In Arkansas, Trade Policies May Influence Feb. 5 Voting

And now to Margaret Warner. She talked last night with a group of voters at public television station AETN in Conway, Arkansas, just outside Little Rock.

MARGARET WARNER: I'm joined by six Arkansas residents with different work and life experiences and different political leanings. We're here to discuss how globalization is affecting Arkansans' and Americans' access to good jobs and what any president can do about it.

With me are cotton farmer Stanley Reed; pipe manufacturing manager Paul Mastro; business efficiency expert Lydia Carson; former factory worker Deborah Donald, now working at a community college; shoe manufacturer Stan Grise; and aerospace company executive Bob Smith.

And thank you so much for being with us, all of you.

Stan Grise, let's begin with you. Your shoe manufacturing company where you are CFO, how have you managed to survive here when almost virtually all American shoe and textile makers have long ago had to shift their operations to Asia or Latin America?

STAN GRISE (R), Shoe Manufacturer: Well, I would say that it's been a number of different reasons, the biggest of those is that we're a niche business and we provide a product that, at least at this point, isn't easily accessible by our Chinese competitors.

MARGARET WARNER: And when you say a niche business, what do you mean?

STAN GRISE: If I could profile the customer that we target, she's probably pretty affluent, baby boomer, maybe 40-plus years old. What we've done is tried to target whatever it is that she's looking for and put her in a position where she thinks our footwear is not only attractive, but comfortable and can't live without them.

MARGARET WARNER: And the Chinese competitors don't want to do that?

STAN GRISE: Chinese competitors want to make shoes in volume, as many as they possibly can, in as short a period as they possibly can.

MARGARET WARNER: Now, Deborah Donald, you were laid off nine years ago from the Levi Strauss factory where you worked. Yet now you're an administrative assistant in the financial aid office of a community college. How did you make that transition?

DEBORAH DONALD (D), Administrative Assistant: Well, when they shut down, the NAFTA program basically gave us an opportunity to actually go back into the workforce or to achieve an education goal.

And I decided to go the educational route, because I wanted not to be in that position again. So I went to a two-year institution. I got my degree in business. I graduated. And basically I did everything they told me to do and got a job basically right out of college.

MARGARET WARNER: And, Paul Mastro, you're at a PVC pipe manufacturer. Your company's actually Swiss-owned. But in what other ways is your business shaped by global competition and your ability to create good jobs here in Arkansas?

PAUL MASTRO (R), Pipe Manufacturing Manager: We are a global company. We manufacture and sell around the world. In addition to just a product, we sell service, we sell support. And we just try to find, how can we offer value that somebody can't get at the lowest cost to a producer?

MARGARET WARNER: But you do have a plant yourself in China.

PAUL MASTRO: Yes, we do. Yes, we do. And, very honestly, we were exporting some items to China five, six years ago that they're making today. Now we're making some higher-end products, what we call engineered piping systems. And five or ten years from now, probably some of those will be made in Asia, and we'll be making something else.

MARGARET WARNER: Now, Stanley Reed, you're a third-generation farmer. Your son, I gather, is also in the business. But how has the global economy, global competition changed the way your family farming enterprise works?

STANLEY REED (I), Cotton Farmer: We have to be constantly aware of, what are the needs of the global market? What commodities does the marketplace tell us they need to produce? And we're just as much a state of flux and a state of change as any other industry in this country.

But globalization has winners. It has losers. That's in every sector. It's in agriculture. We've had to shift commodities that we grow.

I'm a cotton farmer now, but China and India has greatly increased their cotton production. So we may have to shift to other crops or probably will this year because the market is telling us to produce grain. And it's all because of the global market that we're a part of.

MARGARET WARNER: And, Bob Smith, your company, Dassault Falcon, the corporate jet maker, now, you are also foreign-owned, in your case French. I gather, though, that many of the components for these corporate jets are actually made elsewhere, and then you bring them here, and that's the final assembly, is that right?

BOB SMITH (D), Aerospace Executive: That's right. The green airplane flies over from France, which is made up of components that are procured around the world, so it's a global product, as we say. And it comes here, and we put the final custom interior in to customer specifications here.

LYDIA CARSON (I), Business Efficiency Expert: It's all about cutting costs and being more efficient. But there's a couple of things that we look at in addition to being lean, also being innovative and looking at ways to have products and services that are different than what can be offered from overseas or other parts of the world.

MARGARET WARNER: Now, how often does that involve downsizing? Stan Grise, your company's gone from, what, 2,700 employees to 600?

STAN GRISE: We lost a lot of market share. And basically a large segment of our market just simply went away, just went to China, and that was it. What's left for us has been downsized.

But what we really end up doing is asking people to do more than one job. You know, 15, 20 years ago, they did a job. They were a fancy stitcher, and that's all they did eight hours a day. Today, we may ask them to do not only another couple of jobs, but maybe as many as five, and it becomes a way of life in the factories.

MARGARET WARNER: So what difference has this change, this global competition, meant for the quality, first of all, the number of jobs and the quality of jobs here in Arkansas?

BOB SMITH: I currently have over 200 openings right now of skilled jobs at all different levels, from, you know, craftsmen, installation people, and then engineers.

MARGARET WARNER: But you're saying you may not have people to fill the jobs?

BOB SMITH: It's probably our biggest issue that we face today. We have an issue of finding skilled labor. We do train a lot of people, but you can only handle so many trainees at one time. And that's what we're being forced to do now, is to take on people with lesser skills, put our training courses together, and train them.

MARGARET WARNER: Just let me ask you, Deborah, is retraining as kind of a magic bullet? Or are there people you worked with, say, at Levi Strauss who haven't been able to make the transition?

DEBORAH DONALD: I think it depends on the individual. Now, there are a lot of people that are out there that feel like this is the only way to be a skilled worker that they're going to make it.

And a lot of them have that fear of going back into the classroom after being out for 20 years, 15 years, how hard it's going to be. How am I going to be looked at? Because when you have a non-traditional student with regular students, and those classes are going at a regular pace, some of the older students really feel intimidated.

MARGARET WARNER: Deborah, let me ask you as someone who retrained herself, or was retrained, Deb, do you think the job you have now, how does it compare to the job you had at Levi Strauss?

DEBORAH DONALD: It was always, I guess you would say, a burning desire in my heart to go back to school, so basically it was a blessing for me to actually -- when they actually went overseas and shut down. Although I had an income loss, but yet, in the long run, it was better for me.

MARGARET WARNER: Well, Paul Mastro, what's your view of this, in terms of the adequacy of a skilled workforce? Who is in charge of the training and the retraining that we're hearing about that's so necessary?

PAUL MASTRO: I think that's a very good question. And I think, as Bob alluded to, a lot of that falls back on the manufacturers themselves.

PAUL MASTRO: Oh, my personal feeling is that it really has to start locally. I mean, if you look at the high schools and feeding the colleges, that I just don't think we're doing a good job in science and math. And the people we're seeing are just not really tooled to handle some of the new technologies.

MARGARET WARNER: Now, the one area that a president does obviously have impact is in negotiating trade agreements. What more do you think presidents should be doing, or the next president should do, to improve the impact that global competition is having, say, on Arkansas?

STANLEY REED: Negotiating fair trade and access to foreign markets is crucial to American agriculture. And we would like to see presidents in negotiations that give us a better advantage so we can have opportunities to penetrate those foreign markets.

Our trade imbalance is just terrible when you look at the opportunities that people have to trade in our country. There has to be some tougher trading negotiating going on; we're just not getting the benefit of the bargain.

MARGARET WARNER: So do you all think that the emphasis in negotiating future trade agreements should be on trying to retain American jobs here, or should the emphasis be more on trying to open up further world markets?

STAN GRISE: I think the damage is done, in some respects. In the shoe industry, 95 percent of them or 98 percent of them, whatever number you choose, close to 100 percent of the shoes are made in China. The damage is done.

Now what we need to do is those of us that survive in this country need to have access to the global markets and be able to get it out of here. And I think that's a bigger part of it sometimes than trying to back up and undo what's already been done.

STANLEY REED: Ninety-six percent of the customer base is outside the walls of the United States. And we've got to realize that to have access to that marketplace is crucial for Americans to survive.

A rising tide floats all ships to a higher level. And as China and India and their economies have improved over the last 20 years, they are much more of a consuming country. They eat more meat products, more protein and oil, and that certainly has helped everyone in the world. They buy more blue jeans, more denim. It certainly helps the cotton farmer in America.

MARGARET WARNER: Even though Levi Strauss isn't here.

STANLEY REED: Even though the production has gone over there, everyone gains to some extent in fair trade, free trade. There's also some losers, and we have to be able to adapt and change.

The truth is, in this country, we have lost 3 million manufacturing jobs in the last 10 years, but we've gained 3 million jobs in the education and health care industry and also in the professional business services. We gained another 3 million jobs.

MARGARET WARNER: So let's put this in the campaign context. You all face a primary here next Tuesday. Are you hearing enough from the candidates on this issue? And do you like what you hear? Why not?

BOB SMITH: I don't hear very much about the global market and that type of a subject.

MARGARET WARNER: And you're just not hearing the candidates, what, they don't have a sophisticated enough understanding, or they're not talking about it enough?

BOB SMITH: I'm not sure if they're not talking about it enough or the news media is forcing them to talk on certain subjects, like the war or race or something like that, you know?

I think most of us, we don't want to hear that anymore. You know, we want to hear things that are going to affect us personally and the people that are around us and the companies that we work for.

MARGARET WARNER: Deborah, you said you weren't hearing enough.

DEBORAH DONALD: No. And what I meant by that is the fact that I would love to hear them have a plan of action what their ideas are and how they're going to achieve it. And I think they're just skating over the top. You can make a lot of promises, but keeping those promises, that's another thing.