Steering the ATMA ship

Week of February 26, 2001

Annual Meeting, March 1-4, Bahamas Cruise

Editor’s note: Following is an interview between STN and Harry W. “Buzz” Buzzerd, president of the American Textile Machinery Association (ATMA), and Tim Whitener of Luwa Bahnson, Winston-Salem, NC, and outgoing chairman of the organization. The association holds its annual meeting this week aboard a Disney Cruise Line ship.

STN: How would you rate the year 2000 compared to the previous two years for textile machinery manufacturers?

Whitener: 1998 was much better; 1999 was similar to 2000 and either better or worse, depending on the segment of the market where your business tends to operate.

STN: What are the prospects, including export prospects, for ATMA members in 2001 and beyond?

Buzzerd: ATMA members will probably have some improved sales in 2001, but it does not appear that this will be dramatic. Obviously, until the textile overcapacity worldwide is relieved, we are not going to see any tremendous improvements on a global basis. However, there are going to be, from time to time, improved export prospects as markets shift.

Tim Whitener, whose two-year term as chairman of ATMA is nearing an end, said that machinery suppliers need to do a better job of learning to export to ‘key’ markets.

STN: What are the biggest factors negatively affecting textile machinery manufacturers?

Whitener: Continuing consolidation of the domestic market. As machinery suppliers, we have to do a better job of learning to export to the “key” markets.

STN: What alternative remedies are ATMA members seeking to cure what ails ’em?

Whitener: They continue to look for new markets for their products; they continue to look for opportunities to expand along the textile value chain (i.e. apply their products or services to different parts of the market); and they continue to look for acquisitions in other niche markets.

STN: How is ATMA helping members prepare for today’s challenges?

Whitener: Three ways — by continuing to sponsor trade missions and target markets, by continuing to building alliances with associations around the world to benefit our members’ markets and by conducting educational seminars.

STN: How can machinery manufacturers use new international trade laws to their advantage?

Buzzerd: International trade laws and treaties are creating new markets geographically. Quite simply, machinery manufacturers need only watch their customers as they make moves into these new markets created by regulatory actions. We are quite interested in following the moves of the new Administration as, during the course of the campaign, then-candidate George W. Bush offered some creative thinking that would potentially affect textile markets.

STN: What other legislative issues did ATMA address this year and which do you anticipate having to face this year?

Buzzerd: ATMA’s legislative program, as is well known, is not terribly aggressive or broad. We join with like-minded coalitions and alliances in pursuing legislation that is reasonably specific to capital equipment production and sales worldwide. It is our practice to support the key legislation of our customer associations, American Textile Manufacturers Institute (ATMI) and the alliances in which they participate. We are hopeful that we will be able to join these alliances and ATMI this year in pursuit of several tax bills and some trade improvement legislation and regulation, beneficial to all textile industry sectors.

STN Headliners

Week of February 26, 2001

In this week's edition:

Family bids to take Springs private

From staff reports

FORT MILL, SC — Springs Industries may soon be privately owned again.

The home textiles manufacturer announced last week that it has received a buyout deal from the family that owns a majority of its stock. The Close family, which includes Springs’ Chairman and CEO Crandall C. Bowles, said it wants to take the company off the New York Stock Exchange, which hasn’t been kind to the company or many others in the textile and apparel industry in recent times.

The Close family, descendants of Springs’ founder Samuel Elliott White, has partnered with Heartland Industrial Partners, L.P., a private equity firm, to make the deal work. The nine family members own about 41 percent of the company stock and the deal would give them about 55 percent, with the balance held by Heartland, the family said in a news release.

Under the proposal submitted to the Springs board Monday, Springs public shareholders would receive $44 per share in cash, a 26 percent premium over the average share price for the last month and 41 percent over the average for the last three months. The recapitalization would be worth more than $787.6 million.

The family views the offer as “a renewed commitment to the company, its associates, customers and communities,” said Bowles, who would remain with the company in her current capacities. “We believe that all will benefit from the strengths of this new structure and partnership.”

On Thursday, Springs’ board was expected to organize a committee of independent directors to consider the proposal.

Almost all of the family’s holdings are in Class B common stock, which has four votes per share, giving the family about 73 percent of the normal voting power. In voting on the proposed transaction, all Class A and Class B shares will have one vote per share.

Members of the Close family said they have agreed with Heartland that they will not sell their shares to any third party and will vote against any competing proposal to acquire Springs.

Scholler set to shoulder duties as chairman

By Devin Steele

CHARLOTTE, NC — So, who is Kurt Scholler?

First impressions would tell you he is reserved, strait-laced, all business. But he can also show you another side — a side that likes a good laugh, a side that can engage you with a compelling story and a side that will even dance to rock and roll music, if given the chance.

Scholler, who is slated to be voted in as chairman of the American Textile Machinery Association (ATMA) during its annual meeting this week, exhibited hints of all of those qualities during a recent sit-down with STN. Those characteristics may be useful as he leads an organization through these transitional times.

At this point in his career, which has taken him from his native Germany to New York City to the American South, Scholler is ready for this opportunity, he said. In fact, he relishes it.

“I’m the kind of a guy who likes a challenge,” said Scholler, CEO of American Truetz-schler, based here. “I consider steering a ship through rough seas as more of a challenge (than through calm seas), although the risk is that you get beaten up.

“But I think that is what a challenge is all about.”

Scholler, a 12-year industry veteran, has seen the textile and apparel industry and its suppliers struggle in recent years. That’s one of the reasons he believes his time has come to lead the association, he said.

“The well-being of the machinery industry is important to, or should be important to, anybody who heads such a company,” said Scholler, currently vice chairman of ATMA. “And the well-being of our customer base is also very important. I hope that, in this capacity, I can help a little bit to benefit the textile and machinery industries and, also, pay back the benefits we have received from the organization.”

Among those benefits, he said, are the exchange of ideas, problem solving and professional development among peers.

On Scholler’s agenda are three goals, in no particular order, he said:

1) to increase the prominence of the American Textile Machinery Exhibition-International (ATME-I) trade shows, which ATMA co-sponsors with Textile Hall Corporation;
2) to increase membership; and
3) to make membership even through worthwhile, especially with alliances with other organizations.

Hightower era ends at Thomaston

THOMASTON, GA — The century-old Hightower era is over at Thomaston Mills.

The company’s board of directors on February 15 accepted the resignations of Neil H. Hightower, president and chief executive officer, George H. Hightower Jr., executive vice president and president of the Apparel Fabrics Division, and H. Stewart Davis, executive vice president and president of the Consumer Products Division. All three were members of the family that has held a controlling interest in the company since its founding.

The board also elected A. William Ott, the firm’s treasurer and CFO, as the acting president and chief executive officer and charged the company’s Audit Committee with the search for a turnaround management firm to address the Thomaston Mills’ turnaround efforts and liquidity needs. Hightower, Hightower Jr. and Davis continue to serve as directors.

“My family is proud to have been involved with Thomaston Mills for more than 100 years and we have seen the company succeed through good times and bad,” Neil Hightower said in a release. “The difficult circumstances facing the company now are reflected in the textile industry generally and we have every hope and expectation that under new management the company will find new ways to compete in the future.

“For Stewart, George and myself, we will continue to support the company in every way possible.”

Thomaston spins fibers into yarns, which are woven into a variety of fabrics. The company operates four plants in the Thomaston area, with more than 1,500 employees. The company produces sheets, pillowcases and comforters for retail customers and also produces textiles for the home furnishings and piece-dyed markets.

Lenzing bought by Acordis parent

Lenzing, the world’s biggest cellulose fiber producer, is merging with part of Acordis in a $644 million deal.

The transaction will give the combined group about a 25 percent share of the market for rayon. Acordis is Lenzing’s biggest competitor.

CVC Capital Partners, a British venture capital group that owns a controlling interest in Acordis, has paid for an 80 percent stake in Austria-based Lenzing.

As a result, CVC said it has formed a cellulose-based fibers company, “NewCo,” which will combine Lenzing’s activities with certain fiber operation of Acordis.

Carpet backing plant shut down by Bonar

WILLIAMSTON, SC — Bonar Yarns and Fabrics plant has closed, putting 85 people out of work.

The plant had manufactured polypropylene backing for woven carpets.

Low and Bonar, the plant’s parent company based in London, still has plants operating in the U.S.

Burlington sells plant to Yanoor

GREENSBORO, NC — Burlington Industries, Inc. said that it has sold its tufted bath and area rug business located in Monticello, AR, to the Yanoor Corporation, a holding company owned by Saeid Korhani. The business will operate under the name Burlington Rug Corporation.

Burlington announced in October 2000 that it would exit the tufted area rug portion of its Burlington House Floor Accents business.