Coat firm loses fight against cheap labour

New York - Can the industrial nations of the West fight back against competition from low-wage workers in the developing world? The evidence from the once-mighty US apparel industry in the last few days is that it is fighting a losing battle, writes David Usborne.

The raincoat manufacturer London Fog, a household name in the US, has said it is to close its last remaining US factory. The plant, which employs 280 workers in Baltimore, represented a unique experiment to withstand the logic of shifting production to countries where wage costs are lower.

The Baltimore government two years ago gave London Fog almost $2m (pounds 1.2m) in incentives to keep the factory open, and the union agreed to a $1.25 cut in hourly wages. Now the company concedes even with that help, making coats in the US is not viable. "The lower cost of goods manufactured by overseas contractors, as compared to US-based costs, has forced us to join our competitors in placing the remaining portion of our business with offshore contractors," said the chairman, Robert Gregory.

In the debate about the benefits and costs of global free trade, textile workers have long been identified as the group most wounded by the process.

In the primary races of the 1996 presidential elections, Republican contender Patrick Buchanan singled out the earlier closures by London Fog to support his platform in favour of reasserting trade controls.