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A Town Traded Away

As another factory shuts down, residents of Chilhowie ask, where are the jobs that globalization is supposed to create?


CHILHOWIE, Va. — People in this pocket of Appalachia aren't sure what it's like to work in a Mexican garment factory or an Asian furniture plant. But they know how it feels to be globalized.

For years, manufacturers flocked to Chilhowie and neighboring communities because of their abundant supply of loyal, low-cost workers.

"This was the China of Virginia," said Mike Hopkins, who supervises production at a local wood products mill.

Then, in a sudden turn of the global screw, plants began shutting down and moving out. Since 1988, Smyth County has lost 10 big factories employing 2,075 workers. Five of the plants and 1,430 of the jobs were in little Chilhowie, population 1,827.

An entire town, in effect, had been traded away.

Chilhowie's experience is a reminder that world commerce can be a fickle taskmaster. It distributes its bounty and assesses its costs unevenly, not just among nations but within them.

In Washington, activists will take to the streets this weekend to condemn the effect of globalization on developing countries. In Chilhowie, people wonder why no one seems to have noticed the effect it's had on them.

Los Angeles Times Tuesday April 23, 2002 Home Edition Main News Part A Page 2 A2 Desk 2 inches; 37 words Type of Material: Correction
Factory closings--A story in Friday's Business section about jobs lost to globalization in Chilhowie, Va., incorrectly reported that Smyth County has suffered the closure of 10 factories since 1988. Those factories all have closed within the last four years.

"The economists say that over the long haul, this is going to help America," said Town Manager Bill Rush. "Over the long haul, that's fine. But what are we going to do until then? I'm losing another 250 people in 30 days."

But other people in Chilhowie reject the theology of trade.

"Just because you can buy a coffee table for $99 doesn't mean you're going to live well," said Scotty Hopkins, a Chilhowie native who has bounced between employers since 1987.

Chilhowie has lived through several cycles of industrial boom and bust. Situated in the Great Valley of the Appalachians, near the point where Virginia bumps up against North Carolina and Tennessee, its first big employer was Virginia Paving & Sewer Pipe Co., which shipped its bricks "from Lynchburg to London" until its vein of clay ran out in 1910. Chilhowie Lumber Co. had its run too, supplying logs to build the Panama Canal before bankruptcy intervened.

It was not until the early 1970s that Chilhowie began to transform itself into a thriving industrial town. Local entrepreneurs enticed makers of furniture, clothing and other goods to set up shop along Route 11. Before long, Chilhowie was attracting workers from as far away as Kentucky.

The industrial boom transformed more than just the landscape. "We went from one breadwinner in the home to the ladies going to work in the sewing factories," said Tom Bishop, who operates a home supply store, a scrap metal business and a wood framing plant in Chilhowie. With the extra income, families could afford bigger houses, better cars and other middle-class amenities.

The good times kept rolling through most of the '70s, '80s and early '90s. Then Chilhowie's world turned upside-down.

In 1994, Congress approved the North American Free Trade Agreement with Mexico and Canada. U.S. apparel makers soon found themselves fighting for their lives. Some cut back domestic production; some set up plants in Mexico, where factory workers get only a fraction of the wages paid to Americans.

"To be competitive, you had to go south," said Larry Gibbs, who has managed Spring Ford Industries' knitting mill in Chilhowie since 1988. "I've seen the whole industry go away. It was all based on cost."

Four years ago, Gibbs kept 450 workers busy assembling millions of T-shirts for the likes of Reebok International Ltd. and J.C. Penney Co. But Spring Ford announced last month that foreign competition was forcing it to go out of business. Today, Gibbs will lay off his 50 remaining workers.

One by one, Chilhowie's biggest employers have shut their doors. Tultex Corp. closed its 200-worker sweatshirt factory in 1998. The Buster Brown plant, where 300 people assembled children's clothes, followed in 1999. Three months ago, Natalie Knitting Mills shuttered its 350-worker sweater factory. Other mills were shutting down too. Spring Ford was the latest to fall.

Soon, trade winds began buffeting the furniture industry. When Congress approved permanent normal trade relations with China in 2000, enabling Beijing to join the World Trade Organization, a tidal wave swept across the Pacific and headed straight for Smyth County.

The products were different, but the equation was the same. Furniture industry officials say it costs about $2,000 a month to keep an American production worker employed. A Chinese factory worker costs about $100.

In September, American of Martinsville began laying off workers in Chilhowie, where 450 people built veneered furniture for hotels and motels. Last week the firm announced it would close the plant and lay off its 245 remaining workers by mid-June. It blamed competition from imports and the effect of Sept. 11 on the lodging industry.

President Noel Chitwood acknowledged that U.S. trade policy had contributed to the firm's decision to scale back U.S. operations and initiate talks with potential suppliers in Asia.

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