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Few Survivors Left in Massachusetts Shoe Industry

February 21, 1985 GMT

LYNN, Mass. (AP) _ The heart of this gritty industrial city north of Boston holds scores of red-brick reminders that the American shoe industry is down-at-the-heels.

Mostly renovated but some mere rubble heaps, they once housed 150 factories that churned out billions of shoes, sandals, sneakers, slippers and boots in a city that until the 1970s was the undisputed shoe capital of the world.

Today, the footwear industry in Lynn has shrunk to a single company that makes baby shoes. It, too, is fighting to survive.

″We’ve been pulling rabbits out of hats for the past couple of years,″ said Richard Rothbard, president of the baby shoe company. ″What we’re concerned about is: How many rabbits are left in there? When does it all end?″

His despair is echoed throughout the shoe industry in Massachusetts, which was once the most productive footwear state in the nation and now ranks No. 5. As the industry dies here, it gasps in other major shoemaking states, such as Maine, Missouri, Pennsylvania and Tennessee.

The foe, everyone in the industry agrees, is the flourishing import business, which now controls 72 percent of the domestic shoe market. American manufacturers simply cannot make shoes as cheaply as they do in Korea, Taiwan and South America, where workers earn as little as $1.10 an hour. In addition, because of a federal policy supporting free trade, imports are not burdened with heavy tariffs or quotas.

In its heyday about 15 years ago, the nation’s shoe industry boasted 1,100 plants from coast to coast. Last year, 82 of the remaining 600 factories closed. Seven of those were in Massachusetts, leaving the state with 55 still in operation.

Since 1968, when the federal government cut tariffs on imports in half, 110,000 shoe industry workers have lost their jobs and production has dropped 46 percent.

Last year ″was the single most devastating year in the industry’s history,″ said Ken Crerar, a spokesman for the Footwear Industries of America, a national lobby based in Arlington, Va.

The companies that managed to hang on, Crerar said, were simply too angry to give up.

″They are the mean and aggressive ones, the ones that have streamlined themselves. They are fighting companies,″ he said. ″The companies left in this country are survivors, and they have survived a tidal wave from overseas.″

Barry Manufacturing Co., the baby shoe company in Lynn, is one of them.

Every weekday, 200 employees in its one-story factory produce 6,500 pairs of shoes for retailers such as K mart, Fayva, Kinney Shoe and Thom McAn.

The company was founded in 1946 by Rothbard’s grandfather, and in the following years it expanded quickly. But when import tariffs were lowered in 1968, Barry Manufacturing began to feel the crunch.

Rothbard decided to go to business school in 1973, and he soon realized the need for automated, high-speed sewing machines and strict inventory and efficiency control.

With loans from the local government, which was trying to stimulate Lynn’s struggling economy, the Rothbard family steadily computerized Barry Manufacturing, increasing its productivity and lowering packing and shipping costs.

The company purchased 14 computerized sewing machines at about $20,000 each to offset the rising costs of labor and duplicate the elaborate stitching designs made popular by foreign manufacturers.

But at the same time, Barry survived by staying small and specializing.

″We make a particular product and we haven’t varied much from that,″ said Rothbard. ″We haven’t gone off in a million directions trying to stay alive. We’ve tried to stay with what we do best in our own niche.″

In addition, Barry has developed its own brand of fashion baby shoes, called Step & Stride, just in case a major retailer decides to drop its account for foreign-made goods.

″It’s a safety measure,″ said Robert Rothbard, Richard’s younger brother and the company’s vice president.

But even with the company’s success at staying alive, profits have only held steady over the past five years. Richard Rothbard declined to say how much money the company makes or loses, but he added, ″We’re being pinched, most definitely.″

″We don’t know what tomorrow is going to bring,″ he said. ″So we’re kind of on hold, treading water, doing the best we can with what we have.″

The same could be said for the larger and better known Stride Rite Corp., whose national headquarters are in the Boston suburb of Cambridge.

Arnold Hiatt, chairman of the board, said Stride Rite has survived by closing American plants and moving 50 percent of its production overseas. Nevertheless, last year the company’s net income dropped to $5.4 million from $16.8 million in 1983, the first decline in recent memory.

″Has it been a struggle? No, it’s been a picnic. I play golf every afternoon,″ Hiatt said sarcastically. ″It’s a tough industry. The government needs to restore some kind of equity in international trade.″

Stride Rite was forced to close one of its plants in Pittsfield, Maine, on Dec. 1.

″We just couldn’t compete,″ Hiatt said. ″(Business) just kept falling off ... Of course it undermines morale. People say, ’Gee, it could happen there, it could happen here.‴

Still, Crerar said he sees a dim ″ray of hope.″

The International Trade Commission in Washington, the federal agency that removed tariffs and quotas from shoe imports, is currently considering an appeal of its decision. The result of the appeal investigation will be announced in six months.

″We’re hoping that they will find that the industry has been injured by imports,″ Crerar said.

″The footwear industry has fought longer and harder to survive than a lot of other industries. We’ve done a lot to help ourselves,″ he added. ″We’re losing so fast, we just need time to get back on our feet.″