edit1111/lacter/jan.20/1stjc

Hed: Tale of two industries (Hammer)

Guess defection has another side… (italics)

Last week’s decision by Guess Inc. to shift most of its manufacturing from Los Angeles to Mexico could hardly be considered good news. But perhaps it will have the indirect benefit of focusing more attention on this critical and little understood component of L.A.’s economy.

Certainly, an argument can be made that the Guess move was based on the company’s own problems, including testy labor relations and a recent government crackdown on alleged workplace abuses. Added to the mix, however, is a factor that’s hard to dispute: Higher labor costs in the U.S. than in Mexico or other Latin countries.

Indeed, less prominent apparel makers have been quietly leaving town or consolidating their operations. Some industry watchers believe that thousands of garment jobs have been lost in the last year or two and that the state’s still-rosy view of the industry is badly flawed.

In what may be a telling indicator, the Western U.S. market for sewing needles has declined to between 15 and 20 million a year, from as many as 25 million to 30 million in 1993.

But the picture is not altogether bleak. Los Angeles still offers garment makers an infrastructure that cannot be found in a Third World economy. That includes designers, facilities and a transportation network that allows apparel companies especially on the high-end to make quick adjustments in their lines, a critical part of the business.

Carole Little California Fashion Industries, for one, tried to establish a manufacturing operation in Mexico and Central America, but eventually came back to the U.S. because it’s just easier to do business here.

It’s an important point to remember in the wake of Guess’s departure and one that government and industry officials must promote, if L.A. is to retain its position as one of the world’s major garment centers.