A DATE WITH DESTIN(Y)

Week of April 22, 2002

Group tightened belt but added value

ATMA President Bill Shugart III, vice president of operations at hosiery maker W.Y. Shugart & Sons, Fort Payne, AL, will preside during the association’s annual meeting, where state and national politics will be the focal point.

Editor’s note: Following is a Q&A with Bill Shugart III, who has served as president of the Alabama Textile Manufacturers Association during the past year. Shugart, vice president of operations for W.Y. Shugart & Sons, Fort Payne, AL, will turn over the reins this week during the group’s annual meeting in Destin, FL. In reflecting on his term, Shugart answered questions submitted to him by STN.

STN: You earned the distinction of being the first ATMA president of its second century. Your thoughts on this distinction?

Shugart: I think, mainly, it was the luck of the draw. However, the responsibility of being president in the new century has been to adapt to change and to position the association to give our membership the most value for their money.

STN: Please comment on the importance of the association to Alabama’s textile industry, particularly during these difficult times.

Shugart: By providing educational seminars, political forums and social gatherings, we try to provide our companies with enough information to keep them competitive.

STN: What were your goals when you became president and how did you go about meeting them?

Shugart: Our goals were simple: Work within a balanced budget and provide value to our membership. We accomplished this by tightening our belts financially and providing informative seminars and accurately and timely monitoring of state politics.

STN: What are some of the legislative/regulatory issues or concerns ATMA dealt with this year?

Shugart: The legislative agenda was filled with issues that we were concerned about passing or more often defeating. We tracked 43 of the 714 bills introduced in the House and 30 of the 575 bills in the Senate.

We worked for successful passage of: 1) appropriation for the Waste Reduction and Technology Foundation; and 2) workers compensation benefits, subrogation to employer provided.

We were disappointed that the following did not pass: 1) reduction in post-judgment interest rates (tort reform); 2) voter I.D.; 3) mental anguish/ emotional distress judgment cap (tort reform); 4) not charge company with UC for probationary employees; and 5) employee immunity for sharing job performance information.

We worked to defeat the following: 1) ADEM inspection fees; 2) nonpartisan election on justices and judges; 3) to prohibit arbitration agreements; and 4) water resources enforcement change from ADEM to the Office of Water Resources.

STN: As other states, Alabama is ex-periencing serious budget shortfalls. What effect has this had on the manufacturing sector in your state, particularly among your membership, and how have some of ATMA’s causes been affected by these financial troubles

Shugart: It is a domino effect. Retail is soft. Retail squeezes manufacturing for lower prices. People are laid off from factories due to the slow economy and spend less at retail. Manufacturing at a point moves to a cheaper labor pool offshore to meet the price demands of the retailer. Alabamians are out of work. When people cut back on spending, they cut back on association participation.

STN: Alabama hasn’t been immune to the manufacturing woes, especially job losses and plant closures and particularly in textiles and apparel. What are the latest numbers you’ve seen in terms of jobs lost and closed plants in your state? Related to this, what were the most devastating headlines of the past year in Alabama?

Shugart: The largest loss this year was the announcement of VF Jeanswear, which closed five facilities in Alabama that produced Lee and Wrangler Jeans. Total loss of employees is 2,189 in the state.

In 1994, Alabama had 102,000 employees — 58,000 apparel, 39,000 textile and 5,000 fiber. Today, we have 57,900 employees — 18,900 apparel, 34,000 textile and 5,000 fiber.

Since February of last year, we lost 3,800 apparel employees and 1,300 textile.

STN: Has this contraction affected ATMA’s membership numbers? How do those figures compare to last year’s at this time?

Shugart: Yes, our numbers are down from a year ago. There are simply less textile-related facilities in the state.

STN: What are the bright spots in the industry in Alabama?

Shugart: Certain segments of manufacturing are doing pretty well. Some have even made plant expansions. We have to continue to automate and become as lean as possible.

STN: What “exciting” is going on within the organization?

Shugart: One of the most exciting things happening today in our industry is the fact that nearly every manufacturer we have spoken with in the past few weeks has reported stronger business and increased optimism for the future.

We have been very pleased that Frontier Spinning acquired Russell Yarns this year and re-started yarn plants that were previously closed by Russell Corporation.

STN: What are a company’s benefits of ATMA membership?

Shugart: Benefits include a voice in state politics. ATMA is well respected in the political arena by senators and legislators, as well as other state associations. Also, timely and informed seminars meet the needs of our constituents. And, thereby, a major benefit is networking with other people within the manufacturing community, as well as valued suppliers to the manufacturing community and valued suppliers to manufacturing.

STN: What are the biggest challenges facing the textile/apparel industry, particularly in Alabama, in the coming years?

Shugart: Foreign competition and the reduction or elimination of trade tariffs that allow the consumer to buy foreign textiles made with cheap, Third World labor. We can’t pay employees $8.20/hour and compete with foreign labor at $3 a day. We have to continue to automate.

STN: How has ATMA responded to these challenges?

Shugart: ATMA has responded by lobbying not only state legislators, but our national leadership to provide textiles with an opportunity to compete.

STN: Why is serving in a leadership role such as this important to you?

Shugart: It allows me to have a voice in how our association operates. It also allows me to represent ATMA’s views to our politicians on legislation matters that concern us.

STN: Please describe the working relationship you have with your officers and board and the ATMA staff.

Shugart: It is very easy to work with people who have common goals. With the Board and Executive Committee there are no egos or hidden agendas to deal with. Everyone is working for the betterment of ATMA as it tries to serve our member companies. Our staff is tops. They are friends, courteous, intelligent and responsive to our members’ needs.

STN: How long have you been a member of ATMA?

Shugart: Six years.

STN: How has ATMA helped you grow professionally?

Shugart: Primarily it has helped me become more aware of how politics can affect our businesses and our lives. It presents a broader picture than just the manufacturing environment.

STN: The association is making a return trip to Destin, one of its favorite, um, “destinations.” What’s unique about this year’s event and what do you hope members will take away from the meeting?

Shugart: This will be a unique event in that there will be change. We need to savor the relationships that we have made over the past century. We need to rely on those relationships as we go in new directions with new formats. The one thing I would like for our members to take from the meeting is that although there are many changes in our industry and association, relationships and friendships can remain constant.

THA

Week of April 22, 2002

THA delegates set to explore options

CHARLOTTE, NC — The Hosiery Association (THA) has planned to cover a number of timely topics pertinent to its sector when the group holds its 97th annual meeting and convention this week.

Scheduled for Wednesday through Sunday at the Crowne Plaza Resort at Hilton Head, SC, the event is expected to attract about 200 members.

Roundtable discussions will cover such topics as sheers, socks, seamless and greige knitting.

Bob Yoe, chairman of THA, has chosen “Change Brings Options” as the meeting theme.

“There are many ‘mega-trends’ driving this change,” said Yoe, president and CEO, Crescent Hosiery Mills, Inc. “The two most significant are, first, the changing political and cultural mores in the U.S.; and, second, the rapid technological changes, both within and outside our industry. Both of these ‘mega-trends’ are inexorable.”

Additional trends impacting the industry, Yoe said, include the reduction of viable retailers, rising raw material and energy costs, brands, competitors, suppliers and increases in customer demands.

“As leaders in our industry, we must recognize and accept the fact that these trends cannot be changed,” he said. “Thus, as leaders, we must make rational decisions about how to most effectively deal with the options we have. Options are choices, and they cannot be ignored. In many cases, if we don’t react to the options we have today, tomorrow’s options will be even more limited and less desirable.”

Meanwhile, Bill Eubank of Aarthun Performance Group Ltd. will give a two-plus-hour presentation entitled, “Building Better Business People in the Hosiery Industry.” He will explain how having employees understand the financial cycles of a company will help them identify strategies that will improve efficiency and increase productivity and cash flow.

In another discussion, Jim Brendle of Pro Systems will cover, “How to Use THA’s Web Conferencing in Your Business.” Simple and inexpensive, web conferencing is going to be a great advantage to many companies in time and money savings and THA now has these capabilities available to sublease to members.

“We have developed an outstanding assortment of educational presentations that are designed to help members assess the options that are available to them in today’s marketplace,” Yoe said. “These sessions will cover how to better understand the new consumer, strengthen alliances with both internal and external customers, review the latest developments on logistics and distribution technologies, provide a glimpse of the latest production trends and sourcing from around the world and enhance personal skills.”

For the first time, THA is offering companies a chance to exhibit their goods and services during the event.

“We believe that these exhibits will add value to the convention for all participants by creating an environment in which hosiery manufacturers, suppliers and service providers can come together in an informal but organized manner to discuss business relationships, as well as introduce new products and services,” Yoe said.

A “shareholders meeting” also is on tap for the meeting. Similar to a shareholders meeting in the corporate world, the leadership of THA, with the aid of professional facilitator Glenn Kiser, will review the changes in the association in the previous year and the strategic plan for moving into the future.

INDA

Week of April 22, 2002

Nonwovens association to focus on economy

CARY, NC — Dr. James F. Smith, a university professor and well-known economist, will address members of INDA, Association of the Nonwoven Fabrics Industry, during its annual meeting this week.

The event will take place Wednesday through Saturday at the Hyatt Grand Express in Orlando.

Members also will hear a North American and worldwide nonwovens industry analysis by Ian Butler, INDA’s acting director of market research and statistics.

About 100 members are expected for the closed-to-the-media event, which also will feature roundtable discussions related to the economy and that fast-growing sector. In that session, members will brainstrom and develop a comprehensive analysis of the worldwide economy and factors affecting the nonwovens industry.

Smith, a professor in the Kenan-Flagler Business School at the University of North Carolina at Chapel Hill, will present, “The Current and Future State of the Economy and Managing Your Business in a Tough Economy.”

One of the world’s best economic forecasters, Smith has more than 25 years of experience. He serves on the Blue Chip, Bridge News, Business Week and MMS forecasting panels, participates in the National Association for Business Economics (NABE) and USA Today quarterly surveys of forecasters and The Wall Street Journal semi-annual economic outlook surveys. He also is a member of the Forecasters Club of New York outlook panel. In January 1999, The WSJ recognized him as the most accurate forecaster among its panel members for two of the past three years.

Meanwhile, Jeff Cleary and Franklin Covey will cover leadership strategies, under the title “Leading in a White Water World.”

Lee Sullivan, general manager of the Tuft Division of Freudenberg Nonwovens, Durham, NC, serves as chairman of INDA’s Board of Directors and its Executive Committee.

Officers include Dennis R. Tavernetti, vice chairman of planning and global vice president of BBA Nonwovens Group, Simpsonville, SC; and C.K. Wong, vice chairman of finance and president and CEO of U.S. Pacific Procurement Co., Hong Kong.

ATMI

Week of April 22, 2002

Rep. Hayes ‘holds court’ with industry leaders

By Devin Steele

WASHINGTON, DC — U.S. House Rep. Robin Hayes, who has garnered critics and supporters after his “yea” vote on presidential trade promotion authority (TPA) in December, faced a room consisting of both recently.

Addressing members of the American Textile Manufacturers Institute (ATMI) during their annual meeting here, the North Carolina Republican heard his share of tough questions and comments while defending his decision to vote for the measure.

“We’ve got an opportunity,” Hayes, who joined several other Textile Caucus members in voting for the legislation in exchange for a letter full of promises aimed at helping the textile industry, said in his opening remarks. “I’m going to fight with every fiber of my being in every process that goes forward to make sure that that opportunity turns into more jobs, expanded markets and plants reopening and expanding, not plants closing.”

After further explaining why he voted the way he did, Hayes said, “That’s my story and I’m sticking to it. Who’s got the first question?”

Jim Copland III, CEO of Copland Industries, Burl-ington, NC, from whom Hayes said he has sought counsel on textile-related issues in the past, was the first to pipe in.

“There’s no question that a lot of us in this room are fighting for our (professional) lives,” said Copland, whose company weaves polyester fabrics. “And there’s no question that there are some in this room who are upset with you for your vote. That’s a fact. We have a history of being promised things and nothing ever comes about it.”

Then, after describing Rep. Bill Thomas (R-CA) as a “bull gator” for refusing to let anyone “swim to the other side of the pond” on the issue, he asked directly, “Knowing that you were going to run into a stone wall (in Thomas), would you please explain your thought process as to why you voted the way you did, taking that into consideration?”

Hayes did just that, saying he reached his decision in spite of objections by Thomas, chairman of the House Ways and Means Committee, to provisions in the letter from Commerce Secretary Donald Evans and House leadership.

“Bill Thomas is in agreement with most of what’s in that letter,” Hayes said. “But what Bill Thomas is having so much trouble with is the dyeing and finishing provision (that would allow duty-free apparel from the Caribbean be dyed and finished in the U.S.). So I’m not real worried about it, except on dyeing and finishing. He was very strong in his opposition to that all the way through.

“However, there are a couple of fellows — the Speaker of the House (Dennis Hastert) and the President, who occupy higher rungs on the perch as we negotiate, who I strongly believe in. They’ll keep their word.”

Later, Copland related a story about former ATMI president Dewey Trogden, who had shared with him a letter from President Reagan outlining his commitment to the textile industry in the ’80s. “And none of those things in that signed letter came to pass,” Copland said. “We all hope that the faith that you have placed is good faith.”

“Well, everything you’ve said and all of your concerns are legitimate,” Hayes responded. “We just have to take what we’ve got and I’ll do everything I can to make sure those promises are kept.”

Hayes also addressed several questions and concerns from other ATMI members and also drew praise for his efforts on behalf of the industry from one ATMI member. He then thanked attendees for sharing their thoughts.

“The biggest problem I have right now working with this issue is people who don’t have the guts to stand up and do what Jim Copland did today,” Hayes said. “Folks, if you tell me what’s on your mind, I can tell you my understanding of the fact and then we’ll move on from there. But if you just go around behind my back, grumbling and moaning and whining, then we aren’t going anywhere.”

Finally, Hayes said that voting for TPA, which gives the president the ability to negotiate trade legislation without amendment from Congress, was difficult, but that he has no regrets.

“A ‘no’ vote was a wonderfully easy way, a coward’s way out,” he said. “I could’ve gone to Bullfeathers, had a hamburger and been home by 7 o’clock. Well, I have been up ever since then, trying to make this sucker work. And I’m going to keep on doing it.

“So it was either say ‘no’ and we keep losing jobs and closing plants, or it was use this opportunity to create leverage to do something for the industry.”

Earlier in the day, Cass Ballenger (R-NC), who also voted for the measure, addressed members during a breakfast that was closed to the media.

Safety

Week of April 22, 2002

Alabama plants earn safety awards

By Devin Steele

MONTGOMERY, AL — Textile industry officials gathered here recently for the annual Safety Awards Luncheon sponsored by the Alabama Textile Manufacturers Association (ATMA).

Several speakers addressed workplace safety and awards for outstanding safety achievement were presented.

Seminar speakers included Bill Pryer, Alabama’s attorney general; and Neil Wasser of Constangy, Brooks & Smith, Atlanta, GA.

Kenneth Mims, Alabama’s Textile Citizen of the Year of Guntersville, AL, was a special guest speaker. He received the title of Alabama’s Textile Citizen of the Year for his outstanding contributions to his community and job with Kappler Protective Apparel & Fabrics.

Achievement awards were presented to 37 plants for operating the most hours with the fewest or no accidents.

In addition, Alice McKinney, director of the Alabama Department of Industrial Relations, awarded certificates to 61 plants that operated throughout 2001 with no lost-time accidents.

Working safely

PLANT GROUP A
Fiber & Yarn Manufacturing (opening, yarn, packaging)
Division 1 (up to 125 employees)
• 1st Place, Wehadkee Yarn Mills, Talladega Division
• 2nd Place, Frontier Yarns,LLC, Coosa River Spinning
• 3rd Place, Wehadkee Yarn Mills, Chinnabee Division

Division 2 (126 to 250 employees)
• 1st Place, Russell Corporation, Alex City Yarns
• 2nd Place, Russell Corporation, Coosa Yarns
• 3rd Place, RadiciSpandex Corporation

Division 4 (over 500 employees)
• 1st Place, Shaw Industries, Andalusia Plant #65

PLANT GROUP B
Fabric Manufacturing (knitting, weaving, finishing)
Division 1 (up to 125 employees)
• 1st Place, Russell Corporation, #7 Woven Goods Bleachery
• 2nd Place, Russell Corporation, Athletic Specialty Knit
• 3rd Place, Johnston Industries Inc., Lantuck Plant

Division 2 (126 to 250 employees)
• 1st Place, Russell Corp, #6 Weaving
• 2nd Place, Tee Jays Manufacturing, #15–A Knit
• 3rd Place, Vanity Fair Intimates, #6 Dye/Finish

Division 3 (251 to 500 employees)
• 1st Place, WestPoint Stevens, Opelika Finishing
• 2nd Place, Mount Vernon Mills, Tallassee
• 3rd Place, Johnston Industries Inc., Shawmut Complex

Division 4 (over 500 employees)
• 1st Place, WestPoint Stevens, Lanett
• 2nd Place, Johnston Industries Inc., Southern Phenix Textiles
• 3rd Place, WestPoint Stevens, Carter/Lanier

PLANT GROUP C
Apparel, Homefurnishings & Other Cut-and-Sew Manufacturing
Division 1 (up to 125 employees)
• 1st Place, Connie Manufacturing Company
• 2nd Place, Tee Jays Manufacturing Inc., #14 Samples
• 3rd Place, Russell Corporation, Lafayette Sewing

Division 2 (126 to 250 employees)
• 1st Place, New Era Cap Company, Jackson Facility #5
• 2nd Place, Pridecraft Enterprises, Enterprise
• 3rd Place, Russell Corporation, Brundidge Plant

Division 3 (251 to 500 employees)
• 1st Place, Springs Industries, 5th Avenue
• 2nd Place, Russell Corporation, Hi–Tech
• 3rd Place, Kappler Protective Apparel & Fabrics, Guntersville

Division 4 (over 500 employees)
• 1st Place, Russell Corporation, Focused Factory
• 2nd Place, WestPoint Stevens, Fairfax Fabrication
• 3rd Place, WestPoint Stevens, Abbeville

PLANT GROUP D
Distribution, Warehousing, Maintenance, Grounds, Other
Division 1 (up to 50 employees)
• 1st Place, Johnston Industries Inc., Langdale Complex
• 2nd Place, Russell Corporation, Athletic Textile Maintenance
• 3rd Place, Johnston Industries Inc., Stitchbond

Division 2 (over 51 employees)
• 1st Place, Vanity Fair Intimates, Distribution Center #2
• 2nd Place, Russell Corporation, Athletic Distribution Center
• 3rd Place, Russell Corporation, Miscellaneous Maintenance

Wellman

Week of April 22, 2002

Wellman finding successin ‘new fibers strategy’

Sensura fiber was borne out of a partnership between Wellman, Parkdale Mills and several knitters and weavers. The staple fiber, shown here in garments by Champion Sportswear, gives fabrics a sensual and soft hand and a luxurious appearance, according to the manufacturers.
Photo by David Spagnola

The future of the textile industry continues to spiral downward with the migration of fiber and textile manufacturing to lesser developed countries, especially the Far East and particularly China.

This is evidenced in such data as imports of apparel and textiles, which are up 76 percent in the last five years and imports of home furnishings and industrial products, which more than doubled in the same time frame. This flood of imports has devastated the U.S. textile market, resulting in the loss of thousands of American jobs, numerous mill closings and almost daily announcements of bankrupt textile companies.

As mill after mill closes and those remaining lay off workers and tighten purse strings, Wellman recognized that change was in order. Faced with a future of a shrinking textile and fiber market, Wellman concluded that it must succeed in implementing a new fibers strategy or else see its business disappear and its plants close, too.

Yet, despite this climate, Wellman officials said they see a brighter future in strong partnerships with the company’s direct and downstream customers, unique, value-added fibers that allow mills and manufacturers to sell their products advantageously and the power of a full-service organization.

Newly committed to a strategy of developing unique, value-added fibers, Wellman said it sees an opportunity that will give its mill, manufacturer and retail customers the ability to create products that will excite their customers and grow their businesses. Additionally, in mid-January Wellman totally reorganized its Fibers Group to support this strategy by enabling five separate new product teams to focus on bringing their specific product from concept to market in a more expedient time frame.

Whether it is innovative product extension of the core business to enhance productivity in a mill or an entirely new smart fiber, these teams concentrate solely on the process and product at hand, officials said. Working smart and efficiently, these teams research and develop their product, work throughout the chain of supply and market the product appropriately for end-users, Wellman officials contend.

Partnership success

Wellman, recognizing its position as an ingredients manufacturer, knows that working in partnership with its customers is a most successful strategy, according to a company spokesperson.

“Fortrel has been a widely recognized brand of polyester in the workwear market for a very long time,” said Choyce Johnson, Wellman’s director of marketing. “And, we are committed to working closely with our customers to constantly turn out new products for this end-use category.”

In fact, Wellman’s commitment to the workwear market generates exciting partnership opportunities, as in the case of the development of a 100 percent Fortrel polyester knitted shirt with excellent moisture management that meets all of the requirements of industrial laundries, Johnson added.

This partnership — Wellman, Carolina Mills, Milliken & Co. and VF WorkWear — resulted in a “fabulous” new product that holds up wash after wash, lasting longer and staying bright, colorful and comfortable throughout each washing, Johnson said.

“Today’s workwear customer is much more demanding about his work apparel,” said Bill Wedekind, president, VF Workwear. “So, comfort is a very important performance criteria. In our initial discussions with Wellman and Milliken, we challenged them to develop a fabric that was comfortable, with excellent color-retention and a long life. Through our collaborative efforts, this fabric was born, and today it is used in three different business units.”

Another successful partnership between Wellman, Parkdale Mills and several knitters and weavers saw the launch of Sensura™, and with that Wellman introduced a whole new body of chemistry. Sensura is a staple fiber that gives fabrics a sensual and soft hand and an extremely luxurious appearance.

According to the partners, Sensura is naturally comfortable and cotton-like; dyes deeper, holding color much longer and providing great stability throughout the life of the garment; dries twice as fast as cotton; and moves moisture through the microclimate between skin and clothing, transporting it to the surface where it quickly evaporates.
Currently being seen — or soon to be seen — at major retail stores, Sensura fabrics have been added to lines at manufacturers such as Dockers, Savane, Haggar, Champion and Eastern Mountain Sportswear.

Socks: a new opportunity

New market opportunities are also important for success. With the introduction of Sensura late in 2000, Wellman realized that this fiber had perfect properties and aesthetics for the sock market. Officials reiterated that Sensura offers easy dyeability, superior softness and comfort, excellent shape retention and better moisture management — it dries twice as fast as cotton.

Sensura feels like no other and internal wear tests, both for general use as well as for sporting events, proved the comfort is outstanding, company officials added.

Another excellent fiber for socks, a Wellman spokesperson added, is ComFortrel™, a whiter-than-white fiber with superior breathability and pill resistance. Like Sensura, ComFortrel also has a soft hand and outstanding moisture management, perfect for active sports, the official said.

With Spunnaire™, a super white, low-shrinkage fiber, Wellman’s foray into the sock market is complete.

Nonwovens solutions

Continually expanding into the nonwovens market, Wellman is the fastest-growing fiber company in the industry today. Nonwoven technical fabrics, in particular, are well-suited to Wellman’s partnership point-of-view. Working closely with its customers to completely understand requirements and expectations has been the successful formula for growth, a company executive said.

Especially significant in the past few years has been the growth in consumer products areas such as household wipes and personal hygiene products. Heavily supported with print and television advertising, these products fly off the shelves in supermarkets and drug stores around the world. Wellman fibers have been specifically engineered to be the backbone of these successfully marketed products.

Wellman is an active member of INDA, the Association of the Nonwoven Fabrics Industry, which goes by the motto “Nonwovens — Engineered Fabric Solutions.”

Looking towards a future of innovative products and strong customer partnerships, Wellman officials said they are confident that the company can help play a positive part in a resurgence of successful American fiber and fabric programs in apparel, accessories, home furnishings and industrial markets.

MULTI-STATE TEXTILE SUMMIT

Week of April 22, 2002

Hayes urges governors to keep pressure on

Part 4

Editor’s note: In this, part 4 of our coverage of the Multi-State Textile Summit at Gaston College in Dallas, NC, on March 22, excerpted remarks by Chuck Hayes, chairman of Guilford Mills and immediate Past President of the American Textile Manufacturers Institute (ATMI), are published here. The comments of Hayes and other panelists are so pertinent, we deemed it appropriate to publish them, as a matter of public record for our readers, especially those in position to determine the future of this industry. Panelists are being spotlighted on a weekly basis.

Chuck Hayes

You four governors represent states with significant textile production. As you know too well, your textile industry and its workers have been hit by unfairly priced imports from Asia. Over 80 textile mills have closed in your four states in the past two years and the job losses are over 100,000. Plant closings and job losses have been much greater across the entire textile industry.

Our own company, Guilford Mills, is a case study of what happened to our industry. Today, Guilford Mills is in Chapter 11. I started with that company 41 years ago and we have now shut down four plants and have laid off more than 4,000 people. And we may be one of the more fortunate companies because we have positioned ourselves with our creditors to emerge from the bankruptcy as a smaller but more viable company.

And I will say, and what some of the other speakers have said, as far as the banks are concerned in the state of North Carolina, there is no liquidity. They don’t care whether you succeed or whether you fail. (Applause). There is no help from the lending institutions.

Those former Guilford workers, people who I have known for most of my professional career, are not going to find jobs very easily. That story is repeated throughout our industry.

I believe there are some important questions that need to be asked and answered and I understand the three of you are dedicated to finding the answers. Those questions seem to be, first, what caused this sudden loss of jobs and production in the U.S. textile industry and can anything be done about it? Second, what can be done to address the damages that already exist?

Fortunately, the answers to both of these questions are known and I would like to share our views about them with you.

The major reason for U.S. textile plant closings and job losses is the currency devaluations in 1997 across Asia and the financial meltdown that occurred. Countries from Pakistan to the Philippines devalued their currencies to extremely low levels compared to the U.S. dollar. In some cases, the devaluations occurred because currency traders recognized how undervalued these currencies were. In other cases, such as India and Pakistan, governments decided to match the devaluations of their Asia competitors in order to make their export share. Total, uneven playing field! And most price declines continue to this day.

You go into Wal-Mart, you will not see anything made in the USA. You will find stuff made in every foreign country that there is. ... Woven fabric prices from Asia have declined by 14 percent. Knit fabrics, which we make, have seen price declines of 38 percent. And yarn prices have dropped by more than 27 percent.

None of these price declines have occurred because our Asian competitors are working harder. They’re not smarter or working on better machines. But these prices are driving our industry into the ground. Our government must do something about this. So I applaud you gentlemen for devoting your time and energy to this issue.

The problem can be addressed if our federal government is willing to take the necessary actions. And what are these actions? The Bush Administration and Republican leaders in the House of Representatives have gone on record that certain commitments to members of Congress will be fulfilled, that they will take action to address our industry’s problems. Those commitments were made in December, but most of them still need to be implemented.

And let me just mention a few:
• keep the quota phase-out schedule;
• open foreign markets;
• improve customs enforcement, which is miserable and lousy — smuggling in this country has reached, the last I heard, $8 billion; and
• require U.S. finishing and dyeing of U.S. fabrics in the CBI (legislation).

Yesterday, Commerce Secretary Donald Evans spoke to our annual meeting. He said that the administration will act to implement these commitments and I believe that he is truly working to see that these things happen. But not all of our government agencies are as enthusiastic or as committed to our issues as is Secretary Evans and his staff.

Therefore, we need to exert all the pressure that we can on our government to make these commitments a reality as soon as possible. So I urge you to convey your concerns to President Bush and to honor these commitments immediately.

Also, there is something more fundamental that we can do. I believe that we can convince the Bush Administration to take steps to correct the overvalued dollar. I was skeptical myself when this issue was first raised by the ATMI staff. But since then, I have become convinced that it can be done. And I know that Govs. (Mike) Easley (NC) and (Jim) Hodges (SC) have both taken action to urge the administration to do just that.

A powerful coalition has been formed in Washington with the sole purpose of trying to get the dollar down to a level that reflects real economic fundamentals. That coalition had a press conference yesterday and has garnered tremendous support as it puts pressure on the administration. I’m happy to say that ATMI is one of the initial members of that coalition, but let me tell you who else is involved: The National Association of Manufacturers, with over 13,000 manufacturers across the country; and the AFL-CIO. Now, can you imagine when textiles joins the union, you know we are in trouble! For more than 50 years I fought the union. Now we’re welcoming them with open arms! ... And many others are part of this group.

I urge you to ask President Bush for the U.S. to work with our trading partners to correct the overvalued dollar. The U.S. did it in 1985. What they did was known as the Plaza Accord. And it can and should be done now. Hundreds of thousands of jobs have been lost because of the overvalued dollar and this leads to unfairly priced imports, because when the dollar is so strong, the imports come in here ... I mean, there are ships that dock in California and are going back empty. They can make such a profit by bringing that cheap crap into this country! (Applause). ...

After having said the above, I now would like to tell you exactly how I feel. History tells you that this industry has been nothing but a pawn in U.S. foreign policy. Whenever there is a problem with a country, we immediately give them additional quotas and/or reduced tariffs. That is called being a pawn.

The time has come where our industry can not longer be the pawn that is used by our government. There has to be other means of helping Third World nations without continuing to erode the textile industry in this country. (Applause).

Only recently are we getting — and this is coming from Secretary Evans, who I do believe in — the recognition that we deserve. Therefore, U.S. government can help to keep the momentum building. You can no longer stand by and let the textile industry be the pawn. Somewhere along the way, if we work together, we can be the king. That time is now.

Therefore, you carry my message to Washington and tell the president that you governors no longer want our industry treated as a pawn. We now want to be the king! There are other ways to help nations that do favors for the U.S. without continually eroding the entire U.S. textile business.

Keep in mind that every plant that shuts down, typically employees, many of whom are semi-illiterate individuals and many of whom are 50 years of age or older ... where are these people going to find jobs and how will they be retrained?

That whole system needs to be looked at and a modern approach needs to be taken. What I argue is that our industry needs a solid solution and it can only come from the United States government. That is the job for you governors. Move us from being pawns to being kings! (Standing ovation).

Burlington

Week of April 22, 2002

Burlington shedding two more businesses

GREENSBORO, NC — Continuing to concentrate its efforts on growing its fabrics business, bankrupt Burlington Industries announced that it is shedding two businesses in its residential products division.

The company has signed a definitive agreement with Richloom Fabrics Group, Inc. for the sale of Burlington’s residential upholstery business.

The company also announced it will sell to Bacova Guild, Ltd. its bath consumer products assets. Both sales would include certain inventories and intellectual properties.

“These actions support our strategy and provide our Burlington House division a more effective and sustainable manufacturing base,” said George W. Henderson III, chairman and CEO. “These changes will allow us to focus our strong jacquard and decorative weaving capabilities on innovative products where we have a leadership position and bring distinction and value to the market.”

Bacova Guild, a floor mat and accent rug maker based in Low Moor, VA, was previously owned by Burlington. The acquired Burlington business will operate as a division of Bacova and will sell under the Bacova® Bath and other brand names.

Kathy Fowlkes, who headed the business at Burlington, will join Bacova as business manager for bath.

Burlington previously announced the sale of its bedding and window consumer product businesses to Springs Industries.

Tropical

Week of April 22, 2002

Tropical to ax 140

TAMPA, FL — Tropical Sportswear Int’l Corporation said it is cutting 140 jobs as part of a consolidation plan.

The apparel manufacturer is consolidating the administrative, cutting and related functions of its Savane division from El Paso, TX, into its facility here.

The job cuts represent about 12 percent of the company’s work force. About 60 employees in El Paso will be offered the chance to relocate here.

Tropical also announced the reorganization of its South Pacific division, including discontinuing production in factories in Fiji that are partially owned by the company. Product for the South Pacific division will be sourced globally through lower-cost, full-package imports.

Fiscal Notes

Week of April 22, 2002

WestPoint Stevens rebounds with profit

WEST POINT, GA — WestPoint Stevens, Inc. reported income of $2 million, or 4 cents a share, in the first quarter, bettering a First Call consensus estimate of a loss of 5 cents per share.

The company $10.9 million, or 10 cents a share, for the same period last year, which included a $5.8 million charge for restructuring.

Sales were up 4 percent to $435.1 million, from $418.6 million a year ago. Sales growth was driven by double-digit increases in accessory products, more than offsetting a modest decline in sheets and towels.

The company recorded bad debt expense of $2.6 million net of taxes in the quarter related to the Kmart Corporation bankruptcy filing.

Russell Corporation gets credit facility

ATLANTA — Russell Corporation received a $325 million senior secured revolving credit facility from Fleet Capital Corporation.

The facility, which includes a five-year $300 million revolving credit facility and a five-year $25 million term loan, will be used to refinance existing debt and provide for ongoing working capital.

Fab Industries suffers 1Q loss

NEW YORK — Fab Industries lost $677,000, or 13 cents per share, in the first quarter, compared to a loss of $1 million, or 20 cents, for the same period last year.

Sales declined to $14.3 million from $20 million.

Mohawk Industries sees sales, profits skyrocket

CALHOUN, GA — Mohawk Industries reported first-quarter earnings of $43.2 million, or 77 cents per share, on sales of $866 million, as 12 percent increase.

For the same period last year, the carpet and rug maker earned $27.2 million, or 51 cents a share.

CMI’s liquidation plan approved

WILMINGTON, DE — CMI Industries Inc.’s liquidation plan and proposal to sell its lone profitable business was approved by the U.S. Bankruptcy Court here.

Proceeds from the deal, valued at $24.4 million, will be used to pay unsecured creditors and equity holders.

Four creditors object to Fruit of Loom plan

WILMINGTON, DE — Fruit of the Loom Ltd.’s third amended reorganization plan has been rejected by four creditors. For various reasons, Travelers Casualty and Surety Co., the Travelers Indemnity Co., Transportation Insurance Co. and Continental Casualty and Continental Insurance Co. filed objections to the plan in the U.S. Bankruptcy Court here.

PGI changes date of special meeting

NORTH CHARLESTON, SC — Polymer Group, Inc. has changed the date to May 24 for a special shareholders meeting, when it will be asked to approve various proposals to complete a financial restructuring.

Machinery Suppliers

Week of April 22, 2002

Sulzer reports terry machine orders

SPARTANBURG, SC — Fritz Legler, president of Sulzer Textile, Inc., reported that sizable orders have already been booked following the recent launch of the terry version of the company’s G6300 rapier weaving machine.

The G6300 F is ideal for applications where top-quality terry fabrics with exclusive designs, as well as productivity, are called for, he said. This applies to the entire range of terry fabrics — from heavy velours through towels in pre-set lengths to bulk terry in large orders, he added.

Using the swinging sley technology, coupled with the dynamic pile control, top-quality towels with attractive patterns can be woven, Legler said. The pile height can be freely and electronically programmed and varied from one pick group to another. The maximum reed break is 24 mm, which enables the production of exclusive terry fabrics with high and dense piles.

Furthermore, the type of loop formation is also programmable and it is possible to switch at any time between 3-, 4-, 5-, 6- and 7-pick terry.

Based on the proven technology of the G6300 rapier weaving machine, high insertion rates can be achieved on this terry version, thus reducing the productivity gap between airjet and rapier machines significantly, Legler noted.

“Adding the superior versatility of rapier machines over airjets, the G6300 terry should be an interesting proposition to the U.S. industry,” he said.

Available in seven working widths, from 220 cm to 360 cm (85" to 143"), maximum cost-efficiency and towel-width configurations are attainable, Legler said.

Cone Mills gets another Quickwash

CLIFFSIDE, NC — The Cone Mills Denim Plant here has ordered its second Quickwash Plus System after finding that its first unit helped to improve the efficiency of its denim manufacturing process, according to Cone officials.

The completely vertical plant turns bales of cotton into finished rolls of denim for shipment to cutters. Cone managers said they expect the additional machine, designed to speed testing of fabric dimensional stability and other properties, to further help the plant reduce its denim re-runs.

In the past, plant re-runs were extremely time-consuming. They required a trip to the warehouse, the cutting of a two-yard fabric sample, followed by three washings in a conventional home washing machine per AATCC 135 standards.

The Quickwash Plus unit, manufactured by Raitech, provides tremendous savings because only seven inches of fabric is required for testing and wash times are reduced from 12 hours to 30 minutes, according to Raitech officials.

“Quickwash Plus has developed into a key instrument for denim manufacturers in Europe and South America, as well as the U.S.,” said J. Mark Raiteri, Raitech president and CEO. “We’re proud that Cone Mills is finding it so useful here in the U.S.”

Cliffside is the second Cone facility to acquire Quickwash Plus units. The company’s Carlisle, SC, finishing plant bought a unit several years ago and has reported highly satisfactory results, Raiteri said.

Textile News Index