The Cutter and the Bank
"I don't regret any of the votes I've cast up here," says Phil Hare, a Democrat who was elected to represent a downstate Illinois district in the U.S. House in 2006. "But I'm getting close to regretting my vote for the first bank bailout."
"We were assured that if the banks got the money, they would use it to help people to stay in their homes and help businesses to stay open," Hare said. Last Christmas, however, he was disabused of these illusions when he learned that one of the largest recipients of bailout funds, Wells Fargo, was refusing to extend credit to the most venerable of America's suit manufacturers, 122-year-old Hart Schaffner Marx. Wells was the company's chief creditor, and with sales falling, it announced that it wished to liquidate the firm.
Hart Schaffner Marx has a factory in Hare's district, but the congressman's ties to the firm run deeper. From 1969 through 1982, Hare worked in the factory's cutting room, part of an operation that turned out 600 suits a day. For 12 of those years, he headed the Amalgamated Clothing Workers local in the plant. In 1983, he went to work for Democratic Rep. Lane Evans, rising to the post of Evans's district director and then succeeding him when Evans chose not to run in 2006.
Hare, Stephen Lynch (the Massachusetts Democrat who was an ironworker and also headed his local union) and Maine Democrat Mike Michaud, a onetime paper mill worker, belong to the tiny Congressmen Who Actually Made Things for a Living Caucus. Hare brings a blue-collar sense and sensibility to a Congress in which the experience of a working-class life is otherwise hard to find. Listen to him on the plight of unemployed factory workers in his district whom the government encouraged to take medical transcription training, only to discover that there weren't nearly enough medical transcription jobs to go around, and you get a pretty good idea why blue-collar America views our worker retraining programs as a sham.
Hare was understandably upset when he learned that Wells Fargo, to which the government had extended $25 billion in Troubled Assets Relief Program funds, wanted not only to put Hart Schaffner Marx into bankruptcy but also to liquidate the company -- throwing 4,000 people out of work and ending the existence of the last major high-end men's clothing manufacturer in America. With the help of House Financial Services Committee Chairman Barney Frank, other members of Congress and the new administration, he prevailed upon Wells temporarily not to liquidate Hart, whose fate will soon be decided in bankruptcy court.
The outcome of the battle for Hart Schaffner Marx -- there are several bids in for the company, though it may yet be forced into liquidation -- will be part of a larger narrative, along with the stories of General Motors and Chrysler, of whether manufacturing has a future in America. It's not as if the venerable clothing firm has nothing to offer. While sales of its high-end men's suits have tanked along with sales of everything else, some of the bidders clearly believe that the business of making such suits in the high-wage United States (that is, at least when compared with China and Vietnam) is financially viable.
"The fabric used in these suits is so delicate and malleable that you can't automate production," says one investment firm official who has worked on a bid. "You need real skill in manipulating that fabric, and whatever you lose in higher hourly compensation, you more than make up in productivity -- if you can sell the product at a certain [high] price point."
Armani, this official points out, makes its suits entirely in Europe with even higher labor costs than unionized U.S. clothing workers incur. The difference is that Armani has marketed its product much more compellingly than Hart has. It's not as if Hart lacks a hook: A certain president of the United States, who hails from the firm's home town of Chicago and who has personal popularity ratings approaching three digits, regularly wears its suits, in which he manages to appear both imperially slim and democratically cool.
Phil Hare does not look imperially slim -- populist plump is more his style. But like the president, he believes that America has lost too much of its manufacturing capacity to succeed in the 21st century. "We have the most productive work force in the world, but we don't make things anymore," he laments. "There has to be room in America for people who work with their hands for a living."