ORWIGSBURG, Pa. (AP) — One of the last U.S. apparel manufacturers of its kind is losing its shirt.
FesslerUSA had survived war and depression, free trade and foreign imports, producing millions of knitted garments from its base in eastern Pennsylvania. Five years ago, third-generation owner Walter Meck and his family were feeling so good about the company’s prospects they doubled capacity, moving into a former pencil factory outside the small town of Orwigsburg.
They were still setting up shop in the new place when the Great Recession hit.
Sales plummeted. Financing dried up. And, after a long struggle to keep the manufacturer afloat, Meck has finally run out of time and money, still awaiting the strong economic rebound that never came. Production will shut down later this month, tossing 130 employees out of work and ending a run of nearly 113 years.
Meck blames the historic mill’s demise on weak consumer spending, fresh competition from Asia, tighter credit standards that he said prevented Fessler from getting a desperately needed loan, and a lack of interest from private investors and potential buyers.
Though domestic production has ticked up recently, more than 97 percent of the 19 billion pieces of apparel sold in the United States last year were made somewhere else, primarily in China and other Asian nations, according to Labor Department data compiled by the American Apparel & Footwear Association. Employment has declined 75 percent since the late 1990s, from 621,000 jobs in 1998 to 151,800 today.
Fessler had been a rare breed among apparel manufacturers not only for its longevity, but also because it controlled all aspects of production. The company weaves its own fabric, cuts it and sews it into private-label garments shipped to stores around the nation.
“There aren’t very many vertical, made-in-the-USA apparel companies left,” Meck said. “It is an incredible feeling to watch those garments go out the door.”
In 2011 Fessler’s sales were down 50 to 75 percent from their pre-recession peak of $25 million per year.
Meck, a wily busi-
nessman with nearly four decades of experience, insisted Fessler could have survived had he found a willing lender.
“Very quickly it became clear that new regulations that were being placed on banks were crippling banks’ ability to do business, and it didn’t take along for that to rumble right down and hit us square in the face,” he said.
Meck’s lament about tightened credit is a common one among small- and medium-sized manufacturers, said Chad Moutray, chief economist for the National Association of Manufacturers.
“Many of them have complained to me that the standards for borrowing have become a lot more strict since the recession,” said Moutray. “It’s much tougher to get a loan today than it was in the past.”