Losing the shirt (and jobs) off our backs

Another Canadian manufacturer has called it quits in the Great White North, Gildan sportswear, makers of many of the tee shirts, socks and underwear that cost conscious Canadians wear, has decided that it can’t make a go of it anymore in Canada.

Gildan today announced it was eliminating 546 jobs, mostly in the textile industry of Quebec, relocating to cheaper locales overseas and farming out any ancillary business in Canada to a third party.

And the decision by Gildan may only be the tip of an iceberg looming for Canada’s already declining manufacturing sector, a report released today (coincidentally on the same day as the Gildan announcement) suggests that 2007 will be one of the more challenging years for manufacturers in Canada.

With global competition becoming increasingly more intense, many Canadian companies are finding it harder and harder to not only make ends meet, but even survive on a day to day basis.

The question for all levels of government is what can be done to keep a vibrant manufacturing sector alive in the nation, or is the wave of globalization too great to stem now.

It’s a trend that has to be worrisome for average Canadians, those that aren’t part of a resource structure in the nation. The only “growth” areas it seems are in those much valued natural resources such as oil, gas, lumber and such, and in even some of those competition is taking its toll on the long term structure of the industry.

True some outside forces do wreak havoc on Canadian industry, currency fluctuations, energy and transportation costs can cause some serious damage, not to mention taxes and such.

However, another simple fact is true as well, if these companies keep laying off staff and eliminating jobs, eventually that pool of consumers will grow smaller and smaller each year. They may not actually disappear but they’ll have no choice but to cut down on their spending as well, which will continue the cycle that seems to lead to nowhere good. In other situations, towns will see their populations reduced, as those displaced workers look for a more promising future somewhere else.

Now Gildan’s announcement won’t have any real impact on the North Coast, maybe at your local clothing outlet, which may find that their shirt supplies are coming up short in the future. But the reasons for the announcement can resonate with workers here, who have seen jobs go and industries fail with similar arguments and concerns. And their case highlights the struggles that many Canadian companies face and the unhappy result that comes when they can’t compete anymore.

No nation can really move forward if they have nothing to offer but natural resources, ready for the taking with no finished product to show for them. While a troubled industry such as the textile one is probably not the final warning, nor the best example even, it surely offers up yet another indication that the way things are done now, needs to be changed.

If governments need a simple equation for this problem, how about this one:

Unemployed workers = unhappy voters!

And

Unhappy voters = Unemployed politicians!

Perhaps that might help out those that are not paying attention to the warning signs.