China takes a sock in Alabama

FORT PAYNE, Ala. — Chinese imports have people running scared in the self-proclaimed Sock Capital of the World.

The U.S. hosiery industry, with about 95 mills that make more than 14 million pairs of socks a week, has more than a toehold in tiny Fort Payne. It is the backbone of the town, which even has a hosiery museum.

But local manufacturers fear they could be ruined by a flood of low-cost socks from China as import quotas expire at the end of the year. So they are leading an industry call for the Bush administration to step in.

The domestic manufacturers committee of the Hosiery Association last week asked the White House to limit the annual growth of sock imports from China to 7.5 percent, a far smaller increase than has occurred in recent years.

Some retailers, large manufacturers and importing companies oppose the petition. They contend imports keep prices low for U.S. consumers.

That argument doesn’t play well in Fort Payne, with only 13,000 residents and a sock industry that employs about 6,200 people.

The head of a Fort Payne company, Charles Cole, is leading the fight against Chinese socks. He is chairman of the hosiery association’s domestic manufacturers committee, which filed the quota request last week with three other textile associations.

The administration has until mid-July to say whether it will accept the request, and a final decision could come by fall.

Mr. Cole, who owns Alabama Footwear Inc., said sock employment in Fort Payne already is down about 800 jobs from 7,000 because of imports, and things could get worse if more mills go under.

“We’ve had six or eight go out of business in the last year,” said Mr. Cole, whose company employs about 85 people. They work with computer-run machines that knit white athletic socks 24 hours a day, seven days a week.

Down on Gault Avenue, salesman Ken Sanders stays busy at C.J.’s Sock Outlet, which specializes in Fort Payne-made socks. He worries about what foreign competition could do to the town, however.

Generations of families work in the mills, some of which pay upward of $15 an hour, and Mr. Sanders said there are not enough jobs in town to make up for the potential loss.

“If they shut the rest of the mills down, Fort Payne is going to be a ghost town,” he said.

The hosiery association’s domestic makers say numbers tell the story of the problem they are facing.

U.S. companies imported 264 million pairs of socks from China last year, up from fewer than 12 million pairs in 2001. The wholesale price of Chinese imports has dropped more than 50 percent in the same period, according to domestic makers, who accuse the Chinese of product dumping.

At the same time, the industry says U.S. sock production declined from 2.5 billion pairs in 2001 to 1.9 billion pairs last year. Of those, as many as 40 percent were made in Fort Payne, best known as the hometown of the country music singing group called Alabama.

Located in a valley in northeast Alabama, Fort Payne is sprinkled with sock factories, most of them small but some as big as an aircraft hangar. The industry got started in the early 1900s after Fort Payne’s steel and coal business played out. Mills in the Fort Payne area benefited from good cotton supplies and a surplus of inexpensive labor.

Bob Thomas, a general manager with Prewett Hosiery Mills, the town’s biggest employer with an estimated 2,200 workers, said Fort Payne’s industry could be swamped by Chinese products when the quotas expire.

He favors the proposal to limit the growth of Chinese imports, a move that would give the U.S. industry time to adjust.

“If they can do a phased-in control on the amount they can bring in over a number of years, the impact on a town like Fort Payne would be spread out,” Mr. Thomas said.

Town leaders fear what could happen if the administration fails to act.

“It would be devastating if we lost the hosiery industry, and I’m afraid we’re going to if we don’t get some tariffs,” said Larry Hancock, director of the Fort Payne Chamber of Commerce.