CIT Bankruptcy Will Be Serious Blow To US Textile & Apparel Industries

Saturday, July 18, 2009

The Obama administration announced this week that it would not support a bailout of the CIT Group, a leading factor (inventory financier) to the textile industry.

As was echoed by literally dozens of textile and apparel associations in a joint letter sent yesterday to US Treasury Secretary Timothy Geithner, a CIT Group bankruptcy would have a serious impact on the domestic textile and apparel industries. In particular, such a bankruptcy would harm many small- and medium-sized companies throughout the US. In turn, a CIT bankruptcy would have a severe ripple effect through the retail community as well as buyers would have difficulty in sourcing products from manufacturers that rely on CIT to finance their inventories. In short, a CIT bankruptcy has the potential to seriously disrupt the textile and apparel supply chain at a time when sales are down and the retail environment remains uncertain.

At the same time, a CIT bankruptcy would represent a significant political problem for the Obama administration, as it would appear that the government was ready to bailout big firms on Wall Street, but would fail to support a lender of critical importance to so many firms throughout the textile industry.

Yes, I back government support of CIT for the reasons outlined above.

As was so poignantly stated by National Council of Textile Organization (NCTO) president Cass Johnson this week: “It sends a chilling message when the government will bail out Wall Street but then turns its back on the biggest lender to Main Street.”

A grass roots effort has been started to contact representatives in Congress. Click HERE to voice your support of saving CIT.

To read the joint letter sent to Secretary Geithner, click HERE.

To read NCTO’s letter to Secretary Geithner, click HERE.

To read the American Apparel & Footwear Associations' statement, click HERE.

Access the CIT website HERE.

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