Quaker Fabric CEO is Textile World's 2000 Leader of the Year In today's turbulent global textile industry, there are few successful enterprises which are not exporting to some degree. Many companies see export sales as a necessity for survival.

One of textiles' foremost advocates of international trade is Larry Liebenow, president and CEO of Quaker Fabric in Fall River, Mass. Building on nearly 30 years of experience in international textile markets, Liebenow is aggressively pushing his company and the industry toward greater participation in global trade.

Liebenow, whose reputation is growing as an authority on international affairs and textile exporting, has been selected by Textile World's editors as the magazine's 2000 Leader of the Year.

All of the challenges facing industry notwithstanding, Liebenow says the next several years will be one of the most exciting periods in textile history. "The textile industry has gone through a complicated period of sorting through what can be successful," he says. "At the same time, there is such exciting opportunity within this industry as we bring together technology and product specialization. The U.S. industry will sort through its various obstacles and become a strong player in the global market."

Liebenow recently offered his views on a variety of timely industry topics in an exclusive interview with Textile World at Quaker's Fall River headquarters. The Oregon native has an often unique perspective on the global textile landscape and is not hesitant to differ from his industry counterparts when it comes to international trade issues.

Liebenow, 57, has an optimistic take on U.S. textiles. New global challenges also present opportunities, he believes.

"There are a lot of positive things happening within the U.S. textile industry that I believe will contribute to industry's long-term ability to succeed in a global marketplace," Liebenow says. "These include the high degree of technological development we are seeing. The textile industry is no longer labor intensive; it is capital- and knowledge-intensive."

There are, however, major areas of concern. One is specialization, where Liebenow believes U.S. mills can learn from their European counterparts.

"Clearly, the areas in the textile industry that are going to be successful long term are the more specialized aspects," he says. "To some degree we need to look at the European model, where even in the apparel industry, companies in Italy, Germany, Belgium and France are very successful. It's precisely because they have been able to move their products upscale. They have found a model that works not only in Europe, but internationally. This is one area where we have more work to do."

Labor availability is another industry concern. Many textile regions have had difficulty in recent years and have turned to new immigrants for workers. Says Liebenow, "Our immigration policy is going to have to recognize the need for additional workers within the textile industry and more broadly, the U.S. economy."

Liebenow, a director of the American Textile Mfrs. Institute since 1996, says the lack of a "coherent" pro-trade strategy by the U.S. government is another obstacle.

He says that too many trade deals have been made for political reasons, rather than as part of an overall trade plan. As a result, the U.S. is falling behind, he says.

"If we look at what is happening in Latin America, we have a situation that is gradually deteriorating with respect to the U.S. vis-a-vis other countries gaining access to those markets," Liebenow says. "We have not moved forward with the admission of Chile to NAFTA, which had been promised to Chile a number of years ago.

"We're not making any significant progress with the Free Trade Area of the Americas. Meanwhile, everybody else is making all sorts of trade arrangements in the hemisphere to their advantage and our disadvantage. For example, Mexico now has free trade agreements with most countries in the hemisphere. If we were producing goods in Mexico, we could sell into Chile duty free."

Meanwhile, Liebenow says, the MERCOSUR (Argentina, Brazil, Paraguay and Uruguay) trade organization and the European Union have been aggressively pursuing trade deals in the region.

"During all of this, the U.S. has been on the sidelines," Liebenow says. "Many decisions being made are to the advanage of other countries and generally to our disadvantage. On balance, there is enormous strength in the U.S. textile industry and what we need to do is to figure out how we take adavanage of it and get some of these negative issues out of the way."

New England textile industry. In 1920, Fall River boasted more than 100 textile mills. The legacy of many are the numerous multi-story granite-block mills still standing throughout the city today. Built like fortresses, many of these mills have found other uses, but some remain empty.

Quaker Fabric, formed relatively recently in 1945, nevertheless is a survivor.

"The difference in labor costs in New England versus other textile manufacturing areas in the U.S. is almost insignificant," Liebenow says. "Energy costs are higher in New England. On the other hand, New England has generally had access to an excellent workforce, particularly here in Southeastern Massachusetts. The differences that may have existed in the past are relatively small today."

Quaker has not only survived, but grew significantly in the 1990s. The company grew from revenues of $90-million in 1990 to a projected $300-million this year. Employment grew from 1,100 to 2,600 during the same time period.

Specialization has been the stimulus for Quaker's growth, Liebenow says. Quaker has moved into the middle and upper tiers of the furniture upholstery fabric market while also developing an outside market for speciality yarn sales. With export sales already at 20%, Liebenow sees international markets as the company's greatest growth area.

Capital improvements has been another Quaker catalyst. The company has spent more than $160-million since 1990 to upgrade facilities and technology.

"We created a technology development group within Quaker which is providing new capabilities," Liebenow says. "It's helping us differentiate our products and we have been able to establish Quaker as a fashion leader.

"Overall, we have been able to count on a strong workforce and an outstanding management that works well as a team. They are excited, creative and dedicated to making Quaker a financially strong company."

An international workforce. Quaker may have the most international workforce of any U.S. textile company. More than 70% of the company's hourly employees are Portuguese and many speak only Portuguese. As a result, Quaker is a bi-lingual company with manuals, training and signage in both English and Portuguese.

Many employees are descendants of immigrants who arrived two or three generations ago, but the area continues to be a magnet for Portuguese immigrants, Liebenow says. Perhaps that's why Quaker's employees understood the significance of NAFTA prior to its passage.

"When the NAFTA vote came up, it was the first time we ever laid out a political issue to the broader workforce at Quaker," Liebenow says. "We had more than 80% of our employees write to their congressmen and senators in favor of NAFTA. That covered both Massachusetts and Rhode Island. It was really encouraging and shows the extent the folks at Quaker understand how important the international market is for our growth."

China. Perhaps no other word strikes as much apprehension into the minds of the textile industry. Many believe the Asian tiger's pending admission to the WTO will be the industry's version of the China Syndrome. While loud arguments are made against opening markets to China, Liebenow the pragmatist, believes it is inevitable.

"I understand and appreciate all the concerns with respect to China," Liebenow says. "There are a number of issues, however, that lead me to believe the more appropriate response is to support China's entry into the WTO. First, China was going to be admitted with or without U.S. support. Therefore, the end result would be the same had we not moved forward. We would have not isolated China, we would have isolated the U.S., to our detriment.

"Secondly, while there are many legitimate concerns about China, I am convinced that the way to work through those concerns is a process where we are actively engaged with China as a partner. Not that there will be any miracles, but I believe over an extended period, we would be able to address the industry's concerns."

Quaker is prepared for the day when trade flows freely with China. The company has established a sales base for its products. Liebenow says Quaker intends to move forward very aggressively in getting its products into China.

"The rest of world was already committted to bringing China into the WTO," Liebenow asserts. "We have to look at it pragmatically and figure how we can work with China rather than somehow avoid interaction with China. Interaction is going to be there. The question is how do you channel it, how do you build it, develop it in a way that is positive at the end of the day for both countries. I believe that is possible."

An exporting primer. Asked how he would advise a beginning textile exporter, Liebenow says establishment of several fundamentals is essential. A company must first have the commitment to stay in international markets for the long haul.

"Far too often, U.S. companies have been interested more in exporting on an opportunistic basis or when they had excess capacity or when the dollar was more favorable in international markets," Liebenow says. "Once one or more of those conditions were no longer present, they pulled back. That's not the way to develop a market."

To be successful, a company must be prepared to stick it out through the good and the not-so-good times, Liebenow says. "Substantial management resources must be committd to understanding the market and what must be done product-wise and service-wise."

Citing some of Quaker's success stories, Liebenow speaks of penetrating the Mexican market. "One of the markets we first went after, thanks to NAFTA, was Mexico. Early on, it became apparent that to compete in Mexico, we had to have products and service in Mexico. As a result, we established a distribution center in Mexico City where we stock a number of SKUs. We have a sales staff in Mexico and showrooms in Mexico City and Guadalajara."

Also in Mexico is a Quaker adminstrative staff that handles all collections and keeps Fall River operations informed of product and customer requirements.

"We're now in the process of extending that model to Brazil with the opening of a distribution center in Sao Paolo," Liebenow says. Elsewhere, Quaker has opened an office in Dubai for Middle East sales and in London for European sales. These are supplemented with agents in several other countries. Liebenow says Quaker is committed to addressing specific needs of each of its international markets, including design work and colorations.

Introduction to textiles. Liebenow didn't begin his career in textiles. After receiving his B.A. from Willamette University in Salem Ore., and then his MBA from Cornell, he joined Dalmine Siderca, a manufacturer of stainless steel pipes for the petroleum industry in Buenos Aires, Argentina.

Liebenow began work at Dalmine Siderca as a financial analyst and later became vice president, finance.

So how does one go from Cornell in Ithaca, N.Y., to Argentina? While working on his MBA at Cornell, Liebenow interviewed with various companies. He was looking for a position which would provide him with the opportunity to manage other people, gain valuable business experience, and have principal responsibility for a major operation.

Dalmine Siderca, with ties to a European conglomerate, offered him that opportunity, even though he did not speak their language nor did they speak his. Because Dalmine was already a global trader, Liebenow says he knew he could learn much more quickly in this type of business environment. "I loved every minute of it," he recalls.

After three years in Argentina, Liebenow's attention turned to textiles. Investors in the pipe company had found an opportunity in textiles in Mexico and offered Liebenow a chance to join them. So, in 1971, he headed to Mexico to become chief operating officer of Grupo Pliana, a yarn and upholstery fabric manufacturer.

In 1983, Liebenow, along with two current Quaker executives, Duncan Whitehead and Anthony Degomes, formed Nortex International, a specialty yarn manufacturer with facilities in Pennsylvania and North Carolina. Nortex primarily served upholstery markets.

"It became clear to us that we needed to get into the fabric part of the business," Liebenow recalls. "I had approached Quaker several times, but there didn't appear to be any interest by the owners. In 1989, Quaker's owners decided to sell the company, which was a publicly traded company. We put together an investment group and made a successful offer."

Liebenow took Quaker private, reorganized, changed its marketing and product strategy, and took it back public, where it remains today.

Liebenow has developed a reputation as a promoter of free trade. He has been a director and member of the executive committee of the U.S. Chamber of Commerce in Washington, D.C., since 1996. Earlier this year, the chamber gave Liebenow its Dennis Sheehan Award for his efforts in trade education and support of trade with China. The award is named for the late Dennis Sheehan, a former Chamber chairman.

"As the CEO of a textile company, Larry Liebenow has seen opportunity, not crisis, in increased international trade," said Will Nicholson, outgoing Chamber chairman. "He realizes the importance of being involved in the policy debate that creates and expands a pro-business environment."

Liebenow, who is chairman of the chamber's International Policy Committee, is also active in various international affairs organizations. His affiliations include:

- Member, The Providence, R.I., Committee on Foreign Relations;

- Member, advisory board, Council of the Americas, Washington, D.C.;

- Member, advisory board, Association of American Chambers of Commerce in Latin America, Washington, D.C.;

- Member, board of directors, Center for International Private Enterprise, Washington, D.C.

A design leader. Ask virtually anyone in the furniture or upholstery fabric business about design and Quaker is almost always the first mill mentioned. Quaker has assembled a top-notch design department and has made the committment to lead the industry, Liebenow says.

"It requires a lot of talented people, which fortunately, we have. We recognize that in order to achieve creativity, some compromises have to be made. We have an exceptionally strong design leader in Bea Spires, our vice president of styling and design. She has done an excellent job of not only providing product leadership, but creating a spirit of teamwork within the whole design area."

Staying at the top of design also requires a committment to technology, Liebenow says. "We develop on a regular basis technology that enables the design team to further differentiate the product, whether it's new yarn, new manufacturing techniques or new finishing techniques."

e-commerce. Liebenow decribes this new textile market as "a baby that will become extremely important to all of us." He believes B2B will provide near-term opportunities for Quaker in capturing a vast amount of customer and supplier-related information.

"B2B will allow us to respond to what is happening much more quickly and we will have far more accurate forecasting as a result," Liebenow predicts. "That's the most exciting area I see. As we go beyond that and as distribution systems and technology improves and the consumer becomes more comfortable with e-commerce, there will be opportunities to reach consumers in a way to tailor to what they specifically want. This will force us to specialize and at the same time make it more difficult for foreign competitors to deal the same way we do in the U.S."

Liebenow says Quaker is building the required internal information infrastructure to move into B2B.

Future of textile trade associations. The industry will continue to rely on national and regional trade associations to help with various issues, Liebenow says. However, the makeup of associations will probably have more of an international flavor, he says.

"As we become more global, we need to sort through how we can link up with textile companies outside the U.S. because I believe we have a common agenda in many areas. It seems to be a logical evolution for textile trade associations to reach out internationally so we can formulate a global strategy that reflects the interests of the global textile industry."

Hobbies. When he's not involved with Quaker business or his varied international trade activities, Liebenow says he enjoys spending time with his wife and three daughters. Reading, film and theater are other pastimes as is spending time at the family's summer home in Oregon. "Oregon is a great place to relax and hike," he says.

Since Larry Liebenow and partners acquired Quaker Fabric in 1989, the company has become known as a leader in upholstery fabric design. The company is also a premier manufacturer of chenille yarns.

Here's some quick Quaker facts:

- Quaker was founded in 1945 as a family-owned company.

- Quaker is one of the world's largest producers of jacquard upholstery fabric and sells its products in more than 40 countries.

- Facilities include eight plants, all in Fall River, Mass., a historic textile city once considered the capital of the industry.

- International operations include two distribution centers in Mexico and one in Brazil.

- Quaker's 5-story headquarters building offers a history lesson. Built in the mid-19th century as a textile mill, it has had several uses over the years, including as a site for submarine torpedo manufacturing for the U.S. Navy during World War II.