besides, he said, Mexican companies generally provide him with better prices for construction supplies. And in construction, "whichever company comes up with the best price gets the job," Griffin said.
Building Systems de Mexico, the company that manufactured the steel rafters Gonzalez delivered, is often a winner, he said. And with Mexican exporters expecting to shave 15 percent from their operating costs should the U.S. open its southern border, buyers such as Griffin could eventually see lower prices.
"When you're spending $300,000 for steel for a project, saving anything you can is important," he said.
In Gonzalez's eyes, the cross-border trucking program is important because it will save time and money for companies hauling cargo across the border.
As far as being able to drive safely, Gonzalez is convinced Mexican drivers must be among the world's best because of all the obstacles they face on their roads.
"The Mexican people crossing here know the rules, laws, and all the things about driving American people know," he said.
Express-News Business Writer
WILSONS MILLS, N.C. -- When trucker Luis Gonzalez drove from Monterrey, Mexico, to North Carolina last week, he expected to be the first of many who would make such a journey.
Now it appears he may be one of only a handful.
Gonzalez, a driver for Nuevo Len-based Transportes Olympic, is part of a controversial Department of Transportation cross-border trucking pilot program that has the potential to end a 13-year free trade impasse between the United States and Mexico. He hopes it paves the way to new destinations for him.
"I like the adventure of the open road," he said. "Through this program, maybe I will know Alaska. I want to know Alaska." But the day after Gonzalez made the first delivery under the program -- dropping a load of steel at a Baptist church construction site in a small town nestled among farmland, tall trees and picturesque cottages -- U.S. senators voted to pull funding for the program.
No one knows the exact cost of the one-year program, but the 75-23 vote to amend a transportation spending bill falls in line with an earlier House decision to pull funding. President Bush has threatened to veto the bill.
The program aims to give truckers from 100 Mexican carriers access to U.S. roadways and would be a step toward implementing one of the last outstanding components of the North American Free Trade Agreement. As many as 100 U.S. trucking companies also would gain access to Mexico.
More than $500 million already has been spent on preparing to open the country's southern border, according to the Federal Motor Carrier Safety Administration, the agency overseeing the program. Should the transportation spending bill become law, funding for the program would be suspended Oct. 1.
"This is something we've been trying to do for a number of years, but it seems every time we get close, someone in Congress wants to move the goalpost," said John Hill, the safety agency's administrator.
With hopes of breaking a stalemate that dates back 25 years, the Transportation Department announced plans for the pilot program in February. Administrators said it would provide an opportunity to test critics' claims that Mexican trucks are a danger to the environment and to U.S. motorists.
The Teamsters have been the most vocal critic of the NAFTA provisions and have worked for more than a decade to stop their implementation.
"This is the wrong program at the wrong time. It endangers motorists on highways and it endangers national security," Teamsters General President Jim Hoffa said in a Wednesday interview. "Big business wants cheaper labor, and they don't give a damn." Gonzalez earns the equivalent of 13 cents per mile, plus about $20 a day for expenses. U.S. trucking giant Celadon pays truckers 31 cents or more a mile. Truckers in the United States earn an average of about $36,000 a year, according to the Bureau of Labor Statistics.
Cross-border trucking advocates say the real issue is a fear of competition and a desire to protect American trucking jobs, but not all U.S. truckers are scared of their Mexican colleagues.
Like Gonzalez, Victor Dominguez drove a truck from Laredo to North Carolina. But instead of driving his own load across the border, he had to collect his cargo from a Mexican trucker who made the crossing.
Dominguez, an Argentina native who has been in the business 45 years and drives for Trans Texas Transport Inc., believes a trucking shortage on both sides of the border leaves plenty of work to go around.
Gonzalez's safe, uneventful delivery to North Carolina says nothing about the overall ability of Mexican carriers to operate safely in the United States, Hoffa said. "This isn't about one truck. It's the overall fleet that they're going to come across with." Although the Department of Transportation has outlined stricter safety regulations for Mexican carriers than those imposed on their U.S. counterparts, problems still exist in the DOT plan, the agency's inspector general said in his latest report to Congress. The department has "insufficient plans to check every truck every time" it crosses the border, the report says.
Trucking companies would undergo rigorous safety inspections every three months, but drivers' licenses and safety decals would be checked at each border crossing, according to the DOT plan. Initial safety checks also would be limited to only the trucks on a carrier's property when the Transportation Department conducts the on-site inspection.
Companies would not be restricted to trucks that have been inspected, the inspector general's report says. Of the 140 trucks Mexican companies intend to operate in the United States under the pilot program, 78, or 56 percent, have been inspected.
So far, Transportes Olympic is the only Mexican company authorized to operate in the United States under the DOT program, and only two of its trucks have been certified. Owner Fernando Pez said operating his trucks safely is his top priority.
The company has a clean safety record, according to the U.S. government.
The first truck Pez dispatched across the border was a 2007 model sporting less than 150,000 miles. The first driver, Gonzalez, has more than 10 years' experience driving big rigs and is among the company's best, Pez said.
Along the road from Monterrey to North Carolina, Gonzalez regularly performed meticulous checks of his vehicle, stayed within drive time limits, and once motioned to a trucker passing by that his toolbox was open, helping save motorists from a potential threat.
He tracked his driving and rest hours just as his American counterparts do -- with special forms and a pen. He rested for 10 hours a night, spending much of the time in his truck cab's comfortable bed under sunflower-printed sheets.
As other truckers flew past him on the highway, Gonzalez stayed below posted speed limits.
"It's important for me to be safe," Gonzalez said. "I have a wife and two daughters at home." Other than a Mexican license plate and a small caravan of journalists, there wasn't much that differentiated Gonzalez from U.S. truckers. His wasn't a sleepless journey made in a rickety old truck belching black smoke, as critics had predicted. Instead, it was a long haul like the thousands that take place each day in the United States.
On the way home to Mexico, he picked up a load of raw steel in Decatur, Ala. It was headed for a factory in Mexico.
George Griffin, foreman of the construction site where Gonzalez delivered his cargo, said he doesn't mind sharing the road with Mexican truckers.
"I think the really dangerous people on the road are the young and the elderly," he said.
Besides, he said, Mexican companies generally provide him with better prices for construction supplies. And in construction, "whichever company comes up with the best price gets the job," Griffin said.
Building Systems de Mexico, the company that manufactured the steel rafters Gonzalez delivered, is often a winner, he said. And with Mexican exporters expecting to shave 15 percent from their operating costs should the U.S. open its southern border, buyers such as Griffin could eventually see lower prices.
"When you're spending $300,000 for steel for a project, saving anything you can is important," he said.
In Gonzalez's eyes, the cross-border trucking program is important because it will save time and money for companies hauling cargo across the border.
As far as being able to drive safely, Gonzalez is convinced Mexican drivers must be among the world's best because of all the obstacles they face on their roads.
"The Mexican people crossing here know the rules, laws, and all the things about driving American people know," he said.
Saturday, May 5, 2007
Investor Pressure Led To Clear Channel's No On Buyout Offer
By Meena Thiruvengadam
San Antonio Express-News
With a Clear Channel shareholder vote on a $19.35 billion buyout offer from a pair of Boston private equity firms just days away, investors have made their message clear: the price isn't right.
And the San Antonio-based company's board of directors had their own message for would-be buyers Bain Capital Partners and Thomas H. Lee Partners: a sweetened offer of 20 cents more a share or the chance to hold stock in a private Clear Channel isn't enough to make a difference.
But it's unclear whether the majority of shareholders have had the chance to reach that conclusion themselves.
Clear Channel's board announced late Thursday it had decided not to put to a vote Bain and Lee's new offer of $39.20 a share and a chance to hang on to 30 percent of the acquired company's shares, saying significant stakeholders have said they want more than $39 and aren't interested in the option of holding on to part of a private company.
"The drumbeat is loud enough that the board realizes its fiduciary duty is to accept something much higher than $39.20," said David Joyce, an analyst with Miller Tabak & Co. LLC.
Technically, Bain and Lee didn't raise their overall bid for Clear Channel, instead lowering the amount that would be paid to the founding Mays family and increasing the shareholder payout.
Clear Channel founder L. Lowry Mays and sons Mark Mays, the company's chief executive, and Randall Mays, chief financial officer and president, would have been paid only $37.60 a share in the new offer, with the difference being used to finance the 20-cent-a-share increase to shareholders.
Submitting the new bid to shareholders also would have required Clear Channel to delay a twice-postponed shareholder vote yet again.
But the offer of shares in a private Clear Channel may have been the best way to resolve nearly six months of wrangling over the company's original $18.7 billion, $37.60-a-share, sale price.
"What more do they expect?" asked Colin Blaydon, director of the Center for Private Equity and Entrepreneurship at Dartmouth College. "If there's not another offer, it puts the management team in the position of trying to restructure the business to get the same returns as private equity investors. That's going to be a challenging task for them." Stub equity, or the option of holding on to a piece of a private company after a leveraged buyout, is the classic way to bridge the pricing argument, Blaydon said. "If you think the price is too low and don't want to be cashed out, you stay in," he said.
But stub equity doesn't offer the same benefits as traditional stocks. It's not as liquid and can't be can't be traded on a public stock exchange. It would, however, give investors a chance at cashing in on private equity profits.
In an era reminiscent of the buyout boom of the 1980s, "there is all of this concern about whether management teams and their boards truly are serving the interests of shareholders," Blaydon said.
At a $37.60-a-share price, proxy advisor Glass Lewis & Co. estimated Bain and Lee would earn a 22 percent internal rate of return on their Clear Channel investment. Including debt, the total value of the original deal was $26.7 billion.
According to data from transaction tracker Dealogic, Clear Channel shareholders would have earned a premium of 10.2 percent over Clear Channel's closing price the day before the company announced it was for sale.
Sources familiar with the situation say Bain and Lee's latest bid comes after negotiations with major shareholders opposed to both the original offer and a revised $19.35 billion, $39-a-share offer made last month.
Fidelity Management & Research and Highfields Capital Management, which combined hold about 15 percent of Clear Channel's shares, had indicated they would vote against both offers.
However, the New York Times reported Friday that Highfields, which holds 5 percent of Clear Channel's shares, had agreed to vote for Bain and Lee's most recent proposal. Larry Larsen, a spokesman for Boston-based Highfields, declined to comment.
Spokesmen for Bain, Lee and Clear Channel declined to comment beyond a news release issued after the market closed Thursday.
Influential proxy advisors Egan-Jones and Institutional Shareholder Services both had suggested shareholders reject that offer. Under Texas law, Clear Channel would have needed two-thirds of its shareholders to vote for the buyout.
Still, a vote on the $39-a-share offer is scheduled for Tuesday.
But with the outcome already foretold, Miller Tabak analyst Joyce said Clear Channel "needs to refocus on their operations now." Clear Channel shares traded at nearly triple their normal volume Friday and closed up 40 cents at $36.35.
San Antonio Express-News
With a Clear Channel shareholder vote on a $19.35 billion buyout offer from a pair of Boston private equity firms just days away, investors have made their message clear: the price isn't right.
And the San Antonio-based company's board of directors had their own message for would-be buyers Bain Capital Partners and Thomas H. Lee Partners: a sweetened offer of 20 cents more a share or the chance to hold stock in a private Clear Channel isn't enough to make a difference.
But it's unclear whether the majority of shareholders have had the chance to reach that conclusion themselves.
Clear Channel's board announced late Thursday it had decided not to put to a vote Bain and Lee's new offer of $39.20 a share and a chance to hang on to 30 percent of the acquired company's shares, saying significant stakeholders have said they want more than $39 and aren't interested in the option of holding on to part of a private company.
"The drumbeat is loud enough that the board realizes its fiduciary duty is to accept something much higher than $39.20," said David Joyce, an analyst with Miller Tabak & Co. LLC.
Technically, Bain and Lee didn't raise their overall bid for Clear Channel, instead lowering the amount that would be paid to the founding Mays family and increasing the shareholder payout.
Clear Channel founder L. Lowry Mays and sons Mark Mays, the company's chief executive, and Randall Mays, chief financial officer and president, would have been paid only $37.60 a share in the new offer, with the difference being used to finance the 20-cent-a-share increase to shareholders.
Submitting the new bid to shareholders also would have required Clear Channel to delay a twice-postponed shareholder vote yet again.
But the offer of shares in a private Clear Channel may have been the best way to resolve nearly six months of wrangling over the company's original $18.7 billion, $37.60-a-share, sale price.
"What more do they expect?" asked Colin Blaydon, director of the Center for Private Equity and Entrepreneurship at Dartmouth College. "If there's not another offer, it puts the management team in the position of trying to restructure the business to get the same returns as private equity investors. That's going to be a challenging task for them." Stub equity, or the option of holding on to a piece of a private company after a leveraged buyout, is the classic way to bridge the pricing argument, Blaydon said. "If you think the price is too low and don't want to be cashed out, you stay in," he said.
But stub equity doesn't offer the same benefits as traditional stocks. It's not as liquid and can't be can't be traded on a public stock exchange. It would, however, give investors a chance at cashing in on private equity profits.
In an era reminiscent of the buyout boom of the 1980s, "there is all of this concern about whether management teams and their boards truly are serving the interests of shareholders," Blaydon said.
At a $37.60-a-share price, proxy advisor Glass Lewis & Co. estimated Bain and Lee would earn a 22 percent internal rate of return on their Clear Channel investment. Including debt, the total value of the original deal was $26.7 billion.
According to data from transaction tracker Dealogic, Clear Channel shareholders would have earned a premium of 10.2 percent over Clear Channel's closing price the day before the company announced it was for sale.
Sources familiar with the situation say Bain and Lee's latest bid comes after negotiations with major shareholders opposed to both the original offer and a revised $19.35 billion, $39-a-share offer made last month.
Fidelity Management & Research and Highfields Capital Management, which combined hold about 15 percent of Clear Channel's shares, had indicated they would vote against both offers.
However, the New York Times reported Friday that Highfields, which holds 5 percent of Clear Channel's shares, had agreed to vote for Bain and Lee's most recent proposal. Larry Larsen, a spokesman for Boston-based Highfields, declined to comment.
Spokesmen for Bain, Lee and Clear Channel declined to comment beyond a news release issued after the market closed Thursday.
Influential proxy advisors Egan-Jones and Institutional Shareholder Services both had suggested shareholders reject that offer. Under Texas law, Clear Channel would have needed two-thirds of its shareholders to vote for the buyout.
Still, a vote on the $39-a-share offer is scheduled for Tuesday.
But with the outcome already foretold, Miller Tabak analyst Joyce said Clear Channel "needs to refocus on their operations now." Clear Channel shares traded at nearly triple their normal volume Friday and closed up 40 cents at $36.35.
Sunday, October 16, 2005
Some Stitch Plans For Better Future
By Meena Thiruvengadam
San Antonio Express-News
FABENS -- Julia Rodriguez has spent nearly half her life sewing hems onto blue jeans in this one-stoplight town 30 miles southeast of El Paso.
Like generations of factory workers before her, she carved out a life using her salary as a ticket to independence.
"I didn't have to ask anybody for anything, not even my husband," she said through a translator. "Because I had my own money, I could do what I want." But on Oct. 7, the VF Jeanswear plant where Rodriguez worked closed, transferring its workload to Costa Rica, where it can be done more cheaply. And, like many factory workers before her, Rodriguez lost her job.
"The hardest thing you ever have to do is to tell people who are doing a perfectly good job that you don't have a job for them anymore," said Sam Tucker, corporate vice president of human resources.
Losing the VF Jeanswear plant will be especially tough for Fabens. The desert town of about 8,000 was once a railway hub, but now with only a few fast-food restaurants, a couple of bars and a handful of other small businesses, it's barely noticeable to the truckers driving by on Interstate 10.
VF Jeanswear moved to Fabens in the 1960s after buying a local blue jeans manufacturer. At its height, the plant employed 850 people, equal to about 10 percent of the town's population.
With almost 400 employees working at the plant, VF Jeanswear was the city's largest employer, followed by a local school district.
But among workers' stories of uncertainty, anger, fear and financial struggles, there already are tales of successful new beginnings.
Antonia Garcia started a master's degree program in education last month. The mother of four operated a forklift at the Fabens plant until she was laid off in 2003. "When I was laid off, it was like having cold water thrown in my face," she said.
It was a wake-up call that renewed her commitment to her education.
"If I don't finish my education, I'm going to end up working in another factory," she said. "I don't want that." After obtaining a master's degree, Garcia plans to become a teacher.
Pedro Gallo, who rose from sewing machine operator to production line supervisor in his nearly 23 years at the plant, plans to explore opportunities in the medical field. "I'm determined to get some education in that field somehow," he said.
Rodriguez, who doesn't speak much English but can understand almost anything said to her, isn't sure what she'll do next. She wants to learn more English, develop computer skills and get a GED.
"My life is going to change completely," she said. "With no more jeans, I will have to depend on unemployment, and even to survive on that will be hard."
San Antonio Express-News
FABENS -- Julia Rodriguez has spent nearly half her life sewing hems onto blue jeans in this one-stoplight town 30 miles southeast of El Paso.
Like generations of factory workers before her, she carved out a life using her salary as a ticket to independence.
"I didn't have to ask anybody for anything, not even my husband," she said through a translator. "Because I had my own money, I could do what I want." But on Oct. 7, the VF Jeanswear plant where Rodriguez worked closed, transferring its workload to Costa Rica, where it can be done more cheaply. And, like many factory workers before her, Rodriguez lost her job.
"The hardest thing you ever have to do is to tell people who are doing a perfectly good job that you don't have a job for them anymore," said Sam Tucker, corporate vice president of human resources.
Losing the VF Jeanswear plant will be especially tough for Fabens. The desert town of about 8,000 was once a railway hub, but now with only a few fast-food restaurants, a couple of bars and a handful of other small businesses, it's barely noticeable to the truckers driving by on Interstate 10.
VF Jeanswear moved to Fabens in the 1960s after buying a local blue jeans manufacturer. At its height, the plant employed 850 people, equal to about 10 percent of the town's population.
With almost 400 employees working at the plant, VF Jeanswear was the city's largest employer, followed by a local school district.
But among workers' stories of uncertainty, anger, fear and financial struggles, there already are tales of successful new beginnings.
Antonia Garcia started a master's degree program in education last month. The mother of four operated a forklift at the Fabens plant until she was laid off in 2003. "When I was laid off, it was like having cold water thrown in my face," she said.
It was a wake-up call that renewed her commitment to her education.
"If I don't finish my education, I'm going to end up working in another factory," she said. "I don't want that." After obtaining a master's degree, Garcia plans to become a teacher.
Pedro Gallo, who rose from sewing machine operator to production line supervisor in his nearly 23 years at the plant, plans to explore opportunities in the medical field. "I'm determined to get some education in that field somehow," he said.
Rodriguez, who doesn't speak much English but can understand almost anything said to her, isn't sure what she'll do next. She wants to learn more English, develop computer skills and get a GED.
"My life is going to change completely," she said. "With no more jeans, I will have to depend on unemployment, and even to survive on that will be hard."
Apparel Industry No Longer A Good Fit In El Paso
By Meena Thiruvengadam
San Antonio Express-News
EL PASO -- Inside two windowless buildings on El Paso Street, a remnant of this city's former glory is hanging by a thread.
"We try to hold on to as much as we can, but little by little I've had to give up some of my business here and send it to Mexico in order to survive," said Alfred Fernandez, owner and founder of AMERI-TECH Distributors, a company that makes jeans sold under designer and store brand labels.
El Paso was once considered the blue jeans capital of the world. In the 1980s, it cranked out an estimated 2 million pairs of America's favorite pants each week. But in the past decade, America's jeans manufacturing giants have moved elsewhere, and AMERI-TECH Distributors is among only a handful of small-scale jeans makers that remain.
On Oct. 7, VF Jeanswear, the maker of the Wrangler and Lee brands, became the last major jeans manufacturer to leave the area. Laying off 395 workers, it shut down a manufacturing center in Fabens, 30 miles southeast of the city, and transferred the work to Costa Rica, where it can be done more cheaply.
"Unfortunately, if you're going to be in the apparel business, you have a hard time producing in the U.S.," said Sam Tucker, corporate vice president of human resources for VF Jeanswear. "We held out for as long as we could." As recently as 1999, VF Jeanswear, with 4,500 workers at six area plants, was El Paso's largest private employer, a title once held by Levi Strauss & Co. Levi's had more than 4,600 employees working in its seven El Paso plants at its height.
At the time, Levi's also had 2,400 employees in San Antonio. But layoffs began in 1990, and by 2004 the company was no longer making jeans in San Antonio or anywhere else in the country.
"If you go into a mass merchant like Wal-Mart or Target, you can buy a pair of nice specialty jeans for under $10," Tucker said. "In order to meet those prices, you can't make them here." Today, nearly every one of the 450 million pairs of jeans sold in the United States is made outside its borders, with a single pair traveling through several countries as it's assembled for sale here. A pair of jeans that could be made for $6.67 in El Paso costs about $3 to make in Ciudad Jurez, Mexico, and $1.50 in China.
Even China is facing competition from cheaper labor markets such as Indonesia and Russia.
"That is the problem with this type of manufacturing. It follows the low wages," said Jesus Caas, an economic analyst with the Federal Reserve Bank of Dallas' El Paso branch.
Tennessee, Mississippi, Alabama, North Carolina and even Mexico had thriving garment manufacturing sectors that have disappeared or are disappearing.
"You hope the economy outgrows those industries," said Lorenzo Reyes, interim CEO of Upper Rio Grande at Work, an El Paso-area work force development commission. "But with us, layoffs were massive, and there was a lack of recognition that this was going to happen." In the 1970s, an estimated 40,000 people worked in El Paso blue jeans factories. By 1993, a year before the North American Free Trade Agreement took effect, fewer than 24,000 El Pasoans were working in all types of apparel manufacturing.
"As time progressed, NAFTA came into play and things really changed," Ameri-tech's Fernandez said. "All of our customers began going to Mexico for cheaper labor.
The agreement erased limitations that once forced companies to manufacture at least part of their product in the United States and cleared the way for companies to send more of their work abroad to cheaper labor.
Today, fewer than 2,500 people work in all types of apparel manufacturing in El Paso, according to the Texas Workforce Commission.
Many displaced workers, mostly Hispanic women between 35 and 55, received government aid for job retraining and English instruction, but program limitations, a lack of formal education and language deficiencies have stunted their re-entry into the job market.
"The challenge is how to you find jobs for people who are unskilled and uneducated and only speak Spanish," El Paso mayor John Cook said. "Unfortunately all the federal monies that were given to us for workforce training were squandered to teach people English instead of teaching them job skills."
Even with a college degree and fluent English, moving from the blue jeans factories of El Paso to other work is difficult.
Rosa Villa, who was laid off from a VF Jeanswear plant in El Paso in November, recently got a bachelor's degree in business administration from the University of Phoenix.
Nevertheless, "I haven't been able to find anything," she said. With her financial aid and unemployment benefits depleted, Villa is relying on the Women, Infants and Children program and food stamps to support herself and her three children.
To make her electric payment, Rodriguez cut off her phone service last month, a move particularly heartbreaking to her teenaged daughter.
"I am very scared. I don't have any income," Villa said. "This month I was able to make my payments, but next month I don't know what I'm going to do." Caas is sympathetic toward workers such as Villa. Still, he insists El Paso overall is better off now than when apparel manufacturing was a cornerstone of its economy.
Economists call it creative destruction. Apparel and textile factories are often the first factories in an area, and when they leave they free up resources for other, more advanced, higher-paying industries to move in, Caas said.
"In the end, we the consumers benefit because we can go to Wal-Mart, Kmart or Target and get things like a nice pair of shoes for $9.99, and we have more money to enjoy our lives," he said.
Although El Paso has lost 22,000 manufacturing jobs in the past decade, it has gained 48,000 jobs in the service sector, Caas said.
Overall, the city now has about 25,000 more jobs than it did in 1995, and in August, El Paso enjoyed higher job growth than any other city in the state.
"On average, these new jobs pay 30 to 40 percent more than jobs in apparel factories," Caas said. "This is part of the natural evolution of economies." Expensive designer jeans have helped AMERI-TECH Distributors survive that evolution.
The company has moved most of its blue jeans production to Torren, Mexico, but continues to produce high-end jeans and pajamas in El Paso, also its distribution and administration headquarters.
Torren has been a hub for blue jeans manufacturers for years, but before NAFTA, most of its jeans stayed in Mexico. Now, AMERI-TECH's plant there produces more than 100 times as many pairs of jeans per week for sale in the United States as its El Paso plant makes.
"You have to go along with change," Fernandez said. "Globalization is inevitable." Incorporating premium fabrics and labor-intensive designs, the jeans Ameri-tech makes in El Paso sell for $200 to $600 a pair, far more than Fernandez is willing to pay for a pair. But this is one area in which his company has an edge over foreign manufacturers.
Mexico, Central America and Asia may offer lower production costs, but the savings come at the price of longer travel times that can keep companies from keeping pace with America's rapidly changing fashion tastes.
The countries also can't produce jeans with the now rare "Made in the USA" label. "There's a big push from companies for the Made in the USA label," Fernandez said. "For some companies it's a real selling point, but to give it to them, we have to do everything here." And as long as that demand is there, 100 to 130 AMERI-TECH workers will continue cutting, sewing and adding finishing touches to America's favorite pants in what was once the blue jeans capital of the world.
San Antonio Express-News
EL PASO -- Inside two windowless buildings on El Paso Street, a remnant of this city's former glory is hanging by a thread.
"We try to hold on to as much as we can, but little by little I've had to give up some of my business here and send it to Mexico in order to survive," said Alfred Fernandez, owner and founder of AMERI-TECH Distributors, a company that makes jeans sold under designer and store brand labels.
El Paso was once considered the blue jeans capital of the world. In the 1980s, it cranked out an estimated 2 million pairs of America's favorite pants each week. But in the past decade, America's jeans manufacturing giants have moved elsewhere, and AMERI-TECH Distributors is among only a handful of small-scale jeans makers that remain.
On Oct. 7, VF Jeanswear, the maker of the Wrangler and Lee brands, became the last major jeans manufacturer to leave the area. Laying off 395 workers, it shut down a manufacturing center in Fabens, 30 miles southeast of the city, and transferred the work to Costa Rica, where it can be done more cheaply.
"Unfortunately, if you're going to be in the apparel business, you have a hard time producing in the U.S.," said Sam Tucker, corporate vice president of human resources for VF Jeanswear. "We held out for as long as we could." As recently as 1999, VF Jeanswear, with 4,500 workers at six area plants, was El Paso's largest private employer, a title once held by Levi Strauss & Co. Levi's had more than 4,600 employees working in its seven El Paso plants at its height.
At the time, Levi's also had 2,400 employees in San Antonio. But layoffs began in 1990, and by 2004 the company was no longer making jeans in San Antonio or anywhere else in the country.
"If you go into a mass merchant like Wal-Mart or Target, you can buy a pair of nice specialty jeans for under $10," Tucker said. "In order to meet those prices, you can't make them here." Today, nearly every one of the 450 million pairs of jeans sold in the United States is made outside its borders, with a single pair traveling through several countries as it's assembled for sale here. A pair of jeans that could be made for $6.67 in El Paso costs about $3 to make in Ciudad Jurez, Mexico, and $1.50 in China.
Even China is facing competition from cheaper labor markets such as Indonesia and Russia.
"That is the problem with this type of manufacturing. It follows the low wages," said Jesus Caas, an economic analyst with the Federal Reserve Bank of Dallas' El Paso branch.
Tennessee, Mississippi, Alabama, North Carolina and even Mexico had thriving garment manufacturing sectors that have disappeared or are disappearing.
"You hope the economy outgrows those industries," said Lorenzo Reyes, interim CEO of Upper Rio Grande at Work, an El Paso-area work force development commission. "But with us, layoffs were massive, and there was a lack of recognition that this was going to happen." In the 1970s, an estimated 40,000 people worked in El Paso blue jeans factories. By 1993, a year before the North American Free Trade Agreement took effect, fewer than 24,000 El Pasoans were working in all types of apparel manufacturing.
"As time progressed, NAFTA came into play and things really changed," Ameri-tech's Fernandez said. "All of our customers began going to Mexico for cheaper labor.
The agreement erased limitations that once forced companies to manufacture at least part of their product in the United States and cleared the way for companies to send more of their work abroad to cheaper labor.
Today, fewer than 2,500 people work in all types of apparel manufacturing in El Paso, according to the Texas Workforce Commission.
Many displaced workers, mostly Hispanic women between 35 and 55, received government aid for job retraining and English instruction, but program limitations, a lack of formal education and language deficiencies have stunted their re-entry into the job market.
"The challenge is how to you find jobs for people who are unskilled and uneducated and only speak Spanish," El Paso mayor John Cook said. "Unfortunately all the federal monies that were given to us for workforce training were squandered to teach people English instead of teaching them job skills."
Even with a college degree and fluent English, moving from the blue jeans factories of El Paso to other work is difficult.
Rosa Villa, who was laid off from a VF Jeanswear plant in El Paso in November, recently got a bachelor's degree in business administration from the University of Phoenix.
Nevertheless, "I haven't been able to find anything," she said. With her financial aid and unemployment benefits depleted, Villa is relying on the Women, Infants and Children program and food stamps to support herself and her three children.
To make her electric payment, Rodriguez cut off her phone service last month, a move particularly heartbreaking to her teenaged daughter.
"I am very scared. I don't have any income," Villa said. "This month I was able to make my payments, but next month I don't know what I'm going to do." Caas is sympathetic toward workers such as Villa. Still, he insists El Paso overall is better off now than when apparel manufacturing was a cornerstone of its economy.
Economists call it creative destruction. Apparel and textile factories are often the first factories in an area, and when they leave they free up resources for other, more advanced, higher-paying industries to move in, Caas said.
"In the end, we the consumers benefit because we can go to Wal-Mart, Kmart or Target and get things like a nice pair of shoes for $9.99, and we have more money to enjoy our lives," he said.
Although El Paso has lost 22,000 manufacturing jobs in the past decade, it has gained 48,000 jobs in the service sector, Caas said.
Overall, the city now has about 25,000 more jobs than it did in 1995, and in August, El Paso enjoyed higher job growth than any other city in the state.
"On average, these new jobs pay 30 to 40 percent more than jobs in apparel factories," Caas said. "This is part of the natural evolution of economies." Expensive designer jeans have helped AMERI-TECH Distributors survive that evolution.
The company has moved most of its blue jeans production to Torren, Mexico, but continues to produce high-end jeans and pajamas in El Paso, also its distribution and administration headquarters.
Torren has been a hub for blue jeans manufacturers for years, but before NAFTA, most of its jeans stayed in Mexico. Now, AMERI-TECH's plant there produces more than 100 times as many pairs of jeans per week for sale in the United States as its El Paso plant makes.
"You have to go along with change," Fernandez said. "Globalization is inevitable." Incorporating premium fabrics and labor-intensive designs, the jeans Ameri-tech makes in El Paso sell for $200 to $600 a pair, far more than Fernandez is willing to pay for a pair. But this is one area in which his company has an edge over foreign manufacturers.
Mexico, Central America and Asia may offer lower production costs, but the savings come at the price of longer travel times that can keep companies from keeping pace with America's rapidly changing fashion tastes.
The countries also can't produce jeans with the now rare "Made in the USA" label. "There's a big push from companies for the Made in the USA label," Fernandez said. "For some companies it's a real selling point, but to give it to them, we have to do everything here." And as long as that demand is there, 100 to 130 AMERI-TECH workers will continue cutting, sewing and adding finishing touches to America's favorite pants in what was once the blue jeans capital of the world.
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