'This is a health crisis that’s become a business crisis': AAFA CEO

President and CEO of the American Apparel & Footwear Association Steve Lamar joins On The Move to discuss how leadership is responding to the coronavirus and the impact on supply chain.

Video Transcript

ADAM SHAPIRO: As we get ready to introduce you to Steve Lamar who is the President of the American Apparel & Footwear Association, the President and CEO, I need to point out that the men and women who manufacturer clothing and footwear for us have been dealing far longer than the coronavirus crisis with a crisis of their own. That was the tariffs that the Trump administration put in against Chinese imported goods, the things we buy to clothe ourselves.

Mr. Lamar joins us now because there's a quick way you say that the administration could put money into the pockets of the men and women who keep us clothed. How could they do that?

STEVE LAMAR: Well, thanks, Adam, for having me on. Yeah, this is a-- this is a health crisis that's become a business crisis. And, you know, first and foremost, we're doing our part on the health crisis, making sure people are home and safe and doing everything we can to beat this virus.

But it's also become a business crisis because people are-- because their home, they don't have access to revenue. And, without access to revenue, they don't have access to that cash flow. So one of the things we've been doing, in addition to supporting the stimulus package that you just talked about, is asking for the administration to provide tariff relief.

This could come in the form of simply just deferring the payments for 90 days or providing refunds of items like the crucial medical equipment that they're currently now air-freighting into the United States. These are very common-sense measures that would not only help with the health crisis, but also help these companies manage the business crisis they're facing.

JULIE HYMAN: Given that business crisis-- Steve, it's Julie here. It's nice to see you. What kind of disruptions have we seen in the businesses of your members? What kinds of layoffs have we seen as well? Because I would imagine that they're scaling back on production because there's not the demand. Talk to me about the sort of scope of this for your industry.

STEVE LAMAR: Well, the supply chain in China is actually coming back up online. And one of the things that's actually kind of heartening is our members are beginning to go back to those factories that have turned on fully and getting-- approaching them for things like gowns and masks. So that is a piece of good news.

But, on the US side and also in Europe, retail is down. It's turned off. And, when that happens, all of that supply chain, all the services that are connected to them, they turn off as well. And that has a way of cascading throughout the US economy, hitting many, many small businesses that rely upon servicing the retail sector.

So, as retail is shut down-- and, again, there's a very valid reason why it should be shut down. But, as it's been largely shut down, that's denying the ability of many of these companies to make a living. It really removes a lot of cash out of this system.

These are very successful companies, but they're not highly capitalized. Without that cash, they don't have the ability to pay their employees. And that's, again, one of the reasons we've been looking for every tool in the toolbox, whether it's the stimulus package coming from Congress, whether it's tariff leaf coming from the administration. [? So ?] we can put that at work and help our members have the cash so they can keep their employees on the payroll.

- Steve, you talked about the knock-on effects of what's happening. You know, I was reading yesterday, I think it was in The Wall Street Journal, talking about, for example, H&M canceling their orders and how now a factory in Bangladesh is having to lay off 2,000 employees as a result of it. And the apparel sector, as you point out, is really kind of global in the supply chains.

I'm curious how you're assessing that right now. In other words, the closures could be here in the US. The immediate economic impact could be here. But what do you see waiting on the other end in terms of the factories that you rely on to continue operating? And is that going to be a big hindrance?

STEVE LAMAR: Well, this is one of the reasons why we need this-- this relief, this stimulus package, now because, as these retailers are shut down in the US, that has you mentioned these knock-on effects really throughout the US and around the globe. We have a real danger of burning a permanent hole in our supply chain.

Nobody wants to do that. We don't want to do that. And we're trying to make sure that we can keep all of these workers, both in the US, as well as the millions of workers around the world, protected, both protected from a medical perspective, but also protected from an economic perspective, because we want to make sure that, as we get out of this crisis, we come up to speed as fast as we can so people have the wherewithal to, you know, to support their family and to move on with their lives. That's going to be so critical, really making sure that we can start up as fast as we possibly can after this crisis passes.

ADAM SHAPIRO: Steve Lamar is the President and CEO of the American Apparel & Footwear Association. Thank you for joining us on Yahoo Finance. We're going to have you back, obviously, as we move through this crisis.