CHUCK'S CHALLENGES

Week of March 18, 2002

Hayes has led company, trade group, industry during rockiest times

Chuck Hayes

Editor’s note: Following is an interview with Charles A. “Chuck” Hayes, president of the American Textile Manufacturers Institute (ATMI) and chairman of Guilford Mills, Inc., Greensboro, NC. STN Editor Devin Steele supplied the questions to Hayes, who responded in documented form through the ATMI office. Hayes’s one-year tenure as ATMI president ends this week during the group’s annual meeting in Washington, DC.

STN: You have served as ATMI president during some of the most transitional and challenging times for the industry and the institute. Do you believe your efforts over the past year have made a difference to the industry’s future?

Hayes: We have made enormous progress this year getting our message out and getting the attention of Washington decision makers. We took the offensive, using media and political consultants across the Southeast to get our concerns in the media. We also released our “Crisis in U.S. Textiles” report and worked with the Congressional Textile Caucus and our governors and state associations.

And I think the groundwork has been laid for even more progress in the coming months, including fulfillment of all the commitments made to our textile state representatives by the Bush Administration and congressional leadership.

STN: The U.S. textile industry is “experiencing its worst economic crisis since the Great Depression,” ATMI said in a recent communiqué. As the industry tries to break out of this funk, what are its biggest hurdles and what does it have working in its favor at this time?

Hayes: The biggest hurdle we face is one of time. We are already an industry in crisis and are more and more under the gun with the elimination of all quotas scheduled to take full effect in three years. Our industry must be in a strong position by then to effectively compete in a quota-free global environment, and it’s hard to do that when you are struggling just to survive, as so many of our companies are doing. If we can work together as a united industry we can get our government to do things that will help us.

STN: Likewise, your organization, Guilford Mills, has taken its lumps during the past two years and just filed for bankruptcy. How did the decision of more plant closures and bankruptcy affect you personally? Will these decisions be enough for the company’s future? What must happen in order for the company to rebound?

Hayes: The closing of three major apparel plants, plus the movement of equipment and the cost associated with severance packages used up our credit lines and, therefore, we had no choice but to negotiate a bankruptcy. From a personal point of view, I have been associated with Guilford Mills for 41 years and closing those plants and the ensuing bankruptcy is something that I wish no one else ever has to experience.

From today forward, Guilford Mills will be focusing on servicing the auto industry and various industrial items that can be produced on warp knit equipment.

It is hard to describe the amount of time and effort that went into this final decision, but now that it is over I firmly believe that our company is heading in the right direction and our attention will be able to be focused on new product development.

STN: With so much chaos occurring not only within your company, but within ATMI and the industry as well, how have you juggled the responsibilities of both jobs?

Hayes: Being the president of ATMI during the worst economic period in the history of the U.S. textile industry, plus going through the problems concerning Guilford Mills, certainly took its toll. It is extremely difficult being the president of ATMI and thus having the responsibility of working on behalf of the entire industry while still being the chairman of Guilford Mills. Fortunately, Guilford has a CEO, John Emrich, who made the ATMI job doable for me.

STN: Can you take us behind the scenes as to how you have tried to seek results from fellow industry leaders, elected officials and others who have a lot of say-so in the direction and future of this industry?

Hayes: Throughout my year as president I have talked with, negotiated, pleaded and every now and then demanded assistance and cooperation from anybody who has the power to help our industry in these difficult times. I feel like I’ve worn out two or three phone receivers talking to people over the past year.

Every speech that I made and every interview on TV or with newspapers has been aimed at one thing — getting the response that we need from people who can correct the unfairness that we face as an industry. And I believe that we have made a lot of progress. Certainly members of Congress are a lot more responsive to our industry’s problems.

I have even sent monthly reports to all of our members making sure they were informed of what ATMI was doing and I can tell you in just about every one I asked for their involvement and their commitment to our cause. I am pleased to say that they have responded and our membership today is more informed about our problems and more involved than they have ever been.

Also, I am proud of the American Textile Alliance I organized nearly two years ago. Today it has 14 member organizations from fibers through textiles, and it has become more active and a more powerful voice on key issues. One fact was obvious to me when I agreed to serve as an ATMI officer and it has become even more important over the years. That fact is that unless our industry is unified we will have less effectiveness and will not succeed in our mission to help our industry.

STN: In a speech in October, you noted that the majority of the industry is in trouble due to lack of liquidity and reported that you personally delivered a textile revitalization package developed by ATMI and the 14 association members of the American Textile Alliance to Commerce Secretary Donald Evans. Among requests were for:
• a program to extend the net operating loss carryback 10 years and forward through the year 2003, which means companies experiencing losses since 1999 and for the next couple of years will be able to recapture taxes paid in the previous 10 years;
• the government to guarantee textile loans because banks have increased their interest rates on these loans; and
• the removal of the 1.25 cents threshold that keeps U.S. mills that use cotton from becoming competitive with foreign competitors.
Where do these issues stand?

Hayes: While we didn’t get all of what we wanted, we’ve certainly made some significant progress on our issues. It’s just taken time.

We learned pretty early on that our request for government loan guarantees just was not going to happen, so we didn’t waste too many resources in pursing that objective.

On the tax carryback issue, we saw the House pass three different economic stimulus bills that provided for a five-year tax loss carryback period. This longer carryback period would certainly help struggling U.S. textile companies more so than the current law’s two-year carryback. And our supporters in Congress had received indications that this might be extended in conference to six or seven years, if it ever got to conference.

Unfortunately, the Senate could never agree on an economic stimulus package and the three bills just sat there. But this past week, the Democrats and Republicans finally reached agreement on a scaled-back economic stimulus bill that does include a five-year tax loss carryback period. This passed the House and Senate by overwhelming margins, without the need for a conference, and was immediately signed by the president. This is great news because this longer carryback period will be a very helpful lifeline to many of our companies.

We also have some good news in that the Senate passed its version of the Farm Bill in February, which calls for the elimination of the penny and a quarter threshold. This would save cotton-consuming textile mills in the U.S. more than $50 million annually, making them more competitive with Asian manufacturers who can buy cheaper foreign cotton. We are working with our allies in the National Cotton Council to ensure that the House-Senate conference committee that is meeting in March adopts the Senate position and eliminates this costly threshold.

STN: ATMI has worked hard over the last year on behalf of its members, particularly in communicating industry issues and problems to elected leaders in Washington. The very in-depth, problem-and-solution-oriented “Crisis in U.S. Textiles” report, issued in August, is a prime example. What kind of responses have you heard about that report, particularly from lawmakers, and how effective was that piece in communicating the industry’s plight?

Hayes: We decided early last year that we needed a report that would explain to everyone why we are being hurt so badly and the extent of the damage that our industry has suffered. We also needed to suggest some ways the government could fix our problems. I am really pleased about the report that the ATMI staff produced, which we called “Crisis in U.S. Textiles.”

And the response to it has been tremendous. We worked with a textiles magazine to get 30,000 copies out and we continue to get requests for additional copies from around the world. But most importantly, members of Congress and officials in the Administration have read it and now have a clearer understanding that we are being decimated by the devalued currencies of Asia and the continued overvalued dollar.

Many of the remedies suggested in this report are also part of the ongoing discussions we are having with the Administration and the Congress, and are part of the commitments made by Administration officials and members of Congress to our supporters.

If anyone out there wants a copy of the report, they can print it right off our Web site (www.atmi.org) or call ATMI and they will be happy to send them one.

STN: How else was ATMI’s presence felt in Washington and what other ways did the organization work to achieve results?

Hayes: We addressed a meeting of the Congressional Textile Caucus, I think, on June 6 and shared with them much of what was going in the Crisis report. We asked these members of Congress from textile areas not only for their support but for their active involvement to deal with our problems. They have responded and continue to do so.

For example, during the vote on trade promotion authority, some of our supporters made some politically risky decisions, but they did it to get commitments that would help our industry and we still have to make sure those commitments are honored. Also, I have worked very closely with Gov. Mike Easley of North Carolina, who organized other Southern governors and wrote to President Bush asking for his help. Gov. Easley, Gov. Hodges of South Carolina and others are continuing their efforts to help our industry.

Also, ATMI has hosted meetings with our European, Canadian and Mexican counterpart organizations and we have reached common positions on key textile issues that we need to get done in the World Trade Organization. We have carried that message to negotiators at the United States Trade Representative’s office and we are working very closely with Commerce Secretary Donald Evans and his Under Secretary for International Trade, Grant Aldonas. This is very important that we have these people in high-level positions that understand our problems and are willing and committed to do something to address them.

STN: Let’s talk about the trade promotion authority House vote that occurred in December. The industry seems to be split on whether or not the promises made to those textile-state legislators by Secretary Donald Evans will be fulfilled. Do you think those legislators who voted in favor of the legislation as a result of that list of promises did the right thing?

Hayes: First of all, I think if someone voted against TPA because of their concern over textile jobs, they cast a good vote, and I also think that if someone supported TPA because they got specific promises to help the textile industry, that was a good vote, too. I’ve met with Secretary Evans several times and I am convinced he is working to fulfill his promises, despite the criticism he is getting from some people. And we are working with Representatives Robin Hayes, Jim DeMint, Sue Myrick, Cass Ballenger and others to support their efforts to ensure that all of the commitments they received are honored in full.

STN: When all is said and done, do you think the president having this authority — provided the measure passes the Senate and particularly with textiles taking such a prominent role in its passage — will be positive, negative or will have no impact on the industry?

Hayes: I think if TPA ultimately passes in part because of the efforts of our representatives and senators to make sure textile concerns are addressed and all commitments are fulfilled, then the outlook may not be so dismal for future trade agreements that might be negotiated with TPA. I think the Bush Administration has finally recognized that the concerns of the textile industry mean something and cannot be ignored, and this message will not be lost upon the president’s trade negotiators.

I know the USTR’s new special textile negotiator, David Spooner, understands this full well, having worked for Congresswoman Sue Myrick for the past four or five years. He’s seen what can happen to textile companies as a result of bad trade agreements, and I think he will be particularly sensitive to our situation.

STN: When do you think the dyeing and finishing issue related to the U.S.-Caribbean Basin Trade Partnership Act (CBTPA) legislation will be settled and how do you think it will be written?

Hayes: If you ask me when I think it should be settled, I’d say it ought to already been settled because the House Republican leadership has given its word that it will be resolved like we want — by requiring U.S. fabrics made of U.S. yarn to be dyed, finished or printed in the U.S. only. I still think that is how it will be resolved, but our supporters in Congress need us to keep backstopping them in their efforts to make sure that this happens.

STN: On the Pakistan “trade aid” issue, ATMI has been put in the precarious position of having to stand up for the domestic industry’s interests without seeming to not support a war ally. The institute was critical of the trade concessions President Bush made with the Pakistanis recently, although the deal did fall well short of that country’s requests, thanks in large part, perhaps, to ATMI’s lobbying efforts. Other critics already are calling this a promise broken to the domestic textile industry. Please address this issue.

Hayes: Well, first of all, ATMI was very active in pointing out that Pakistani production and its ability to export had not been damaged by the war in Afghanistan, and we repeatedly emphasized this point with the Administration and our allies in Congress who went to bat for us. We made it clear that wholesale quota elimination and duty cuts, as sought by Pakistan, were not needed and would have simply provided added profits to importers at the expense of U.S. production and jobs.

And the Administration recognized this when President Bush told President Musharaff that he could go no further than the package he put on the table in February, despite Musharaff’s pleadings. But ATMI could not ignore the fact that even this reduced package meant that nearly one-half BILLION square meters of additional Pakistani apparel, on top of what they are already shipping us, could come in duty-free over the next three years.

We’re not about to ignore that, or pretend it doesn’t hurt, so we called it what it was — very damaging to our industry at a time we can’t afford any more harm.

It was a fine line the Administration and our supporters in Congress had to walk, and we are thankful to them that the damage wasn’t worse — but we still wish they had not given as much as they did out of our hides.

STN: Textiles certainly gained a lot of national attention during the past year, due again, perhaps, in part to ATMI’s work in educating elected officials and the public about the problems that have led to massive job losses and plant closures. The industry even earned a brief mention this weekend on Meet the Press, featuring Sens. Tom Daschle and Lott. What are your thoughts on the fact that textiles is at least being talked about among Washington leaders?

Hayes: I think it’s great that textile issues are in the national news. Thanks to a lot of hard work by ATMI and others in our industry, we’re back at the table in Washington, fighting for our industry and our jobs. We are going to make sure they keep talking about us and keep remembering that promises must be kept and that this industry is worth saving.

STN: You’ve worked with Van May over the last year or two. Please comment on your relationship with him and his abilities and leadership skills.

Hayes: During my tenure as ATMI president, I could never have had a better associate than our First Vice President, Van May. His knowledge of the cotton industry, coupled with my personal knowledge of the synthetic industry, made us a great combination.

Van was very instrumental in bringing about a much stronger relationship between the Cotton Council and ATMI. He agrees with the programs that have been enacted and we could not ask for a better individual to lead us forward.

STN: Recently, Carlos Moore announced that he would be stepping aside as ATMI executive vice president after 21 years at the institute and that he would work part-time on trade policy and cotton issues. Please comment on his effectiveness and leadership at ATMI and your relationship with him.

Hayes: In my three years as an ATMI officer, I give great credit to the ability of Carlos Moore. Carlos recognized that ATMI was heading towards financial difficulties, with so many companies leaving our industry or facing hard financial times. Carlos, realizing that ATMI would be facing a reduction of income as a result of these hard times, worked directly with Van May and between them developed a new approach for managing ATMI in the future.

I have personally found him not only knowledgeable of our industry and its issues, but also extremely well respected by his peers.

STN: What’s next for Chuck Hayes?

Hayes: It’s difficult to say what is next for Chuck Hayes. First, Deloris and I are going to take a vacation, then analyze what might be available. With the downsizing of Guilford Mills, there may not be a need for Chuck Hayes. Therefore, at the age of 67 and having spent 50 years in this industry, I may follow Deloris’s advice and retire and enjoy life.

STN: I’ll end with a bonus question that’s a little more personal. Can you tell me where you were and what you were doing the morning of September 11? What was going through your mind? How have the events of that day affected you since then?

Hayes: On September 11th, I was working at home and witnessed on TV the second terrorist plane hit the World Trade building. At first, I couldn’t believe what we were seeing. Since that tragic event, there is no question that the patriotism in the United States is at an all-time high.

I compliment President Bush on his actions and, now, we must wait to see what happens next. One thing is certain, all of us in America have a much better understanding of the meaning of “life” and how important it is to appreciate each day and be happy.


Longer carryback period a victory for Hayes, ATMI

Less than two weeks before the end of his presidency of the American Textile Manufacturers Institute (ATMI), Charles A. “Chuck” Hayes can report victory on one of his advocacy items.

Included in the economic stimulus bill passed by the House and Senate on March 9 is a provision that provides for a five-year net operating loss carryback period, more favorable depreciation treatment for certain new property acquired by businesses and a number of technical corrections and extensions of miscellaneous tax provisions. In short, this could mean millions of dollars worth of assistance to struggling textile companies.

ATMI has been advocating a longer net operating loss carryback period as part of the Textile Industry Revitalization Program it announced last August. Hayes, chairman of Guilford Mills, Inc., Greensboro, NC, applauded passage of the legislation.

“This is tremendous news for the American textile industry,” he said. “For nearly seven months, ATMI has been calling for a longer tax loss carryback period to provide struggling textile companies with the ability to receive refunds on taxes they already paid. We are grateful to our supporters in Congress who would not let this issue die.”

ATMI had been urging Congress since last summer to expand the carryback period from its current two-year limit.

“The two-year carryback period simply wasn’t enough for many textile companies, given the extent and duration of our industry’s financial crisis,” said Hayes, who worked hard to keep the stimulus bill alive, according to ATMI. “Many of our companies needed to go back further to get badly needed infusions of cash, and this five-year carryback will be the lifeline they have been seeking.”

ATMI ANNUAL MEETING

Week of March 18, 2002

May’s day coming: Texan set to take reins

Van May (R), president and CEO of Plains Cotton Cooperative Association, is in line to become president of ATMI, marking the first time a member of the cotton sector will hold this position. Here, May discusses cotton samples in PCCA’s sample room with House Ag Committee Chairman Larry Combest (C) as David Stanford, PCCA’s vice president of marketing, looks on.
Photo courtesy of PCCA

By Devin Steele

This week, Van May is expected to become the first representative of the cotton sector to be elected to the top post of the textile industry’s most powerful trade group.

And, as a supplier to the industry and a manufacturer, he will bring a unique perspective to the presidency of the American Textile Manufacturers Institute (ATMI).

Oh, and one more thing: He ain’t from around here — here being the Southeast textile manufacturing belt.

“Throw in the fact that I am a Texan, and I may be more unique than anyone wants,” said May, currently ATMI’s first vice president, who will join fellow members in Washington for the group’s annual meeting Wednesday and Thursday.

May, president and CEO of Plains Cotton Cooperative Association, Lubbock, TX, sees his position as an “outside insider” as an asset.

“Our problems in U.S. textiles and U.S. cotton are intrinsically linked,” he said. “When I am working for one, I am working for both, so I hope there’s synergy there.”

He added: “This business, which is suffering so much right now, has been very good to our company, our farmer-owners and me. It’s only right for me to give something back. Since our company is better known for cotton than textiles, it provides a nice exposure and is sort of a validation for us in an area in which we have historically not been as visible.”

May, 48, didn’t need much arm-twisting to take a leadership role in the textile lobbying group, he said — just the encouragement of his company’s board of directors, all of whom are cotton farmers.

“They are not ‘free riders’ and neither am I,” he said. “It is important to us to work hard at solving our problems because we believe that’s what our competitors and detractors are doing. If we don’t get involved, we will have to live with the results of their efforts and that is almost always a little short of optimum.”

Asked if he had wondered to himself, “Why me? Why now?,” in terms of taking this position during perhaps the U.S. textile industry’s most dire times, May said he is resolved to handle the task at hand.

“I have never shied away from a tough job, though I obviously wish the circumstances were better,” he said. “My experience has been that we often do our best work and make our best contribution when the climate is the most challenging. Hopefully we can all rise to this challenge.”

May has set two primary goals for the organization during his tenure: Trade-related communications and coalition-building.

“I would like to get the trade debate framed properly,” he said. “If we do a good job at carrying the trade message for our industry, I think we can make a difference in future trade negotiations and benefit us all. If so, I think ATMI will be more attractive to our current and former members, and we can stabilize the organization.

“Secondly, whatever we achieve I hope it can be through improving our coalitions with others in related industries. By joining with others we greatly improve our odds of success in all legislative and regulatory matters.”

May said that he intends to maintain the mantra of his predecessor, Chuck Hayes, who continually preached the importance of unity among various textile and related factions. But uniting the industry will continue to be a challenge, he added.

“I think the single biggest hurdle we’ve been facing and continue to face is our inability to speak in Washington with one voice on certain issues,” he said. “All of us — cotton, manmade fibers, yarn, thread, textiles — have a stake in our mutual survival, and all of our various organizations need to work better together. Chuck Hayes has been preaching this, and he’s dead right.”

ATMI, and the industry in general, has two things working in its favor, May said. One is that it has been effective when unified, as proven by the efforts of the American Textile Alliance, a coalition of more than a dozen textile-related organizations that has become more active and a more powerful voice on key issues.

And, two, the industry has built momentum over the past few months and now has members of Congress and key people in the Bush Administration who are keenly aware of the industry’s problems and are working with the industry to help solve them.

“Our visibility is better right now than I have seen it in many years,” May said. “We need to build on that.”

May credited Hayes with helping to create that visibility, adding that he has been privileged to work with the Guilford Mills chairman.

“I love Chuck Hayes,” May said. “As he has said to me so often, God must have had a hand in putting a synthetic/knit guy together with a cotton/woven guy, and we have worked side by side like we had known each other for 30 years.

“How could one not benefit by being around Chuck’s boundless energy and enthusiasm? It has been one of the great joys of my life, and his philosophy of ‘unity’ could not be more in line with my own. He has become a real friend, and if we accomplish anything this coming year, it will be due to the foundation he built for us.”

Sees woes first-hand

May’s company, PCCA, is a farmer-owned, cotton marketing cooperative that also manufactures denim. Plain represents about 26,000 cotton producers in Texas, Oklahoma and Kansas. Heading a unique enterprise of this nature certainly has helped him prepare for his role at ATMI, he said.

“I think that structure helps us see the entire supply chain better, and recognize that the interests of the different elements in that chain are completely interdependent,” he said. “When you have a ‘field to fabric’ mentality, as we like to say, you recognize that success at the farm gate depends on success at the mill loading dock and vice versa. It is virtually impossible for us to lose sight of that and get our focus too narrow as a result. That is a real strength.”

Like the textile industry, though, PCCA hasn’t been immune to the “layoff bug” during the past year, having been forced into job cuts totaling about 550 people. The company exited its yarn-dyed wovens business and consolidated its efforts back to denim. And making those tough decisions has changed him, he said.

“I will never quite be the same,” he said. “It broke my heart for those employees. It humbled me, as I wondered what we might have done differently to have forestalled that result. It angered me that we allowed markets to go to other countries, not based on economies of production, but due to our unwillingness to address currency imbalances. My people had to pay that price, and I am still upset about that.

“Finally, it has inspired me to learn more, and fight harder to get our operation back on track.”

The industry’s challenges have manifested themselves at ATMI, as well. Squeezed by falling membership, the organization in the last 15 months has endured two major rounds of layoffs, the latest in January when it announced the elimination of several high-level staff positions.

As soon-to-be president, May already has developed a sales pitch to prospective members, including those who have pulled out of the organization.

“This is going to be a recurring theme for me — we have to be together,” he said. “If you’re in ATMI now, you need to stay in. If you’re not in, you need to get in, because it’s going to be very hard for us to win on our issues unless we are unified and speak on behalf of and with the support of the broadest possible group.

“You don’t have to always agree with every policy adopted by the ATMI board. None of us do. But if you’re in this business you should recognize that, on the whole, this association performs a vital role, and if you’re not at the table, you don’t have a chance to influence our policies and priorities. We must not allow our detractors to divide us and conquer us.”

Even with a leaner staff — about 50 percent of its level of Jan. 2001 — ATMI can still maintain its effectiveness, he added.

“We will do it because we have no choice, and the stakes are too high,” May said. “Most of us are facing the same challenge at our own companies. Just because we have to downsize doesn’t mean we will lose effectiveness. In fact, it may help us better target our resources and better define our priorities. In some ways it will make us more determined to succeed, not less. I remain excited about our future.”

During the past year, May, as an high-ranking officer, has worked closely on various issues through ATMI. And results were achieved, thanks to ATMI’s lobbying efforts, he said.

The institute’s communication efforts focused not only on members of Congress, but also on the White House and key government agencies, as well, he said. Notable highlights were meetings with Secretary of Commerce Donald Evans and Under Secretary for International Trade Grant Aldonas.

ATMI also hosted textile organizations from the EU, Canada and Mexico, and included a number of key government officials.

“Our objective was to agree on a set of issues that we would promote with our respective governments regarding upcoming trade negotiations,” he said.

ATMI is also involved in a number of coalitions in Washington, including the Coalition for a Sound Dollar, which includes much of U.S. manufacturing, agriculture and labor. The “Crisis in U.S. Textiles” report, issued by ATMI in August, was also effective in bringing the industry’s woes to light in D.C., he noted.

Some setbacks

Everything in Washington didn’t turn out as ATMI had hoped, however, May said. Trade promotion authority (TPA) passed the House by a single vote in December, as textile-state legislators voted for the measure in exchange for written promises aimed at assisting the textile industry. Now, though, ATMI is turning its attention to making sure those promises are kept.

“I was not a supporter of TPA and was extremely disappointed when it passed,” May said. “However, it did provide the vehicle for U.S. textile trade issues to get the highest possible visibility, and that may ultimately bear fruit for us. I think we have to agree that when the President of the United States himself begins to give his personal commitment to consider our interest in his trade negotiations, you have achieved visibility.

“The key, in my mind, is to see that all those commitments by the Administration and House leadership are realized in ways that help us. For example, look at the CBI issue. It will do us no good if, with the one hand they give us what they promised on U.S. dyeing and finishing of U.S. fabric, but with the other hand they take away even more U.S. production and jobs with a bad Andean trade bill or an expansion of the Sub-Saharan Africa trade law.”

Related to the CBI issue, or more formally the U.S.-Caribbean Basin Trade Partnership Act (CBTPA), May added that keeping that commitment is crucial.

“I hope this one is settled soon, and I think our supporters in Congress must insist that their leaders keep the promise they made to fix this situation, no ifs, ands or buts,” he said. “Out here in Texas, a person’s word still means something. So I’m looking for those who received the commitments on CBI and other issues to make sure that these commitments are honored.

“By implementing the comprehensive proposal agreed to last year by ATMI, the National Cotton Council, the American Yarn Spinners, even the American Apparel and Footwear Association, this could be accomplished very simply.”

Then, there was the Pakistan trade issue. As a reward for that country’s support of the war, President Bush made a deal with the Pakistanis that amounts to $426 million in apparel quota increases into the U.S. over the next three years. ATMI was critical of the package, although it did fall well short of that country’s requests, thanks in part, perhaps, to ATMI’s lobbying efforts.

“As an American, I applaud Pakistan for helping in the war on terrorism,” May said. “As a human being, I applaud them for standing with us against the crimes against humanity levied last September 11. And, I am not against paying them for their help if that’s what it takes, as we must be successful in ridding the world of the terrorist threat.

“However, to ask the U.S. textile and apparel manufacturers to foot the entire bill for their help is wrong. The fact is that Pakistan has become one of the largest textile and apparel importers to the U.S. over the past few years without this help. They devalued their currency after the Asian financial crisis and began to take market share in this country very successfully. In cotton textiles and apparel, I believe they are now the No. 1 importer to the U.S. market. Last year they were one of the few major exporters to actually increase their shipments of textiles and apparel to the U.S. Do they really need more help? Our strong dollar policy gives them all the help they should need.”

Gearing up

May is gearing his sights on several major issues in Washington, chief among them pending trade bills. The Andean bill, the CBTPA, TPA and free trade agreements with Singapore and Chile may all be addressed during his tenure.

“Since every country in the world seems to have their hand out looking for trade concessions at the expense of U.S. textile jobs, I shudder to think what else might be coming,” he said.

He also plans to try to bring the textile/fiber complex together to make sure the government doesn’t agree in WTO talks or elsewhere to ease more U.S. tariffs, he said.

“The U.S. has already opened our market up to foreign imports,” he said. “We’ve given at the office. Now we need to make sure U.S. negotiators work to lower foreign trade barriers to our levels so we can have the opportunity to export to other countries.

“Likewise, we need to work with our supporters in Congress to fight any efforts to weaken U.S. trade laws and make sure officials in the Commerce Department, Customs Service and other federal agencies get tough on textile trade fraud.”

ATMI ANNUAL MEETING

Week of March 18, 2002

U.S. House members on docket

Two U.S. House members who have come under fire for their December vote for the trade promotion authority (TPA) measure will speak during the American Textile Manufacturers Institute’s (ATMI) 53rd annual meeting this week.

The meeting will take place at The St. Regis Hotel in Washington, DC, and has been pared to two days, Wednesday and Thursday, in response to industry conditions.

North Carolina Republican House members Robin Hayes and Cass Ballenger each will address ATMI members. They were among several representatives who changed their minds and voted for the TPA measure after written promises aimed at assisting the U.S. textile industry were made by Commerce Secretary Donald Evans. They have since been criticized by some of their constituents and other interests.

Meanwhile, U.S. House representative Virgil Goode (I-VA) is scheduled to discuss the impact of trade policies that have played a major role in accounting for massive job losses in his Southside Virginia district.

Also speaking will be newly appointed Special Textile Negotiator David Spooner, who will discuss his expectations for textile trade negotiations in the upcoming months.

Charles A. “Chuck” Hayes, outgoing ATMI president, will also address the group. He is expected to be succeeded at the meeting by Van May, CEO of Plains Cotton Cooperative Association, Lubbock, TX.

Schrum

Week of March 18, 2002

Industry icon Schrum retires after 50 years

Schrum

By Devin Steele

Edward P. Schrum, who made a profound impact on the textile industry during a distinguished 50-plus year career, has retired as chairman of Carolina Mills, Inc. of Maiden, NC.
George A. Moretz has been elected chairman, a position held earlier by his father. Other officers elected were Stephen G. Dobbins Jr., president, treasurer and CEO; and Bryan E. Beal, chief financial officer.

Schrum, 74, worked at Carolina Mills for nearly 51 years in various capacities and served in several leadership positions within industry organizations.

Among presidencies he held were with the American Tex- tile Manufacturers Institute (ATMI), the American Yarn Spinners Association (AYSA), the North Carolina Textile Manufacturers Association (NCTMA) and the Southern Textile Association (STA).

Jim Conner, former executive vice president of AYSA who worked closely with Schrum for years, called him a “great statesman” of the industry and a “true gentlemen.”

“The industry will miss Ed’s leadership,” Conner said. “He was a tremendous asset to AYSA and the industry and it was certainly a pleasure for me to work with him.”

Schrum’s tenure as ATMI President (1989-90) was marked by his efforts to encourage textile companies to start or expand programs in their community for improved literacy training and education, and to promote a drug-free workplace.

During his President’s Address to ATMI delegates in May 1990, Schrum said, “We must ask ourselves, where do we want this industry to be at the turn of the century? What’s our vision of the future? What are our goals? I see an industry where our employees are not just literate, they are computer literate — where opportunities are abundant — an industry where people pull together to solve problems.”

Later, he added, “A high priority must be to improve the system of education in America. There’s no room in the industry in the future for people who can’t read or write or work on a computer.”

A 1949 engineering graduate of N.C. State University, Schrum for years was active in organizations affiliated with his alma mater. He is a past member of the school’s Board of Trustees and the Student Aid Association’s Board of Directors, and is a past president and board member of the North Carolina Textile Foundation, NCSU’s textile-scholarship arm.

He joined Carolina Mills in Feb. 1951 and held a number of executive positions before being elected president and CEO in 1976. He was elected treasurer in 1985 and chairman in 2000.

He was also named CEO of the Year in Textiles by Financial World in 1990 and received an honorary doctorate from Catawba College in 1992.

Schrum is spending many of his “retirement” days in his newly established office in Newton, NC, where he engages in such activities as keeping track of his stock portfolio and handling the affairs of the estate of his recently deceased mother.

“I’m trying to figure out how I ever worked because I have a full-time job right now,” he said.

He said he also enjoys spending time with Edith, his wife of 53 years.

Reflecting on his career, Schrum said that being involved in so many industry organizations had its benefits.

“It was important for me to be active,” he said. “I thought the company would benefit from my being involved in some of these organizations and activities. It’s amazing some of the contacts you make at those industry meetings because you see a lot of people who you would never have the opportunity to meet otherwise.”

Throughout his half century of service, Schrum obviously saw his share of changes in technology.

“From the open-end spinning to the shuttleless loom to the water-jet loom, everything from band drives for spinning to tape-driven spinning and so on, I’ve seen a lot of changes,” he said. “When I first came along it was a matter of big package — make the largest can and the largest bobbin you could. And then, all of a sudden, it went in the other direction. It was all high speed and all small ring and small everything, so it’s been a radical change.”

From an industry standpoint, Schrum said he has lived long enough to see things occur that he never envisioned.

“We’ve seen companies and plants close that we never imagined we would see,” he said. “We’ve seen Burlington go into bankruptcy, which nobody ever thought would happen. And we have Guilford, Pillowtex and Malden Mills in bankruptcy. You would never have predicted that.”

One of his proudest moments, he said, came in 1990, when several busloads of Carolina Mills employees joined other textile and related employees in Washington, DC. All told, about 3,000 people marched in support of a textile quota bill in 1990.

“We were real pleased that so many of our employees took the time to go up there to make a case for the industry,” he said. “It was a good day.”

However, the legislation, which would establish future quotas for imported textiles and apparel, failed. “Had we not lost that vote, I think we would see quite a different situation in the industry today,” Schrum said.

And the situation since then has deteriorated, he said, as Washington continues to make the industry expendable, he added.

“Unfortunately, from a political standpoint, we haven’t seen any change in thinking since then,” he said. “We’ve had promise after promise after promise in the political arena and we’ve seen nothing, yet we’ve had everything from letters signed by the president, saying that he’s going to look after the textile industry and it’s not going to go away. That didn’t come to fruition.

“We currently have the same situation, where we’re being promised all this stuff and nothing’s happening, or it hasn’t happened yet.”

Looking ahead, Schrum said he sees a future for U.S. textile manufacturing, but nothing resembling the past.

“I think you’re going to see a different textile industry,” he said. “You’ll see a fast-moving textile industry, one that has to be quick on its feet. They’ve got to look for their niches in the marketplace. They cannot just do the commodity business anymore. It’s very difficult to compete.”

Officers’ bios

Moretz has been with Carolina Mills since his 1964 graduation from N.C. State, where he earned a degree in textile technology. He joined the company’s board of directors in 1976 and was elected vice chairman and secretary in 2000.

Dobbins, a native of Elkin, NC, earned a degree in textile technology from N.C. State in 1968. He joined Carolina Mills in 1971 as plant manager before moving into corporate management.

Beal, who earned a degree in business administration and accounting from Appalachian State University in 1980, has been with the company since 1998.

ATME-I numbers

Week of March 18, 2002

Early ATME-I sign-ups strong

GREENVILLE, SC — More than 200 textile machinery and equipment manufacturers from around the globe have applied to exhibit at the 2004 American Textile Machinery Exhibition-International, organizers said.

The event is slated for Oct. 11-15, 2004 at the Palmetto Expo Center.

With applications received for about 40 percent of the available exhibit space at the center, show planners said they are optimistic that the exhibition will be successful.

For the first time since 1973, ATME-I will be a complete show featuring machinery for all textile processes, according to Butler Mullins, show director.

The 2004 exhibition, co-sponsored by the American Textile Machinery Association and Textile Hall Corp., and produced by Textile Hall Corp., will join machinery manufacturers for fiber and yarn production, weaving, knitting, dyeing, printing and finishing, nonwovens production and plant engineering and maintenance.

ATME-I will also feature The Knitted Arts Exhibition-Fabric (KAE-Fabric) as an integral part of the exhibition under special arrangements with the Knitted Textile Association.

“We’re excited about reviving the complete show format and the opportunity to promote the show worldwide to manufacturers in all textile processes,” Mullins said.

Closings

Week of March 18, 2002

Guilford files plan, finds plant buyer

GREENSBORO, NC — Guilford Mills, Inc. said Wednesday that it filed voluntary petitions for Chapter 11 reorganization, a week after receiving approval from its lenders for the debt restructuring.

The warp knitter said it plans to emerge primarily as a maker of automobile fabrics, possibly as soon as early summer.

Under the restructuring, the company will cut its $270 million senior indebtedness to about $145 million.

First Union National Bank has agreed to furnish the company with a debtor- in-possession (DIP) revolving credit facility that will provide the company with up to $30 million in financing during its reorganization proceeding.

Separately, Guilford said it has agreed to sell its Twin Rivers Textile Printing and Finishing in Schenectady, NY, to H. Greenblatt and Co., Inc., which will assume operations at the facility.

“I am happy that we were able to successfully reach this agreement that will result in continuing the operations at the Twin Rivers facility,” said John Emrich, president and CEO of Guilford.

H. Greenblatt and Co., Inc. is a leading print fabric converter primarily servicing the swimwear and intimate apparel markets, with offices in Los Angeles and New York.

Since December 2001, H. Greenblatt and Co., Inc. has been the exclusive converter of Twin Rivers’ library of patterns and screens. As part of that agreement, H. Greenblatt has been servicing orders and developing business using Twin Rivers’ screens, artwork and original designs.


NC county takes another hit

FOREST CITY, NC — Pennsylvania-based Spring Ford Industries said last week it will close factories in neighboring North Carolina towns Spindale and Ruther-fordton.

Also, Schneider Mills said it will temporarily lay off employees at its facility here. Together, the moves will account for about 200 job losses in Rutherford County.

Spring Ford is closing T-shirt and casual wear manufacturing facilities, putting about 380 people out of work nationwide, including 140 in this county.

Schneider Mills is furloughing 60 people at its women’s apparel cloth factory, leaving 35 employees, until business conditions improve.


Biddeford revises plan

BIDDEFORD, ME — Biddeford Textile Corp. filed a revised Chapter 11 bankruptcy plan on March 8 and 250 of its employees have returned to work.

More than half of its employees had been temporarily laid off a week earlier due to cash flow problems, the company said.

But Biddeford, its union and creditors reached a tentative agreement, making way for the revised Chapter 11 filing to take place.

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