The Financial Times" "Tuesday" "ICULUĢIJ
TEXTILE MACHINERY II
Closing the cheap
labour gap
By KEN GOFTON
Last year, grey cotton cloth close the cheap labour gap? This worth £39m. was imported into is a question which the Textile the UK.; no one doubts that Council is trying to answer in the figure would have been the case of the Lancashire sector even higher, but for the protec- of the industry, and if a defini- tion of the quota system. In tive answer is possible it may be woven wool fabrics, the value found in the report of the Coun- was £9m., in knitted fabrics, cil's £100,000 marketing and pro- £7m. Particularly in the case of ductivity study, now awaited. But cotton textile imports, Britain at least some general pointers has until now adopted a more can be given. generous posture than the other developed nations-and largely for historical reasons.
Be that as it may, it is beyond dispute that a large market exists for the textile products of Hong Kong, Pakistan, India, Portugal, and others in this country.
Price is the main factor, and the most important reason for the relatively low prices of the imported goods is the low cost of labour in the producing coun- tries.
U.K. industry sources suggest that the going rate for spinners and weavers in Hong Kong is 20 to 30 per cent. of the rate paid to workers here: a study of the Portuguese knitting industry last year quoted wage rates of 1s 6d an hour for men, 1s for women, and 4d for 12- year-olds.
Can modern textile machinery
More output The overall aim has to be cheaper yarn and cheaper cloth, while still making a profit, and the only way of achieving that is a major increase in pro- ductivity-more output per wor- ker. Certainly this can be done. I understand that the value of the net output per worker in traditional cotton spinning and couple of weaving in 1967 was hundred pounds or more a year below the average for British manufacturing
industry of
£1,700. Admittedly, 1967 was not a good year for cotton tex- tiles, with much short working, and that would have the effect of dampening down the indus
But the performance. try's value of output per worker is claimed to be two to three times
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as high where modern ring spin- break spinning, and ning, shuttleless looms are concerned. The snag, obvious enough, perhaps, is that modern machin- ery costs more, and so that the benefits resulting from reducing the labour cost element in a yard of cloth are not whittled away by increases in that ele- ment which represents capital charges of machinery, the equip ment needs to be intensively used on a round-the-clock basis. I have argued the need for more shift working before in the FINANCIAL TIMES and been re- galed by a reader with the view that the amount of shift working related directly to a country's poverty, and that round the clock seven-days-a-week working as practised in Hong Kong would not be tolerated here. That is not an argument that would carry much weight in the steel mills, oil refineries, in the man-made fibres production or American textile industry.
The need for 24-hour working course reflects capital of intensity, and a modern textile operation can call for an invest- ment approaching £10,000 per employee (say £30,000 per em-
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ployee if it was only to be operated one shift a day). Is it worth it? My best informa- tion is that Hong Kong local selling prices are up to 30 per cent. below average U.K. pro- ducer prices, but that this gap can be almost halved with the latest looms, working flat out, and modern spinning techniques. This doesn't eliminate the prob lem but it undermines the argu- ment that the Lancashire tex- tiles industry is so far out of the running it is not worth sup porting.
Knitted fabric
On the whole, the problems are less acute in other sectors The of the textile industry. labour element in knitted fabric is relatively small, for example, veloping countries to exploit reducing the opportunity for de- their cheap-labour advantage. Another equally threatening gap can be opened up where these countries have access to syn- thetic fibres at prices below those ruling in the U.K.. but that is a separate story. Where the cheap labour gap is felt is among those companies which convert their own fabric into garments, because making-up is labour in- tensive. Significantly, the Hosiery and Allied Trades Re- search Association is to under. take а major research pro-
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gramme into techniques for in- creasing the degree of automa- tion possible at the making-up stage.
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In Yorkshire, on the weaving side, the problem at this moment is more one of meeting increasing competition in tradi- tional export markets, rather than one of facing a flood of imports at home. But there is
a
need to raise productivity, even if it has to be achieved without lowering quality and without affecting too seriously the choice of patterns available. Some of the most go-ahead Yorkshire spinners have demon- strated what can be achieved by modernising their mills and cutting back their production lines to the absolute minimum after careful market research into the mass-market counts,
This underlines an important point: modern equipment, if in- tensively utilised, can often cut production costs and thus reduce the cheap-labour advantages of other countries. But it also means greater output per unit, which can be a problem on its own. It is not the complete answer-it cannot be divorced
from such other essentials as an up-to-date approach to market- ing.
Machinery," as one senior executive in the industry put it, “is one leg of the chair. You'll fall flat on your face if you don't put equal weight on the others."