A foundation hopes to keep the saying on shirt labels

Published: Thursday, August 1, 2002 at 6:01 a.m.
Last Modified: Thursday, August 1, 2002 at 12:00 a.m.
HATHAWAY on Page 7B Continued from 5B HATHAWAY: Difficult past Waterville, Maine The Made in the USA Foundation spent years urging Americans to buy domestic goods as thousands of manufacturing jobs were exported overseas. Today it's trying a new tactic.
The nonprofit organization is leading an investment group to buy C.F. Hathaway, the nation's last major manufacturer of domestically sewn men's dress shirts.
"We've done everything we can for the past 13 years to promote American goods," said Joel Joseph, chairman of the Made in the USA Foundation. "But if you can't find American goods, you can't buy them."
Hathaway, recognized for its man with an eye patch logo, set the standard for men's dress shirts back in the 1950s and '60s. Back then, button-down shirts were sewn in factories like the 19th century brick building Hathaway occupies along the Kennebec River.
Times changed, though, and most shirts sold in the United States are now imported from countries where labor is cheaper and there are fewer regulations. U.S. shirtmakers like Arrow and Van Heusen have moved their operations overseas.
"Offshore pressure is a huge competitive problem for us," said Donald Sappington, chief executive officer of the 165-year-old Hathaway, the nation's oldest shirtmaker. "There is no domestic competition."
Hathaway has survived, but just barely. The company's pending sale, its third in six years, was negotiated after its current owner, Connecticut-based Windsong Allegiance Group, announced plans to close the factory this summer.
Joseph read a newspaper article about Hathaway's imminent shutdown and saw a chance to save 300 U.S. manufacturing jobs.
Joseph has previously orchestrated deals to save other U.S. manufacturers, but the Hathaway buy will be the foundation's first direct purchase of a company.
More deals to preserve American manufacturing jobs will follow if Hathaway proves to be a good investment, Joseph said. He insists U.S. shirt manufacturing is still viable if owners are willing to accept lower profit margins than they'd have overseas.
Howard Davidowitz, chairman of Davidowitz & Associates Inc., a retail consulting firm in New York, predicted it will be a struggle.
"Ninety percent of the people who have tried this have collapsed," he said. "There are bodies littered everywhere."
The key will be whether Hathaway can design distinctive shirts and then sell them for a premium market, the same way a handful of U.S. shoe makers have managed to survive, Davidowitz said.
Sappington, who will remain CEO, believes the company can be competitive despite the higher cost of running a U.S. plant. His unionized work force is paid an average of more than $10 an hour, far more than apparel workers in developing countries, and receives paid holidays, health care benefits and retirement accounts.
Hathaway also pays more for raw materials because it buys roughly half its fabrics from U.S. producers.
A local investment group that bought the company in 1996 had similar hopes for a revival but was forced to sell last year. Former Maine Gov. John McKernan, who led the group, said his greatest frustration was not having the bankroll to expand the firm's product line. Hathaway's new owners are raising a total of $6 million, so they might not have the deep pockets, either.
"I think it's just a godsend that the Made in the USA Foundation was available," McKernan said, but added: "I think it's still going to be very difficult."

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