World affairs leave U.S. textiles in rags.

• Position: Economic Outlook

Chuck Hayes is chairman and chief executive of Greensboro-based Guilford Mills Inc. and president of the American Textile Manufacturers Institute. In August, ATMI released a study blaming Asian currency devaluations for the closings of more than 100 textile plants in the United States and elimination of 60,000 jobs in the previous year. Hayes discussed the study and other problems facing the industry.

BNC: So the problem is the combination of cheap labor and devalued Asian currencies?

Hayes: That's the reason we have such a flood of garments coming into the United States. In the yarn- and fabric-producing business, we are as competitive as anybody in the entire world. But we're not competitive when you start getting government interventions and currency devaluations. Because of the currency crisis, we kept lowering our prices to sell our material, trying to maintain market share. Our margins eroded to where we were selling at losses. We had to discontinue our selling.

But what can the U.S. government do about Asian currency values?

Not an awful lot. After Sept. 11, our problems are even going to get worse, because the Asian countries that were the biggest offenders were Pakistan and India and Indonesia, states we're looking to for help. We in the textile industry support President Bush 100%. But our textile industry is decimated. We have more people unemployed and more plant closings than I have seen in my 50 years in the industry.

How can the government help Pakistan without hurting the U.S. textile industry?

With all the aid we're giving to Pakistan, why don't we purchase the textile materials or garments being made by Pakistan, then give them to the refugees. That way, the Pakistani companies can run full out and employ the people.

What about helping the domestic textile industry?

What our government can do, if it's going to maintain a very strong currency, is to find a method to give the industry the liquidity it needs to stay in existence to come back to fight at a later date.

Can't you go to the banks for liquidity?

Just call the banks and ask what lending rates they're giving to the textile industry. It's 11% to 12%. The banks call our loans questionable and increase the interest rate. I can remember when they couldn't lend us enough.

What should be done?

Our government can give us some loan guarantees. Equally if not more important, it can provide tax-loss carrybacks. There were a lot of good years in North Carolina when the textile...