|Asian Competition Has Hand in Glove Maker's Closures|
|Subject||Comparative statics, Shut-down Conditions|
|Key Words||Sales, plant, work force, labor costs|
Historically, gloves were worn by few people other than boxers and debutantes. Nowadays, gloves, particularly latex or synthetic gloves, are commonly seen in the work place due to the fear of, for example, anthrax, E. coli, and AIDS. Some are cheap, only 2 cents a pair, and are used by people such as home health care workers. Others are expensive, costing $2 a pair: these are used by surgeons and computer-chip manufacturers.
Sales of disposable gloves have skyrocketed. In 1986, only 1 billion were sold world-wide. In 2001, in the U.S. alone, 27 billion were sold. During the anthrax scare, the U.S. Postal Service ordered 90 million pairs of synthetic gloves.
However, only one latex glove maker remains in the U.S., Tillotson Healthcare,
of Bedford, N.H. It has closed two of its three U.S. plants in the last
six years and has thinned its work force from 1,300 to 300 workers. The
problem is that labor costs in the U.S. are high compared to those in
Asia. The CEO is unsure whether the surviving plant will stay open.
(Updated May 6, 2002)
|Source||Bruce Horovitz, "Anxiety spreads love of gloves", USA Today, March 1, 2002.|
Return to the Perfect Competition
©1998-2003 South-Western. All Rights Reserved webmaster | DISCLAIMER