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Foreign trade imbalances hit close to home

Brookhaven’s second oldest manufacturing company is joining manyother small to medium-sized manufacturers feeling the pinch of an”unbalanced” foreign trade policy.

Ed Gove of Hartley Gove Sons said the company is experiencingsome “pretty lean times” as it tries to compete with trade in theOrient, predominantly China.

“I’ve heard rumors that we’re shutting our doors, but I have nointentions of closing or moving out of Brookhaven,” Gove said. Welove Brookhaven and hope to stay here for many years to come.”

In recent years, Gove said, the company has lost three of itssix top customers, approximately 45 percent of its annualproduction, to Southeast Asia.

His customers began “giving us hints and then warnings” in 1995or 1996, Gove said, when China was opened for trade. He was askedto hold costs from year to year.

About two years later, he said, the warnings turned into demandsto cut prices where he had already been holding costs, despite therising costs of production.

“Everything was going up, but we were having to sell for less,”he said.

Technological improvements in manufacturing enabled them to holddespite the rising costs, he said, but then in late 1999 or 2000″those customers started saying they would no longer be buying ourquality thermometers and would gradually reduce their need for us,”Gove said. “They didn’t leave us because they wanted to. They leftbecause they had to.”

The pressure on his customers, Gove said, came from the largediscount retailers. He said his customers advised him that theircustomers, the large discount retailers, would no longer be usingtheir thermometers unless they could make them for the same priceas China.

And that, Gove said, is impossible. As an example, he said Chinaemploys young teenage girls to make their thermometers and paysthem the equivalent of $2 a day. He can’t compete with that, hesaid.

“We don’t want Congress to bail us out financially, but I dowant Congress to level the field so that small and medium-sizedmanufacturers can compete with the foreign trade,” Gove said.

One way to do that, Gove said, is to establish stronger tradetariffs. The old tariff, he said, required up to 40 percent taxeson tubes used in thermometers from foreign sources. By making thewhole product in China, he said, they can bypass the tariff.

Foreign trade imbalances, Gove said, are directly affectingemployment across the nation, and Mississippi is certainly feelingits effects. In a recent year, the U.S. imported $100 billion inproducts from China and exported only $20 billion to China.

“Our politicians and administration feel that internationaltrade is of the utmost importance,” Gove said. “That would be fineif the balance of payment were in our favor or equal and we werekeeping manufacturing jobs or adding to them, but it’s not andwe’re not.

“Most of the jobs being lost today from foreign trade are smallor medium-sized manufacturers that employ less than 500 people,” hesaid. “The million or so laid off of manufacturing jobs in the past18 months are because of the jobs going overseas, mainly to theOrient.”

Gove said, however, he will continue to make thermometers at hisplant here and the company is looking for other ways to expand itsproduct lines.

The company was founded in 1889 by Gove’s grandfather, HartleyGove, in Philadelphia, Penn. Hartley Gove moved to Vineland, N.J.,in 1903. At that time, the company was run by Ed Gove’s father anduncle.

A branch was established in Brookhaven in 1957. The Vinelandplant was closed in 1963 and the company moved all its operationsto Brookhaven. They moved to their present location in IndustrialPark in 1967 after the community overwhelming passed a BAWI bondissue for construction of a new plant.