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Viewpoint

Bud Weisbart, IFM, MFC

Let me introduce myself and explain why this column: I, along with my wife, have been owners of a company in our industry since 1978. Our company – AR Tech – started as a traditional family-owned company making products using technical textiles but sought to diversify into new areas based on the capabilities we and our staff have developed during the past 38+ years.

 

Steve Warner, the publisher of BeaverLake6 Report, asked if I would be interested contributing to the website on an occasional basis. I agreed to share thoughts and ideas that relate what’s going on in the world to what I see as the realities of our industry. 

Trans-Pacific Partnership Withdrawal Impact

Posted March 29, 2017

 

As I briefly mentioned in my article on December 12th in the BeaverLake6 Report, I had recently returned from Peru, during which time the Asian-Pacific Economic Cooperation (APEC) meeting was being held, and saw the immediate stepping into negotiations by the Chinese with Peru.  Subsequently, in January and February I was in Shanghai and Thailand (not a Trans Pacific Partnership participant), and was amazed in both locations by the dynamic development and the degree to which the Chinese influence is rapidly replacing the US influence in the marketplace.

 

No longer can we count on the Chinese or even the Thai to be a primary market for U.S. high end goods, as their markets have developed well beyond that limitation.

 

The United States is looked upon by those with whom I inter-related as less and less relevant as an economic force, and has become simply the market into which those within and outside of the Trans-Pacific Partnership (TPP) countries would sell their goods and services with little concern for reciprocity.  To me, our immediate withdrawal from TPP after the election only compounds this situation.

 

From my hotel in Thonburi, across the Chao Phraya River from Bangkok, I could see miles and miles of development that easily exceeds trillions of dollars of value, or better said, opportunities that those active in the market will enter.  And while Thailand was not a signatory to TPP, the influence of their neighbors’ participation would have created a gateway into the Thai markets.

 

My argument in favor of the trade agreement had been as follows:  What is really being addressed has only ancillary relationship to the points raised in the newsletter regarding supply chain issues and the other details related to protection.  The big issue has to do with the history of where China is in the world, how they are expanding and consolidating their role in the world, and their continued insecurity over territorial threats to the (as they fear) unsteady unification of the cantons that have created today's China.  Whether it's the creation of new land masses on what are currently atolls, claiming new territorial waters, or desperate islands, China still suffers from the insecurities to unification and acts accordingly.

 

This insecurity, whether based on reality or not, is further manifested in such things as how many of our technology companies, even such simple things such as the use of Gmail, is prohibited from being used except in tourist hotels such as the one I stayed in.

 

This insecurity in and of itself may be the single most inhibitor to China’s ability to extend to its potential in the global marketplace, but it seems that the powers in China are content to accept that risk.

 

So TPP had offered an alternative political and trade counter balance to the expansionist political and protective economic efforts at the base of China's current strategy in the world, and therefore was to become imperative to the political security and economic potentials of the countries involved (i.e. "trans" Pacific), from Asia to Latin America.  In addition to the United States, the agreement included Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam, and this, rather than issues such as "yarn forward", is the macro reality that TPP was addressing, or 40% of the world’s industrial output.

 

In the long run, what we have done by withdrawing from this effort is to create a global vacuum that will be filled by China expansionism, as well as by the other major economic interests in the world: Russia, Europe and the South Asian countries.

  

Are we ready to live with that outcome?

Managing in Times of Political Uncertainty

Posted December 12, 2016

 

One thing that is certain after the recent election is that the political climate will change.  For those who supported the candidacy of Mr. Trump, for the better, and for those who didn't, for the worse.  So what will that mean for those of us who are either suppliers or manufacturers in the Specialty Fabrics Industry, as well as industry in general, and for the economy of the United States and the world?

 

First of all, it is my opinion that we all have to judge the degree to which we as individuals and members of our industry are impacted by political decisions and political changes.  For some, it may be unperceivable, but I think for the majority of us there will be impact. 

 

Traditionally, members of industry in general, and our Industrial and Specialty Fabrics Industry in particular, do not do well in managing unpredictable change.  In general, we are all reconciled to the reality that there has always been and will continue to be change.  Some will be predictable, but most will be unpredictable, so much of the art of our management must be a commitment to strategically manage that change.

 

So for starters what do we know and what do we not know? 

 

Internationally on trade, we can predict that the Trans Pacific Partnership (TPP) is history, which means in essence that we have ceded trade dominance in the Pacific Rim, the area from Asia to the Pacific Coast of the Americas, to China.  I was recently in Peru, and Chinese envoys and the Peruvian Government were already in negotiations regarding their future relationship, as was the government of Japan in the Asian region. 

 

Regardless of Mr. Trump’s pronouncements on “fair trade”, my thought is that as long as we are in the Global Economy, the impact of this for those with operations in China, particularly suppliers, will be an enhancement of their ability to serve our markets with their Chinese supplier base.  At the same time for those of us who are manufacturers here in the United States, we can expect a further commodification of what we produce and increased price pressure from Chinese supplied products, as opposed to U.S. supplied products.

 

So how about those of us in the fabrication segment of our industry?

 

My analysis is that the political impact on what we do and how we do what we do will be impacted primarily by the degree to which we will have a broader supply base.  And that will create within most in our industry a further incentive to move towards price based rather than value based efforts.  For those of us who have already based our sales and marketing primarily on the price of what we are producing, this will mean we will have to increase that effort.  However, as more "mom and pop" companies enter our industry, we will feel additional price based pressures.

 

Further, we can predict that there will be constraints on immigrant labor, and most of the companies in our industry are dependent on the capabilities of our employees who learned their craft overseas...there are very few industrial sewing programs located here in the United States, so if our businesses are constrained in employing immigrants, we will face difficulties attracting and retaining workers.

 

For those of us who are in the crafting and engineering sectors of the specialty fabric products markets, we will have to extend our efforts to brand ourselves and justify what we do based on the value we bring to our customers and our markets.  In other words, we will need to be clear in how we "sell" value, and how we do that for the long run rather than the short run.  Not only do we have to "sell" that to our current and future customer base, but also to our co-workers and vendors.  We must continually reinforce that what they supply and what we produce must be with a commitment to uncompromised quality.

 

This will mean that those of us who fit in this latter category of our industry will have to look for tools to make our case: securing ISO certification, maintaining employees for the long term, reinforcing our mission and purpose for being in business, and basically looking for every opportunity to make our case.

 

The old cliché is that change is the only constant, but that cliché in the current political climate is the reality that we will be living with more now than we ever had to in the past.

 

Therefore, those of us committed to our industry and the values our products and service bring to our society should go forward with eyes wide open and with the commitment to manage that future, both the predictable and to the extent possible the unpredictable.  The consequences of not doing so will mean we will have allowed ourselves, our companies, and ultimately our industry to be under the control of outside situations and forces, rather than ourselves.

 

For most of us, that would mean turning our backs on the very reason we got into business in the first place.

In Pursuit of Clarity

Posted January 25, 2016

 

In my previous article for the BeaverLake6 Report, I spoke about what I thought we as members of the Specialty Fabrics Industry can be, and, further, what our industry can be. So that begs the question: What actions have to be taken to clearly pursue what we want to be and all that we can in fact be?

 

For me personally, this was a process requiring that I look into myself as I made the commitment to join our industry. In my first article in this series I spoke of our industry as being “noble,” and to a large extent what I looked for within my own values in life were the justification of ensuring that, indeed, this would be a noble undertaking.

   

Realization of the nobility of our Specialty Fabrics Industry evolved in me as I identified with clarity the real needs we met for our customers, our family of workers and those on whom we depend to allow our abilities to create value in the marketplace.

 

So now as a 75-year-old with over 38 years in our industry, my idealism in meeting that purpose does not waiver…it stays with me as if I were just beginning in our industry back in 1978. 

 

As I said in my previous articles, the justification could only be valid if the products and services we provided were without compromise clearly bringing value to the markets we are serving.  I also identified entrepreneurs as those who bring that value to the markets they are serving by building on their core-competencies. And those core-competencies can only be developed if there is passion for the end purpose to which they are directed; otherwise, why even get involved?

 

The clarity, and the pursuit of it, then, must be based on our passion for the market(s) we serve, the abilities we have to do so (i.e. our competency to do so), and our commitment to create the abilities when they do not yet exist. And these elements must pervade throughout our organization, not just at one or another level, but throughout. 

As leaders of our organizations we have the fundamental responsibility to grow the competency of our organizations. In our industry that means ensuring that we create a culture of commitment to meeting customer needs and that we instill in our co-workers the ethos of self-improvement in addressing opportunities and needs, in fabricating to meet those needs and to the quality of our work in doing so. Then we must commit to provide the resources and opportunities to continuously improve.

   

In our company’s case, given the variety of markets we were pursuing, our commitment is manifested in many ways, but is verified by our having certifications to meeting international quality standards known generally as ISO 9001, and for our aerospace business pursuits, the addition of AS 9100 to the ISO certification. Pursuing these certifications is not an easy task, but the degree to which we identify our commitment to ensure excellence in our products and services, we and our customers feel, must be validated through legitimate third-party audits.

 

These audits require very specific clarity in every aspect of how we process what we produce and the services we provide, an arduous task for sure, but a manifestation of our commitment to develop our core competency to serve our customers, whether it is the trucker working to put food on his or her family’s table, or the rocket scientist, trying to put satellites into orbit.

 

The beauty of this pursuit, as difficult as it is, is that all of the policies and procedures that we are following are designed by us and/or our customers…so in essence, to use today’s colloquialism, we are required to “walk our walk,” not just talk.

 

Nevertheless, the way we and all in our industry will be judged is based on the degree to which we in fact satisfy our customers with the products and services we provide.  So, while fulfilling the requirements of ISO and AS may only open the doors to a customer, for us it becomes a way of life to have the clarity of confidence that we will satisfy those customers. Further, the importance of customer satisfaction that we have met, and hopefully surpassed, customer expectations, is that we move more into the value arena than the price arena, which will be the subject of a coming presentation. 

What We Can Be

Posted November 13, 2015

 

In a previous column titled “WHAT ARE WE?” I described what I consider to be the nobility of our industry and the degree to which we pursue what we bring to the market place through entrepreneurial approaches to business in our industry.

 

The first step in identifying what we can be is to begin to see the areas in our society in which we are currently providing value, but which often go unnoticed even by those of us who share a common interest in the Specialty Fabrics Industry.  So the degree to which we open our eyes to the areas in which specialty fabrics have been and are being applied, opens up our minds and perceptions to what we can possibly pursue as a part of our role in society’s “value equation.”

 

My definition of entrepreneur in that previous column was based on building upon the core competencies we have developed in our lives and in our businesses. This definition allows us to identify what legitimizes our role in the value equation. Sometimes opening our eyes to the broader environment in which fabrics and fabric products have been applied is identifiable through our partnerships with our supplier base that develops the resources which allow us to address those needs: fabrics providing shade to allow awnings to keep structures cooler in the summer, or provide comfort for outdoor events, or keep school children away from harmful UV rays, as a few of many examples.

 

However, during my past 38 years in our industry, what I have found that most often identifies how our company’s core competencies can provide this value is through those who have walked through our door with needs that they didn’t even know fabrics and fabric products could address. 

 

It was early on in my company that this "solution-provider" concept occurred for me as we were approached by a hay farmer who needed to provide protection for his stacks of hay in order that the rain (yes, at that time in 1978 we had rain in California) would not soak into his hay and create mildew and mold, thus ruining it. It was at that time we opened our minds to what we needed to be about: addressing vital requirements for potential customers that were driven by their identification of what they need and our understanding of how we could address what they need. So we developed a slogan that stays with us to this day: “Fabric Solutions – Quality Driven.”

 

But that is not just a slogan for our company,  that is what I think of as what our industry is all about as well. Let’s think of that when the next opportunity walks through our door, or today more likely, contacts us through our website.

What Are We?

Posted October 19, 2015

For over 38 years I have been honored to be associated with what I consider to our noble specialty fabric industry.   

 

I consider our industry to be “noble” for many reasons, primary among them the value and creativity we provide the market place: awning and shade sails that provide temperature control and protect against cancer, stadia roofing and enclosures that add to the aesthetics and provide comfortable entertainment venues, truck covers and truck cover systems that allow truckers to protect their loads and contribute to their income and put food on their families’ tables, geosynthetic products that provide our communities environmental protection, and the list goes on and on. 

 

However, having identified the nobility of our industry, I also recall what was a focus for me during my graduate studies: while we can identify all of those things we “do”, we must realize that we have not been set on earth to be “human doings”, but rather as “human beings”.   

 

So the question I faced early and constantly over the years in my career at my company was one that I would like to share with you because you also share with me involvement in our industry: how, as human beings, should we identify what we are, why we exist, and what makes our industry noble?   

 

My answer to this series of questions is that we are entrepreneurial.  So, then, how do we define what is “entrepreneurial”, or more in keeping with the concept of “being” rather than “doing”, how do we define being entrepreneurs?   

 

Over the years, in ours as well as other industries, we have often used the term “entrepreneur” in cavalier ways.  Creation of the Pet Rock comes to mind, even though it made money for the person who developed the idea, often a primary criterion for the definition of being an entrepreneur. 

 

However, to me this is insufficient, and the attributes of being an entrepreneur are and should be significantly more profound.   

 

Therefore, based on my time in our industry, I have developed a definition for entrepreneurship and for entrepreneurs as follows:  Entrepreneurship is defined as creating sustained value by building on proven core competencies to address markets in ways that modify current approaches or establish new approaches to meet those market needs.    

 

So we create sustained value by developing our abilities and core competencies and by doing so create value in the marketplace we address with our products and services.  And this is what makes our industry noble in my opinion.

Need to Renew Authorization of the Export Import Bank of the United States

Posted August 14, 2015

In this first contribution, I want to discuss my advocacy for the renewed funding of the Export-Import Bank of the United States (EXIM). EXIM is an independent, self-sustaining Executive Branch agency with a mission of supporting American jobs by facilitating the export of U.S. goods and services through providing loans, loan guarantees, and insurance to facilitate overseas sales by U.S. firms.

 

Despite an 80-year history of helping small businesses and a generating of $7 billion more than the cost of its operations over the last two decades, EXIM’s funding has been caught up in the politics of Washington.  Current funding lapsed at the end of June.  On July 1, EXIM stopped providing funding. The U.S. Senate passed a bipartisan effort to reauthorize EXIM but the House of Representatives failed to act on the bill before going on its August break.

 

What’s the issue? The opposition to funding renewal is that significant commitments of EXIM are for the largest of international companies who don’t need that funding since they have their own resources. These opponents feel EXIM is a form of corporate welfare. At first glance, it may seem they have some legitimate concerns if you look at the lending: Of the $27.5 billion lent in FY2014, five major U.S. corporations received $15.3 billion. Boeing was the largest recipient with $8.3 billion.

 

However, as a small business supplier to some of those large businesses as well as a small business that is exporting products, the holdup of EXIM funding creates serious risk to my company and others in our industry with similar interests, as well as to the economic viability of the United States.

 

First of all, those larger businesses, many in the aerospace industry like Boeing that we serve, have a filter-down impact on us and as their risk is increased, they will reduce their purchases from us. But secondly, and most important, as a small business, we simply do not have the resources to effectively evaluate the credit worthiness of those in other countries with whom we are seeking to enter business relationships.

 

The impact of not moving fast enough to reauthorize funding of EXIM is significant. $10.7 billion of the $27.5 billion total in FY2014 went to support exports from 3,340 small businesses. Small business represented nearly 90% of EXIM bank transactions. Currently, there are $3.5 billion in EXIM funding for 116 projects in the pipeline that are suspended until reauthorization happens.

 

So, the direct impact on those of us who want to pursue exporting, and who are small to medium size businesses in our industry, will be to simply not take the risk and shut down our export efforts…the results being we will all lose.

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Coming Events

  • October 22-23: 32nd Annual Meeting of American Flock Association, Novi, Mich., USA

  • October 24-26: Automotive Interiors Expo 2017, Novi, Mich., USA

  • October 24-27: Intermediate Nonwovens Training Course, Cary and Raleigh, N.C., USA

  • October 25-26: Nonwovens Innovation Academy, Chemnitz, Germany

  • October 26-27: SYFA 2017 Fall Conference, Charlotte, N.C., USA

  • October 29-31: Graphene Innovation Summit & Expo, Nashville, Tenn., USA

  • November 6: German Technology Meets US Textile, Charlotte, N.C., USA

  • November 6-9: 3rd Annual HYGIENIX Conference, Austin, Texas, USA

  • November 7-9: SPESA Executive Conference, Memphis, Tenn., USA

  • November 7-8: 2017 RISI Asia Pacifice Hygiene Products Symposium, Shanghai, China

  • November 8-9: TCL 2017 (Textile Coating and Laminnating Conference), Berlin, Germany

  • November 8-10: SINCE 2017 (Shanghai International Nonwovens Conference & Exhibition), Shanghai, China 

Click here to view the complete technical textiles events calendar that includes show information links.

Is Saving the US Navy's Peacoat a Matter of National Security?

Since last August, the US Navy has been planning to phase out its iconic traditional wool peacoat in favor of a less expensive, synthetic cold weather parka which is lighter in weight and more versatile in types of inclement weather. It actually replaces two types of coats and the seabag the wool coat is stored.

 

The wool coat, however, has some powerful friends in the US Congress. Companies such as Northwest Woolen Mills in Woonsocket, R.I. and Sterlingware in Boston, Mass. Altogether, the supply chain involved in the manufacture of these woolen peacoats -- including sheep farmers -- is estimated to account for 400 jobs in the Northeast. Add to the drama that the new parka, made by the long-time military supplier Propper, is expected to be manufactured in Puerto Rico, a perceived feeling the new coat will be made by non-American workers. Read more...

 

Steve Warner

Publisher

June 29. 2017

President Trump's Reveals 2017 Trade Policy Agenda

The Office of the U.S. Trade Representative (USTR) has released President Trump's 2017 Trade Policy Agenda. The document, officially called 2017 Trade Policy Agenda and 2016 Annual Report of the President of the United States on the Trade Agreements Program, outlines the new Administration’s four trade priorities:

  • Defending the US National Sovereignty over Trade Policy
  • Strictly Enforcing US Trade Laws
  • Using Leverage to Open Foreign Markets
  • Negotiating New and Better Trade Deals

​BeaverLake6 Report has created a special page within this website and placed the first chapter of the 336-page document which summarizes the policy. Click here to read it. Posted March 2, 2017

What's the NCTO Game Plan for the Post-TPP Era?

Back on March 24, 2016, I was one of the first to predict the Trans-Pacific Partnership (TPP) agreement was a dead deal. In fact, I said that I wouldn’t be surprised that, if Donald Trump became President, the agreement is shredded on day one of his new administration. Well, I was off by three days. Yesterday, President Trump signed an Executive Order, officially withdrawing the United States from the TPP agreement. Now the question is can the National Council of Textile Organizations put together a comprehensive plan for the domestic textile industry in a post-TPP era? Click here to read the rest. Posted January 25, 2017

Steady Growth Prospects for Expanding Specialty Geosynthetics

There are literally dozens of market reports for the many market sections and subsections within the technical textiles industry. In 2017, BeaverLake6 Report will be introducing a few of these reports to our viewers. The first report being features is The Future of Spcialty Geosynthetics to 2021. It was developed by Smithers Apex, a market research firm based in the United Kingdom. 

 

In exchange for the promotion, Smithers Apex agreed to write an exclusive expanded executive summary of the market report for our readers. Click here to view the market summary. Posted January 9, 2017

2016 China Textile Innovation Conference Explores the Roads to a Textile Power

Sun Ruizhe

2016 China Textile Innovation Conference, as an annual summit of industry innovation, was held in Beijing on December 12th, 2016. The conference, themed on “New Opportunity, New Advantages, New Vitality” – Stepping Towards a Textile Power, comprehensively summarized the industry innovation achievements and explored the new advantages in development in order to grasp the strategic opportunity of the new round of industrial changes. BeaverLake6 Report is pleased to present a report on the conference via our partnership with China Textile magazine. Please click here. Posted December 21, 2016

In My Opinion

Re-Shoring: Good for the Goose is Not Good for the Gander?

Domestic PFD Manufacturer's Application for FTZ Additional Production Authority Riles Textile Industry Trade Associations. There is a nasty fight taking place these past few months behind the closed doors of Room 48019 at the Herbert C. Hoover Building in Washington, D.C. The room is the office of the Foreign-Trade Zones Board. The fight pits domestic technical textile industry suppliers and a coalition of textile-trade associations against a fairly large domestic end-product cut-and-sew manufacturer. Click here to read the story.

 

Steve Warner

Publisher

Media Partners

In My Opinion

In 2015, I posted more than 425 items of interest for our industry on the BeaverLake6 Report website. In reviewing it all last week, it got me to thinking about putting together a list of influential events, news and trends that I observed during the past year. I have focused primarily on the US marketplace but each of “the things that mattered” to me has global implications.

 

So, here go my thoughts in no particular order of importance. Let me know if you agree or if I have missed some. Click here to read the list.

 

Steve Warner

Publisher

Posted January 17, 2016

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Ron Gottlieb  

  Director

  Ricky Richards (Sales) Pty Ltd.

 

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Secretary Gary Locke, US Dept. of Commerce, and Steve Warner Commerce Secretary Gary Locke and Steve Warner

Success in our industry is all about knowledge, integrity and developing relationships. BeaverLake6 Group, LLC, publisher of BeaverLake6 Report, is a management consulting firm focused on helping businesses understand the complex global technical textiles industry.

 

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