Outlook: Guarded optimism
IFAI’s 2014 Outlook Conference speakers review current economic and industry trends.
Specialty Fabrics Review | June 2014
By Mary Hennessy
When members of the United States Industrial Fabrics Institute (USIFI) and the Narrow Fabrics Institute (NFI), both divisions of the Industrial Fabrics Association International (IFAI), gathered this May for the annual Outlook Conference, they enjoyed all the usual benefits: interesting speakers, the luxurious setting of the Omni Grove Park Inn in Asheville, N.C., and extensive networking opportunities with some of the industry’s most important experts. But this year, the conference offered something truly special: former Secretary of Defense William S. Cohen as the keynote speaker.
Secretary Cohen talked about his history and life lessons at the opening night dinner, and spoke in depth the next day about world events. He grew up in a working-class family, the son of a Jewish baker. In Bangor, Maine, he started his political career at age 29 on the city council, and later served as mayor.
Cohen began serving as a U.S. Congressman at the age of 32, and went on to serve in the Senate. He left the Senate in 1996, frustrated by gridlock and partisan politics, and in a rare and unprecedented bi-partisan move, was nominated by opposition party President Bill Clinton to serve as Secretary of Defense.
Cohen stipulated that if he accepted, he never wanted to be drawn into any political discussions at the White House and in return, he would never share private discussions with anyone outside of the White House. President Clinton agreed, setting the stage for a very successful bi-partisan working relationship. Secretary Cohen’s participation at the Outlook Conference was secured by Dave Clarke, Global Group Director of TenCate and IFAI chairman of the board.
On the first day of the conference, Dr. John Connaughton, University of North Carolina, gave a review of economic conditions that was guardedly upbeat. He sees positive economic signs in job growth and housing price increases and the decrease in trade and budget deficits. Threats to the recovery are federal spending cuts through sequestration and excess banking reserves. The wild card is consumer confidence and consumer debt.
Alasdair Carmichael, president of PCI Fibres, Spartanburg, S.C., gave an update on world fiber markets, noting that although demand is high, capacity has outstripped it. Capacity utilization in 2014 is at about 70 percent for polyester, with similar numbers for nylon. Due to lower labor and energy costs, the U.S competitiveness index is much improved, putting U.S. manufacturing costs below Germany, France, Italy, the U.K. and Japan and slightly above China. Polyester fiber is continuing to take market share away from other fibers; the strength of the U.S. automotive market is driving domestic synthetic fiber consumption.
Gail Strickler, Assistant United States Trade Representative for Textiles at the Office of the U.S. Trade Representative, and Kim Glas, Deputy Assistant Secretary for Textiles and Apparel at the U.S. Department of Commerce International Trade Administration, talked about progress on two trade agreements currently in negotiation: the Trans Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP). The industry, through USIFI, has expressed a strong preference for an agreement with yarn forward and strong customs enforcement language in the TPP, and for a strong defense of the Berry Amendment in the TTIP.
The Berry Amendment (USC Title 10, Section 2533a) requires the Department of Defense (DOD) to give preference in procurement to domestically produced, manufactured, or home-grown products, most notably food, clothing and fabrics, and specialty metals. Congress originally passed domestic source restrictions as part of the 1941 Fifth Supplemental DOD Appropriations Act in order to protect the domestic industrial base in time of war.
Ron Houle, vice president of government relations with DHS Systems LLC, gave a detailed assessment on progress made by the Berry Amendment Textile Coalition (BATC), an informal group formed by USIFI, the American Fiber Manufacturers Association (AFMA) and the National Council of Textile Organizations (NCTO). The mission of the BATC is “to preserve, enhance, and expand the Berry Amendment to promote the economic strength and national security of the United States.” Recent victories include adding language in the National Defense Authorization Act directing the DOD Inspector General to audit compliance with the Berry Amendment, and directing the DOD to produce a publicly releasable report on its ongoing efforts to comply with the Berry Amendment.
The Outlook Conference is organized in a partnership between USIFI and NFI, divisions of IFAI, providing participants with an enjoyable, informative and useful event each year. Peter McKernan, president of Herculite® Inc., and a veteran of many Outlook Conferences, noted: “Even aside from an outstanding venue like the Grove Park Inn in Asheville, the Outlook Conference is a premier event, providing a great blend of forward-looking business information and networking opportunities.”