.
The cotton industry is quite small in Ecuador (10
mills with 37,286 spindles and 1,454 looms), and is principally located in Quito and its surroundings (65 per
cent of the total number of spindles). Other mills have
been built at Riobamba (8 per cent), Ambato (9 per
cent), and Otavalo, (18 per cent), where the mills originally sought hydraulic power, and native labour—•
which, by tradition, is extremely skilful in textile crafts.
The mills are extremely small and the machinery is almost all old. This can be accounted for by the fact that
some of the mills were built at the beginning of the
century, and there has been no renovation of their equipment, while others, founded later, use imported secondhand machinery. Production consists largely of coarse
• popular fabrics which supply about 60 per cent of total
demand for cotton textiles. Seventy per cent of the raw
material consumed by the mills is grown in the country,
but deficiencies in cotton production—principally the
lack of seed selection and of organization in the picking
and ginning operations—contribute to its poor quality
(short fibres which are irregular and weak). This affects
the operation of the mills and places a limit on the yarn
counts they produce.
32. The cotton industry in Mexico is second in im-
.portance to that of Brazil (278 mills with 935,582 spindles and 34,133 looms). It also resembles the Brazilian
industry closely in the age of the machinery (85 per cent
of the spindles are old and 95 per cent of the looms are
non-automatic), since the principal phase of development took place during the first quarter of the present
century and little progress has since been made. The
'mills are located in the Federal District and in eighteen
of the twenty-eight states, but the greatest density is in
Puebla (32.4 per cent of the total number of spindles),
Veracruz (17.6 per cent), and in the Federal District
(12.2 per cent). The greater part of the mills are engaged in the manufacture of "manta"—a thick cloth,
woven from coarse yarn (counts 16's and 18's)—which
is generally used by the native population for clothing.
During the Second World War and in the years immediately after the close of hostilities, the extraordinary
foreign demand for textiles and the high prices obtaining proved to be a strong incentive for Mexico's textile
industry. As a result, fifteen entirely new mills were
built and others were partially modernized. The process
of modernization has been slowed down in the recent
past, especially since the early post-war years, though it is
known that in certain undertakings funds are available
with which to replace machinery. These firms, however,
are awaiting the modification of the present labourmanagement contract legislation which, because its rigid
provisions do not take into account possible technical
improvements, prevents the modernization of equipment
from giving rise to labour savings.14
33. Though the textile industry in Peru (24 mills with
14 The mills which set up as new industries, with modern machinery, have managed to avoid this contract legislation since the
beginning; they contend that they constitute different industries,
the machinery of which is not governed by the aforesaid legislation. The mills which were already in operation could not escape
from its provisions and for about six years attempts have been
made to alter it. It would appear that in the near future some
agreement will be reached and this will probably lead to an
increase in the degree of modernization of the industry.
15 From 1925 until the present date, Peru's textile production
capacity has been increased by 68 per cent, whereas that of Brazil
and Mexico increased 40 per cent and 18 per cent, respectively.
During the same period, Peru has modernized about 30 per cent
of its equipment, whereas Brazil and Mexico have only 7 and 10
per cent of modern equipment; respectively.
176,332 spindles and 6,304 looms) also developed most
- intensely during the early part of the century, it reveals
certain contrasts with the majority of the Latin-American textile industries founded in about the same era,
in that it has progressed relatively further, not only as
regards the increase of its capacity, but also in the degree
of modernization of its installations15 (25 per cent of
new spindles and 35 per cent of automatic looms). Unlike the other countries, this degree of modernization of
equipment in Peru has been achieved mainly by the
gradual replacement of the machines in the old establishments ; in other countries, this has been predominantly achieved by the building of new mills. Thus,
-often within the mills themselves, one finds a great variety of different types of machinery in Peru, whereas
in other countries, on the whole, one may draw a fairly
clear distinction between the old and modern mills. The
production of Peruvian industry is featured by relatively high standards of quality, as compared with those
of other Latin-American countries. This may be largely
attributed to the excellent quality of the cotton grown in
Peru. It is possible, however, that the fact that Peruvian
industry has been protected to a relatively smaller extent than other Latin-American countries may also have
exercised considerable influence, since the Peruvian industry has had to compete constantly against the quality
of foreign production. The bulk of the industry is located in Lima (90 per cent of the total number of spindles), but there are also mills in Arequipa (5 per cent),
Cuzco (2 per cent), lea (1 per cent), and Sullana (3
per cent).
I V . SUMMAR Y OF TH E RESULTS OF TH E INVESTIGATION
34. The numerical results of the investigation have
been summarized in tables 1 and 2, in the form of indices
of importance of the factors affecting productivity.
These have been shown in a diagram indicating the
manner in which the causes, or principal factors, were
analysed with a view to ascertaining their components.
Each number in the tables indicates the labour consumption of the industry, if there were no cause for low productivity other than that to which the number refers.
It therefore represents the influence of this cause independently of all other factors.
35. Instead of indicating labour consumption in the
usual units, that is to say, in man-hours per kilogramme,
it was decided to express it as an index or percentual
ratio of normal or standard consumption, that is, the
industry's consumption, operating under optimum conditions. In this manner, the influence or importance of a
factor may be directly compared with that of any other,
even though it be another mill or country, or different
type of product. Similarly, it is also possible to compare
productivities, since these are merely the reciprocals of
labour consumption.16
16 The following examples may help to clarify this point: if
fifty men are employed in a mill when the number of workers
can be reduced to twenty-five, the index of the importance of this
excess of labour, operating independently of any other causes of
low productivity, would be 200. If, in fact, there were' no other
causes, the same index could.be obtained by dividing the actual
consumption of labour, measured in the factory, by the standard
"or normal consumption, and multiplying the result by 100. If "a
loom operates at 180 revolutions per minute instead of the standard speed of 200, the difference between speeds, operating independently of other factors, would give rise to a relative labour
consumption of 111, which is obtained by dividing 200 by 180;
or, if there were no other cause of low productivity, by dividing
actual labour consumption by standard'labour consumption.
Chapter I. Productivity in the ; Group of Countries Visited 5
36. As has been shown diagrammatically in tables 1
and 2, the indices of the importance of all the causes
affecting productivity (in the upper box) are broken
down into their component factors or causes. These are
subsequently divided into two principal groups (lower
boxes) for the purpose of: (a) bringing together the
causes which can only be eliminated by the investment
of large amounts in the purchase of machinery for modernization and expansion of the installations, and (b)
grouping the causes which can be corrected principally
by the improvement of organization and administration
of the mills. In order to simplify the explanation, the first
group of factors, causes or deficiencies were designated
by the term "of equipment", and those in the second
group "administrative", using the latter term with a
wider connotation than is generally ascribed to it.
37. The results shown in table 1 indicate that in the
countries visited, for the old industry as a whole,17
labour consumption per kilogramme of fabric (taking
into account the process of spinning and weaving) is
five times greater18 (index 505) than that which could
be expected under the best conditions—within practical
limits—of modernity of equipment, size, organization
and administration. These deficiencies of productivity
become very important when one considers that approximately 90 per cent of the industry, in all the countries
visited (4 million spindles and 130,000 looms), is characteristically old.
38. However, the productivity of the old mills is not
so low in all the countries visited; for instance, in
Mexico the index, or relative labour consumption, barely
reaches 369, whereas that of Ecuador is 1,210. There are
also large differences between the deficiencies in the spinning and weaving mills; in Ecuador, for instance, the
weaving mills are three times more deficient than the
spinning mills (1,856/611),19 whereas in Mexico labour
consumption in both sectors is approximately affected to
the same extent (381/360).
39.
Instead of pursuing the analysis of total deficiencies and their immediate causes, subsequently to be examined in detail, attention will be drawn now to the
summary in which these causes are classified into the two
groups of deficiencies, namely, "of equipment" and "administrative" (lower part of table 1). From this summary it may be concluded that at least in two countries
(Brazil and Ecuador) it is more important to reorganize old industry on a new administrative basis than to
modernize equipment and expand the installations. In
two other countries (Mexico and Peru), the opposite
occurs; and for all the countries taken as a whole, it
might be stated, to judge from the indices (230 and
220), that both groups of causes exercise approximately
the same amount of influence.
40. This conclusion is of interest because it shows
that what has been termed the "backwardness" of the
Latin-American textile industry and has been generally
attributed entirely to equipment, is partly due to the lack
of organization and administration in the mills, although
• 17 In order to simplify the explanation in this part of the report, itwas .decided to use only the weighted general averages of
the indices for each of the mills visited and each of the products
examined.' Both the original indices for products and countries,
and the. labour consumption, expressed in man-hours per kilogramme, may be found-in chapters II to VI. The individual
productivities of .the mills visited are shown in the corresponding
graphs for,each country. -
18 That is to say, productivity is five times lower.. ,
these conditions, as will be shown later, do not depend
merely on the will, or on the administrative capacity, of
the manufacturers. In the Latin-American countries
which are unable to purchase new equipment because of
their scanty savings capacity, or because they must divert
capital to more pressing needs, the significance of administrative deficiency in the textile mills shows that there
is still a wide margin to increase productivity without
recourse to substantial investments.20
41. The results of the investigation in modern industry (table 2) show that the mills in this sector employ
82 per cent more labour (man-hours per kilogramme)
(index 182) than would be consumed in an optimum
size, well-organized and well-administered mill in which
the same type of equipment is installed. As in the older
sector, large differences in the rates of productivity are
found among the modern mills of the countries visited.
For instance, in Chile the relative labour consumption
is 241 (an excess of 141 per cent), while in Mexico it
only reaches 137 (an excess of 37 per cent). On the
other hand, there are not very large differences in the
productivity deficiency between spinning and weaving
mills within each country
.
42. Momentarily disregarding the analysis of deficiencies, and observing the indices corresponding to the
group of causes designated by the terms "equipment"
and "administration" (lower boxes of table 2), the conclusion may be drawn that modern industry does not take
full advantage of the modernity of its equipment. This is
due to administrative deficiencies which increase labour
consumption by 61 per cent. The factor "equipment",
which in this case refers almost exclusively to the small
size of the industry, is responsible for a 13 per cent
increase in labour consumption.
43. Though it is recognized that a part of the administrative deficiency of modern industry may be ascribed
to the fact that some of the mills have only recently begun to operate—their performance, therefore, not yet
being normal—the presence of these deficiencies in all
the countries visited and their great importance in nearly
every case, suggests the possibility that those general
factors which give rise to administrative backwardness
in the old industries are also affecting the modern mills.
In this case, it is to be feared that the Latin-American
textile industry will continue to have a low productivity,
despite the modernization of its equipment, unless it
makes a deliberate attempt to offset the pressure exercised by those factors.
44. The fact that there are many examples of LatinAmerican mills in which there are no administrative
deficiencies, and other examples in which there are no
deficiencies whatsoever in the mills,21 shows that individual efforts by certain manufacturers have made it
possible to counteract the influence of the economic
environment. These constitute an excellent example of
what can be done in Latin America, whilst also serving
as a very useful source of experience in future projects.
