Factories dig niches to divert job runoff.

• Position: MANUFACTURING

Among North Carolina manufacturers, one topic dominates most discussions: globalization. Textile makers seem obsessed with it, and many other Tar Heel manufacturers are at least wary of foreign competition, especially from the surging Chinese economy. "Everything is China," N.C. State University economics professor Michael Walden says. "China is getting into virtually anything that can be manufactured."

Textile and apparel makers have been hit hard by cheap Chinese imports for years, and the siege continued last year. Trade barriers to Chinese goods fell at the start of 2005, which led to even more imports and a new round of plant closings in North Carolina and elsewhere in the U.S. From January to July, for example, imports of Chinese polyester fabric rose 1,034% from the same period in 2004, according to the Washington-based American Manufacturing Trade Association Coalition. Imports of Chinese wool suits increased 890%.

[ILLUSTRATION OMITTED]

Meanwhile, 31 U.S. textile plants closed, and the state's long manufacturing decline continued. In the first 10 months of 2005, the state lost more than 10,000 manufacturing jobs.

The federal government provided some relief in November. It capped growth in Chinese apparel imports at 10% for 2006, 12.5% for 2007 and 15% for 2008. Growth in textile imports will be limited to 12.5% in 2006 and 2007 and 16% in 2008. Jim Chesnutt, CEO of Washington-based National Spinning and chairman of the National Council of Textile Organizations, lauded the agreement but warned that China remains a long-term threat partly because it subsidizes its textile and apparel industries. Tar Heel companies have responded by downsizing and shifting production to lower-wage countries. From 2000 to 2004, textile and apparel employment in the state shrank 41% to about 100,000. Greensboro-based apparel maker VF had 75,000 employees in 2000--38,500 foreign and 36,500 domestic. By the end of 2004, it had 53,300 employees--only 17,500 in the U.S. It plans to shut a jeans plant in Wilson by June, axing 445 jobs, and transfer some of the work to Costa Rica and Honduras.

Greensboro-based International Textile Group, a holding company that owns several old-line Tar Heel companies such as Burlington Industries, Cone Mills and Guilford Mills, is following suit. Guilford Mills said in April that it would cut 230 jobs at plants in Fuquay-Varina and Greensboro. In November, Cone said it would close its denim operation in Rutherford County...