0002230
G.F. 323
CONFIDENTIAL
Appendix I
Statement made by Baron de Geer at the Opening Session
Situation in the Swedish Textile Industry
As is well known, the Swedish textile industry is passing through
a very difficult stage. The pains of a necessary process of structural reform are being aggravated by the additional strain of a simultaneous increase of low-priced textile imports.
When you have to reform an entire industry, a year or two is certainly a very brief period. Thus, although this process has been under way for some time and in spite of the active efforts of the Swedish Government to make the process smooth, the difficulties for the Swedish texile industry are still very considerable. It can even be said that the situation has worsened in some respects.
During 1969/70 the increase in cost for the Swedish textile industry may amount to as much as 30%. Production in the ready-made clothing industry has continued to decrease. During 1969, the decrease was 3% in volume in comparison to 1968. Simultaneously, total imports of ready-made clothing articles increased by 25%. The corresponding figur for the knitted sector amounted to 36% and the imports from Hongking of knitted products increased by no less than 43%. Statistics from the first months of this year indicate that these import trends are catinuing. At the same time a marked decrease in the order stock of Swelish firms this year gives rise to serious concern.
Throughout 1969 a great number of firms were forced to close down, creating difficulties on the labour market in addition to the serious economic problems involved. This worrying trend has also continued during the first months of this year. With regard to several textile items, so many firms have now shut down that the Swedish production tends to fall short of the minimum level necessary to avoid a serious supply crisis in the event of war.
The expected lose down later this year of one factory will alone put more than 850 people out of work which has caused serious concern, in its wider contxt as well as in Norrköping. The development in that former textile entre can serve as an illustration on a regional level of the developmnt in the Swedish textile industry. In 1950 some 7,000 people in Torrköping were engaged in the textile sector. Today, the aforementione close down will bring that figure down to 1,000.
The situation is a bad in the western part of Sweden where about two thirds of the Swedish ready-made clothing industry is located. These companies are situated in small municipalities where the textile factory is normally he only source of occupation. A closing down of these firms the refre always implies especially difficult social problems.
In the whole country the number of workers in the textile industry decreased by 7% between January 1968 and January 1970. The total employment in the sector has fallen from 85,000 in 1965 to 70,000 today. The rate of unemployment in the textile sector is also distinctly higher than the average of the industry. So far this year already 28 textile plants with a total of over 2,000 employees have given notice that they intend to close down. The last- mentioned figure comes close to that for the whole of 1969.
/In order
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CONFIDENTIAL
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