Kiev Coats Put U.S. in a Sweat

CORINNA, Maine -- American consumers' eyes may light up when they see the price tags on wool coats this winter. But when Matthew Burns envisions the bargain-priced coats headed toward department stores, he sees red.


That's because cheap wool coats are flooding in from Ukraine, threatening the U.S. woolen fabric industry and Burns'own company, Eastland Woolen Mills.


"It's a new Cold War," says Burns, chief executive of the 85-year-old woolen mill. "This situation has the potential to destroy what's left of the United States woolen manufacturing industry."


Eastland, which is battling its way out of bankruptcy, is fighting along with other U.S. woolen mills to keep out the cheap imports.


Burns and other mill executives are hanging their hopes on the actions of federal trade officials. They want bilateral trade negotiations with Ukraine and import quotas for 1995.


Much of the U.S. woolen fabric industry today is located in New England, where many textile manufacturers are struggling to survive. Maine has the largest concentration of woolen manufacturing of any state, with 12 mills employing 2,500 people.


With roughly 400 employees, Eastland is the fourth-largest woolen mill in the country. Most of its woolen fabric is used to make winter coats, the majority of which cost $160 to $240.


Comparable coats made in Ukraine showed up in stores last year for less than $100. Eastland general manager Joel Eldridge said American coat makers cannot compete.


"No mill in this country can make a coat for that price," he said.


Production has slowed at Eastland, where the company recently dropped one day per week from its work schedule. It's not the only mill feeling the pinch.


"It's made a tough season," says Allan T. Britton, the president of Homestead Industries Inc., a woolen mill in Claremont, N.H. Britton said the 200 employees at his mill have anxiously watched work slow in what is traditionally their busiest season.


"We are slower on July 1, 1994, than we ever have been in anybody's memory," he said.


The cheap Ukrainian coats are finding their way into the United States as a result of defense conversion programs in the former Soviet republic.


After decades of clothing the Soviet military, Ukraine has a huge capacity to produce woolen fabric and sew clothing, U.S. mill executives say. Ukrainian workers' comparatively low salaries help producers there save even more.


Some major U.S. coatmakers are rushing overseas for the Ukrainian coats. One has invested in a Ukrainian coat factory, while another has sent employees there to oversee coat production.


The coats are inexpensive, but Burns says they are not shoddy.


"I have seen the coat, and it's an excellent garment. It's well-tailored. It's well-manufactured. It's stylish. ... These are not cheap goods," he said.


Last year, Ukraine sent 1 million coats to the United States -- the fabric equivalent of one New England mill's annual production. Ukraine coat exports are expected to leap this year.


One major coat company, Lou Levy and Sons Fashions, has already ordered 1 million Ukrainian coats for this winter and other companies are expected to follow suit.


"We have our own people in the Ukraine. We have factories that are working exclusively for us. We have woolen mills that are producing goods exclusively for us as well," said Neil Haimm, the president of the company's Donnybrook division.


That's bad news back in Maine, where Eastland has supplied wool to Lou Levy and Sons. "It has hurt our people," Burns said. "It's very hard on them because they're going home with a lighter paycheck."


Haimm said his company isn't looking to put U.S. woolen fabric producers out of business. Lou Levy and Sons still operates coat-making factories it wants to keep open in New Jersey and Alabama, he said.


"We still buy lots of wool domestically," said Haimm. "There's room for both."