By Devin Steele
SAVANNAH, GA - Aaron Feuerstein said he still can't understand the adoration he received - and continues to receive - due to his actions nearly a decade ago.
Such attention - and resulting hero status given the Malden Mills' chief - may simply constitute a sad commentary about society today, he added.
He insinuated as much to members of the Southern Textile Association (STA) during their 95th annual meeting here last month.
Feuerstein, of course, gained national fame after a fire gutted much of the fabric maker's production facilities in 1995. Then 70, he opted not only to rebuild - rather than take the $300 million in insurance money and run - but to keep 3,000 displaced employees on the payroll, with full benefits, during the rebuilding. His benevolence made him a something of a corporate celebrity, landing him on national TV and in numerous magazines and newspapers and earning him a mention and a guest spot at President Clinton's 1996 State of the Union address.
Malden finds itself in bankruptcy today, but that hasn't kept Feuerstein out of the spotlight - or, rather, the spotlight away from Feuerstein. Last year, "60 Minutes" aired a segment about his good deeds and determination to return the company to profitability. Video footage of the program was shown to STA members prior to his taking the podium.
Early in his remarks, Feuerstein related a story implying that too much fuss has been made over his quick decision to do the right thing.
"In 1865, the first mill building of the Arlington Mills, which rested on the very same grounds that Malden Mills is located today, burned to the ground," said Feuerstein, Malden's chairman, president and CEO. "And that original owner of the Arlington Mills rebuilt the mill in the very same location, thus enabling him to keep the community flourishing by maintaining jobs for the employees. I searched and searched and found that he never got any credit for doing that.
"What's most interesting here is that the original owner remained unpublicized, uncelebrated and unsung - for doing exactly what I did more than a century later. One might conclude that maybe I don't deserve all the praise that's come my way. Maybe the praise which was lacking in 1865 was because the owner's actions were considered more normal then. In the close of the 20th century, it wasn't considered normal, and that's why I got the praise."
A positive aspect of Feuerstein's unsolicited notoriety is that it has resulted in his receiving thousands of letters from people around U.S., as well as other countries, he said.
"Many of the writers poured out their hearts to me," he said. "I've come to the conclusion that what the millions of workers in the United States really feel is that they've given their loyalty and trust to the corporation and what they want in return is a corporation to give them the same loyalty and trust. They want that the CEO act the way I did at the time of the fire. They want him to have a feeling of responsibility for the workers and responsibility to their respective communities."
During his presentation, Feuerstein talked openly about "the chapter," as he referred to Malden's bankruptcy - its second trip through the Chapter 11 courts since 1981. He finds himself in a battle to maintain ownership of a company forced into court protection partly due to mounting debt and slumping outdoor goods sales. He is trying to put up $92 million to $94 million in order to buy back from creditors the company, which has been in his family since 1906.
On June 30, Malden announced that it expects to emerge from bankruptcy by Aug. 26 after nearly two years of restructuring.
"In the chapter, you sort of undress in public, and everybody knows your business," he told the STA. "I am very confident that we will in fact raise that money and put it on the table."
Under the reorganization plan, supported by lead creditor GE Capital, the option to buy back the company remains in effect for three years, but the price rises considerably after the Aug. 26 deadline, according to reports. The plan also calls for another CEO to be named, with Feuerstein staying on as chairman and president - unless, of course, he's able to come up with the funds.
In Savannah, Feuerstein also talked about the values his parents and grandparents taught him growing up.
"When I was a kid, I was very fortunate to sit at my father's and mother's table every night for dinner," he said. "It was a great honor and it was absolutely mandatory. My four siblings and I all sat there and every night we ate together and had a grand time - at least I did. And we talked about politics, we talked about school, we talked about religion - everything. It was terrific."
As a businessman, Feuerstein said he recognizes that ethical values have an important role to play today if the business is "economically justifiable," he said.
"You can't just talk about goodness and not have the money to pay your wages or to pay your vendors or your shareholders and to keep your company going," he said.
As such, Malden Mills has a company strategy that "makes us economically justifiable and will, in spite of our troubles, enable us to win the battle," he added. That strategy is divided into three parts, he said: quality products, branding and innovation.
"We're dedicated to the proposition that the products we make will absolutely be the best in the world," he said of the first point. "No one is going to make it any better than us, almost irrespective of costs. We're not going to compromise - we're going to make the best."
Secondly, he added, that quality will be backed up with a top-notch brand, in this case Polartec® fleece. With this product, Malden is involved in "ingredient branding," or marketing Polartec to help customers recognize the value of the fabric compared to others.
And on the last point, Feuerstein said that innovation will be paid for by customers only if you have a good brand.
"We think we have the best R&D department for a company our size and in our industry and we have an R&D director we think is the best in the country," he said. "We have a policy today of trying to innovate so rapidly that it's not going to be China that's going to make or products obsolete, but we'll make them obsolete ourselves."
He summed up the strategy thusly: "These three things together - the quality, the brand and the innovation, done as excellently as one can figure out how to do - is, I think, the final answer on how a textile fabric mill can win in the United States."
Feuerstein spent much of the rest of his talk extolling the virtues of a manufacturing-based society.
"When I think of what happened in the Civil War - and here I am, talking in the Deep South - was, when everything was said and done, it was the manufacturing base in the North that beat the South. After all the valor and all the sweat and tears, it was the North that had the manufacturing base and the South that had to import it."
Similarly, he then credited America's ability to produce goods as the reason the U.S. won both World Wars.
"If our country, which in my book is the best country that ever existed, is to remain No. 1 and retain its supremacy, it will have to be based on manufacturing," he said. "It cannot be done totally on creativity, on financing, marketing, research and development, etc. There has to be a manufacturing base. It can't all go offshore."
He then asked: Why is winning so important?
"It's important to win but it's tough to win, especially when we have a political situation in Washington, both Democratic and Republican, that doesn't give a damn," he said. "It's important to win because the manufacturing base cannot be lost. God forbid. But it's eroding very rapidly at the present time."
Over and above the U.S. retaining its superpower status, winning is important on a human level, Feuerstein added.
"When the average worker has a production job, he can hold his head high," he said. "He has a job that is not below the poverty line. He's getting paid well. He has benefits. He can take care of his family. He can send his children to school. And he's somebody. But when you take the production job away, what job is he going to have? Making beds in this hotel? Or sweeping the floors in this hotel? He'll be paid a minimum wage, which is still a lot higher than any place else in the world, but that minimum wage is below the poverty level. And he'll become a nobody.
"Yes, in the employment figures in the U.S., he's going to be registered as employed. But as you wipe out the manufacturing base, you're going to have a larger amount of those people who are employed when (Federal Reserve Chairman Alan) Greenspan talks who are not really employed. They're employed in such a way that in 20 or 30 years, we might lose our democracy, as well as the values that our forefathers demanded in the Declaration of Independence."
Feuerstein, whose favorite pastime is committing religious passages and poems to memory, concluded his poignant presentation with the words of Alfred Lord Tennyson, from Ulysses:
"Though much is taken, much abides; and though
We are not now that strength which in old days
Moved earth and heaven; that which we are, we are;
One equal temper of heroic hearts,
Made weak by time and fate, but strong in will
To strive, to seek, to find, and not to yield."
SEA ISLAND, GA - William A. Barron Jr., vice president of manufacturing for Shaw Industries in Dalton, GA, was elected chairman of GTMA: The Association of Georgia's Textile, Carpet and Consumer Products Manufacturers (GTMA) at its 103rd Annual Meeting here recently.
Barron succeeds Thomas B. Gardner, senior vice president of Bath Manufacturing for Springs Industries in Griffin, GA, as chairman. Donald R. Henderson, vice president of Manufacturing for Mount Vernon Mills, Inc., Trion, GA, was elected vice chairman, and Tom Watters, chief operating officer, Syntec Industries, Inc. in Rome, GA, was elected treasurer.
Barron is the first representative from a carpet manufacturer to serve as an officer of the association. He has been with Shaw Industries for 34 years, joining the company following a two-year tour in the Army.
A graduate of The Citadel with a degree in business administration, he began his career with Shaw as an industrial engineer in Cartersville, GA, in 1969. He progressed within the company to the position of director of manufacturing over the Cartersville operations in 1974 and moved to Dalton in 1977 to become the director of Carpet Manufacturing. In 1992, he was promoted to vice president of manufacturing with responsibilities for fiber extrusion yarn, carpet samples and engineering.
He has served on the board of GTMA and on the boards of the United Way of Dalton and the Heart Association. He is also a past senior warden and vestry member of Saint Mark's Episcopal Church of Dalton.
Henderson has spent his entire career in the textile industry, joining the Riegel Division of Mount Vernon Mills in 1969 upon his discharge from the Army.
He also has an impressive record of service to his community and church, and to the industry. He served as the chairman of the Chattooga County Chamber of Commerce and on its board; as a member of the Windwood Advisory Board; as chairman of the administrative board of the Trion United Methodist Church, and as a Sunday school teacher; as a director, treasurer, vice president and president of The Textile Education Foundation; as chairman of the Georgia Textile Operating Executives; and as a director of GTMA.
Watters has not only spent his entire career in the textile industry, but has been involved, through his family business, in the industry his entire life.
After graduating from the Darlington School in Rome in 1972, he continued his education at Georgia Tech, where he graduated with a degree in textiles in 1975. Upon earning his degree, he joined his family's business, Integrated Products, where he worked in every facet of the company. In 1983, he succeeded his father as president.
In 1989, he and three of his brothers formed Syntec Industries in Rome and he currently serves as chief operating officer.
He is active in many community activities in the Rome area and is a past president of the Greater Existing Industries Association. In 1988, he served as president of the American Yarn Spinners Association's Carpet Yarn Group. He has also served as treasurer, vice president and president of The Textile Education Foundation and as a member of the GTMA board.
Five executives were elected by the association's membership to serve three-year terms on the board of directors:
Harry J. Batty Jr., CEO, Sylvania Yarn Systems, Sylvania,
Toni Cauble, vice president, Communications, WestPoint Stevens, West Point, GA;
Trey Hodges, president, Swift Spinning, Columbus, GA;
Bradford T. Mortimer, president, Amoco Fabrics and Fibers Company, Austell, GA; and
Bryon Vines, vice president, Manufacturing, National Textiles, Winston-Salem, NC.
The association also re-elected Roy Bowen as president and Suzanne Wilkes as secretary.
Lee S. Bryan, vice president of Finishing Operations, Mount Vernon Mills in Trion, GA, was elected president of The Textile Education Foundation, Inc. (TEF) at its 60th Annual Meeting.
Bryan succeeded Richard P. Strawhorn, director of Risk Management for Mohawk Industries in Calhoun, GA.
A native of Jefferson, Bryan began his career in the industry in 1980 as a manufacturing trainee with Burlington Industries following his graduation from Purdue University, where he majored in industrial engineering. In 1984, he joined Jefferson Mills, where he served as finishing plant manager and then vice president of manufacturing until the company was sold to Texfi Industries in 1991. He remained with Texfi until 1993 when he joined Mount Vernon in Trion.
John Cahill, vice president of Human Resources for Ten Cate Nicolon in Pendergrass, GA, was elected vice president, and Douglas R. Tingle, CEO of 1888 Mills LLC in Griffin, GA, was elected treasurer.
Three people were elected by the Foundation's membership to serve three-year terms on the board:
William H. Shapard, chairman, American Mills, Griffin,
Stephen Felker, Jr., manager of Manufacturing and Administrative Services, Avondale Mills, Inc., Monroe, GA; and
Don G. Aaron, president, Sylvania Yarn Systems, Inc., Sylvania, GA.
In addition, the foundation elected Russell Grizzle, president of the Carpet Division USA, Milliken & Company, LaGrange, GA, to fill an unexpired term on the board.
More than 150 industry executives, their spouses and those who supply and support the industry attended the Annual Meeting of TEF, which was held in conjunction with the Annual Meeting of GTMA.
chairman, makes history
SEA ISLAND, GA - During its 101st Annual Meeting here recently, Paul G. Campbell Jr. was elected chairman of the South Carolina Manufacturers Alliance (SCMA).
Campbell, president of the Southeast region for Alcoa Primary Metals, became the first person outside of the textile industry to hold the association's top industry position.
During his acceptance address, Campbell emphasized the chief objective of the alliance.
"The leadership of the South Carolina Manufacturers Alliance realizes the necessity of protecting manufacturers' interests, especially during this time of a threatening tax crunch, and in other significant issues," he said. "Manufacturers banded together in an organization such as the SCMA provides us an opportunity to participate with state and local governments to make sure our interests are considered in these critical issues. The track record of the SCMA has proven it to be a strong pro-business and proactive advocate.
"Through this representation, we can create solutions that safeguard interests of our manufacturers and also benefit the economy of the state of South Carolina."
Campbell's company, Alcoa Primary Metals, includes Alcoa Mt. Holly of Goose Creek, SC. He has been associated with Alumax and Alcoa since 1978, when he joined the management team responsible for engineering, construction and startup of the $360 million plant.
His industry honors include: 1999 president of the American Institute of Mining, Metallurgical and Petroleum Engineers; 1995 president and director of the Minerals, Metals, Materials Society; and a member of ASM International, and the American Institute of Chemical Engineers. He was recognized with TMS's Distinguished Service Award for contributions to the aluminum industry.
Campbell is past chairman of the South Carolina Chamber of Commerce and has served as president of Trident United Way, Berkeley Chamber of Commerce, Coastal Carolina Boy Scouts of America and the Summerville South Carolina Rotary Club. He serves on the boards of directors for First Financial Holdings and First Federal of Charleston.
Meanwhile, H. Malloy Evans, chief executive officer of Cheraw Yarn Mills, Inc., Cheraw, SC, was elected vice chairman; Carl W. Flesher Jr., vice president of corporate communications and environmental services for BMW Manufacturing Corporation, was elected second vice chairman; and David Hastings, chief financial officer of Mount Vernon Mills, was named treasurer.
In addition, Robert E. Barnett, director of operations for Honeywell, was named chairman of the Chemistry Council; and Lawrence G. Perugini, division manager of Carolina Yarn Operations for Mohawk Industries, was picked to chair the Textile Council.
Roger Milliken, chairman and CEO of Milliken & Company, was honored as Board Member Emeritus for his lifelong service and commitment to advancing the manufacturing industry in the state.
The SCMA is the only organization dedicated solely to the interests of manufacturers. Its mission is to elevate the quality of life for all South Carolinians by advancing the revenue-producing manufacturing industry. It represents 91 premiere manufacturing companies in South Carolina.
South Carolina has a diverse manufacturing economy, producing everything from high-tech electronics, software and plastics, to cars, boats, pharmaceuticals, chemicals and textiles.
Tony Dotson verifies color quality control numbers with
Diane Powell of new product development at KoSa's Shelby, NC, operations.
Editor's note: Following is an interview with Tony Dotson, president of the Textured Yarn Association of America (TYAA), which will hold its Summer Conference this week in Myrtle Beach, SC. Product development engineer & technical sales representative, Polyester Textile Filament, KoSa, Inc., Charlotte, NC, and Shelby, NC, Dotson answered questions supplied to him in documented form by STN Editor Devin Steele.
STN: What were your goals for TYAA when you became president and how did you meet them?
Dotson: I wanted to do my best to involve everyone on the board in the decisions that needed to be made for the association. The board of directors is made up of a number of individuals, who are all very involved in the industry and have a wealth of knowledge and experience to offer. So, to be honest, the board has made my role as president remarkably easy.
If I had to choose an issue that I felt was a top priority, I would have to say it was preserving the financial stability of the association. With the economic conditions and import pressures weighing heavily on the industry, the association has recently focused on providing the highest value of service to the members at the lowest cost. Again, I can't take credit for the preemptive measures taken to address this issue, but some serious consideration and decision-making had to be made by the board of directors.
The board offered a number of creative options for handling an immediate budget crunch and establishing a meaningful budget for the immediate future. I feel very good about the recommendations that were agreed to and implemented by the board over the past year. And I am confident the Textured Yarn Association is providing the membership with the highest value of return.
STN: Please explain TYAA's accomplishments for 2002-2003?
Dotson: I can highlight a few:
significant upgrades were made to the TYAA Web site
that enhanced the membership value;
the Winter Conference, which attracted more than 120 people, offered an excellent line-up of presentations and speakers, including TYAA's own Splicing Committee's presentation; and
the one-day seminar was again conducted to provide an educational opportunity for those interested in an overview of "Raw materials to Textured Yarn."
TYAA officers and directors for 2002-03 include (kneeling, L-R) Jim McBride, Jerry Eskew, Richard White, Chas Scott and John Amirthiraj; (standing, L-R) Alasdair Carmichael, Charlie King, Jerry King, Tony Dotson, Tommy George, John Edwards, Ulrik Frodermann and Pat Murray. Not pictured: Robert Howell.
I also think the organizing of this Summer's Conference will prove to be an additional accomplishment and success for the association.
STN: How did TYAA members benefit this year?
Dotson: The conferences continue to offer a venue for those in the industry to network and share insight into the status of the texturing market and related areas.
Just to mention a few current issues the association has brought to the forefront at the Winter Conference: the latest developments in trade legislation, progress to date in developing a practical "marker" technology for tracing fiber origin, the latest splicing technology available and recommendations for applying the technology in the texturing process.
STN: Would you like to offer updates on projects taken up by certain committees?
Dotson: A couple of committees are in the beginning stages, requiring the chairperson(s) to define the overall goal(s) of the committee and outline the membership value. This step has proven to be helpful in narrowing down the focus of newly formed committees, so that the projects can provide meaningful results within a reasonable period of time. So, at this point, it would be premature to offer any specifics, other than the new committees are currently working on laying out a proposal for what they will accomplish.
STN: In what other ways did TYAA seek to enhance its usefulness to members this year?
Dotson: I think the Web site efforts have really begun to pay off this year for the membership. Over the past year the association has stepped up the capabilities of the Web site so the latest information can be quickly added to the site and made available for the members on-line.
Also, the ability to sign up for the conferences and make payments on-line is an added membership convenience. As the association has worked to make the membership aware of these useful additions, I think the membership is finding the Web site to be an effective tool and are visiting it more often to check on the latest calendar of events, technical committee updates and material presented at the conferences.
STN: What else exciting is going on within the organization?
Dotson: In today's globally competitive environment, the ability to work closely with suppliers and customers can prove to be a valuable asset. The association is working on ways to enhance the members' (vendors', suppliers' and customers') ability to network and access information/products/services that are available. Again, we are looking for opportunities where the association can provide additional value to the members.
STN: What is the current condition of the textured yarn side and the climate for future prospects?
Dotson: The current condition is very competitive in the commodity textured yarn business. This creates an ever-increasing urgency to develop specialty/niche products and to find ways to add value to textured yarn products. Specific to the domestic market, the added value has to translate into significant added value to the customer's product and provide the yarn customer with a competitive advantage.
STN: How is TYAA helping members deal with these changing times?
Dotson: We are helping members stay informed on all the rapidly changing fronts - the overall market conditions, latest technology available, winning company strategies, trade conditions and legislation.
STN: How is KoSa responding to these challenges?
Dotson: I think KoSa's strategy is very sound. The Intermediate and Polymers group, along with the Polyester Textile Filament group, offer a full range of polyester products to the marketplace. Polyester resin is offered in various lusters, as well as specialty polymers, a wide range of POY, FDY and warp draw products are offered, in addition to commodity and specialty textured products.
KoSa has also participated in alliances that bring together synergies that are effective in getting product to the market.
STN: What are some of the trends you see developing on your side of the industry?
Dotson: Beyond the trend for developing specialty products, one thing that comes to mind is forming alliances and joint ventures to improve utilization of current assets and reduce overall costs. Another trend seems to be activity outside the U.S., such as sales, sourcing of yarns and even the manufacturing of products.
STN: Why is serving in a leadership role such as this important to you?
Dotson: I enjoy being part of the efforts to change things for the better. I think I can offer input and make a difference based on my experience. And specifically with TYAA, I feel the need to offer something back to this association that has played such a meaningful role in my career.
STN: How long have you been a member of TYAA?
Dotson: I took advantage of the opportunity to join TYAA sometime in the early '90s.
STN: How has TYAA helped you grow professionally?
Dotson: In addition to providing the opportunity to play an active role in the overall textured yarn industry, TYAA has provided a venue for sharing and interacting with top management and experts in the textured yarn and related industries. The ability to network in this way, stay in touch with other key players (suppliers, customers and competitors alike) and develop contacts that extend beyond a specific employer is a professional growth opportunity that can't be equaled.
STN: How have you juggled responsibilities between your full-time job and your position with TYAA?
Dotson: The mutual benefit has been well recognized by my employers and there has never been a lack of willingness to allow me the necessary time I needed to devote to the TYAA responsibilities. At the same time, the TYAA organization is supported by the involvement of full-time professionals who work together very well to share in the responsibilities that are at hand.
And much of the responsibilities are self-induced and volunteered for, so if the responsibilities to TYAA conflict with your professional responsibility to your employer, things can always be juggled around with other board members, to ensure employer responsibilities remain as the top priority.
STN: Please describe the working relationship you have with your officers and board and the TYAA staff?
Dotson: I can't say enough about the professionalism and teamwork that comes together with the group of officers and all the members of the board. The same has to be said about the managing director, Kim Pettit, and the support staff in Ranlo, NC.
STN: Let's turn to the more personal side. Tell us about your childhood and your family dynamic. How did the experience of growing up point you in the direction to where you are today?
Dotson: I grew up with an older brother, younger brother and a sister who's the youngest. I consider myself very fortunate in having a solid foundation as a child with regards to having all my needs and many wants provided for, by hard-working and loving parents. My older brother and I were close in age and chose many of the same activities growing up, so there was some amount of competitiveness that was a part of growing up. And, being sandwiched between my older and younger brother, there was a need to fend for myself at times.
Although my family was not needy, we saved and worked for what we had and with four kids, you kind of picked up on the value of a dollar and the importance of taking care of what you had. Growing up somewhat out in the country, there seemed to be a learned creativeness for some new way to pass the time entertaining yourself, and my older brother and I seemed to always push the envelope. There was the time he volunteered me as his moving target for his bow and arrow practice, and I won't go down the endless list, but I'm just glad we both survived some of our mischief.
STN: What is the best thing your parents did to prepare you for adult life?
Dotson: Responsibility comes to mind. Taking ownership and responsibility of taking care of pets, taking responsibility for making mistakes and learning from them, taking responsibility for caring for the things you have so that they last and taking responsibility for making things happen and making yourself into what you want to be.
STN: When the well runs dry, how do you recharge yourself?
Dotson: Lately it seems I don't really have time for the well to run dry, there is just too much happening on a number of fronts. We are members of Broad Street United Methodist Church in Statesville and worship there on a regular basis.
I do get a recharge spending quality time with my family. My mother is always there to provide me with her insight and wisdom for picking me up no matter what has drained me. She is really good at putting things into perspective. Although I have to say it has been neglected this season, yard work is pretty therapeutic for me.
STN: Are you comfortable with change?
Dotson: I embrace change and like nothing more than to be a part of making change happen. Many times change can be out of one's control, but I try and keep in mind a favorite prayer of mine - asking for the strength to change the things you can, the courage to accept the things you can't change and the wisdom to know the difference.
STN: Please complete this sentence: "In my wildest dreams, I never imagined ..."
Dotson: During the beginning of my career, working at Milliken, I picked up early on the fact that the future of the U.S. textile industry was greatly affected by federal trade policy and legislation, and the industry faced some serious challenges in the future. But I never imagined there would come a time when our country would accept the kind of gutting that we have recently seen take place in our industry, an industry that I think is underestimated in its role in protecting our national security and everyday life as we know it.
STN: Who have been some of your biggest influences?
Dotson: My grandmother was a big influence growing up, more so than I could appreciate at the time. She was a tremendous lady who had an endless drive and commitment for improving the standards of education. She spent over 30 years teaching and at the end of her career was heading up a literacy program where she was teaching children with literacy problems to read.
Upon retiring at the age of 62, she (Mary C. Nesbitt) was elected to the N.C. House of Representatives for Buncombe and Transylvania counties and she held this seat until she passed away with leukemia at the young age of 67.
When she was not in session in Raleigh, she spent a lot of time at her home in Lake Lure. All the grandchildren took every opportunity to join her there in the summertime. I can remember she would come up with games, flash cards, and other creative methods of teaching us how to spell, or learn multiplication tables. I can even remember going out for a pontoon ride to watch the sunset, and on the way she would quiz me on my multiplication table. Like I said, I'm sure I didn't appreciate some of her influences at the time like I do now.
Of course, my mother and father have been the biggest influences in where I am today, and my wife and my wife's parents have certainly added to the big influences in my life.
Professionally, I have been influenced by my first boss in the industry, Jim Sherrer of DuPont, my mentor at Milliken, Jerry King, my longtime friend and colleague, Richard White, and a number of other key managers within Milliken, who I won't list for fear of leaving out any one of the key individuals who have influenced me and my career. There are also a number of people at KoSa who are adding meaningful influence to my career, but I would be afraid I would leave someone out if I tried to narrow it down to one or two.
By Odyll Santos
Change is almost inevitable in the U.S. cotton acreage figure between USDA's prospective plantings report in March and its final plantings report two months later. Back in March, cotton watchers were expecting U.S. farmers to plant more cotton in the 2003-04 season. On June 30, USDA revealed that plantings this year would be just about the same as last year, at 13.9 million acres.
The acreage figure is just off the last season's level and down about 2.5 percent from March prospective plantings of 14.25 million. Upland plantings this season are expected at 13.7 million acres, about the same as last year's level, while acreage of 176,000 devoted to pima, or extra-long staple cotton, is down 28 percent from the previous year.
While growers in Texas and California decided to plant more upland cotton following last year's good production results, growers in the U.S. Delta and the South, some of whom had intended to increase their cotton acreage, decided to plant less. Wet weather delayed planting, prompting some Delta and Southern farmers to turn to alternative crops.
A slight increase in California plantings contributed to the nearly unchanged U.S. acreage figure, with farmers there expected to sow 700,000 acres compared to 690,000 in 2002. Texas, however, is a major contributor to total plantings, with acreage estimated at 5.82 million, an increase of 200,000 from 5.62 million in 2002.
Still, growers and cotton watchers in Texas are considering whether all those acres will contribute to a normally sizable crop. While about two-thirds of the state's cotton is in good to fair condition, the crop is behind last year's development pace, with a notable amount, 36 percent, in very poor-to-poor condition as of June 30.
In Texas's High Plains region, which has 3.6 million cotton acres, June weather proved to be a challenge. "During the month, High Plains cotton fields were blown, drowned and pummeled by wave after wave of June thunderstorms, an adversary that has not been a regular visitor to the region for several years," noted Shawn Wade of Plains Cotton Growers, a Lubbock, TX-based farmers organization, in comments dated July 4. "So far, some 1.2 million acres of predominantly irrigated cotton in the region's northern tier counties are estimated to have been lost."
Dryland cotton acreage, however, may make up for part of any losses in irrigated fields. Wade noted that dryland acres south of Lubbock carried into July crops that were "slightly delayed, but makeable."
In the Delta states of Arkansas, Mississippi and Tennessee, USDA saw plantings fall from 2002 levels. Some of these states saw persistent thunderstorms in the spring that saturated fields, preventing farmers from completing fieldwork.
Arkansas is expected to plant 950,000 acres, compared to 960,000 in 2002, while Mississippi is seen sowing 1.12 million acres, down from 1.17 million last year, and Tennessee is seen putting 560,000 acres in the ground, just off the 565,000 in the past season. So far, the crops in these states are behind in development compared to crops at this time last year. In Arkansas, 67 percent of cotton was squaring as of June 30, well behind last year's 82 percent and the average of 88 percent for 1998-2002. Just 35 percent of Tennessee cotton was squaring compared to 64 percent in the same date in 2002 and the five-year average of 79 percent. Mississippi fared better, with 64 percent of cotton in the squaring stage compared to 68 percent in 2002. But crop development still is delayed when compared to the 85 percent average.
Meanwhile, USDA expects Missouri farmers to plant 400,000 cotton acres, up from 380,000 in 2002, while it sees Louisiana sowing 550,000 acres, up from 520,000 last year. Crops in these states also are behind in development compared to last year.
WASHINGTON, DC - A united U.S. textile and fiber industry sent a letter to President Bush on July 7 urging the U.S. government to self-initiate the China special textile safeguard, reject any pro-China tariff TPLs in the Central American Free Trade Agreement (CAFTA) and other free trade agreements, and maintain current U.S. textile tariffs in the Doha Round of WTO negotiations.
Eight new organizations joined the original six textile coalition members in signing the letter.
The letter was sent five days after the American Textile Manufacturers Institute (ATMI) released a 22-page analysis of Chinese textile and apparel import growth during the last 15 months. That report asserts that China stands poised to take over two-thirds or more of U.S. textile and apparel market once quotas are removed on January 1, 2005.
The report, titled "The China Threat to World Textile and Apparel Trade," concludes that if China follows a similar pattern when quotas are removed, it will quickly take control of between 65 to 75 percent of the U.S. market. The result will be loss of 630,000 U.S. textile, apparel and related jobs and the closure of more than 1,300 U.S. textile plants, the study said.
Signing off on the letter were the original coalition members - ATMI, the American Manufacturing Trade Action Coalition (AMTAC), the National Textile Association (NTA), the American Yarn Spinners Association (AYSA), the American Fiber Manufacturers Association (AFMA) and the National Cotton Council (NCC).
They were joined by the American Sheep Industry Association, the American Textile Machinery Association, The Carpet and Rug Institute, GTMA: The Association of Georgia's Textile, Carpet & Consumer Products Manufacturers, the USA Domestic Manufacturers Committee of The Hosiery Association, Industrial Fabrics Association International, the North Carolina Manufacturers Association and the Textile Distributors Association.
The letter follows a joint textile/fiber industry summit and press conference of June 10 and 11. Allen E. Gant Jr., CEO of Glen Raven, Inc. said. "The letter of the president is not the only action we are taking. The U.S. textile and fiber industry has already begun a full-court press of grassroots activities, public education, congressional and executive lobbying activities and international outreach to confront the threat from China."
George Shuster, co-chair of AMTAC, added, "The U.S. textile industry cannot afford to wait for China to comply fully with WTO rules they have no intention of complying with. That's why the U.S. government must immediately self-initiate the special China textile safeguard in multiple categories."
Secretary of Commerce Donald Evans, contacted by Bloomberg, responded to the letter.
"We're going to make sure that our textile workers are not put in the position of having to fight illegal competition," Evans told the news agency, adding that the administration will soon begin dispatching senior officials to China monthly to urge its government to eliminate barriers to U.S. imports and piracy of U.S. products.
Unifi's Willis C. "Billy" Moore III, chairman of ATMI, noted that U.S. textile manufacturers export large amounts of fabric and yarn to countries in the Western Hemisphere, where it is then transformed into apparel and shipped back to the U.S. market.
"Granting tariff preference levels (TPLs) to benefit countries not involved in the CAFTA negotiations would simply give the Chinese another undeserved opportunity to flood the U.S. market at the expense of the U.S. textile industry and our employees," Moore said. "This is why no TPLs should be granted and why we urge the Bush Administration to stick to its announced position and not cave in to the Chinese and their allies in the importing community."
Geoff Schofield, chairman of the AFMA, also noted that the U.S. manufactured fiber customer base faces a significant threat from China.
"If our government agrees to cut U.S. textile tariffs in the Doha Round of WTO negotiations, China will have wider opening to use its managed currency to boost market share," he said.
The united textile industry agreed that failure to act immediately would have grave consequences for an industry already in crisis.
"I just had to close a plant because of the U.S. government's flawed trade policy," said National Spinning Co. CEO Jim Chesnutt, chairman of the AYSA. "According to Bureau of Labor Statistics, 26 percent of U.S. textile and apparel jobs have disappeared since January 2001. How many more plants have to close before the U.S. government decides to curb the flood of unfairly subsidized Chinese imports?"
"If the U.S. textile industry is completely destroyed, American cotton farmers will lose their best customer. Domestic mill consumption of U.S. cotton has already fallen by more than one-third in recent years," said Gaylon Booker, immediate past president of the NCC.
Added NTA President Karl Spilhaus: "The time for the U.S. government to act is now. If they don't act now, still more orders will flow to Chinese textile factories instead of U.S. factories next year. Tens of thousands of U.S. textile workers will lose their jobs in 2004 if that happens."
According to the ATMI study (available at www.atmi.org), the initial impact of quota removal in 2005 will actually be felt in 2004 as U.S. textile mills begin to lose billions of dollars in orders for yarns and fabrics as a result of customers begin shifting orders to Chinese suppliers.
These conclusions are based on a detailed analysis of 29 apparel categories which had quotas on Chinese products removed on January 1, 2002. In the 15 months since the quota removal, Chinese market share in these categories has increased from 9 percent to 45 percent and, at current rates of growth, is projected to reach 65 percent by the end of this year.
The analysis also reveals that the impact on the developing world will be dramatic. With the Chinese quota removal, $42 billion in export trade is expected to shift to China from Mexico, Central America and Sub-Saharan Africa and other nations in as little as two years time, ATMI reported.
This will result in the loss of millions of jobs in those countries, ATMI concluded. The study also revealed that, based on 2002-03 trade data, countries with trade preference programs or free trade agreements are expected to fare no better than the rest of the world.
The Chinese surge has been fueled by unprecedented price cuts, averaging 46 percent and dramatically undercutting U.S. and other suppliers. Imports from China in the de-controlled categories in 2002 increased by $980 million while imports from the rest of the world fell $813 million.
In related news, there is strong evidence that China is intentionally undervaluing its currency to drive down the price of its exports and to hurt U.S. manufacturers, a bipartisan group of Senators charged July 17.
Sens. Charles Schumer (D-NY), Lindsey Graham (R-SC), Evan Bayh (D-IN) and Elizabeth Dole (R-NC) asked the Treasury Department to determine if China's currency is undervalued and take the appropriate action. World Trade Organization and International Monetary Fund rules prohibit currency manipulation for the purpose of gaining an export advantage.
The Chinese yuan has been tightly pegged to the U.S. dollar in a range of 8.3 yuan per dollar since 1994. In a letter being sent to Treasury Secretary John Snow, the Senators wrote that given China's enormous growth since 1994, this fixed level most likely does not reflect its true value.
Suessen last week announced that it, too, is pulling out of the International Exhibition of Textile Machinery (ITMA) trade show.
Spindelfabrik Suessen, Schurr, Stahlecker & Grill GmbH (Suessen) of Germany said in a two-sentence statement that, "due to the latest events, the cancellation of participation of the two important Swiss groups Saurer and Rieter, as well as the reluctance to travel that has to be expected of many of our customers," the maker of equipment for yarn spinning processes has decided not to exhibit.
In June, Saurer and Rieter announced that they were canceling participation in the trade show, scheduled for Oct. 22-29 in Birmingham, England, due to what they called global travel fears, especially related to the SARS (Severe Acute Respiratory Syndrome) epidemic.
During an ITMA preview seminar on June 17, the day after the Saurer's pullout was announced, a member of the ITMA Organizing Committee told an American audience in Charlotte, NC, that SARS is not a concern of show producers and shouldn't be a concern to those planning to attend the event.
"There are no SARS cases in the U.K.," said Andrew Bird, before deadpanning: "OK, we had one case, but we just shot the guy. So for us, SARS is not an issue."
In a press release dated July 4, the Organizing Committee announced that "any lingering fears that the SARS virus might adversely affect the ITMA 2003 international textile machinery show were finally and totally quashed as the China National Textile Industry Council confirmed to CEMATEX (European Committee of Textile Machinery Manufacturers) the visit of a top-level delegation to the show."
In answering rumors that ITMA would see a reduced number of visitors because of the Saurer and Rieter cancellations, Maria Avery, exhibition director, said: "There are always rumors of this sort circulating in the market," she said in the release. "But the announcement of the Chinese visit proves that this and the SARS fears are totally unfounded. Our visitor numbers are up by over 200 percent compared to ITMA '99 bookings at the same stage of planning - and the number of bed nights booked to date for the show stands at almost 500,000 - clear proof that visitors are committed."
Meanwhile, France-based ITMA sponsor CEMATEX issued a separate release, signed by more than 100 ITMA exhibitors, voicing their support and commitment to the expo.
At the ITMA preview seminar, organized by the American Textile Machinery Association (ATMA), Bird provided an in-depth look at the exhibition and accompanying forum. In addition, John Broughan, president of World Travel Meeting & Incentives, offered an update on ATMA's facilities and services during the show.
Also, Kurt Scholler, CEO of American Truetzschler, gave an exhibitors' perspective of ITMA, while Berkshire Weaving President David Stewart gave his opinion on what he expects as a visitor.
"I'm looking for manufacturers of equipment who can make us more competitive," Stewart said. "It's up to you guys to let us know what you're showing. I'm not going over there to look for something out of the blue. We need that information from you. Without it, we're not making the most of our time."
Stewart then added: "We still have a textile industry in the United States and, in order to keep one here, we have to find the right technology."
HENDERSON, NC - Harriet & Henderson Yarns, based here, filed for federal bankruptcy protection in Raleigh, NC, on July 15.
The news came the same day the company closed its 95-year-old Harriet No. 2 plant, its last production facility here, at the cost of 125 employees. This closing is the privately held company's fourth here in about two years, at a total job loss number of about 450.
"Due to rapidly increasing imports from China and other Asian suppliers, our company has struggled financially," Dale Fite, president and CEO, said in a statement. "This problem is exacerbated by the Bush administration's unwillingness to curb or control illegal textile imports or attempt to save the textile jobs that still remain in this country."
The filing, like the closing, came at the request of lenders, Fite said. The lenders, led by Wachovia unit Congress Financial, have reached a deal to provide funds to keep the company's remaining plants in Bladen County, NC, and Cedartown, GA, running, according to the company.
GREENSBORO, NC - VF Corporation, the world's largest apparel company, has signed a definitive merger agreement to acquire Nautica Enterprises, Inc.
The acquisition will enhance VF's portfolio and business mix by adding new brands, boosting its presence in department and specialty stores and providing the company with a strong new entry into the sportswear category. Nautica's sales in fiscal 2003 were $694 million.
The transaction, which is expected to close early in the fourth quarter, could add about 10 cents to earnings per share in 2004.
KANNAPOLIS, NC - Pillowtex Corp., which may be on the verge of a sale or another bankruptcy filing, has been granted five-day extension on a loan from its term loan lenders on a forbearance agreement. The agreement is now in affect through July 25.
July 18, 2003 -- Pillowtex Corporation (OTC: PWTX) today announced its term loan lenders have extended a forbearance agreement set to expire July 21, 2003 under which the Company's lenders agreed to abstain from exercising the rights and remedies available to them as a result of certain defaults under the Company's term loan agreement. The forbearance agreement is now in effect through July 25, 2003. The Company is continuing to work with its term loan and revolving loan lenders in reviewing its strategic alternatives.
GREENSBORO, NC - Unifi, Inc. said July 17 that it has signed a letter of intent to form a joint venture type company with Kaiping Polyester Enterprises Group Co. of China.
Under the deal, with expected sales of about $300 million, certain polyester and nylon products will be manufactured and sold.
Unifi said it expects to own 75 percent of the joint venture company.
Kaiping, owned and operated by the Kaiping City Government, is one of the largest polyester textile filament producers in China.
NEW YORK - Galey & Lord, Inc. said that it has received interim approval from the U.S. Bankruptcy Court for the Southern District of New York to retain New York-based Alvarez & Marsal, Inc (A&M) and its restructuring professionals.
A&M will supplement existing management with professionals led by Peter A. Briggs, a managing director at A&M. Briggs will serve as chief restructuring officer of Galey & Lord and report to Arthur C. Wiener, chairman and CEO.
DULUTH, GA - Delta Apparel, Inc. announced that it has signed a definitive agreement to buy all of the outstanding capital stock of activewear producer M.J. Soffe Co.
SUGAR VALLEY, GA - Mohawk Home recently bought the tufted bath rug division of Calhoun, GA-based Brumlow Home.
FORT MILL, SC - Springs Industries announced July 9 that it is shutting two of its original plants and laying off 630 employees in South Carolina.
The company blamed weak sales for the closings of the White Plant here and the Lancaster Plant in nearby Lancaster, SC, as well as the layoff of 130 employees at its Grace Fabrication Plant outside of Lancaster.
Both of the shuttered plants were built in the 1890s.
DECATUR, AL - In response to growing competition from Asia and Latin America within the apparel industry, Solutia, Inc. is laying off 200 people at is production plant here.
The plant produces Acrilan, a type of acrylic fiber, as well as a raw material for nylon. Before the announcement, the plant employed about 660 people.
The plant's Acrilan focus will not be on specialty products such as craft yarn, upholstery and outdoor fabric, according to reports.
ROSMAN, NC - Coats North America said July 17 that it is shutting its thread manufacturing plant here, putting 228 people out of work in September.
The 40-year-old plant produces thread for the apparel industry, much of which has moved offshore.
WILKESBORO, NC - Schas Circular Industries said June 27 that it is closing its glove-manufacturing facility here immediately, at the cost of 158 jobs.
The company, started here six years ago by Perfect Fit Glove of Buffalo, NY, made seamless knit work gloves for the automotive and food-processing industries.
BEFORE HE became a corporate saint of national notoriety in 1995, textile industry good guy Aaron Feuerstein was "sort of an isolated individual who stayed in my own little provinces of Brookline and Lawrence, MA," he said recently. Today, though, because of his much-publicized actions after a fire that destroyed much of Malden Mills' production facilities that year, he is willing to venture wherever he is asked to go to share his story.
Which is why he made his first trip to Savannah, GA, with his wife Louise last month - at the invitation of the Southern Textile Association (STA), where members had gathered for their 95th annual meeting. Even with his company operating under Chapter 11 bankruptcy court protection - and in danger of losing the company started by his grandfather in 1906 - Malden's chairman, president and CEO kept his date with this group of Southeastern-based industry peers who had no doubt adored and appreciated him from afar. "I much prefer that I would have this grand opportunity to talk to you not while I'm in the chapter," said Feuerstein, as he referred to the bankruptcy. "But in keeping with a resolution that I made at the time of the fire (pronounced 'fy-AH' in his strong Boston accent), if someone wants to invite me, then I'll go and talk. After the chapter, though, it was extremely difficult to get myself up and have the courage to talk while being in a position of financial difficulty. But, nonetheless, I have. And it's been OK."
INDEED, FEUERSTEIN still seems uneasy in the spotlight. But you have to credit the man for showing his face when things aren't going his way. It's definitely easier to appear in public after doing good deeds, as he did after the fire struck on Dec. 11, 1995. During the rebuilding, as you probably know, he dipped into his own pocket to keep 3,000 idle employees on the payroll for three months.
Keeping a low profile these days, as he fights to regain control of the company from lenders, would seem like the logical choice. Yet there he was last month, offering information and inspiration to the STA membership, as he has many others in the last few years.
He even had a last-minute chance to renege on his commitment, had he chosen to do so. Due to flight delays, the Feuersteins had arrived in the Georgia port city late the night before his early-morning presentation and, to make matters worse, their luggage had been lost. Checking into a hotel at midnight with only the clothes on your back can certainly dampen one's spirit. But what's a little inconvenience compared to the adversity the Feuersteins have seen? Wearing the same clothes, they arrived to the business session the next morning with smiles and cheerful miens.
WHEN HE TOOK the dais, Feuerstein provided insights into the "chapter," his company, his view of U.S. manufacturing and even his childhood. Related to the bankruptcy, he discussed in detail the battle with which he finds himself in his pursuit of reacquiring ownership of the company. He is heavily involved in trying to raise between $92 million and $94 million by August 26 in order to do just that - and he insists he'll put the money on the table at that time.
As an industry, as Americans and as members of the human race, let's hope he wins this battle, too, as he has his other tribulations. An observant Jew who has remained humble throughout his brushes with fame, this beleaguered industry needs Aaron Feuerstein. We need him in the trenches with us, helping to keep us honest and fighting for our interests. After all, who wants to see this noble man return to a life of isolation in his Massachusetts' provinces?