CHANDLER, Ariz. — What is the future of the laundry industry going to look like?
A variety of factors will influence that future: the global economy, changes in the marketplace, workforces. But what might the future hold, and how can the industry make a difference?
This was the topic of discussion at the Association for Linen Management (ALM) annual conference here earlier this year during the session titled A Conversation Among Leaders.
Representatives from the Textile Care Allied Trades Association (TCATA), the International Association for Healthcare Textile Management (IATHM), the American Reusable Textile Association (ARTA) and ALM examined the future of the industry in five areas: the return of textile mills to the United States, government regulation, equipment leasing, automation, and what the U.S. can learn from other countries.
TEXTILE MILLS RETURN TO U.S.?
The first topic of discussion was the possibility of U.S. textile mills returning operations to the home front. Textile manufacturers and processing industries have hinted that there is a “swing” back here for the mills.
Ed McCauley, president and CEO, United Hospital Services in Indianapolis, past president of ARTA, doesn’t see the return of textile mills in the short run.
“We heard [about returns] from a lot of the suppliers in the industry,” McCauley says. “I think when this started to happen in 2008-10, when the cost of fuel was high, China was booming. Weight trades in China started coming up, the projection was that we could probably start thinking five years down the line to put more manufacturers back in the states.”
What happened, he says, is that China’s economy took a downward turn. In addition, the price of all types of fuel is way down.
“That’s not to say those things can’t change, but with those two main items, I’m not seeing it right now,” says McCauley.
Mike Dineen, vice president, Pellerin Milnor Corp., in suburban New Orleans, representing TCATA, sees three factors that lead him to believe the textile mills are coming back.
The first factor, Dineen says, is that the cost of cotton differential is about $900 a ton right now, China being more expensive than United States.
“There’s one place in the United States, a Chinese company in the United States, that sees 30,000 tons a year. They make yarn and cloth. But there is a $27 million differential in the cost of goods,” he says. “There are a lot of things shipping back and forth with that differential, so there is something there.”
Secondly, according to Dineen, is the return of the denim business.
“We were very much involved in the stonewash industry. NAFTA came through in 1994 and made that whole business disappear,” he says. “It went south. It went east. We no longer really were involved because they didn’t use high-tech equipment that was designed for the wash styles of jeans. It all just disappeared. Today, there is a manufacturer here in the United States that’s doing 90,000 yards a week domestic.”
Finally, Dineen says he spoke with a mill owner who is closing plants in Southeast Asia and bringing them back home to the United States.
“There are changes coming. It’s going to take a while,” he says. “As the marketplace changes, as the cost changes, that’s going to be the harbinger of what’s to come.”
McCauley says that certain items made elsewhere, such as sheets and towels, will not return to the United States.
“That stuff is not coming back, I can guarantee you that,” he says. “But there are parts of the industry that could, anecdotally, come back.”
The technology in the United States has to be updated in order for mills to return, according to McCauley.
“What happened when they shut the mills down and sent them over there, they sent the equipment over,” he says. “They’re working on 1970s equipment. What you are going to see, they are going to retool the United States with the best equipment and bring it back that way so they can offset some of that added cost of operating here with high automation.”
With the mention of new technology, the question arose of whether or not a skilled labor force is available in the United States should textile mills return.
McCauley says that the country has the people and the skills. The problem, in his mind, is getting those technologically qualified employees to see laundry as a career option.
“There’s little bit of a disconnect with the laundry industry,” he says.
Dineen says his company is always looking for designers who will provide the “new stuff.”
“Our H.R. department is always at job fairs and colleges recruiting the next and best, but that doesn’t always work,” he says. “We have a lot of Navy personnel on staff who know how to get things done. These working veterans are very good on the technical side.”
Linda Fairbanks, executive director of ALM in Richmond, Ky., also sees a challenge in overcoming a lack of desire in the workforce.
“The challenge is getting people who are willing to work, with some of the programs that have been put in place in the U.S. that incentivize them to not put forth that effort,” she says. “We are going to have to instill that level of responsibility.”
If and when textile mills do return to the United States, how will laundry operations change?
Rocco Romeo, CEO, Ottawa Regional Hospital Linen Services in Ontario, president of IATHM, sees a benefit for laundry operations in lag time in terms of placing an order.
“If we had mills in the United States, it would reduce the lag time,” he says. “Right now, it takes 90 to 120 days. We would probably see that come down to about a month.”
Read Part 2 on Tuesday, looking at government regulations and equipment leasing
Have a question or comment? E-mail our editor Matt Poe at [email protected].