Answer to a Problem

In New England, no business problem is more pressing than the drift of the textile industry to the South, lured by cheaper southern labor and new plants financed by southern cities. How can the industrial migration be stopped? Last week, New Hampshire businessmen and state officials planned a banquet for a man who had shown them how it can be done. His name: Mack Kahn.

Kahn, who started a brassiere company after World War I with $1,500 in Army savings, has built it into a $40 million textile organization, Artistic Foundations, Inc., that turns out bathing suits (Sea Molds), piece goods (Kanmak) and girdles (Flexees). As proof that his 13 northern mills can compete with all comers, his company has signed up $42 million in Government orders, all won by competitive bidding. To keep up with--or ahead of--southern competitors, Kahn is putting the finishing touches on a ten-year, $8,000,000 program of expansion and modernization. This month he added to his bathing suit line by buying Los Angeles' Caltex of California Co., one of the West Coast's bigger swimsuit producers.

"We Had Our Troubles." Kahn's success is partly based on New England's troubles, notably in Manchester. The weaving and knitting mills there were shut in 1936 following the crash of Amos-keag, world's biggest cotton-textile company. New Hampshire business leaders pooled their resources, paid $5,000,000 for mills once worth much more, and were trying to get someone to open up the mills again. In 1941, when piece goods were scarce, Kahn took a chance on Manchester. He bought one mill for $750,000, soon got three more at bargain prices. He started replacing old equipment with modern machines, now has the newest combing machinery in the U.S. and, in some of his plants, what is probably the only carding equipment of its kind in the nation.

As Kahn extended his modernization program to his other plants, from Pennsylvania to Rhode Island, man-hour output doubled: a worker who could operate only one of the old machines was able to tend two new ones with the same amount of effort. "We had our troubles convincing the union to boost productivity," says Kahn, "but we were firm. You have to help them understand that labor has as big a stake in industry as management."

New Fields. Once, when the CIO textile union balked at letting members step up production with the new machinery, Kahn's firmness took the form of a slowdown strike by management. For two months he stopped hustling for new business, cut production. Says Kahn: "That convinced the union that it would gain more by agreeing to step up output--and it has. While output has doubled, the earnings of our employees have tripled." (Kahn has had but one short strike among his 4,500 employees.)

Kahn thinks that most of the ills of

New England's textile industry can be cured by his methods, plus community help such as he got in Manchester. Says he: "New England textile people have not been fully recognized by politicians, tax assessors and civic leaders for doing a job. They have come to feel like a neglected part of the family and have permitted their mills to run down. Sure, the new plants in the South are more efficient than the old plants in the North, but new plants and equipment in the North would be just as efficient."

Despite Kahn, the southward migration of New England's textile industry continued. Monroe County, Miss, prepared to float a $2,600,000 bond issue to supply Rhode Island's Textron, Inc. with a plant--all part of Mississippi's well-organized program to "balance agriculture with industry." Since this program got under way in 1938, Mississippi has lured nearly 70 new plants (mostly textiles) to the state. Result: state employment has jumped by 15,000, payrolls by $35 million. Kentucky, Tennessee and Alabama have similar programs.

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