EnvisionSC, May 13: Erwin Maddrey
05/12/2013 11:19 PM
05/12/2013 11:21 PM
Erwin Maddrey helped create Delta Woodside, one of the largest, most profitable textile entities in the state. Maddrey now devotes much of his time to philanthropic efforts and to helping South Carolina grow.
Q: Did the textile business, particularly in the Upstate and the textile folks, did they miss the boat? Did we as a state learn a lesson with textile, and now are we with the right mindset engaging in the global marketplace?
I think the attitude is better, but there’s still this thinking that if I make it cheap enough everything is fine. The whole economic development stuff in this state has been pointed at ‘we’ll bribe somebody to come here and use our cheap labor’ as compared to saying ‘we’re going to take our money, put it into our colleges and advanced education, so that we have the smartest people in the world who are going to get the most money when those companies come here.’ And it’s not just Ph.D.-type people. I’m talking about good technicians. South Carolina was in a real leading position when the tech schools started. We were ahead of most states, and we did a lot of good bringing businesses in. But since then we’ve kind of drifted. Tech schools are talking about (students) have to have English. (Students) have to have all of the supplemental stuff and so companies that need highly trained technicians have trouble getting them here …We’re not preparing people coming out of schools for what they have to have to succeed. And as a result, people are not financially succeeding; they’re not paying a lot of taxes, they’re not making a lot of money and guess what, South Carolina’s a poor state. We’ve attracted companies that are looking for low-cost production.
Q: Are we engaging in the next level up of sweat shops? Are we making a quantum leap or are we just ratcheting up the floor in terms of our labor?
I don’t think we’re doing quantum leaps. ... There are examples. Across the board when the total wages are dropping as opposed to, I’d probably compare it to the United States average wage. We’re falling further and further behind. The last couple of years it’s kind of leveled out at about a 20 percent discount, but before that it was getting a little bit worse every year. So maybe it’s going to level and start to move up.
Q: How do we need to make a realignment to aim to be world class? What are the factors that we have to align?
One key factor is time. If you look at the impact of globalization. When you globalize by making things wherever the best cost is, you get the cost advantage first and then you get the leveling of that. In other words, the cost advantage would come in quicker and the savings advantage would come along later. The inflation rate is rising much higher in China than it is in the United States. After a number of years that differential will get smaller. And we’re already seeing it. We’re seeing companies leaving China going to places like Vietnam. You can almost build a case that the labor cost has basically been squeezed out. The second thing, which is really what we can do, because the timing thing, we can’t really do anything about that, is we have to move the educational needle so we are training people for $70,000, $80,000, $90,000, $100,000 jobs, instead of training them for $15,000, $20,000 or $30,000 a year jobs … How many MITs do we have in this state? How many Cal Techs and places like that; that are all there because of major investments in the professors and the labs that are there. I think we’re so convinced we have so little money – this is a legislative move – there’s so little money we’re so poor we can’t afford to teach people.
Hometown: Winston Salem, N.C.; lives in Greenville
Education: B.A., Davidson College; MBA, University of North Carolina
Occupation: President of Maddrey and Associates; philanthropist
Other notables: Current Furman trustee; serves on the boards of BlueCross BlueShield of South Carolina, KEMET Corp. and Delta Apparel Inc.; former president, COO, director of Riegel Corp.; co-founder, Delta Woodside Industries; currently serves as chairman of the Greater Greenville Forum; chairman of the S.C. Governor’s School for the Arts Foundation
About this series
This is the 17th in a series of interviews for Envision S.C., an initiative in which some of the state’s brightest thinkers share their perspectives to inspire South Carolina to become world class in technology, education and business. It is sponsored by the College of Charleston with the S.C. Chamber of Commerce, newspapers, TV stations and other groups. Interviews are being conducted by Charleston businessman Phil Noble .
Future installments will appear on this page and at thestate.com/envisionsc.
Video: An interview with Maddrey