I . SUMMAR Y AND CONCLUSIONS
A. Productivity of the industry
210. The Chilean cotton textile industry can be considered as typically modern, 77 per cent of its spindles
| and 72 per cent of its looms being entirely new. This
feature, which is in direct contrast with other countries
studied, is due to the late development of the Chilean
textile industry; though there was one mill as early as
1867, 72 per cent of the present spinning capacity and
47 per cent of the weaving capacity were installed after
1938.68 If the shortage of equipment during the last war
had not obliged some manufacturers to import old machinery, about 90 per cent of the industrial equipment
would now be modern.
211. For this reason, only the modern sector, which
is the most representative,
has been discussed in connexion with the productivity of the Chilean industry.
The measurements made in the old spinning mills have
been used only as additional observations in the study
of the Latin-American industry in general. The low productivity of this sector is not important, from the point
of view of replacing equipment, since it corresponds
to a few mills which will probably be modernized shortly,
without the necessity for large investments or displacements of workers, as is the case in other Latin-American
countries.
212. In order to measure productivity in Chile's textile industry, a sample was made of five modern spinning mills, five modern weaving mills and three old
spinning mills, representing 32, 50 and 60 per cent respectively of the capacity of the corresponding sectors
of the industry. Four of these mills were subsequently
chosen for a detailed analysis of the factors affecting
productivity, independently of the type of equipment and
the small size of the establishments.
213. The results of the investigation show that productivity could be substantially increased in the modern
mills. In fact, the spinning mills could increase their
productivity by an average of 91 per cent with their
present installations. If their size were increased to at
least 25,000 spindles, the gain in productivity would be
129 per cent. The productivity of weaving mills could
be increased 129 per cent while retaining their present
size, and 158 per cent, if their individual capacity were
enlarged to 500 looms.
"
The development of the industry, expressed as percentages
of the number of spindles (173,534) and of looms (5,012)
existing in 1950, can be seen below:
Period Spindles Looms
1867-1924 10.8 17.2
1924-1938 17.0 36.2
1938-1950 72.2 46.6
214. Modern industry in Chile is not taking full advantage of its new equipment, as may be seen from the
fact that the average productivity of its spinning mills
is 30 per cent lower than the maximum productivity
which could have been attained with old equipment. The
productivity of the modern weaving mills is only 15 per
cent higher than the maximum productivity which could
have been obtained on antiquated looms.69
B. Causes of low productivity in the modern industry
215. The most important cause of low productivity
is the employment of an excessive number of workers,
even taking into account the fact that they are not fully
skilled, and that, as a result of certain manufacturing
conditions to be discussed later, a greater amount of
labour must be applied to obtain a good output from the
machinery. In the analysis made of the mills, it was concluded that on the average 58 per cent of the labour in
the spinning mills and 38 per cent in the weaving mills
could be eliminated without altering to any great extent
the efficiency at present obtained in the processes; that
is, provided that corrections are made to the hourly output per unit of the spinning machinery and the speed
of the weaving machinery, which have been raised intentionally in order to obtain greater production. Expressed
in other terms, it can be said that superfluous labour is
responsible for increases of 137 and 61 per cent respectively in the consumption of labour per kilogramme
produced.
216. The most important reason for the employment
of a superfluous number of workers is the production
policy followed by some Chilean mills, whereby the
greatest possible output must be obtained from the machinery, even if this means the employment of numerous
workers and the lowering of the output of labour. The
results of this policy are evident not only in the indices
showing the excess of labour, but also in those recording
the increase of production above the levels considered
normal. In the spinning mills, average output of the
machines is 33 per cent higher than normal, due to average increases of 4 per cent in the unit weight of the
intermediate products, 26 per cent in the speeds and 5
per cent in efficiency. In the weaving mills, production
is 4 per cent higher than normal due to excessive speed,
but this is offset by the low efficiency in the processes,
deriving from other defective conditions discussed later,
which raise the consumption of labour per kilogramme.
" A comparison with the productivity graphs of other countries will show that the productivity of many old mills is higher
than the average of the modern Chilean industry. In the graph
of the Chilean spinning mills, some old mills obtain better results than certain modern mills.
51
52 Productivity of the Cotton Textile Industry in Latin America
217. The policy described arises from the relatively
small importance of wages in the industry compared to
the level of ptices of the manufactured articles. It is
also influenced by the lack of commercial competition,
which weakens any incentive to reduce costs and stimulates the effort to obtain a greater vcîume of production.
If the importance of the level of wages is expressed as
the relationship between the price of a man-hour and
that of a popularly-consumed fabric, it is seen that in
Chile this importance is only 0.82, while in the United
States, with a fabric equivalent in type and popularity,
it is 4.26.70 This disparity demonstrates both the incentive in the United States industry to increase labour
productivity and the corresponding lack of incentive in
Chilean industry to do likewise. As regards the lack of
commercial competition, it must be pointed out that
during the last few years the Chilean textile industry
has enjoyed a sellers' market which now seems to be
disappearing as a result of the increase in the capacity
of production. This is borne out by the fact that stocks
are beginning to accumulate.
218. Another factor which sometimes influences the
decision to follow a policy of high production volume at
the expense of labour productivity is the excessive cost
of textile equipment in Chilean currency, compared with
the cost of labour. Making still another comparison with
a more highly industrialized country, it can be seen that
if in the American textile industry the relationship between the price of the man-hour and that of the loomhour71 were assumed equal to 100, in the modern Chilean
industry it would equal 485.72 This contrast partly explains the emphasis laid by Chilean industry on the high
output of machinery.
219. The second important cause of low productivity
is the lack of training of the workers. It is estimated
that if an attempt were made to normalize the oganization of labour and other conditions such as efficiency,
speed and yarn defects over a short period, it would still
be necessary to maintain 20 per cent more workers in
the spinning mills and 36 per cent more workers in the
weaving mills than would be the case with adequately
trained labour. The lack of training is principally due
to the fact that the workers have not been given the
opportunity of practising with heavier work-loads. Another important factor, however, is that the industry is
almost entirely new and not only the workers but the
instructors themselves must be trained. The greatest
weakness in the weaving mills, for instance, lies with
the loom-fixers ; much of the efficiency of the machines
depends on them, and it takes several years of wellguided work to produce a competent loom-fixer. It
should be stated that, despite this fact,
no great effort
was being made by industry, generally, towards completing the workers' training. The system adopted in
several mills is that of contracting workers, testing them
and dismissing them if they do not immediately evince
the ability necessary for the work assigned to them.
220. The small size of the mills is the next most
important cause of low productivity. The majority of
the spinning mills have fewer than 5,000 spindles, which,
This relationship was calculated, in the case of Chile, on the
basis of 18 pesos per man-hour and 22 pesos per metre. In the
United States, it was based on 0.982 dollars per man-hour and
0.23 dollars per metre. The fabrics compared were approximately 36"—32 x 36—2.95 yds./lb.
71 The price of the loom-hour includes the loom and all the
according to the sample, means that there would be a
20 per cent excess of labour in this sector, as a whole,
even if all other conditions were normal. The position
in the weaving mills is not so serious, since nearly all
of them have more than 200 looms. In this sector of the
industry the average excess of labour arising from the
small size of the mills is only 13 per cent.
221. The modern Chilean industry probably developed with small rather than large mills for the following
reasons: (1) the favourable atmosphere created for any
type of enterprise, large or small, by the protection
afforded to industry, the shortage of foreign currency,
and a domestic market on which production could not
meet demand; (2) the difficulty of obtaining equipment
during the last war, when the industry was in full development; and (3) the fact that the majority of the industrial enterprises were undertaken by social groups that
preferred a closed circle of investors, such as is contained in a family, or, alternatively, individual investments; this naturally provides more limited resources
than if they had resorted to the money market.
222. The third cause of low productivity consists of
certain manufacturing conditions which affect only the
weaving mills to any great extent. The most outstanding
are the deficient preparation of the warp, that is the
cone-winding, slashing and drawing-in operations, which
increase labour consumption by at least 5 per cent; and
defects in the twist and winding of the filling, which
must be attributed to the spinning mills and which increase the consumption of labour by approximately 3
per cent.
223. The excessive speeds of the machinery, both in
spinning and weaving mills, raise productivity but probably lower the quality of the products and affect efficiency in the processes. This is also true of the abnormal
weight per unit of length of the intermediate products
in the card room.
Moreover, as already mentioned, high
machinery outputs were obtained in the spinning mills,
as a result of the application of an excessive amount of
labour per machine. Taken together, these factors increase the production of the spinning mills by 33 per
cent, and of the weaving mills by 4 per cent.
224. As the small size of the mills is the only cause
of low productivity which cannot be corrected, at least
over the short period, it may be said, in summarizing the
foregoing, that the modern spinning mills could increase
productivity 91 per cent by eliminating superfluous labour, training the remainder and normalizing both the
speed of the machinery and the organization of the
processes. The weaving mills could, in a preliminary
phase, eliminate superfluous workers, which would increase productivity by 61 per cent. An, additional increase
of 42 per cent would follow the completion of the
workers' training and the correction of certain manufacturing conditions, such as the defects in the warp and
the filling yarn.
225. In addition to all these, another factor also of
great importance to productivity was observed in most
factories; this was the lack of interest in the development
equipment for spinning and weaving preparation necessary to
feed that loom in a mill manufacturing popular fabrics.
72 The figures for the United States were calculated with a
depreciation of 0.073 dollars per loom-hour and a cost of 0.982
dollars per man-hour, and for Chile at 6.5 pesos per loom-hour
and 18 pesos per man-hour.
Chapter III. Chile 53
of appropriate methods for the control of efficiency in
the processes, and the quality of the intermediate and
final products. Nor was it usual to find rational systems
for determining the number of machines to be assigned
to each tender according to the type of product and the
manufacturing conditions. These administrative measures are absolutetly essential to determine and correct
systematically the causes affecting productivity. It was
also noted that, generally speaking, no adequate system
was used to control cotton wastage which, in a country
where raw material is imported and expensive, is indispensable to reduce costs.
