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Restructuring and reconfiguration: EU T/C industry in transition

Restructuring and reconfiguration: EU T/C industry in transition. Ian M Taplin Wake Forest University & Bordeaux Business School. Main points. Clothing: past 4 years has seen employment decline of18% Textiles: employment decline of 10% Clothing: firms declined by 15%

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Restructuring and reconfiguration: EU T/C industry in transition

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  1. Restructuring and reconfiguration: EU T/C industry in transition Ian M Taplin Wake Forest University & Bordeaux Business School

  2. Main points • Clothing: past 4 years has seen employment decline of18% • Textiles: employment decline of 10% • Clothing: firms declined by 15% • Textiles: firms declined by 9% • Clothing labour productivity = €22000 pa • Textiles labour productivity = €33000 pa • Textiles retain better labour-related cost competitiveness than clothing

  3. Main points • ¾ of T/C production in 5 countries (Italy, Spain, UK, Germany and France) • Italy accounted for 40% of EU clothing production in 2002 • Netherlands had highest T/C productivity rates (textile dominant) • Portugal the lowest (clothing dominant) • Spain and Sweden increased employment 1995-2002 (but Sweden from such low absolute numbers)

  4. Capital investment • Multi-year average annual investment • Italy dominant at 47% of EU total for clothing and 27% for textiles • Investment rate (share of value added) • Ireland, Portugal, Belgium and Greece all invested more than 15% of value added • UK bottom with 5% • EU average is 9%; Italy is 10% • Investment per person • Netherlands & Belgium have highest investment per person (€8400 and €7800) • Portugal and Spain both very low (€1750 and €1800) as is UK (€1900) • EU average = €3300

  5. Noteworthy trends • Italy • Continues to compete on quality/design dimensions • Value added stable, productivity rising, employment falling • OPT shift to eastern Europe, Romania becoming pre-eminent • OPT of higher value added goods; low value added mechanised domestically in early 1990s. Continuing?? • Large independent retailer presence, many of who now doing their own sourcing overseas (overcame early problems of small size) • Branded manufacturers developing retail outlets (Max Mara, Diesel, Zegna). Networks important. • Retail concentration low = lower rates of import penetration

  6. Trends continued • UK • Rapid decline in both sectors since mid 1990s • Increase in import penetration = lower prices = increased consumption • Minimum wage introduction not seen as problem • Firms unwilling to invest in worker training and skill acquisition • Male/female ratios now 50:50 • New categories of workers emerging as firms specialise in distribution coordination and design/marketing functions

  7. Trends continued • Germany • Continued capital intensification and technological upgrading in textiles (high value added and innovative products) • Clothing focused upon organisational optimisation and outsourcing • As firms outsourced, demand for high quality production resulted in industrial upgrading for overseas manufacturers and further competition for domestic manufacturers • Strong links between textile firms and buyer groups (autos, packaging etc.) • New job categories emerging: distribution and coordination plus craft-like specialist studios

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