|
Teaching aim: Detailed analysis of the transformation of the German textile and clothing industry with special emphasis on regional disparities regarding production and employment structures.
Keywords: Transformation, product branches, decrease in employment, traditional centres of the textile industry, location factors, global competition, automation, diversification, specialisation |
The textile and clothing industries
are among the oldest in Germany. Before the invention of the spinning machine
and the mechanical loom, the production of textiles and clothing was a
labor-intensive process. Weaving and spinning mills were among the first
economic activities to use industrial processing technologies to meet the
demands of the growing population. Today, both industries have declined
in importance in terms of the number of employees and firms.
Since the 1960s, the German textile industry has experienced
a downturn, as revealed by the number of firms and employees. In 1950,
there were 700,000 employees in the textile industry in West Germany, making
it to one of the most important industries back then. In 1997, only 132,000
of the jobs remained in eastern and western Germany, overall. High specialization,
flexible adaptation to the markets, product innovations and the use of
automation were strategies that enabled this industry to survive. Outputs
have decreased dramatically since 1990. Despite closures and the relocation
of firms (i.e. the number of textile firms dropped from 4,100 in 1965 to
1,300 in 1997), Germany is still an important location of the textile industry.
It is difficult to imagine that textiles would fully disappear from the
production landscape. They are needed for the production of clothes. Also,
textiles are important for interior decorations and in the production of
yarns, fabrics, fibers or textile materials in plane seats, as ship ropes
and seat belts. Especially technical textiles like assembly belts or dressing
material are a growing product group. In addition, there is a considerable
number of final textile products being produced such as tents, table cloths,
ropes, carpets or curtains.
To separate the textile and clothing
industries is not an easy task because the production processes are integrated
in many cases and are sometimes situated in a single plant. The major difference
is that the clothing industry employs more elaborate sewing processes and
is more labor-intensive. The production of chemical fibers can also be
regarded as part of the textile production process. They account for two-thirds
of the resource inputs in textile production. Natural garments like wool,
linen, silk and cotton have lost in importance. In functional terms, the
textile industry includes both garment/ fiber and clothing. In a limited
sense, weaving and spinning, finishing, the manufacture of off-the-peg
textiles, material production, stockings, pullovers and carpets are the
core textile operations. They make up a large number of product groups
as indicated by the industry association
Gesamttextil [1].
The primary centers of the German
textile industry are either agglomerations
which were chosen because of their high population concentrations (that
is, high demand) or rural regions with favorable locational conditions
such as specific resources (i.e. special water quality), energy, transportation
facilities and/ or low labor costs. Germany’s most important textile regions
have all lost their former significance. Some concentration can still be
found in eastern Westphalia, the lower Rhine, the Ruhr District, Bavaria
(Frankony), Baden-Wurttemberg and southern Saxony. According to the number
of employees in 1997, North Rhine-Westphalia (40,700), Baden-Wurttemberg
(27,400) and Bavaria (25,600) were the centers of the textile industry.
Of the eastern Länder, Saxony (12,000) was the most important. Of
131,600 employees in Germany (100,000 less than in 1984), 115,600 worked
in the western Länder. The clothing industry is less significant than
the textile industry. In 1997, only 84,300 people worked in the clothing
industry. In terms of its spatial distribution by Länder, Bavaria, Baden-Wurttemberg, North Rhine-Westphalia,
Lower Saxony and Hesse are the clothing centers in the West. Eastern Germany
had only 5,600 employees in the clothing industry, overall. One should
keep in mind that almost two thirds of the total job losses had already
taken place before 1994.
A dynamic comparison of the development
in western Germany (1984-1994) shows the regional distribution of structural
changes and job losses. Between 10%
and 40% of the total textile employees in each Land lost their jobs. In
North Rhine-Westphalia, Baden-Wurttemberg and Bavaria the losses were the
greatest. They are still, however, the principal textile centers. In the
clothing sector, more than 33,000 employees in Bavaria lost their jobs.
This affected especially remote areas where some of the bigger firms accounted
for almost two thirds of the regional industrial output and employment.
This process was accompanied by a large number of factory closures and
a reduction in the number of clothing firms.
This has been an ongoing process since the late 1960s. Baden-Wurttemberg
hosted 763 textile firms in 1984, which amounted to about 40% of all German
textile producers. In 1994, only 406 remained. The clothing industry shows
basically the same pattern. Relocation to other countries where labor is
cheaper was a widespread strategy to avoid high labor costs in Germany.
Both industries are greatly suffering from the effects of market changes
since the 1960s. Thousands of firms have been forced to close or cut jobs
due to high production costs and the emergence of price-competitive producers
in developing countries. To retain competitiveness, productivity was increased
through automation, thus causing job losses.
The fierce competition was also
due to over-production in the textile sector. During the 1980s, over-capacities
were reduced by employment cuts. Before that time, the transformation to
capital-intensive production was largely achieved in almost all product
groups. Today, formerly large firms are shrinking. The development of the
demand side was also problematic. With the stagnation of large-scale demand
for domestic textiles and clothes in the 1970s and 1980s, problems arose.
Exports could not be increased further as a result of the high costs. Even
worse, imports were dramatically increasing. Foreign trade, however, is
still controlled in favor of the industrial countries by tariff regulations
and subsidies. Today, the individualization and segmentation of demand
limits output growth in Germany. Demand remains for selected and specialized
product groups. While textile producers are influenced by the performance
of their industrial customers and fluctuations in resource demand, the
clothing industry is highly dependent on final demand.
Global competition was one of the
biggest threats. Textiles and clothing were the first industries to internationalize
production. Due to the decisive import growth, many German producers were
forced out of the markets. Today, international pressure caused by labor-intensive
competitors keeps growing. As a result, almost all German producers have
established branch plants in Eastern Europe or in emerging markets like
Asia and invest little at home. Nevertheless, German firms try to stick
to their home location as long as possible because the label ‘Made in Germany’
provides a competitive advantage for it is thought to represent quality.
High domestic production costs also instigated successful survival strategies,
such as the production of highly-specialized and design-intensive rather
than mass products. Also, firms diversified by producing several product
groups and using flexible technologies.
Today, the production and processing
of resources is often carried out by suppliers from Asia or eastern Europe
and by branch plants in such countries. This is much cheaper than producing
in Germany. Many firms acquire ready-made garments or materials and finish
them in Germany. High-value production, technology-intensive refining processes,
design and the automated production of specialized textiles is still carried
out in Germany to some extent. Even there, further rationalization will
happen. Firms that still produce standardized products with low value-added
will have difficulties adjusting to market changes and maintaining competitiveness.
The textile industry (except clothing
and fibers) had a turnover of DM 31.6 billion in 1997. Although the big
players have declined in importance, some enterprises have survived as
significant producers or have merged with smaller firms. Verseidag [2],
the world leader of sailcloth production and producer of various interlinings
and textile materials, and Hartmann [3],
a producer of medical dressings and bandages, are among them. Export orientation
varied between the product groups. Stocking suppliers exported only 10%,
while fleece producers ranked first with exports of 47%. Major export markets
are Europe and, to a lesser degree, the U.S., Hong Kong, Taiwan and Japan.
Although the textile and clothing industries are not among the German core
industries they are one of the world’s major in- and exporters. Some of
the former producers, though, remained as small trading companies. Structural
change will continue and cause a further decrease in employment.
In the clothing industry, opportunities
for flexibility and cooperation are much greater in regional structures
and help raise the industry’s competitiveness. Most restructuring took
place quite early. Large firms had to close down due to high labor costs
and the influx of cheap imports. Alternatively, they relocated to low-cost-countries
(first to southern Europe, later to Asia and Africa) or established large-volume
branch plants to produce for mass markets. The production of specialized,
often unique and design-intensive, high-quality goods in Germany has stabilized
the development of the industry. Stagnation in domestic demand has been
offset by product diversification and specialization on product quality
in fashion markets. Germany still hosts worldwide renown brands such as
Adidas-Salomon [4], a producer of sport
and leisure clothes, and specialized designer clothes such as Hugo
Boss [5].
[1]
http://www.gesamttextil.de
Questions that may be asked:
[2]
http://www.verseidag.de/edocs/f_hauptauswahl.html
[3]
http://www.hartmann-online.com/english/default.htm
[4]
http://www.adidas.com
[5]
http://www.hugo.com
TOP
CONTENT
VGT
HOME