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samboct -> Harts Schaffner Marx on the ropes... (5/14/2009 6:31:12 AM)
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One of the few remaining garment manufacturers in the US, Harts Schaffner and Marx (who also makes Hickey Freeman) is in deep trouble according to an article in the NY Times. For those who don't know their stuff, much of their sales were to Wall St. Execs- some of whom clearly are scrimping these days. Obama's suits are made in their plants- heck, I even have an HSM suit and a pair of Hickey Freeman pants. Essentially their business has fallen off by 40% since the start of the year. Like many businesses, they rely on banks to provide loans to purchase raw materials and the problem they've got is that their bank is Wells Fargo. Wells Fargo is saying that they plan on selling off HSM to the entity with the highest bid- since that's what makes sense to their shareholders, i.e. Wells Fargo should be as profitable as possible. Except that if HSM gets sold to an overseas investor, they're probably going to take the brand and shutter the US plant, where IIRC, there are some 3,600 workers making around $12/hr. Anybody gonna say these people are overpaid?
Here's my outrage on this one... As taxpayers, we've fronted Wells Fargo a chunk of money to stay in business. Wells Fargo's move is shortsighted at best- without manufacturers like HSM, this country has nothing and besides, HSM's workers are helping to pay the taxes which bailed out Wells Fargo. There is just something terribly ironic here and I think it illustrates the problem in our banking system. We don't need to bail out banks which make money for wealthy investors by shopping US companies overseas- we need banks which support US businesses. In the long term, I'll bet HSM's business comes back- well cut and manufactured clothing is like cars- sooner or later, you're going to need it, even if in the short term, you can make do. It seems to me that banks which needed the bail out money are too focused on short term returns, and have ignored longer term issues- and they haven't fundamentally changed, even with all the bail out money they've been showered with.
Sam
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